july/august 2013 institutionalinvestor.com

TheTECH50The leaders in financial
technology rely on
innovation and agility toanticipate market
needs and stay aheadof rivals.

Mastersof aVolatile
Universe

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Challenged by complexity and turbulence, theexecutives in the forefront of financial technology innovation —the Institutional Investor Tech 50 — show an uncanny
ability to come up with the right solution at the right time.

cover story

Gaurav Suri, Head of Information Technology and Software Development
D.E. Shaw Group

D.E. Shaw Group still bears the name of its founder, computer scientist David Shaw, who launched what began asa $28 million hedge fund in 1988 and left day-to-day management in 2002 to pursue computational biochemicalresearch. Now a $30 billion global investment firm, D.E. Shaw has always depended on homegrown, state-of-the-art
technology to fuel its highly sophisticated quantitative strategies and analytics. But this aspect of continuity in thefirm is anything but static. “Innovation has been the hallmark of our success,” explains Gaurav Suri, head of IT andsoftware development since 2011. “It comes from the grass roots and is not a top-down phenomenon.”To help keep
it going, Suri has instituted hackathons — not to break into systems but to encourage his 400 technologists, morethan one third of the firm’s 1,100 employees, to hatch new ideas that keep D.E. Shaw ahead of what competitors are
doing and vendors are selling. One weekend last summer 45 teams of three or four people spent 32 straight hours
brainstorming and coding, stoked by pizza and snacks. “We think this approach to innovation allows us to attract
talented people and keep them engaged,” says Suri, 42, who joined the company in 1996 from Bell Laboratories.

21
On April 2 the U.S. Securities andExchange Commission declaredthat corporations could use social
media like Facebook andTwitterto publish required financial
disclosures, in the same way
they use websites.Two days later
Bloomberg claimed an industry
first when it added liveTwitter
feeds to the proverbial fire hoseof information gushing into its
vaunted terminal network.
Hardly alone among the leaders in financial technology spotlighted in this year’s Institutional
Investor Tech 50, Bloomberg’sThomas Secunda seeks out
opportunities presented bymarketplace changes and prizes
agility in responding with innovative products. No development
has stirred the competitive juices
of financial technology strategists
over the past couple of years
more than social media, andBloomberg’sTwitter integration
was a home run, a masterstrokeof timeliness. It’s one reason
Secunda, Bloomberg’s global
head of financial products andservices, repeats this year as No. 1
on theTech 50 ranking.
But there is more to the story
than the SEC’s announcing
something on a Tuesday andBloomberg’s working some
programming magic by Thursday. Secunda, who oversees theBloomberg Professional service
as well as the company’s 3,000
technologists, says the Twittersystem was in the works for ayear. “We’re constantly building
our products,” he notes. “In thiscase the timing worked out especially well.”Lucky? Perhaps. But this win
also came about by design.Without its army of programmers andone of the financial world’s mostextensive and aggressive commitments to research and development, Bloomberg wouldn’thave been prepared for theTwitter opening, nor would it bethe pacesetter that it has shown
itself to be since its start in 1982,
when “you had to invent technology to survive,” as Secunda, aBloomberg co-founder, puts it.
The company “still writes andbuilds some of its own technology,” he adds.This year it looked
downright Google-like when it
launched a $75 million venture
capital fund to get in closer touchwith high-tech start-ups. In thatregard, however, Bloomberg
might be seen as a latecomer:
Citigroup, in the person of chief
innovation officer Deborah Hopkins (No. 14), has been on theground in SiliconValley making
strategic venture investments forfive years. ICAP (see MichaelSpencer, No. 16) introduced its
Euclid Opportunities incubation fund in 2011, resulting in
an investment in and business
relationship with OpenGamma(KirkWylie, No. 50).
Indeed, in a hotly competitive
industry that is buffeted by economic, regulatory and financial
market uncertainty and depends
on information technology tomaintain its dynamism andresilience, no organization has

a corner on intelligence, inventiveness and the ability to beboth lucky and good — and evento stumble.
In May, Bloomberg had toissue apologies when its news
reporters were found to be monitoring the comings and goingsof terminal users. Bloomberg’s
bad press gave a publicity boost
to Markit Group, led by CEOLance Uggla (No. 3), which
is developing an alternative
to Bloomberg’s popular chatfeature.The Markit project is
not new; it fits within a desktop
strategy that has been on Uggla’s
drawing board for years. And it
was not explicitly designed as
an attack on Bloomberg, which
would have the option of linking
to Markit’s chat network. Butthe script went in unplanneddirections, and the timing wasfortuitous. Meanwhile, Markit
has become a target of a European Union antitrust probe into
the derivatives business.
IntercontinentalExchange
CEO Jeffrey Sprecher (No. 2)
has engineered more than a few
acquisitions since the turn of thecentury, but two of his bolder bids
fell short: for the Chicago Boardof Trade in 2007 and for NYSE
Euronext (jointly with Nasdaq
OMX Group) in 2011. Last
December, Sprecher got the big
prize, landing NYSE Euronext ina deal now hurtling toward completion. “Postclose,” says Sprecher, “serving evolving customer
needs through technology will becore to our success.”

Years of effort in cloud computing are yielding tangible costbenefits for the likes of Goldman
Sachs Group (Steven Scopellite,No. 6) and State Street Corp.
(Christopher Perretta, No. 30).
With new regulations and risk
controls putting a premium on
collateral and the ability to moveit around, platforms built for that
purpose by Euroclear (LieveMostrey, No. 34) and Omgeo(Marianne Brown, No. 28) arenow coming into their own.
Capital One Financial Corp.
(Robert Alexander, No. 37)
runs R&D labs in three off-site
locations, and Fidelity Investments relies on its Center for
AppliedTechnology to prepare
for advances that will reach themarket in two to three years.
“The more you engage with thethings that are changing,” notes
Fidelity enterprise chief technology officer Stephen Neff (No. 5),“the more you realize what youdon’t know.”
TheTech 50 ranking was compiled by Institutional Investor editors and staff, with nominations
and input from industry participants and experts. Four primarysets of attributes were evaluated:achievements and contributions
over the course of a career; scopeand complexity of responsibilities;
influence and leadership insideand outside the organization; andpure technological innovation.
Of the 50 entries, 38 return fromlast year.The 2012 ranks arenoted, and the rest are designated“PNR” (previously not ranked).

Disclaimer: The attached document is provided for your information only and does not constitute investment advice or convey an offer to sell, or the solicitation of an offer to buy, any securities or other financial products. Furthermore, the D. E. Shaw group does not endorse any information, beliefs, and/or opinions
discussed in the document and makes no representation as to their accuracy or adequacy. Please note also the date of the document as the information containedin it has not been updated for any information that may have changed.
Past performance should not be considered indicative of future performance. No assurances can be given that any aims, assumptions, expectations, and/or goals
described in the document will be realized or that the activities described in the document did or will continue at all or in the same manner as they were conducted during the period covered by the document.
Please visit www.deshaw.com for current and additional information about the D.E. Shaw Group.
Reprinted from the July/August 2013 issue of Institutional Investor Magazine. Copyright 2013 by Institutional Investor Magazine. All rights reserved.
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