HIM - Vadim di Pietro
Vadim di Pietro joined JPMorgan in London as an investment strategist in July 2007 – just in time to get a first-hand look at a crisis that shook the world. Two years later, when the the banking industry drama subsided, di Pietro returned to academia – and to the city where he grew up – as a Faculty Lecturer in Finance at Desautels. He now teaches a wide array of courses, including Finance 1, Investment Management, Fixed Income Analysis, Market RiskModels, Real Estate Finance, and Market Microstructure.
“It was always my goal to come back to Montreal at some point,” says di Pietro. That point arrived sooner than he had expected, when Prof. Peter Christoffersen – with whom di Pietro had studied finance as a McGill undergraduate – contacted him in mid-2009 about an opening at Desautels. Di Pietro jumped at the opportunity.
His return to McGill has a certain symmetry about it. Even as di Pietro earned his Bachelor’s degree in Engineering here, he had a growing interest in the stock market. So he minored in Management, and became fascinated by the complex world of derivatives after taking a class in that subject with Christoffersen. After graduating in 2001, he went on to complete a Master’s degree in Mathematical Finance at the University of Toronto and a PhD in Finance at Northwestern University’s Kellogg School of Management.
In his academic research, di Pietro found that equity option prices are related to underlying firm characteristics: Options on small and value stocks are more “expensive” than options on large and growth stocks, respectively. One interpretation is that investors overestimate risk on small and value stocks. This finding provided a new context for understanding the size and value anomalies in stock returns: It suggests that investors expect higher rates of return on small and value stocks because they perceive them to be riskier than they truly are.
At JPMorgan, di Pietro put his academic training to good use as he developed quantitative trading strategies across asset classes – stocks, bonds, and commodities. Di Pietro’s background as a competitive debater in his school years – he won first place in the Quebec Provincial Debating Championships as a high school student in 1993 – also helped. In research and sales, “communication is key,” because “a lot of the time it’s about convincing someone else to do a trade – rather than doing the trade yourself.”
Now, he is sharing his insights with students in the honours program in Investment Management, as they develop investment ideas as analysts for Desautels Capital Management and its clients.