PhD Student testimonial

Suprita Vohra

Director, FX & Commodities Structuring Asia, Barclays, Singapore, Singaporean

Could you tell us about your background and what you are doing today?

By qualifications, I am an Engineer & finance MBA, from India. Most of my career so far has been in the financial industry, working at HSBC, Citi and now Barclays. Working across India and Singapore, I have had fruitful experiences in private banking, foreign exchange sales and now foreign exchange and commodity structuring.

Why did you decide that you needed to do a PhD at this stage of your career?

Continuous learning is always exciting, and several industry role models encourage that. After completing CFA a few years back, I was looking for that next challenge, something where I could focus on my areas of expertise. I was not looking for a PhD in particular, but then I read about the EDHEC doctoral programme in The Economist and two points stood out. One, it was rigorous but also allowed for doing the program without leaving my full-time job. Second, I could choose a preferred topic to deep dive into and contribute to from an applied perspective.

What has been your experience so far in the programme and has the programme met your expectations to date?

First, there was this hurdle about understanding the time commitment and whether I really had the basic foundation knowledge that is needed for the program.

Then there was the need to understand the financial commitment, and how to go about getting a financial grant. I must say that the program directors and their team members were extremely supportive throughout the process. They went well beyond the call of duty in order to help me put all the pieces in place. It took a lot of patience and shows a true commitment on their part, and I would not have been able to even start the program without all the help in these pre-course steps.

The objective of the course is to make you sit down and deep dive into what you do not know, so that you acquire the right tools to work on your thesis later on. The first year was tough in terms of time commitment that is required to pass the four core courses, but it needed to be that way. Personally, that pressure got results – it took me back to basics, and that was crucial since I did not have an academic financial engineering background, even though I work in an applied quantitative role. The first year also helped to learn some of the new concepts that were not main-stream when we were students. Now, we are in a different phase of our learning; a lot of what we learnt in the first year is very useful when we think of tools to build some desired models or analyse certain market factors.

There are obvious benefits to taking some time out and acquiring new knowledge – my general understanding has broadened, and it was exciting to identify new areas to grow as a professional. I found my conversations with clients and colleagues got deeper and more knowledgeable. A key benefit was acquiring the habit to read research papers. Before the program, research papers felt too arcane and academic. But during the course, we went through several different research papers (and even critiqued a few!), it started to feel less daunting and a lot more enriching. This was my “a-ha” moment! Now if I want to research a particular topic, instead of searching on Google, I would look for the related research papers that have been published. You get a lot more out of them than publicly available mass consumption literature.

Are there other ways in which the program has impacted your daily work?

Part of what I am doing is structuring efficient derivatives solutions for clients who have exposures across multiple currencies. What often underlies this is the assumption that the investor is rational and that markets are efficient. In reality, it is often less so. To bridge this gap, I got attracted to behavioural finance, which explains decisions that may appear as irrational from a theoretical perspective, but satisfies an important objective for the investor.

To me as a practitioner in the derivatives space, this gives me a lot of insights. I understood how different market participants can and should look at derivatives and what kind of roles these instruments play in their investment thinking, above and beyond just aiming at a target return and a target risk.

Overall the program provided me with a better understanding of the models that we are currently using. When I initially studied finance many of these models were not in place. Coming back to study gives me a perspective on why these models are being used but also on the research that is being done to improve these models and on the new directions taken in the options market. As we were discussing before the interview, an option price is not just a black-box price anymore: it is also about the kind of documentation and collateral agreement you have with your client, the kind of credit risk that you are taking, and so on. So there is a lot more that goes into a derivative pricing today than say seven years back. As a result there is a lot more research happening in this field and very fresh recent topics are emerging.

What is your experience of the class? What benefits do you see in the class dynamics if there are any?

My class is relatively small but no two individuals are alike. I come from a FX options background; some students have an asset management background, others are entrepreneurs or senior professionals in corporate and investment banking. It was great to put them all together in a room and see very different kinds of questions and very different perspectives come out in open discussions. The classroom is clearly international and culturally very diverse. It was great fun attending classes and growing the circle of friends.

What I also benefited from, and which I probably value the most, is the teaching methodology that the instructors used. This is what I share with others who ask for feedback on this program. The typical course is divided into two and a half days. Maybe one day is spent on brushing up on the theory and the models that you need to know in order to understand what will be seen in the remaining one day and a half. Then we discuss from an applied perspective the models that are being used, the problems that may exist with these models, the related research contributions, and open issues. These discussions draw out the students a lot more because they start talking about their own experience and asking questions based on this experience. From these discussions one can start forming ideas about potential research topics. So this pedagogical style offers the right mix of theory and applied work.

Can you tell us what you are working on?

My focus is on aspects of behavioural finance – the first paper looks at the role that options play in a portfolio from 3 points of view: regret risk, portfolio skewness, and lower tail dependence. Increasingly options are being recognised as a valuable addition to a portfolio- but to assess their utility it is important to go beyond the traditional returns/risk measures. The second paper is on a related but parallel realm of socially responsible investing. Again, this is beyond maximising returns, and more towards maximising investor satisfaction. These are currently the two areas of focus, and it has so far been an exciting world of discovery, learning and analytical adventures!

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