This former prop trader reinvented himself in fintech after his start-up failed
Charles Poliacof took a rather circuitous route to his current role as the chief revenue officer at Visible Alpha, a fintech firm that provides data analytics and a research distribution network connecting the buy side and the sell side. His career suffered a serious setback, but he was able to reinvent himself, like many Wall Street traders and fintech entrepreneurs have had to.
Poliacof started out as a proprietary trader for close to a decade at Schonfeld Group, where he managed a portfolio of equities and futures and was eventually promoted to manager of a trading desk, where he trained junior traders. During that time, he also immersed himself in the technology component of the trading business.
“I learned a lot about markets, identifying price dislocations and trading at Schonfeld, and I spent a lot of time with the quants as well, developing some of their strategies and working on trading technology and the infrastructure involved in building signal generation," Poliacof says. “As the market structure evolved and pricing dynamics changed with the introduction of high-frequency trading, the role of the prop trader changed.
“A lot of those arbitrage signals that existed for minutes, hours or days were truncated to milliseconds,” he says. "Prop trading had to evolve and so did I.”
A poorly timed startup launch leads to soul-searching
Poliacof was bitten by tech bug at Schonfeld and decided to invest in himself by launching his own automated trading and investment analytics startup. The focus was on grey-box quantitative trading strategies, where firms use data to inform trades but a human is mining the signals, as opposed to black-box, where the algorithm executes the trade as well.
However, his timing was not good, as he soon found himself trying to build a business during the depths of the financial crisis.
“I wanted an opportunity to build my own track record,” Poliacof says. “I still traded my own proprietary capital as I worked to build the infrastructure for black-box trading, and I also started building technology to support grey-box trading, using tech to identify signals in the market and allowing the fundamental guys and prop traders to trade around those ideas and take a ‘quantamental’ approach.
“After I had an extremely successful 2008, and even though friends in the industry warned me that liquidity had dried up, I sank a lot of capital into building new infrastructure because I saw a lot of opportunities, but I slowly saw my returns disappear,” he says. “It was my first real lesson in abject failure.
“In 2009, I drank too much of my own Kool-Aid, but I learned an important lesson: It doesn’t matter what you’ve done or know, it only matters if you can execute – you can’t rely on what you’ve done in the past to assure success in what you’re going to do in the future.”
Regrouping and jumping to a hedge fund – then fintech
Despite the setback, opportunity soon knocked at multi-manager long/short equity hedge fund firm Centurion Investment Partners, which Poliacof joined as a portfolio manager and the co-head of trading.
The following year, a phone call with the CEO of Novus Partners, a fintech firm offering a portfolio analytics platform, changed his life dramatically. Soon after, he joined Novus as a managing director.
“A career switch was terrifying – I was going into fintech when I was 42 years old and had been doing the same thing for a very long time, and my new role involved business development, building up the sales team, product development and consulting with clients, all of which I had never done before,” Poliacof said. “I took a bit of a pay cut, and the next four years of my life were basically entrepreneurial school, learning everything I could about the pain points managers face, using tech, building best-of-breed sales and relationship-management practices and learning about the mistakes you want to avoid.
“Make sure to learn from your mistakes and course-correct as quickly as you can,” he says.
From there, Poliacof joined the C-suite of ONEaccess.io, which was subsequently acquired by Visible Alpha. He doesn’t regret his move into fintech by any means, but traders and other financial services professionals should know that it’s no cake walk.
“It’s easy to get enamored by fintech, but you have to figure out what you’re really passionate about – I work more today at 47 years old than I have done in my entire life, so there are tradeoffs, like less vacation,” Poliacof said. “You have to find your areas of strength and ask yourself, will your skills directly translate into the fintech world?
"How will you leverage your core competencies that will put you on a trajectory of growth?” he says. “Just because you were a senior position at a bank or hedge fund doesn’t mean you will be in a senior role after you make the leap, and just because you have had success previously, it doesn’t come automatically, you really have to work at it.”
The first step when making a dramatic career change is realizing that you have a lot to learn.
“My greatest fear was becoming a relic – the disaster in 2009 has followed me forever, and I channel that experience to this day,” Poliacof says. “For those who haven’t experienced failure before, it’s important that you learn, grow and continue to forge ahead.
“Be ambitious, be bold, try things and don’t be afraid to experiment,” he says. “You have some successes and failures, but the key is to get on an upward trajectory and keep an agile mindset.
“I’m somebody who changed careers midway through my life, later than most, but I finally found something I’m truly passionate about.”
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