Richard Schimel joined Citadel this year as the head of its newest equities business, Aptigon Capital. We sat down with him to talk about how serial entrepreneurship is unique and how markets have changed the ways to start a business.
When I was about seven years old, my father, who was a stock broker, would take me to his office. I remember it so vividly. Back then, trading wasn’t computerized. My dad and his team would write their orders onto tickets and put them in these metal tracks that would quickly take them down to the back office for trading. Those tracks ran everywhere and I can still hear the sound of them clacking across the tables and walls. My dad also showed me the stock ticker with prices changing by the second. Every one of those slips of paper meant the world was changing in some way, and even more important was seeing that change isn’t a moment, it’s continuous. That hit me on a visceral level.
Well, every experience is an ingredient that gets added to the mix, and there are a few beyond what my dad taught me that were important. By the time I was in high school, I knew I wanted to work in finance, but it was playing lacrosse that taught me the thrill of competition and the value of camaraderie. In my early jobs, I saw how teamwork could take a good performer much further. So it was really out of a desire to win — and to win in a collaborative certain way — that brought me to found my first business.
When you start out, you may know how to work in a business, but not a lot about running a business. You spend the first few years making mistakes and the next few years fixing them. I’ll give you an example. When you’re a start-up, everyone tends to be hands-on and the temptation is to have every person be a generalist. It’s part of the excitement and the thrill of learning new things. I saw that again in other ventures as well. One of the most valuable things I’ve learned is that it’s better to have a larger number of specialists doing specialized work from the start because they not only make fewer mistakes, they also actually help you scale faster and ultimately perform much better.
The first time you’re an entrepreneur, everything’s new; everything’s idiosyncratic because you’ve never done it before. Being a serial entrepreneur means that you see patterns, so you can predict what’s likely to happen, avoid risks, seize opportunities. That’s also how you grow as an analyst and ultimately a portfolio manager.
A major bonus is that you can take those patterns, those lessons, and share them with the junior members of your team. That way they’re three, four, even five steps ahead of where they’d normally be in a typical career arc.
I’m a fundamentals guy. I like to survey a sector, spot an opportunity, and seize it. But the markets have changed a lot in the past few years. Markets are more crowded; movements can be more exaggerated. Nearly every business you’re following, no matter its size, is affected by global macro factors. So the ability to filter that out in order to make a trade based on the fundamentals is now a determinative factor in trading success. The tools and quantitative teams at Citadel let you filter out that noise, truly trade based on the fundamentals, and ultimately generate more real alpha through your ideas. Every entrepreneur is building on a platform of some kind. I wanted to build on Citadel’s.
When I started out, I could see that a culture was shaped not just by the people, but by the way they interacted, and even the floor plan they work in. Having done this now three times, I’m taking everything that’s been learned to create a business that allows the industry’s best talent to work in the most optimized way. That’s why we called it “Aptigon.”
People often say ‘be open to learning new things’, but even more important is ‘be open to new ways of learning things’. I’ll give you an example. I’ve been doing this for 26 years, and some of the best things I learn are from new graduates. It’s not that someone who’s new to the business will know the history of a certain stock better. It’s that they’ll ask questions from a different starting point or evaluate a situation in a different way, or see factors converging that I wouldn’t. That’s invaluable and it’s one of the reasons why mentorship is an investment that always pays off.