Susan Estes, formerly a managing director at Morgan Stanley, Deutsche Bank and Countrywide Securities Corp. got her start in the industry as a runner at the New York Board of Trade, a commodity futures exchange. Now the co-founder, president and CEO of OpenDoor Trading, a Jersey City, New Jersey-based fintech startup operating an electronic bond-trading platform, Estes recounts working her way up from sales to trading and eventually senior management at big banks in a male-dominated environment.
“My first jobs were in sales back in the early ’80s, when women were unheard of in fixed income and female traders were nonexistent,” Estes says. “I was clear about what my career aspirations were, though: I wanted to trade, because, as a woman, it’s black and white – no one can argue with the bottom line.
“Your numbers are published and everyone knows where you are,” she said. “I loved sales, but there’s a lot more grey area associated with it.”
Over a decade and a half at Morgan Stanley, Estes worked her way up from junior trader to managing director, running U.S. Treasury trading and eventually global bond trading, as well as the co-head of bond sales.
After leaving banking for a short stint as an entrepreneur in 2001, Estes joined Deutsche Bank as an MD and the head of fixed income, North America, then in 2003, made the move from New York to Los Angles and came on board Countrywide as an MD and the head of non-mortgage rates trading.
“Back then, the Treasury market was more volatile, moving 50 basis points at the time,” Estes said. “Countrywide was the largest mortgage originator [in the U.S.], and they hired me to build a domestic dealership, which was the first new dealer in more than 50 years.”
Soon after, Estes was invited to serve on the Treasury Borrowing Advisory Committee (TBAC), which meets quarterly with the Treasury Department to provide advice on funding requirements and separately with the Federal Reserve Board of Governors. She also became a board member at the Securities Industry and Financial Markets Association (SIFMA).
From banking to fintech
Around the time that Bank of America’s acquisition of Countrywide was announced, Estes broke off to start her own firm, Arch Pacific, followed by a two-year period working at MAP Alternative Asset Co., a hedge fund consulting firm specializing in risk management. She began to sow the seeds that would become OpenDoor Trading, which she launched with managing partner Brian Meehan, a veteran sales-trader previously with Banc of America Securities and Jefferies, in 2013.
“We’ve been in artificially pegged rates for quite some time, and I don’t think OpenDoor would be possible without the restraints placed on the market after the crisis,” Estes says. “The idea spread across the industry that liquidity is going away and they’re not going to be able to trade as profitably as they used to.
“I like puzzles – the way that I used to trade, I wasn’t a day trader – I liked to look for the large, macro trade, and OpenDoor the largest macro trade that I’ve ever put on, as it was originally self-funded,” she says. “It’s exciting – it’s something go from an idea on a piece of paper to now a team of 21 people working with the largest investment banks as dealer sponsors, the largest asset managers, sovereign wealth funds and central banks.”
OpenDoor hosts anonymous auctions of “off-the-run” U.S. Treasury bonds, which are issued before (and traded less frequently than) the most recent offering with the same maturity, and Treasury inflation-protected securities (TIPS).
Including the seed round in 2015 and two private investment rounds, including one that closed at the end of last month, OpenDoor has now raised $22m, part of which will go towards upgrading the platform, building an API and hiring. The firm has been adding people to market support, sales, relationship management and technology project management and plans to continue to do so.
Estes has been able to use her industry connections to bring people on board, including CTO Michael Sacks, the ex-COO of fixed income technology and global head of bond technology at Morgan Stanley and the former head of software production at MarketAxess, an e-trading platform for corporate bonds. She also brought on board Michael Paulus, most recently a J.P. Morgan MD who previously worked at HSBC, Citi, Bank of America and the Federal Reserve Bank of New York.
“We’re looking to have a global footprint, so we’re going to open a small office in London and considering different locations in Asia, as we want to move to an around-the-clock operating model,” Estes says.
Pick fintech over trading
Having worked at big Wall Street banks and in fintech, Estes says she’d recommend the latter for students considering (and professionals reconsidering) their career options.
“Today, fintech is a better option than trading at a big bank,” Estes says. “I was always on the sell side, and I rode the large balance sheets and banks’ ability to take a lot of risk, but those trading jobs have pretty much gone away today.
“People have gone or are going fully electronic, so the most interesting places to be are AI and big data, learning to use the data available out there to better forecast the market, would make for an incredibly fascinating career,” she says.
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