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June 3, 2013

Global Search, Local Nets

By John D'antona Jr.

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  • Global Search, Local Nets

Artisan Partners' search for alpha is endless. The ongoing search is the job of Derek De Petra, partner and managing director of international trading at the San Francisco-based investment firm. Finding above-market returns for portfolio managers and in block size is the goal he pursues around the globe, regardless of whether it is in Russia, Nigeria or South America.

"We want to make sure we can access liquidity wherever it is," De Petra said. "It's that search for liquidity that drives us wherever we have to go."

The search for performance wherever it can be found tops the thinking Artisan uses when it picks brokers to use, worldwide. And the global nature of the search is why it has relationships now with a large list of brokers, roughly 60 worldwide.

Derek De Petra

As De Petra sees it, one never knows where liquidity will be found, and that means casting a wide net of brokers to canvass the local international markets.

While he has about 10 brokers he uses regularly, he doesn't limit himself to one firm or one geographic region. Rather, the opposite.

"If I need to find liquidity in a name, I'll talk to anyone," De Petra said. "And the same goes for market intelligence; if it comes from a German bank, or a South American or Russian local, we'll take that call."

Finding the right stock at the right price and in the right size is the constant challenge. Whether it's to find a block of stocks in a frontier market or complete a downhill ski run from a helicopter, De Petra knows it's about persevering and scouring myriad countries to find the equities his firm needs and portfolio managers want to buy.

And for him, perseverance and tenacity have been hallmark traits since the beginning of his trading career.

A graduate of the University of California, Los Angeles, De Petra got his start in the business during his summer breaks working at broker Merrill Lynch.

Upon graduation in 1993, De Petra was hired by Mellon Capital to work on its West Coast trading desk, getting exposure to program trading, derivatives and futures. His primary focus for the three years was trading stocks for the firm's international funds.

After Mellon Capital, he joined San Francisco-based Montgomery Asset Management while studying for his Master of Business Administration at the University of California, Berkeley. Balancing the rigors of school during the day and a trading career in international stocks each evening was a challenge. Often, De Petra would trade from 6:30 p.m. to 2:30 a.m., grab some sleep and then go to a 9 a.m. class.

"It was a lot of long hours and lots of coffee," he reminisced. "I was trading at a time when the emerging markets were developing. I didn't really sleep. I was working Sunday nights through Thursday six days a week. And classes in between."