Features
Ryan Tolkin (Duke) is just 30 years old: a fairly tender age in the world of finance. Yet he’s climbed the heights of his industry at impressive speed.
Since 2013, Tolkin has been the chief investment officer (CIO) of Schonfeld Group Holdings and Schonfeld Strategic Advisors, both founded by financier Steven Schonfeld. Schonfeld Group Holdings, founded in 1988, is what is known as a family office, which means it is responsible for managing the personal assets of Schonfeld and his family. The latter firm, Schonfeld Strategic Advisors, manages the assets of Schonfeld Group Holdings as well as those of high net worth individuals and other institutional investors, including pension plans and other family offices.
Under Tolkin, the two firms take a multi-portfolio approach to financial management: some 50 teams manage a portfolio of stocks on behalf of their investors. Each of the teams' portfolio managers has free rein to make trades based on their own market predictions. Schonfeld is focused on long-term returns, in contrast to other, more immediate-minded investors. “We don't necessarily have a benchmark that we're shooting for, but the idea is to produce as high as possible a return with minimal volatility,” Tolkin says.
Ryan Tolkin
Schonfeld's firms have benefited from a few industry trends that have shifted favor away from traditional hedge funds. Although the markets have recovered from the financial crisis, hedge funds, overall, haven’t posted the same returns that they did pre-recession. As a result, family offices have become an increasingly desirable destination for ambitious, up-and-coming traders. Some hedge funds have even converted to family offices, including the firm of prominent investor and political donor George Soros. According to Bloomberg, Schonfeld Group Holdings has led the way among family offices in devising a more sophisticated approach to managing investments. Now other investors are benefitting from that approach: Schonfeld Strategic Advisors was established in 2015 in order to take in outside capital, apart from Steven Schonfeld's family assets.
Tolkin is among the cohort of rising stars on Wall Street that Schonfeld has snapped up. After graduating from Duke in 2008 with a degree in economics, he went to work at Goldman Sachs. There, he worked for five years managing trades in energy and real estate investment trusts, with a focus on corporate debt and derivatives. In 2013, Tolkin joined Schonfeld Group Holdings as CIO, leading the firm’s overall investment strategy. He then assumed the same role at Schonfeld Strategic Advisors upon its founding.
The biggest challenge of his job, Tolkin says, isn’t necessarily figuring out where to allocate funds or how to keep up with the technological shifts in his industry. Instead, it’s managing Schonfeld's 50-odd investment teams. Together, Schonfeld Group Holdings and Schonfeld Strategic Advisors have more than 300 employees, including traders, analysts, recruiters, technologists, and operations managers. While the firms are innovation-focused, constantly looking for ways in which they can improve operations through technology, even the best technology won’t be able to replicate the competencies required for effective management, Tolkin says. “There's never a dull moment here in that when you have 300-plus people associated with an organization, there is always something going on and something to deal with,” he says.
To meet that challenge, Tolkin seeks to reward his employees twofold. Employees on the investment side of the business, including traders, researchers, and senior technologists, have the opportunity to invest their own money into the firm's portfolios. Their compensation is also tied to Schonfeld's financial performance. In other words, if the portfolios produce solid returns, the employees get to share in the spoils. “The more that I can properly align the way in which people are compensated with their job function and with the success of the firm, the better the work product will be over the long run,” Tolkin says.
“The people who build their careers in the best way are the ones that recognize when change is happening and do what they can to broaden their skill sets so that they can change with the business.”
Even more important, according to Tolkin, is giving employees greater responsibilities, opportunities, and challenges at earlier points in their careers. Having effective communication skills is critical to the job, he says, and it’s one of the traits he looks for in potential employees. And he’s well aware that for his own well-being, he can’t be responsible for every single decision that’s related in some way to investment. Developing trust in others to make those decisions takes time, though. That’s why Tolkin delegates decision-making early and often, he says.
Tolkin is keen on developing young talent, no doubt, in part because of his own age. But, he says, it’s also a smart approach for maintaining work-life balance, a key priority for a practical newlywed such as Tolkin, who got married in 2015. He’s a stickler for order in his workplace: not just the physical office, but wherever he may have to pick up a work responsibility—which these days can be anywhere. It helps, he says, that he has a “fantastic assistant,” but he puts in personal legwork toward organization. He keeps regular task lists, maintains a clean email inbox, responds to messages quickly, and lets others know of his schedule priorities. Doing so allows him greater flexibility, Tolkin says. “When you're out of the office, you can be more responsive to things if you know what needs to be responded to today, what can wait until tomorrow, and what you have till next week,” he says.
Though making it easier to achieve work-life balance is a perk of Tolkin’s emphasis on delegation, it’s not his sole motivation. He encourages employees both young and old to speak up in meetings—sometimes, he even mandates it—and he doesn’t favor a dictatorial management style in the least. Instead, he and his employees “make decisions by building consensus around perspectives,” he says. Having a group of sharp, young employees willing to step up to big responsibilities, according to Tolkin, bodes well for the success and longevity of Schonfeld's business. “The more experience they have making tougher decisions at an earlier point in their career, the more I will get out of them over the long run,” he says.
Given his interest in developing young talent, it’s unsurprising that Tolkin also has plenty of advice for those seeking out a career in finance. Keeping up with trends, he says, is especially important in such a fast-moving industry. Many of Schonfeld's new recruits, for instance, are quantitative traders with specialized skills in computer science and engineering. The industry is continuing to move toward a greater emphasis on technology, Tolkin says, so new entrants into the industry need to respond accordingly. “I see too many people that are stuck doing things the way in which things were done five, ten years ago,” he says. “The people who build their careers in the best way are the ones that recognize when change is happening and do what they can to broaden their skill sets so that they can change with the business.”
Another piece of advice from Tolkin: find good mentors, both within and outside of one’s industry. His experience in the Gamma chapter of Sigma Nu at Duke helped him immensely in this regard, he says. Tolkin joined Goldman Sachs just months before the Great Recession—certainly a challenging environment to deal with for anyone just entering the workforce. But having fellow Sigma Nu brothers within the same company, he says, helped him tremendously. “Having some of those people in those seats certainly allowed for me to navigate what was a rather difficult environment,” he says.
As a result, Tolkin has continually sought to open up similar experiences to those he knows. In college, he encouraged his two younger brothers, who also attended Duke, to join Sigma Nu. At one point, all three of them were members of the Gamma chapter at the same time. They’ve since joined their brother in the world of business: one in development and strategy at their father’s travel company, the other at Harvard Business School after a period of working in finance.
“Many of the things we learned, certainly, from being college students and being part of a special brotherhood have allowed us each to build our own career paths and trajectories,” Tolkin says. “So it’s been fun.”