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July 29, 2020  

Ex-RBC Trader Aims for Fund Launch

The former head of RBC’s proprietary statistical-arbitrage trading desk is looking to launch his own fund in September.

Tebogo Phiri is aiming to begin trading with at least $50 million from a select group of investors via his New York firm, qPULA Trading Management. Its fund, qPULA Stratus Fund, will focus at least initially on U.S. equities, but it plans to expand its investments eventually to other countries and asset classes. Once the vehicle launches, Phiri intends to take the time to develop a track record before marketing more broadly.

Phiri had a contentious exit from RBC in 2016. That year, he filed an arbitration claim and a related lawsuit in New York, alleging the bank failed to live up to an agreement he claimed would allow him to take his track record and intellectual property — the data and trading code he used there — if he were to leave the bank under a certain condition.

The suit revolved around RBC’s decision to move its statistical-arbitrage business to the Bahamas in 2015. Phiri said in his suit the move was made to circumvent Volcker Rule restrictions on banks’ proprietary-trading operations within the U.S. Phiri claimed he was skeptical of the plan and agreed to go to the Bahamas only if the bank agreed to cede the track record and the intellectual property should it shutter the operation. RBC did just that in mid-2016, Phiri said.

The lawsuit and a counter-suit by RBC both were settled. The outcome of the arbitration case is unknown.

In speaking to investors about his new fund, Phiri is showcasing his RBC track record. That he’s doing so suggests he had at least a partial win in the legal fight.

Phiri aims to launch with a staff of four, all of whom previously worked at RBC. They include trader Joseph Giammarella, who worked as a stat-arb trader at RBC and at Bank of Montreal, and analyst Mitulkumar Patel, who also spent time at Estee Capital and quantitative proprietary-trading firm TransMarket Group. Both men signed up to work with Phiri in 2018.