MARKETS SPECTATOR: Tough at the top

Citigroup sits atop the Australian equities pile and English born, Wall Street-experienced, Tough Mudder enthusiast David Haldane is determined to see it remain there.

Last weekend Citigroup’s head of Australian equities David Haldane ran, crawled and climbed through mud, over and under obstacles that drew blood and electrocuted him. 'Tough Mudder' a 20km obstacle race, is perhaps a metaphor for Haldane and his colleagues at Citi.

Last year Citi knocked off UBS to surpass its Swiss rival for the first time in 11 years to become Australia’s number one equities broker, based on market share. On the 40th floor of Citigroup’s Sydney offices on a Friday afternoon, Haldane, who joined the firm in 2011, takes little credit for his firm’s predominance.

“It’s a result of the investments made before I joined,” says the 39 year-old Haldane, a six-foot five-inch (195cm) ex-rower who looks like he could be in his mid-20s.

“You have to lay the groundwork over a long period of time. There have been the right investments in technology. People realised the markets were going through an `electronification.’ Stephen Roberts, Citi’s country head, has hired very good investment bankers. Luke Randell, my predecessor, realised what products the market needed: a warrants and derivatives desks together with market making capacity that gives tighter prices for clients and off-lays risk.”

Haldane has a team of 55 people. It's hardly the biggest such equities group on the street (Haldane reckons it is the fifth or sixth biggest in Australia). But what Citi does well, Haldane opines, is that it has an excellent program trading desk and a team that helps move portfolio investments between funds at the least possible cost to clients. It spends a lot of money, which he won’t disclose, on execution technology.

“Gone are the days when one alpha male sales guy had the key relationships,” says Haldane. “The guys with the relationships know they have to help the electronic execution side of our business meet clients. If we don’t, someone else will.”

Citi’s rates, foreign exchange, fixed income and equities team sit on one floor in the firm’s Park Street offices. Haldane oversees derivatives, warrants, options market making, an electronic trading desk, equities sales and trading force. Compared to a previous job at JPMorgan, Haldane says Citi is "client focused". JPMorgan was "trading focused", he says.

Born in Cambridge, England to a RAF pilot father and a mother who was a schoolteacher, Haldane lived in Scotland for the first 10 years of his life. He moved to the very "twee" English town of Marlow where he began to row. Accepted into London’s Imperial College on the basis that he would continue the university’s proud rowing tradition, Haldane dropped out of rowing after a year, finding the seven-day week grind to become a world class rower too much for an engineering student.

He began work in the City of London as a derivatives trader for NatWest Markets. Later JPMorgan asked him to come to New York where he and his Australian born wife Laura lived in Darien, Connecticut. Haldane would arise at 4.40am to exercise before catching a train to get into JPMorgan’s New York offices on Park Avenue by 6.45am.

One Friday night his wife called. It was 10.45p.m. She asked him when he would be home.

“There’s this firm called Lehman and it has just collapsed,” Haldane told his wife. “I’m going to be here for at least another four hours.” Haldane would not only work through much of the night but spend all that weekend in the office. The grind wore on him. He found it increasingly difficult to have time for his family. Laura wanted to return to Australia.

Citi called and so the Haldanes packed their bags for the antipodes. He is enjoying Australia and now finds time for a 5am run, swim or weight lifting session most mornings and as well as more time to spend with his four children.

To remain number one Haldane says Citi must stay humble. “It’s a team effort that gets you to number one. You have to be constantly looking at ways to get better.”