Spot light on Andrew Falco, Global Head of FX & Fixed Income Trading at Fidelity International

Head of Trading Champion 2020

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2020 has been a year of disruption – how has your desk coped with the pandemic? What key learnings can be made?

What a year ! It’s easy to forget 2019 but running a global team where the Hong Kong based traders had already been dealing with split site working (from the office and home) we learned a lot about what worked and what didn’t through this period leading us to begin upgrading our home solution. The teams across the globe were amazing and with the dedicated support from our technology partners working from home moved quickly to business as usual. Ensuring that we replicated the trader desktop was paramount - having the ability to connect to dealer boards was far easier than I ever imagined and embracing both Microsoft Teams and Zoom helped to keep the continuity and dialogue through some truly challenging times. I would say that this is where the power of the trader was on full display. 

 

We made some great strides on automation for Fixed Income with a view to applying some of the logic in FX. This was developed inhouse and at a high level this is a smart decision tree, designed to aid the team and over time learn from historical trading patterns. I think that it’s fair to say that I was glad that we didn’t forget to incorporate a kill switch ! As the volatility and sheer volume of business magnified we needed to ensure that we were achieving the best outcome for our clients and so we either dialled down or turned off the logic. 

 

Looking back and reflecting on the main pain point, it came from the vast swathes of issuance. When you look at a new debt offering you face two challenges,  internal and external. The external: back and forth with the leads is manual, aided by Bloomberg and Symphony but largely follows the same workflow that has been in place for an eternity. It’s great to see the likes of Directbooks, Liquidnet and IPREO all making great strides but interoperability will be key. The internal: arriving at a decision to buy a new issue security will vary at asset manager to asset manager but will have many component parts being met by the analyst/pm/trader and then arriving at a suitable risk size, then it’s the operational build for a security that doesn’t yet exist and ensuring that all of the pre trade tests are met. We have worked hard here as a team for the last couple of years to refine the process and in December 2019 decided to create a portal to bridge the communication and ensure a centralised hub. This is still in development but will see us ready for the challenges that lie ahead.

 

Which projects have you successfully worked on this year?

A big year for us for technology and initiatives. In 2017 we registered in China as a WFOE (Wholly-owned Foreign Operating Entity) and are currently applying for our mutual fund license. In early 20’ we began to trade repo, we have been using reverse for a couple of years but adding this component will help improve our clients outcome. We have been operating from Hong Kong for many years giving us a deep rooted understanding of QFII/RQFII/CIBM and Bond connect, leveraging this experience we also successfully onboarded CIBM for the WFOE.

 

Regulatory challenges posed by Brexit and RFR have presented challenges. We have successfully implemented and begun collapsing legacy risk in an operationally scalable way. Brexit was quite stressful and we ended the year utilising the SEF to ensure that our clients, regardless of location enjoy the same liquidity that they have in the past. The biggest tech initiative for me though has been steering our FX project. Historically we have used inhouse systems to support our FX business and when my role expanded in 2019 I was asked to assume overall responsibility for the migration onto Charles River. We successfully onboarded the first phase of the project in late 2020, a couple of months behind our expected timeline but when considering the magnitude of the project as well as the working from home environment I am incredibly proud of all the teams that have made this possible through a truly challenging year.

 

How do you envisage the trading desk of the future post the pandemic?

 

As I have said above, the robust nature of the home setup has worked fantastically but even with all of the solutions like Zoom or Teams I still see the need to collaborate in person. I think that working from home will form an important part of the workplace going forward but will vary from firm to firm. I believe in a strong culture and partnership, my personal view is that any future state should align with portfolio manager and analysts at the minimum. If the trading desk is working differently to other teams then the cohesion breaks and investment inputs could be missed. I miss people and with that the spontaneity of the office environment allowing for a quick catch up, the healthy and in person collaboration, being asked for an immediate view on the market or to attend a random meeting. 

 

 

What are your top tips to inspiring traders about how to reach to the top of their profession?

 

My teams are located in Dublin, London, Hong Kong and Shanghai and we have managed to hire some truly remarkable talent through the years with and without experience. I encourage everyone to understand themselves recognising strengths and weakness. Everyone is different and as a manager I try to ensure that I adjust my style to ensure that I help each team member reach their goal. The only generic advice I would give is that always  ask questions, be proactive, focus on detail, engage with people how you would want to be spoken to, learn to code and most of all listen. The rest can be taught.

 

What has been your career path before your current role?

 

I spent the first couple of years at JPMorgan in operations and then as an FX sales assistant working with the hedge fund team. I learnt an incredible amount in a fast paced, respectful and stressful environment. I moved to FIL and joined as an Associate Trader focusing on short dated instruments. I was fortunate to work with some great investment management professionals and developed quickly under their guidance. ABS was an asset class that was fast developing and I was asked to work on developing our capabilities for modelling and analysis. The credit crunch brought a whole suite of challenges and as a team we performed well. I was then asked to expand my remit and focus on bank capital and to also work closely with our corporate traders. In 2013 I was asked to lead the London based trading team, in 2016 to become the global head of FI trading and then in 2019 to incorporate both FI and FX.