Israel Englander Quotes
103 Israel Englander Quotes
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[In June 2010.] The fee should be commensurate with the fund strategy.
Israel Englander
[In June 2010.] It is not about initial investment, it is about maintenance of investment.
Israel Englander
[In May 2011.] Rules are being rewritten without being rewritten.
Israel Englander
[In November 2011.] If a manager has skin in the game, why would he create larger costs that are unnecessary.
Israel Englander
[In October 1992.] David A. Lipton's ‘A Market Structure Unprepared for a Crash’ (editorial page, Oct. 12) gives a distorted and unfortunate impression that the reforms implemented since October 1987 are inadequate. In fact, there is no degree of structural reform - short of abolishing the market altogether - that could prevent a sudden break if perceptions about the value of U.S. equities were to change sharply.
Israel Englander
[In October 1992.] There are two flaws in Prof. Lipton's focus on the New York Stock Exchange and its specialists' capitalization in advocating tougher crash-prevention standards. First, the Big Board today has only two-thirds of the trading volume in its listed stocks… Second, no level of required capital can change the fact that specialists cannot, and are not expected to, intercept an avalanche of sell orders so as to stop a market break.
Israel Englander
[In October 1992.] Nasdaq advertises that it is the market for the next 100 years, yet has far lower capital and trading obligations for its market-makers than the NYSE has for specialists.
Israel Englander
[In October 1992.] No level of required capital can change the fact that specialists cannot, and are not expected to, intercept an avalanche of sell orders so as to stop a market break. The specialist is expected to manage order flow and invest his own capital to preserve an orderly market for individual securities subjected to temporary supply-demand imbalances. The combined capital of all exchange specialists could not stop a crash.
Israel Englander
[In October 1992.] That capital levels are not the key determinant of liquidity is demonstrable: The performance of over-the-counter market-makers in the October 1987 crash was far worse than exchange specialists, despite the greater number and aggregate capital of over-the-counter market-makers compared with exchange specialists.
Israel Englander
[In October 1992.] The Securities and Exchange Commission is embarked on a new Market 2000 Study, which it is hoped will at last recognize that the fragmentation of exchange markets in recent years, encouraged by the SEC in the name of competition, has weakened the central auction mechanism that is the key to U.S. stock market liquidity and stability.
Israel Englander
[In the fall of 2003.] Don't pay attention to what you see in the press.
Israel Englander
[In September 2008 on asking to pull out $800 million of the $1 billion of assets it kept at Morgan Stanley.] Listen, we have to protect our assets. This is not a personal thing.
Israel Englander
[In November 2008 on hiring Michael Gelband to manage its global fixed income business who was formerly the Global Head of Capital Markets at Lehman Brothers.] Millennium is very fortunate to bring on board someone of Mike's talent, experience, and stature within the industry. His joining is a reflection of both our commitment to building a world class fixed income business as well as the opportunities we see around the globe going forward.
Israel Englander
[In December 2009.] I started in the business in 1970, just after I had finished graduating from college and went to work as a specialist clerk on the American Stock Exchange.
Israel Englander
[In December 2009.] A specialist role is basically a job system where people will make a market. The business is based on trading flow – very little to do with fundamentals and much more on a transactional basis.
Israel Englander
[In December 2009.] My immediate introduction to the business was something related to a transactional type business as opposed to a fundamental analysis hedge function.
Israel Englander
[In December 2009.] Soon after that someone offered me a job trading convertibles… We would typically hedge these portfolios, these transactions. And so when I put the two together in my initial start being highly transactional and then trading in converts and setting up hedges you can see that the mindset is something that’s of the hedge mentality rather than doing things that were outright. In other words taking outright risk.
Israel Englander
[In December 2009.] I was basically brought up in the world of non-correlated hedge trading. Non-correlated to the markets, the general markets. Always trying to find an edge and trying to make a good profit – a good risk adjusted profit.
Israel Englander
[In December 2009.] Alongside trading convertibles we also did some merger arbitrage which a lot of people would consider to be as well a non-market correlated hedge strategy.
Israel Englander
[In December 2009.] One of the ways the option market became standardized in New York in the 70’s with the advent of the Chicago Board of Options Exchange, so most arbitragers which was what we were called at the time and traded converts would naturally go and trade options as well.
Israel Englander
[In December 2009.] Especially if you were trading warrants, options were nothing really more than short-term warrants. So we were able to do short-term warrants and long-term warrants, converts and it all worked out that there was lots of arbitrage that could be done with these various instruments. Again without taking market risk or a gigantic amount of risk.
Israel Englander
[In December 2009.] A couple of years later in 1975/1976 the American Stock Exchange got options and instead of having to move up to Chicago, I decided to leave my job and get a seat at the New York Stock Exchange as a market maker and trade my own account.
Israel Englander
[In December 2009.] At which point someone suggested rather than get on a trading desk, is to do brokerage for proprietary trading desks such as the Salomons and Goldmans and Merrill Lynchs and some firms that are no longer in existence – Drexell Burnham… and what I would do is interface with these proprietary trading desks – give them ideas as to what spreads to do or they would tell me things that they would like to get executed and it turned out to be a very substantial business because at that time the options market was in it’s infancy, and as I like to tell people ‘In the land of the blind the one eyed person is king.’ It just produced a lot of business.
Israel Englander
[In December 2009.] At the same time, what I would do since the regulations didn’t allow for brokering and trading from your own account at the date on the same security, I would see market makers by giving them a pool of capital and they would trade in particular option crowds on the floor of the exchange and we would have a profit split – a profit arrangement with them. [On when this started.] I’d say that evolved in 1978-79-80. It went on pretty much until I left the floor.
Israel Englander
[In December 2009.] I made markets in stocks and I made markets in options and again that was more a natural extension of what I was doing.
Israel Englander
[In December 2009.] Ultimately I left the floor in 1985, and started Millennium in around 1989/1990. The model was effectively pretty much the same. The trajectory – the journey just kept on continuing. And that is we started with a very small amount of money, we started Millennium with about 30-35 million dollars, of which a big chunk of it was my own. I also had some friends and family and some investors who thought they wanted to chip in with me.
Israel Englander
[In December 2009.] At that time I started trading I was doing the Nikkei for those who don’t remember, was trading at 38,000/39,000 in the late 80’s and investment banks were issuing lots of puts and derivatives and puts and calls and options. There was a lot of hay that you could make. So I traded that book, also did some merger arbitrage as well and I did it the same way as I did on the floor, I would try to find managers who were specialists in various types of lets call it ‘arbitrage specialties. It might have been convertibles, it could have been option volatility trading or in the olden days statistical arbitrage called ‘pairs trading’, when you actually did one stock against another. You did Coke against Pepsi or you did Merck against Lilly, or you did Texaco against Mobil. Sometimes you had to have pretty fast figures, sometimes you had to use the telephone, but obviously the technology wasn’t as advanced as it was today.
Israel Englander
[In December 2009.] So it’s now effectively twenty years later, the model effectively is still the same and the only difference is that I’m not really sitting and actively trading on the desk, I’m more involved in the management of the business which has got substantially larger in size than it was twenty years ago.
Israel Englander
[In December 2009 on the secret to longevity in the hedge fund business.] I think the primary piece is the ability to deliver what you say you’re going to deliver. From there you need to control various pieces of the business, such as risk. Risk becomes very, very critical.
Israel Englander
[In December 2009 on how he planned his organization and teams when he started his hedge fund.] It wasn’t anything that I really planned when I started twenty years ago. So it really evolved over time. You get beat up along the way, but you figure out ways to continue and you make it better and better. And today I wouldn’t say we are perfect, but will continually try again to improve the process.
Israel Englander
[In December 2009.] Today we are a firm of about 900 people of which at least close to 400 are involved with infrastructure.
Israel Englander
[In December 2009.] We have a 25-30 person list team. Legal compliance is an essential part of the business and that has grown over the last few years. I have over 30 people in legal compliance. We are regulated to some extent, we are registered as a broker/dealer. So we have to comply with far more regulations than lots of other hedge funds that are really not registered in any way shape or form.
Israel Englander
[In December 2009.] We also have an extensive technology effort, there are about 140/150 people that are involved in technology. They make sure that our systems are as state of the art as they could be.
Israel Englander
[In December 2009.] We have an extensive back office and accounting of close to 80 or 90 people in that area. I just might add in addition to that we also have outside administration an outside administrator.
Israel Englander
[In December 2009.] Recently we’ve started doing multiple audits a year.
Israel Englander
[In December 2009.] Our risk department used to issue the risk transparency reports themselves, and we now have an independent risk organization that is now taking the data and issuing it on an independent basis. So everything has moved towards independence, and away from the manager, issuing the reports themselves.
Israel Englander
[In December 2009 on lots of people demanding managed accounts these days.] There are lots of considerations, one of which is the amount of transactions we do and the normal various types of instruments. So effectively in round numbers we do anywhere from a million and a half to 1.5-2 million trades a day. Now that can encompass file exchange trades. Encompass equity trades. Can encompass futures trading. Nevertheless it’s a tremendous amount of trading and adds up to a lot of infrastructure. It has to be developed before a managed account platform can be put into place. And there are also lots of regulatory issues that have to be addressed as well. In terms whether they are broker/dealers or leverage or things of that nature.
Israel Englander
[In December 2009 on whether Millennium can do managed accounts.] As you know… these days everything is possible. We can send some people into space. It’s just a question of how much resources you want to put to it. Do you want to double your back office? Do you want to double every single transaction? I think it’s all possible. It’s just a question of really how much sense does it make.
Israel Englander
[In December 2009.] Maybe there are other ways to get investors comfortable, maybe where they have the liquidity and the transparency and not necessarily have the need to have the custody. Every investor has a different need. And the idea is to try to adjust yourself to those needs and effectively meet their expectations.
Israel Englander
[In May 2010.] Hedge funds will never be ‘institutionalized’ like a Vanguard or a Fidelity.
Israel Englander
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