7 Feb 2013

A career in finance sounds a lot sexier than it really is, says Danny Yong, co-founder and chief investment officer of Dymon Asia Capital. It entails a lot of hard work. To do well, 99 per cent of the time its really just sweat. Thats the rule of the game. Danny would know a thing or two about finance. After all the Dymon Asia Macro Fund he manages was Asias top performing hedge fund in 2011, generating more than 20% returns on assets exceeding US$1 billion. Danny might be doing well now, but life hasnt always been this good. Growing up in a single-parent family after his father died from cancer, Danny has from an early age felt the need to prove to himself that he was no less able than others despite the adversity. From young, I always strived to be the best, be it in studies or sports. I didnt want to give people any excuse to look down on me, he says. This winners mentality saw Danny well through school. It also pushed him to excellence in sports, where he broke into the national badminton team at age 17. As he was still a student at Catholic Junior College, Danny had to juggle his training on top of his studies. Back then, I had to wake up at 5am to go running. After school, I would immediately hit the track in the afternoon for circuit training. I would then take a nap, eat a little, and train at the badminton courts from 7pm to 10pm. And I would do this six days a week. To save on the travelling time between home and the badminton courts, Danny would sleep over at the Singapore Badminton Association hall on some nights.

I wanted to save on the one hour it took to get home from the courts. I would do all my school work there, he recalls. Why such extremes, some might ask? Danny explains: I dont think sleeping at the courts was very extreme. I had school work to get done, and I had to train to stay on top of my chosen sport I just did what I had to do. To me, if you want to do something, you do it properly. Upon completing his A levels, Danny decided to quit the sport, choosing instead to focus on his studies. Yet even as university beckoned, he still did not really know what he wanted to do. I was good in chemistry, so I briefly thought of becoming a genetic engineer. But then I asked myself how many genetic engineers could I name? And how many of them were making a comfortable living? Given I didnt know any better, I scrapped the idea. I then looked at the finance industry. At the time, people working in banks seemed to be making a decent, stable living this was before the Asian Financial Crisis. It looked like a tried and tested career path towards financial success. So I decided to study business at NBS. Danny says: The three years at NBS were absolutely the best years. Staying in hall, there was total freedom and independence. We arranged our own timetables and, fortunately for me, Business had very few hours, just 14 a week which I could squeeze into two to three days. That meant a lot of free time for sports and fun. Danny played hard, but when exams approached, I would drop everything and study solidly for two months, he says. I managed to stay on top of my school work through term because I always listened and asked questions during class. Fortunately, I had lecturers who were willing to tolerate my many questions. The hard work paid off and Danny eventually graduated with first class honours, which helped open doors for him. The education I received at NBS was good, very well rounded. It was important as it gave me the interview opportunities that I needed. After a stint in financial engineering at DBS Bank, Danny began his career in financial trading in 1997 when he snagged a position at Wall Street giant JP Morgan as an Asian currency derivatives trader. He had beaten 1,000 applicants for the coveted job. But more remarkably, he managed this even after his application had been tossed into the Reject pile. As it turned out, an internship with the bank during his second year at NBS held the key. A trader he

barely knew during the attachment had come across his resume while thumbing through the stack of over 900 rejected applications, presumably on a quiet market day. Remarkably, he recognised Dannys picture, and put his resume back into the contenders pile. My jaw dropped when the trader told me the story, says Danny. Its incredible how one small action changes everything. Luck, as Danny readily admits, has played an important role in his career. From JP Morgan, Danny went on to join Goldman Sachs, where he was first posted to Hong Kong, and then Tokyo, as head of trading for South Asian derivatives, fixed income and foreign exchange. Danny made his first foray into hedge funds in 2005 when he joined Chicago-based Citadel, one of the worlds largest hedge funds, to set up its Asian currency, interest rate, and macro trading operations in Hong Kong. Two years later, he became chief investment officer and managing partner at Abax Global Capital, then a newly formed hedge fund adviser part-owned by Morgan Stanley. In August 2008, Danny hooked up with long-standing NBS buddy Keith Tan and founded Dymon Asia, with US$100 million seed funding from hedge fund legend Paul Tudor Jones, well known for predicting the 1987 Black Monday crash and trebling his money from it. One month later, investment bank Lehman Brothers went bust and so began the Global Financial Crisis. We were practically thrust into the eye of the storm. We didnt expect the Crisis to be that bad and lost money for the first two months. Back then, everyone thought I was very calm. In my mind, I knew that if I lose money, theres nothing else to do but to work harder to make it back. Thats my responsibility. Dymon Asias flagship macro fund has since gone from strength to strength. In 2011, it became the top performing large hedge fund in Asia, according to a Bloomberg poll, with assets of about US$3 billion. Even today, the head honcho of Dymon Asia still works hard, at times even sleeping over at the office just to stay on top of the markets. Maybe its from my badminton days, but I still keep a pillow in the office. Sometimes when the markets are very volatile, every minute matters Id rather stay in the office than spend time commuting between office and home.

Theres no denying it I have awkward sleeping habits. To trade global markets, you have to monitor them across different time zones. Thats why I end up sleeping in spurts or at funny hours. Danny adds that his wife, a former economist at JP Morgan, and his mother did not understand initially why he continues to work so hard, especially since the fund is now well established. This is what I love doing. Its what I enjoy. Look at the guys from the US, like Soros in his 80s and Louis Bacon in his 60s, theyre all still going strong. To do well in investing, one has to be 100 per cent committed. The day one feels like slowing down, it is better to just retire. In this business, you are either 100 per cent engaged, or not at all. There is no inbetween. I am fortunate that I have a passion for investing. If youre in this only for the money, you will burn out quickly and end up quitting altogether. Truly grateful for all the blessings and opportunities that have come his way, Danny believes in giving back to society. He has established the Yong Hon Kong Foundation in memory of his late father, which, among other things, provides scholarships for St Josephs Institution students from single-parent homes. Together with Keith Tan, he has also set up the Chong Pang GRC Scholarship for less privileged Singaporean undergraduates. Danny says he is in the midst of setting up the Ray of Hope Foundation that will focus on helping the less privileged in Singapore. This is slated to be fully operational within the next six months. I often reflect, how does a hedge fund manager or a trader contribute to society? I am not an educator, I dont save lives, I dont build buildings. What value do I add to society? Maybe my contribution to society is to use what Ive made from the markets to help the less fortunate. To be the luck for someone else, and pass forward the opportunities Ive had in my life.