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Q&A: Will Andrews CEO, Campbell and Company IN CONVERSATION WITH HAMLIN LOVELL


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HFJ’s visited Campbell’s new offices in midtown New York and talked to its Chief Executive Officer, Will Andrews,


to hear about the veteran CTA manager’s growing ambitions. Having been with Campbell for 18 years, during which time he has held roles including Co-Director of Research, and Chief Operating Officer, Andrews has a broad perspective on Campbell.


Hamlin Lovell: So why did you decide to open an office in New York and what functions does it carry out?


Will Andrews: Baltimore is still home – that is where we have the main facility, but we always strive to be more accessible and transparent to our client base, and to our business partners. The reality of it is that if you are coming to New York for three or four days, getting down to Baltimore – while it is only a two hour train ride – is essentially a full day out. So having an office here is a convenient way for people to be able to visit us.


Via video conference we can also make our staff in Baltimore available to visitors to our New York office.


The office will be home to our institutional distribution team. We have three people there now, including Richard Johnson, our Global Head of Institutional Sales, and have plans for a couple of additional roles related to distribution and investor relations.


Being in New York has also helped us with our recruiting efforts. When you are looking for roles in New York, your universe is vast. As soon as you say you have to move down to Baltimore it narrows pretty dramatically. While we do like the diversity of being in Baltimore we also want to be realistic about where we need to be located to continue to attract top talent.


HL: You have made at least two high profile hires in the last year. In 2014 you hired Katy Kaminski – a renowned academic author, speaker, fund manager – how is she driving the business forward?


WA: Katy has increased the visibility of Campbell because of the nature of her experience, as well as her focus on educating people about managed futures at large. We were very lucky to be able to find her and it worked out synergistically for her – Baltimore happens to be an easy plane ride to where her family is in Nashville and we were able to offer her an environment that she was going to be able to do well in. By leveraging her prior experience in education she has been able to elevate Campbell’s


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visibility from the get-go by working with our clients to help them educate their teams and committees on many concepts associated with investing in managed futures.


We plan for her to travel 40% of the time in that role of a being a resource for our clients and the industry- she has certainly got the quantitative skills as well as the experience to be able to communicate about managed futures – and she is also going to spend about 60% of her time in the research department, focused on portfolio research.


research directors are all very capable quants and very strong communicators, but the reality of it is, there was an enormous time demand on them from participation at conferences and addressing our clients’ needs. Having Katy come in with a dedicated focus on supporting those efforts on behalf of the research team, reduces the burden. We still want to get our team out and about and provide transparency for our clients, but Katy’s role has reduced that burden somewhat. They can be here and focused on improving the portfolio.


HL: And is Katy authoring the thought leadership papers or is that more a team effort?


“We are trading the most liquid exchange-traded markets in the world, added to which 80-90% of the assets are actually sitting in cash or cash equivalents.”


We bifurcate the portfolio role; there is the production portfolio, which is where our clients are currently invested, and we need to continually monitor and evolve that portfolio to make sure that is operating according to its investment objectives and the parameters we’ve set. Dr Grace Lo oversees the production portfolio and works daily with our full Investment Committee. Katy works closely with Grace on forward looking portfolio innovation. We were looking very specifically for that role to reduce some of the travel demand upon the rest of our portfolio management team. We have six people at Katy’s level who are all working under Chief Research Officer, Dr Xiaohua Hu. He has been here for more than 20 years and has been instrumental in building the team we have now. That team of


WA: As Katy prepared to formally join Campbell and was in the process of working out the logistics of moving her family overseas, she also worked on some white papers that were essentially a continuation of some of the themes in the book that she’d recently co-authored; Trend Following in Managed Futures. For those initial pieces where she didn’t yet have an opportunity to work with the full research team, she would be the primary author. Those pieces went through our normal peer review process with the research team but didn’t have as much collaboration during development as we’d normally have.


Since Katy’s now made the move and is in the office we’ve migrated back to our normal approach with a team effort throughout the white paper development and review process.


HL: One of her recent white papers has been quantifying CTA risk management, and how to identify four risk management factors: liquidity, correlation, volatility and capacity. How have these factors been manifested in the volatile sector in the course of 2015 when some CTAs have seen quite big drawdowns?


WA: The initial data set for the white paper ended around the end of the first quarter of this year, so I’m not sure if the white paper included any data from the second or third quarters. However we do believe the findings can be applied to those periods and have some ideas on how they would have manifested. In that vein, of those four factors the correlation factor is probably one that under- performed in the second and third quarter. In periods where there are low-trend signals, following a period of strong trends like we experienced last year into the first quarter of 2015, you may see short term strategies wanting to be long and short across different markets, but you still have strong correlation between some of those markets within the same asset class. This can lead to exaggerated positions, so I would suspect that anybody who had risk exposure to that particular factor probably


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