Working for a hedge fund is the ultimate aim for a lot of traders working in investment banking. If you made it into a Wall Street buy-side firm would you quit to start your own business in China? This is exactly what Chen Xi did. He now runs personal styling business called Champzee in Hangzhou - a tourism city along the Southeast Coast.
How did you manage to find a job with a hedge fund and what were you trading on Wall Street?
I was a bit lucky in job-hunting. It was in 2010, when the financial crisis was still quite severe. But the upside was that once you get an offer, a working visa became quite easy to obtain. My employer was a small British hedge fund, which wasn't very well-known on Wall Street. I happened to see their job ads on campus and had a try. Then I got the job.
I worked as a trader there, focusing mainly on equities, options and some derivatives.
How many staff were there at the hedge fund? Were you the only Chinese?
It was a pretty small fund, with just over ten people, but we managed about $2bn assets. I was the only Chinese there, the rest are all white Caucasian people. About a third were Americans, the rest were from Australia, UK, Ireland, South Africa....
It sounds very international, but did you have any cultural clashes with them?
Definitely! But before clash, there were the cultural barriers. When we had casual chats over lunch, and when I wanted to say something, I would frequently struggle with words and expressions. For example, there was one time when I tried to tell my colleagues the story about China's great explorer Zheng He, but failed half way through because there were lots of words which I didn't know how to say in English.
As for clashes, some of it has to do with histories. As you know, the history lessons I had in China were quite different from the Western ones, so my perceptions on some historical events are different from that of my colleagues. That's where you find clashes.
Would this type of barriers and clashes prevent you from making real friends with Westerners?
Not necessarily. I still think Chinese and Westerners can become real friends. Being Chinese shouldn't stand in the way. But if you think of your Chinese identity too much, it might prevent you from making some adjustments, because you would start to calculate whether it's worth giving up some of your previous behaviour patterns and adapting to a new environment. I would say, it's possible for all of us to get adapted to the Western pattern, but not everyone is willing to give up his or her previous social habits.
It certainly helps if you go abroad when you were still very young. I've seen Chinese people who went to US while still in junior school. After about 10 or 15 years, they just look very American in every way.
Is this clash the reason why you left Wall Street and return to China?
No, the main reason is I was a bit fed up and didn't want to work in finance anymore. It was at the end of last year, when I was talking to my friends about what to do after leaving the hedge fund. I then decided to work on this "Champzee" idea. I handed in my resignation in December, stayed on for two months for the notice period, spent the Spring Festival in New York with my family, before heading back to China in April.
I understand "Champzee" is a personal stylist business. But what exactly do you do?
Simply speaking, we help people dress up, especially in the area of smart casual dresses. Firstly it's because the customer base is large. Everyone needs smart casual. Secondly it's an area people easily get confused and lost, especially for men. They don't want to spend a lot of time on buying clothes. They are not interested either. So they are more likely to seek external help and advice. We help them choose what to wear and deliver the clothes to them.
So most of your clients are men?
It is the first product line where we started. Initially we were targeting young professionals who are financially viable but are too busy to do the shopping. They are perfect clients for us. Later on, we found out that some young teenagers could also be our clients because their parents are willing to spend money on them. Potentially these kids could become our clients too.
And our clients are not confined to bankers, because bankers need to wear suits for most of their times, and suits are not our key products.
Starting a business requires capital. How did you get your initial capital?
I've got some personal savings after a few years at the hedge fund, which is enough for me to live on. My parents also gave me some financial support, so that I can have a better financial position.
You have left financial industry now. Can you make a few comments on this trade?
I still have personal sentiments towards trading, and I'd suggest everyone have a try if they are given a chance. This is such an interesting profession.
As a start, trading is a relatively fair game, just like sports. You go into the game with almost the same amount of information as others. Those who can make best use of the information win. This is simply to see who is smarter. And because everyone has millions of dollars at stake, no one will easily give up. It's a very exciting but fair game.
What's more, in trading, all your opponents are human beings. You rival against other traders, not the economic cycle or an industry. You try to figure out what your opponents think with the available information and calculate what their next step might be. Again, it's very much like a video game. In this process, you may need to take advantage of some loopholes in the rules. This is perfectly legal, but not everyone can spot it. You get it, you make the money. This is so interesting.
Also, it does help you make a lot of money at the early years of your career. It's a good way to accumulate personal wealth.
Why did you quit if trading is so interesting?
It was interesting just at the start. To me it won't stay interesting if I keep doing it for decades. I won't be able to have a sense of achievement if I carry on doing it until I'm 40. Of course there are people who find it always exciting, especially when they are able to rival a huge economic entity singlehandedly. But I don't feel it exciting enough, because it doesn't really create anything.
Are there any downsides about this?
Yes, there are. The first downside is, as far as I'm concerned, the financial professionals are quite mean. New York as a city is a lot meaner than other US cities. It seems to me people in this circle are eager to show off, to show they are different by talking about extravagant stuff. I don't like it.
The second downside is, the longer you work in this sector, the narrower your friends circle become. You end up with more and more friends from finance, and this is boring. That's why in New York I didn't want to hang out with my working friends in the weekends. Rather, I preferred to spend the weekends with my high school mates, because many of them didn't work in finance. I felt more like friends with them, and we certainly wouldn't talk about work.
So would you advise today's students to go into hedge fund upon graduation?
I understand your point. I wouldn't advise against going into finance, but I would advise against taking the first job in hedge fund, unless you are a PhD in maths or engineering. It's because the requirements of hedge funds are much higher than a normal graduate can meet. My case is a bit unique because I was lucky enough to have a very kind boss who was very willing to teach me, but this wouldn't happen at every firm.
But if you really want to go into hedge fund, I'd suggest you think it carefully which type of hedge funds you want to join. For example, there are many hedge funds focusing on high frequency trading or algorithm trading. If this is what you want, then you have to make sure you are very good at IT, computer science, statistics or maths. You don't even to worry about finance too much. It won't be difficult for you to grasp it if you are good at maths or computer.
Generally speaking, maths and science skills are crucial, as well as economics because it helps you to understand the global economy. You can afford to put finance on a lower priority.