The importance of investing with military precision

A former Captain in the Canadian Armed Forces, Brian D'Costa tells WP the secrets to his investment industry success

The importance of investing with military precision

Brian D'Costa was a Captain in the Canadian Armed Forces in the 1980s when he realized it was time to plan his next move. The military was about to downsize and D'Costa decided that spending his entire career in the army wasn’t feasible. “So, I did what anyone who wants a career change does,” says D'Costa, who is now a founding partner and president of Algonquin Capital. “I did an MBA.”

While doing his MBA at the University of Western Ontario’s Richard Ivey School of Business, D'Costa struggled to make any solid decisions on his future. He was interested in many fields, but nothing specific appealed. It was at that point that Citibank asked him to come in for an interview and subsequently offer him a job. “I was fascinated when I walked onto the trading floor for the first time,” D’Costa says. “I was fortunate that my first job was on the trading desk, because that experience hooked me on the markets and trading. From that point on, I spent the next 20 years trading.”

D’Costa moved from Citibank to TD Securities where he became the Global Head of Vanilla Interest Rate Derivatives, managing trading teams in Toronto, London, Tokyo and Sydney. After 11 years at TD, D’Costa joined CIBC and became the Global Head of Fixed Income and Rates, where he was responsible for the bank’s entire bond and rate trading business, overseeing 40 traders globally. It was a rapid rise up the ranks but the changing regulatory environment was hitting the banks hard and they were forced to change how they conducted their fixed income business. “I saw an opportunity for creating an alternative fund, which had been an interest of mine for several years,” D’Costa says. “A combination of those regulatory changes and me wanting to fulfil my own personal goals led me to leave the bank and create Algonquin Capital.”

D’Costa and his partners incorporated Algonquin Capital in June 2014 and launched the fund in February 2015. They launched with with $3.35 million (the majority of which was their own and some of their friends’ money) and are now managing just under $160 million. D’Costa believes that one of the biggest advantages he and his partners had was their naivety: they had no idea how difficult it would be to start a fund.

 “The experience is marked with highs and lows in terms of emotion, it’s been an exhilarating experience” he says. "We had to learn how to do marketing and sales and that has been really fun, but we were surprised by the amount of compliance and operations work required to build a fund - that is not always as fun!” 

Although way back the past now, D’Costa attributes much of the success he’s achieved in the industry to the military training he received early in his career. “In the armed forces a lot of the training centres around making decisions with imperfect information,” he says. “Trading is very much like that – you have to decide whether you’re buying or selling very quickly without all of the information that you’d like to have. Being able to make decisions in all kinds of environments has really helped me to be successful.”

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