Timing is everything—even when it comes to careers. Two years before Chris Perez completed his PhD in physics at Stanford, the Soviet Union collapsed. By the time Perez completed his degree, world-famous Russian physicists had immigrated to the United States and filled most of the available jobs.
Luckily for Perez, two other Stanford colleagues who had graduated ahead of him had found positions at Morgan Stanley working on option pricing, which utilizes equations similar to certain physics computations. His relationship with his fellow alumni ultimately brought him to the company and to his career on Wall Street. After roles as chief risk officer at several hedge funds, in 2011 Perez came to Goldman Sachs, where he is now a managing director.
In an interview with The Alumni Society, Perez shares how he navigates the world of finance—and why successful careers are based on doing what you’re good at, not what you think you should be doing.
Was it difficult to make the transition from physics to finance?
I audited some business classes in school, so I had a good idea what the work would be like. The culture was quite different, since physics is generally more solitary. But since I knew what to expect and am also fairly social, the transition was relatively easy. I will say that finance, in general, is now much more diverse than when I started in the industry—and the sizes of various quant groups are much larger. Both of those factors make it easier for many different types of people to find a place, even physicists who might be more introverted.
Did you have a mentor or any other support group when you started?
When I came to Goldman, I got involved with the company’s Hispanic/Latino network. I didn’t know a lot of people in the firm, and it helped provide instant support. I had a mentor from the network who gave me the best advice of my career: “People at the firm value individuals who run toward fires, not away from them. Be the person who fixes the problem.” I tended to do that, anyway, but it was still good advice.
How has the financial world changed over the course of your career?
The financial crisis changed everything. After it was at its worst, I moved into counterparty credit risk management, where I run a quantitative team responsible for simulating complex derivatives forward in time over ten- and twenty-year time frames to figure out how much risk the organization faces if counterparties default. After the 2008-2010 time period, the scrutiny and regulations applied to risk management intensified exponentially. So, where my previous responsibility as chief risk officer at hedge funds had been to provide actionable reports to senior management, my teams and I now have to satisfy extensive external demands imposed by regulators and laws like the Dodd-Frank Wall Street Reform and Consumer Protection Act. So in addition to calculating risk itself, the results were now feeding into the company’s future capital plans—whether it can buy back stock, issue dividends, etc. Our work gets much more attention than it used to. Even changing how we calculate risk now requires input from a separate model validation team, alerting regulators, and, sometimes, waiting for their approval.
What’s the most important lesson you’ve learned over the course of your career?
Always find a way to contribute, no matter what the situation is. By diving in and getting involved, you learn a lot about what happens in the particular circumstances and find ways to demonstrate your value. In spite of the obvious problems created by the crisis, I had a great experience working on issues that were related to it, such as how to get the team aligned to resolve issues. And the more people get involved, the more they feel like they’re making a difference, which is a huge motivator. As a manager, that’s why it’s important to always engage your team in addressing significant challenges.
What is the biggest challenge that Latinos in finance face?
We’ve enjoyed tremendous successes, thanks in part to the rising importance of emerging markets and our knowledge of the culture and language. I’d like to see the opportunity set broaden so that more Latino individuals get a chance to show what they’re capable of in other areas. It will happen. It’s just a matter of time.
To what behavior or personality trait do you most attribute your success?
A certain level of intelligence, but just as important is being flexible. It’s easy to fall prey to worrying about things that are beyond your control, but you have to stay flexible so that you deal effectively with the matters at hand. You can’t get caught up in the little things that don’t matter at the end of the day.
What do you know now that you wish you had known at the start of your career?
That I didn’t need to over-manage my career. When I started, everyone—including me—wanted to be a trader. That’s where the money and the glory was, but that wouldn’t have been a good fit for me. Over time, I learned that you can have a good, sustained, and substantial career doing what you’re good at and doing it where you feel comfortable—even if it’s not physics.