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Citadel's James Gildersleeve Builds A Winning Program

James Gildersleeve, head of global front office and risk technology, ensured that technology platforms bolstered resilience at Citadel during and after the financial crisis.

As many technology organizations grapple with the shift from IT as order-taker to business partner, rising star James Gildersleeve already operates from the next philosophical level.

"We don't have IT projects here," says Gildersleeve, the head of global front office and risk technology at Chicago-based Citadel LLC. "We only have business projects, where IT is just a means to an end."

Gildersleeve began leading this business-centric approach to Citadel when he joined the firm in 2004. Ultimately, his partnership philosophy would be tested during the financial crisis when the systems he and his team engineered would play a big role in the firm's resilience.

Yet according to Gildersleeve, it all began fairly modestly. "I was hired by Citadel to facilitate and build out our self-clearing and self-funding platform," he recalls. "It was fairly new territory for me."

That's an understatement for someone who studied economics as an undergrad and became involved with technology at his first post-college job at Pershing. Later, Gildersleeve moved on to Lehman Brothers, where his focus was equity sales and trading software modules.

Then came Citadel, which charged Gildersleeve with managing the IT build-out around creating "more systematic diversification and execution around clearing and financing flows," he says.

For this effort Gildersleeve's business experience proved golden. "It helped enable our team to leverage front-office technologies as a means for solving what were more typical middle- and back-office problems," he says. This meant harnessing Citadel's algorithmic and quantitative tools and applying them to funding and clearing workflows.

Weathering The Storm

According to Dan Dufresne, head of global treasury for Citadel, Gildersleeve's work proved invaluable during the downturn. The "platform provided a significant component of our operational strength," he says. "This has been critical to our ability to navigate market dislocations."

Indeed, after a 55% loss in 2008, Citadel's two flagship funds -- Kensington and Wellington -- posted a 62% gain in 2009, cleared their high-water marks in 2011 and achieved a 25% gain in 2012. By contrast, the average hedge fund posted just over a 6% gain last year.

As if that weren't enough, Gildersleeve also worked on creating an integrated research, portfolio construction and trading software suite flexible enough to extend across the firm's fundamental investing teams. Not bad for a guy whose 40th birthday is still a couple years off.

He's also leading efforts to improve fundamental trading systems to put more visual tools in the hands of the traders. "We're working on coupling systematic routines with real-time measurement of algo performance," Gildersleeve says. "We want to go beyond a traditional trading blotter to show more analytics in what's happening with the flows."

Beyond technology, Gildersleeve's management style has also contributed to creating the IT-infused business Citadel is today. It starts with how he structures his 100-person team. "Within my overall team is a series of smaller teams," he says. "This includes horizontal teams across the different investment cycle disciplines serving various business lines. All are expected to intimately know the products, the role players and the flows across the integrated stack."

Regardless of the project, Gildersleeve keeps his teams laser-focused on engineering each system to span Citadel's business lines. "We make sure the software we build is asset-agnostic, broker-agnostic and region-agnostic in order to truly leverage it across the franchise," he says.

Anne Rawland Gabriel is a technology writer and marketing communications consultant based in the Minneapolis/St. Paul metro area. Among other projects, she's a regular contributor to UBM Tech's Bank Systems & Technology, Insurance & Technology and Wall Street & Technology ... View Full Bio

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