UNC Kenan-Flagler Business School

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UNC Kenan-Flagler Business School

UNC KENAN-FLAGLER NEWS


Alum steers independent brokerage firm to success

7/7/2010

As an equity sales trader and manager at Instinet Corporation in New York, Joseph Saluzzi (MBA ’93) was familiar with market risk. That may have made it easier to take a big personal risk — starting his own company.

In 2002, Saluzzi and Sal Arnuk founded Themis Trading LLC, where they trade stocks for institutional clients, from small hedge funds worth $50 million to multibillion-dollar mutual funds.

“We knew the markets well and knew how the game works,” Saluzzi says. “It’s a trade-off, independence for the security of a big corporation. Pick one.” Saluzzi has enjoyed his pick. “With your own business, you know that what you do affects your bottom line,” he says. “We like to control our own destiny. I love going on TV and saying what I want to say.”

Saluzzi says what he wants to say in various forums, including articles and commentary for such publications as the Wall Street Journal, New York Times and Financial Times and appearances on CNBC, Bloomberg Television and Fox Business News.

Media exposure is one way Saluzzi personalizes his business in an industry increasingly reliant on technology. “There are so many machines out there. For us to sell our services, we tell clients that we’re still here. We can talk to them on the phone. If you can add value, there’s business to be had,” Saluzzi says.

He also uses the social networking tools of blogs and Twitter to share information with industry analysts and others. “It’s one of the best ways to get information out into the market quickly,” he says.

One challenge at Themis, an independent brokerage firm in Chatham, N.J., is keeping up with changing regulations and technology. Saluzzi trades only electronically but opposes high-frequency trading, in which machines trade stocks based on a formula related to volume.

“We’ll use technology, but we are in control,” he says. “It’s the human element that adds value.”

After working as an analyst at Morgan Stanley, Saluzzi added value to his career with his MBA, which led to the job at Instinet. As co-owner of his own company, Saluzzi talks freely about high-frequency trading.

“We’re not tied to a big firm where there’s all kinds of conflict of interest,” he says. “A lot of the volume you see is machines trading with each other just to scalp a penny,” he says. “The equity market needs reform. We want a fair and transparent market with more oversight.”

The economy has affected financial services firms. “Last year was pretty much a disaster for everyone. But this year we’ve seen a change,” he says. “As a small business, you have to manage your costs, and you can probably survive a business downturn.”

Being flexible helps. “If you’re nimble and you can change, there’s a spot for you,” Saluzzi says. Finding the right spot is important. One of Saluzzi’s biggest returns on his investment in opening his own company was more family time. He traded a whirlwind schedule and two-hour round-trip commute for a five-minute commute and the role of baseball coach for his sons’ teams. “My quality of life improved dramatically,” he says.