Home NewsJamaica News David Smalling, a Fast-Rising Star on Wall Street

David Smalling, a Fast-Rising Star on Wall Street

by caribdirect
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SMALLING… at Harvard I managed to get pretty lucky with the advisors that I worked with.

“Considering the political climate, I think I should point out one thing that I think has been crucial to forming who I am, and I can relate this with my friends who went to Campion… In my year at Yale there were three of us … Growing up the way I did I never really thought about race… it just never really came up because it didn’t need to. Now, that could be my personality trait or naivete, but it was what it was, so going to college, the most formative parts of my growth were with a really clear mind, which I realise now was indispensable.

“I know my own level of competence, the things I am good at and not good at, and I try to evaluate my own skills reasonably, but at the same time I have confidence, and so that kind of insecurity thankfully doesn’t impact how I behave.

“When I look at my peers in a professional setting, not only the African-Americans, but also Asian-Americans, homosexuals etc, who are constantly thinking about whether some person or other is judging them or discriminating against them… it’s a tough reality, but for me coming from Jamaica my experience was growing up with a lot of friends who are all different nationalities, orientations, etc ,so we didn’t care that much or think about it that much…it just never came up.

“So I was never really worrying if my boss or peer in a professional setting was discriminating against me as a foreigner or for being black. Maybe it’s something I think about more now — especially as I am raising money in Asia — but very little. This has been hugely impactful in terms of [influencing both] my conduct and state of mind.”

Confidence goes a long way towards laying the foundation for growth and development, and this young man, clearly a poster boy for the benefits of a privileged childhood spent in Jamaica, has it in spades.

A graduate of Mona Preparatory School, then later Campion College, Yale University in Connecticut, and finally completing his academic education with a PhD in Economics from Harvard University, David Smalling comes in at the younger end of the spectrum in this survey of the forthcoming generation of Caribbean leadership as he makes his way on Wall Street.

Smalling was recently identified by prestigious business magazine Forbes as one of their top #30Under30 in the financial industry, an annual comprehensive list of 600 of the brightest young entrepreneurs, innovators and game changers within several fields.

When the list came out, a quick search revealed that Smalling — the only Jamaican on the list — was less than a few degrees of separation away and quite open to sharing his journey so far. A few quick conference calls and messages followed.

As the trade suggests, Smalling proved succinct and efficient; and with a Facebook profile showing a fun-loving, adventurous spirit, he opened up about his past.

Presently a portfolio manager and head of research for group trading systematic strategies at BlackRock, wherein the teams use quantitative models to trade across asset classes for a US$6-billion dollar hedge fund, Smalling moved to that firm in April 2016 after spending five years at hedge fund Ellington Management, which he left after having risen to the position of quantitative trader.

The hiking, skiing and poker enthusiast first entered the financial world at Yale, when a former professor — no less than renowned American economist John Geanakoplos, the current James Tobin Professor of Economics and one of the founding partners of Ellington Capital Management — awarded the promising Math major, who was one of the top students in his financial theory class, a summer internship with the firm.

“In college I spent one summer living in China for a couple of months, and I spent two other summers working for hedge funds, including Ellington. I also did consulting during my senior year with AQR Capital Management [a global investment management firm based in Greenwich, Connecticut], but when I graduated in 2009 it was right in [the middle of] the recession, and given the market at the time I thought I would pick up the pieces and figure things out.”

Figuring things out for Smalling meant being accepted into arguably one of the most prestigious financial programmes in the world, at Harvard University.

“I went right into the PhD programme at Harvard right out of undergrad and continued consulting on some smaller projects at Ellington, then started working with them [while I studied]. At Harvard I managed to get pretty lucky with the advisors that I worked with.”

Here luck is an understatement, as the committee under which Smalling developed his thesis comprised notable economists and leaders in the field, including lecturers Warren Quinn, Christopher Malloy and John Campbell; former president of the American Finance Association and member of the Federal Reserve System Board of Governors Jeremy Stein, and Larry Summers, noted economist who is well known as a former president of Harvard University.

“I managed to pick an interesting dissertation topic, the stars aligned, and at the end of the second year I found myself (this is now in 2011) well positioned to hear that the CEO of Ellington had decided to seed internally a new fund. Ellington is basically a fund that specialises in trading mortgage-backed securities, assets that are sensitive to interest rates and creditworthiness…credit-sensitive instruments. While I was at Ellington I worked in a group that was more peripheral, so what I did was completely quantitative, and from a business standpoint a little more nuanced [and suited to] the new venture that focused on derivatives and liquid futures [crude oil, natural gas, etc.].

It was at this point that Smalling decided to switch things up a bit.

“So I’m in my second year of grad school, and Harvard has a thing [whereby] you can press pause and go and do whatever you want to do, and you don’t really have to give a reason. Most people do fieldwork etc, but in my case I used this free option to go back to Ellington and feel out this new fund. At that point I was not really hung up on finishing my PhD, which in retrospect was probably misguided…”

At this stage Smalling walked away with a Master’s degree, although he did eventually complete his PhD studies and defend his thesis, operating from a position where he had garnered invaluable work experience.

“I went back to Ellington as one of four founding members of this new group, and the other members were basically the partners of the group that I had interned and worked with before… three other guys… all of them were class of 2005. They had been there a few years at that point doing the equities fund, but one of them did mortgages, which was Ellington’s core competency and my skill set. I worked there for the next five and a half years until last April when I moved to BlackRock.”

Smalling recalls his years in Jamaica fondly, not only as a balanced place to grow up, but also crediting his parents Donald and Patricia Smalling for encouraging and supporting him, but never fostering a sense of expectation or entitlement.

“I was pretty well supported [and] I was reasonably well provided for while growing up. My parents weren’t like super rich or something, but they were both professionals. I have a younger sister as well who went to college [his sister Danielle is now based in Canada working in public health research and outreach] and my mom’s side of the family, especially, is a bigger family and they all have professional degrees. I have cousins on my mom’s side who also went to Harvard.

“Going into a family business or something like that was actually frowned upon… my family operates in a slightly different way! My Dad, for example, or my uncles, their relationship with me is, ‘Ok, you are entitled to food, shelter and a good education, but everything I have earned belongs to me, it doesn’t belong to you, so go and find your own treasure’. There was nothing I ever expected to be available, like if I wanted to sit back and travel the world, or go to Thailand for a year or something, regardless of my parents’ financial situation.”

Smalling is clearly poised for a promising future. However, this doesn’t mean he is casually comforted by where he is and ready to simply maintain the status quo. Quite the opposite.

He finds inspiration in innovative thinkers such as Elon Musk, founder and CEO of SpaceX. He considers Musk, former Google CEO and current Alphabet Inc Executive Chairman Eric Schmidt, and business magnate George Soros as mentors. When asked what advice he would share with other peers or students resembling where he was five or even 10 years ago, Smalling states resolutely:

“Think big. If people around you are always certain you’ll succeed, then you’re not thinking big enough.”




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