NYU Tandon Leads in Minting New Financial Engineering Professionals
MSFE Alumni Russell McManus and Dianne Ellis share how, in addition to the field’s complex practices and procedures, learning to be flexible set them up for success
When Russell McManus was an undergraduate in systems engineering at the University of Virginia and dropped his résumé into a box one career day, he had no idea that he would end up bearing witness to some of the most pivotal moments in the US economy’s recent history. Now chief technology officer at Chicago Trading Company, back in college, he says, “I didn’t know anything about finance.” Still, based on that résumé he ended up being hired to work as a software developer at JP Morgan, moving to New York in 1992 just before the launch of the World Wide Web and subsequent dot-com boom. “When I got to Wall Street,” he recalls, “I was struck by how much money there was and how much opportunity there was to apply technology. It was the beginning of electronic trading—an exciting time to be in that world.” While working at JP Morgan, he learned a little about options trading and financial mathematics, fields that piqued his interest enough that, after putting in a few years as a developer working on equities at Goldman Sachs, he enrolled in NYU Tandon’s master’s program in financial engineering (MSFE) in order to get the foundation and training he needed to work more directly with options.
Financial engineering—the application of mathematical and computational tools to finance as a way to price financial instruments—is often taught as a commercial trade, where students learn the specific practices and procedures of an admittedly complex field. But it also demands a certain degree of flexibility, McManus explains. As electronic trading becomes the way of the future, he observes, “everything becomes more and more automated and the rate of change keeps increasing.”
Financial engineering—the application of mathematical and computational tools to finance as a way to price financial instruments—is often taught as a commercial trade, where students learn the specific practices and procedures of an admittedly complex field. But it also demands a certain degree of flexibility, McManus explains. As electronic trading becomes the way of the future, he observes, “everything becomes more and more automated and the rate of change keeps increasing.” Financial institutions are forced to keep innovating, and it is the task of financial engineers to design the kinds of custom tools that will create new opportunities for profit and growth. This combination of responsiveness and creativity in the face of dynamic change, along with a firm grounding in the concepts and technologies that drive that very change is what defines NYU Tandon’s approach. Little wonder then that, this past summer, a SATPRnews report found that Tandon sends more grads to work in financial technology than any other school.
McManus knows a lot about innovation. Raised in New Jersey, he was always, he says, mechanically inclined, interested in hardware and software, engineering and programming, and relishing the hands-on, craft-like aspect of technology. “If I couldn’t get paid to play with computers I would do it anyway,” he says. These days, his self-described love of tinkering carries over into his free time as well, during which he pursues hobbies like fixing old cars and flying a Vans RV10 single-engine plane. At work, a similarly “obsessive” level of interest is what he looks for when hiring technologists for his team. “I ask them, ‘tell me about your home network,’” he reveals. “A lot of times the best technologists have very elaborate home networks; that’s the person you want to hire.”
“I really got the chance to help build a whole new business model. And I would never have gotten the opportunity without the training from NYU.”
McManus credits Tandon’s financial engineering program with giving him the opportunity to apply these skills to his career. In 1999, while McManus was still in school, a professor got him an interview at Morgan Stanley, where a brand-new way of trading called “options market making” was coming online. Over the next eight years, McManus built the technology and systems that made this new mode of trading possible. “It was a great opportunity to be there when this business was just starting up,” he recalls. “I really got the chance to help build a whole new business model. And I would never have gotten the opportunity without the training from NYU.”
Now, as Chicago Trading Company’s chief technology officer, a position he’s held since 2010, McManus works with a team of developers, programmers, and quantitative researchers as he continues to create new tools for traders to use. “We build a lot of custom hardware and software,” he notes. “I’m responsible for running all of those projects and making sure that all that stuff can be built.” But he’s the first to admit that the financial industry has altered dramatically since he got his start. “It’s changed massively,” he says. “So much that I don’t even know if I could be a developer anymore.”
This sort of rapid change was on the mind of Tandon 2014 alumna Dianne Ellis when she made the choice to return to school and pursue a master’s in financial engineering. After receiving her bachelor’s in economics from Chulalongkorn University in her native Thailand in 2010, she found work as an equity derivative sales trader at Phatra Securities in Bangkok. But, as is often the case in the world of finance, the ground was shifting beneath her. “I saw more and more clients using trade algorithms and started to see how automation was becoming more popular in Thailand,” she says. “I realized that my job was going to be replaced by a computer in a few years. I figured that I needed to adapt and pursue further study in something that involved technology, especially coding.” Now a research analyst at OppenheimerFunds in New York, Ellis found herself drawn to Tandon for the school’s flexible approach to financial engineering. Its curriculum allowed her to sample a variety of approaches and incorporated current trends through classes in special topics that changed year to year. “The diversity of the curriculum [permits] you to taste a little bit of everything and decide what you enjoy the most,” she says. “It allows you to find a career path for yourself.”
Although she enjoyed learning to code and believes that the skills she’s gained in that field will continue to serve her well, Ellis nonetheless finds that, as first a summer intern and now an employee at OppenheimerFunds, it is this flexibility that she ends up drawing on most. The firm’s global multi assets team, to which she is assigned as a research analyst, invests in a variety of financial instruments—bonds as well as equities—in the United States and overseas. “As an analyst, I’m focusing on the macro side,” she explains. “So my day to day, apart from staying on top of what’s going on in the global economy, usually involves backtesting strategies and building tools that will help us make investment and asset allocation decisions.” Despite her current role as what she calls a “price taker” rather than a “price maker,” she’s found that knowing the how and why of financial instrument pricing gives her an edge. “What I got from school was an understanding of how these different instruments are priced, how they’re made up, and the calculations behind them,” she says. “Really understanding them definitely helps when you’re on the side of making an investment. It gives you the option to choose. So financial engineering for me involves all of the context we learned—it’s not just pricing instruments, but things like coding, risk management, high frequency data, and big data.”
As an analyst, Ellis says that her ability to draw on a variety of technological and mathematical tools allows her to approach her work and the masses of data on which it draws much more nimbly. “Creativity in my job is not about coming up with new products,” she says. “It is more about using what I learned from coding or quantitative techniques and involving all of that in coming up with different ways to approach a problem. If you’re someone who does not have all these tools you might be able to see it only from one angle.”
“The diversity of the curriculum [at Tandon permits] you to taste a little bit of everything and decide what you enjoy the most.”
Problem solving seems to be something Ellis thrives on. Finding horseback riding and Thai boxing, both of which she pursued back home, harder to access in New York, she now spends her off-hours—when she’s not out sampling new restaurants—going bouldering, figuring out the best route to take up a sheer rock wall. But in life as in sport, things do change fast, and while she’s happy with where she is in her career, and especially with the variety to which she’s exposed through her position on OppenheimerFund’s global multi assets team, Ellis is determined to stay on her toes. “I just want to keep learning,” she says. “Maybe I’ll take more online classes or even go back to school to catch up with these new techniques like machine learning that weren’t available yet when I was at NYU.” Already, she notes, she’s starting to see new skill sets come into play in her work, just as she did in Thailand five years ago. “Things change so fast,” she muses. “You’ve got to keep learning and adapt.”
The fact that finance is a volatile and ever-moving field needn’t be a bad thing, of course: both Ellis and McManus seem to thrive on variety and change. In fact, one of the reasons McManus is so happy to have ended up in finance, and continues to be excited by it, he says, is the opportunity it has given him to participate in some of the most pivotal shifts of recent decades. “I was there for the internet bubble, working in technology at Goldman when Netscape and Yahoo went public,” he remembers. “I was at Morgan Stanley when the first electronic options exchange started trading. I was around for September 11th when the markets closed. I was working at Chicago Trading when there was a flash crash and the markets got unhinged for half a day. I’ve just seen a lot of those major events.” And, as he and Ellis have both found, a little flexibility and the willingness to innovate—combined with a firm knowledge of technology—can do wonders in helping one weather such storms.