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Elaine Crocker, Moore Capital President

Moore Capital President Elaine Crocker has been with the $14 billion hedge fund since January 1995, and in the
industry since 1970. She displays an empathetic nature, and a humble respect for how the ever-changing nature
of markets makes it so difficult for traders to consistently outperform and for allocators to predict which traders
will sustain strong returns. She thinks many traders have difficulty adapting through market cycles with only the
very best able to continually adapt. The scarcity of truly gifted discretionary traders is such that Moore is constantly
looking for new talent in London, New York and Hong Kong. When we met at Moores London offices, Crocker
was animated in discussing her own career history, and her vision for Moores continued growth.
Commodities Corporation
Crockers first taste of time-sensitive financial risk came unexpectedly, as her first job was not in finance. After
three months compiling bibliographies for university libraries she was instructed to urgently cash her pay cheque,
and later that same day found out why: the firm, located opposite Princeton University, had gone bankrupt. In
need of a job in 1970 Crocker became the fifth employee of local Commodities Corporation (CC), which was
started in 1969 by three portfolio managers with PhDs who wanted to bring econometric analysis into the study
and therefore the trading of commodity futures. The founders had worked at Nabisco prior to founding CC and
were determined to start a company that would be free of politics, in a suburb, Princeton, rather than Wall Street.
Her remit to do everything the principals did not want to do set the pattern for her remarkably wide purview
today overseeing Moore. CC duties in practice ranged from watering the sponge in the cigar humidor to
administrative and office management tasks to accounting work. She also had the opportunity to provide analysis
of commodity markets, feeding into the early econometric techniques used by CC founder, F. Helmut Weymar,
whose MIT PhD dissertation researched the dynamics of the world cocoa market. CC was entrepreneurial,
dynamic and ahead of its time, said Crocker. For example, CC would send cocoa pod counting teams to Africa to
predict crop size.
Throughout the 1970s CC grew and so did Crockers role in nurturing the portfolio managers. So scarce was seed
funding in those days that there was fierce competition for the allocations Crocker was awarding from an initial
small pool by todays standards. By the early 80s, she was already earning renown for spotting promising traders,
with as many as four in 10 entering CCs Trader Evaluation Programme (TEP), and performing well enough to
secure additional capital, and sometimes also employment for those who wanted it.
Working with a legend
Crockers first encounter with Louis M. Bacon at CC in 1981 did not result in her hiring him; she quips he had the
last laugh by hiring me. Crocker recalls how in the early 80s Bacon, who was, as always, leading a hectic life
trading commodities on the floor whilst studying for his Columbia MBA, rushed in carrying a motorbike helmet
underarm. She immediately knew he was special but was not completely sure he would make it in the
Commodities Corporation role available. Crockers initial impression was that Bacons individualistic
temperament made him more of an entrepreneur than an employee since she was ideally seeking research
assistants and trading assistants to work under major PMs such as Bruce Kovner and Michael Marcus. Yet Bacon
never revealed his disappointment, he and Crocker kept up the rapport over the years and later she became the
first person to fund him, producing profitable returns. Crocker was bewildered when he returned the first tranche of
capital. Crocker only realised how high the ber-ambitious Bacon had raised his own bar when his second trading
episode generated stellar results far superior to the first.
On top of his trading record Crocker started to identify plenty of other reasons to foresee that Bacon would
become the icon that he is today. Louis is incredibly focused and has a tremendous work ethic, she says. He
also exhibits the adaptability and stamina that she views as critical, saying, Its unusual for people to be able to
continually reinvent themselves, keep up the energy level required to be flexible, and adapt to different market
environments. Crocker admits that these phases of trying to adapt to new market climates can be painful but
says Bacon has done this again and again.

Bacons focus on investments is greatly appreciated not only by chief administrator Crocker, who likes his singleminded attention to the investment process, but also by the other portfolio managers. Bacon is so attentive to his
own trading that he allows other managers a lot of autonomy naturally within guidelines and does not
micromanage. Moore Capital Managements flagship fund, Moore Global Investments, has an 18.27% annualised
rate of return, net of fees, since inception through 31 October 2013. Recruiting portfolio managers for the firm is
helpful, Crocker believes, when they know that someone like Bacon is at the helm. Louis gets real energy from
seeing the success of others, says Crocker, and she, too, finds it tremendously rewarding to continue finding
portfolio managers for Moore and to source investment opportunities via those portfolio managers. The trading
platform Louis built is valuable to others, and their input is helpful for its ongoing development, she says.
The combination of a successful risk-taker such as Bacon and a senior trading administrator like Crocker has
proved an effective combination. Crocker recalls years ago Bacon mentioning that he believed there were real
opportunities in the credit market and asking her to find someone in the credit arena to profit by opportunities
which may be available. That led to her recruitment of Tim Leslie, someone with investment acumen to help lead
the way in this area.
Louis truly understands both how to make money in the markets and risk management, says Crocker. Although
she has never traded, Crocker has been in the trading business all of her career, and finds it ideal to work for
someone like Bacon who is a very successful portfolio manager, has a tremendous work ethic and who serves as
an inspiration to both portfolio managers as well as administrative personnel.
A panoramic remit
Crocker thinks that she may be one of the last generalist managers with a panoramic purview encompassing
finance, compliance, regulatory reporting, operations, technology, investor relations, talent scouting, human
resources and much more. Yet in each of these areas Moore has some truly extraordinary and very senior
managers who have line responsibility. So Crockers role is more as an orchestrator, fostering communication
across the firm. This is where listening skills become essential, as she has found when people are very focused
they may not always communicate information, which can impact other areas at the firm.
To take regulation as one example, this impacts Moore across three continents and throughout its functions
requiring careful coordination. The main impact has been felt in the front office and in finance and operations,
says Crocker, explaining that they are getting the full force of the reporting obligations as Form PF aggregates
information on assets, liabilities, risk data, counterparty exposure, aggregate positions by asset class and
leverage, adding to quarterly reporting routines. Meanwhile the CFTC requires two other forms that cover much
of the same information but in a different format. Similarly, Crocker views the twice yearly reporting to the UK FCA,
and the annual reporting to Hong Kongs HKMA, as essentially the same information formatted in a different way
with questions asked in a different way. The reports, which are monthly, quarterly, semi-annually or annually,
depending on regulator, take the CFOs operations team thousands of man hours to produce.
Crocker is prepared for further increases in reporting, with Dodd Frank only 40% implemented and the European
reporting requirements a year or two behind the US. Crocker views the Open Protocol initiative as a big job with
the jury still out, and thinks it is motivated by consultants as part of their fee, as an attempt to provide investors
with more comfort with added transparency. Regulation is also impinging on operations and execution areas
where technology makes a big impact.
Technology has always been essential, says Crocker, and she reels off examples of how it is vital for multiple
functions. Electronic execution already makes up a significant part of Moores total and is growing as Dodd-Frank
makes voice products like swaps electronic, and plays a key role in sourcing liquidity across asset classes.
Computers also naturally assist with risk management, pricing, and assessing PMs. In compliance, technology
helps to monitor real-time limits, see that traders are living within those limits and their individual guidelines, and
screens for patterns in trades. Encryption and firewalls are also essential for confidentiality and security, Crocker
explains. On the back-office side straight-through processing also helps to eliminate trade errors.
Trials and tribulations of nurturing traders
Most of this meticulous work takes place behind the scenes, so Crocker is most famous for appraising traders
something she has done for decades. Over the years CC experimented with various tools and techniques for

identifying good traders. They would seek out successful chess and poker players, retained psychologists to work
with traders, even utilising handwriting analysis to identify which traders were likely to become successful. These
efforts sometimes wrote off those who later became the most successful traders. Crockers lessons from this were
to not strive for perfection, to learn from errors, and to never forget common sense. I learned that with a few good
behaviour and risk management rules and decent selection techniques and common sense, an environment could
be born which both nurtured but pressed all employees, not only investment professionals, to achieve success.
She prides herself in being a straight, direct, no-nonsense talker to build up a trust factor with traders.
This frank dialogue has contributed to many of Crockers most memorable moments. In the early days CC had the
flexibility to do two things that Moore does not do: hire inexperienced professionals to put in a trading training
programme, and allocate to systematic strategies, based on testable simulations. Crocker remembers an airport
meeting with fresh-faced CTA pioneer Salem Abraham, who turned out to be the toughest negotiator I have ever
dealt with in my entire career. This was no mean feat when Crocker describes herself as not such an easy
negotiator either.
Open discussions were not just a bilateral matter between Crocker and individual traders. The entire team at CC
was encouraged to share ideas, and special lunches and dinners were dedicated to this. Paul Samuelson was a
founding shareholder of CC, Weymars mentor at MIT, and a Nobel Laureate who enjoyed taking meetings and
chatting with the portfolio managers. Crocker remembers taking him to lunches at various traders offices. When
she brought him to Bacons offices well before she had joined him all of Bacons attendees brought the
Samuelson economics textbook for Paul to sign.
Dinner-table discussions among Bruce Kovner, Richard Axilrod, Louis M. Bacon, Paul Tudor Jones, Wim Kooyker,
Paul Samuelson, and others revealed one major lesson: beware of consensus trades, as whenever the diners
agreed on a trade it invariably failed. The dinners also provoked traders to get outside their comfort zone. Paul
Tudor Jones was bemused to be told by Weymar that recovering losses, and dealing with adversity, were the
marks of a good trader. Having arrived already exhausted and hoarse-voiced after an arduous trading floor
session, Tudor Jones was even more surprised to find himself paying for the entire group dinner. To this day Tudor
Jones will not forget this episode and chides Crocker saying after encouraging me to lose money you asked me
to pick up the tab. Tudor Joness profitability had already made the evaluation programme a huge success.
Discussions within the trading group may have also helped Crocker to identify superstar traders. Although most
PMs at CC initially were hired for specific sectors such as metals or energy, the selection process found that
Michael Marcus was versatile enough to become CCs first generalist trader, and he made $60 million in the late
1970s a gargantuan sum at that time. Marcuss prescience went beyond predicting markets: after Marcus
interviewed and hired Bruce Kovner, he told Weymar that he just hired his successor.
Notwithstanding these spectacularly successful traders identified at CC (and many others including Frank
Vannerson, Wim Kookyer and Monroe Trout), Crocker no longer contemplates hiring neophyte traders because
training them is too difficult and success rates are higher with experienced ones.
What Moore looks for
Moore expects traders to be fully formed by the time they apply for a job. Moore asks potential portfolio
managers to write up a trading philosophy setting out a range of issues. This lays the ground for a discussion
about the PMs style and process, and in which markets and time periods they are most and least successful, as
well as risk controls. A PM must be able to articulate his style, so that allocators can ascertain if the trader will be
able to adhere to their guidelines, and understand the environment and support he will need to succeed, she
points out. Common pitfalls can include traders struggling to adapt to a structure that is too tight, or conversely a
return target that is too high, as every portfolio manager has a gut level of drawdown that they cannot tolerate,
she observes. Moore puts aspirant PMs through interviews with four or five staff including at least one specialising
in the PMs particular asset class. Moore is alert to inconsistencies amongst answers to these multiple interviews.
Crocker also watches out for interviewees who try to spontaneously tailor responses to tell the allocator what they
want to hear.
Crocker notes that portfolio managers can be confused by an allocators goals. Investors want returns, a solid
infrastructure and integrity, but conversations around high Sharpe ratios, being in the top tier of a similar asset

class and not losing money, coupled with ongoing requests for transparency, allow little room for success. Moore
can offer portfolio managers steady capital, and potentially a relatively long time-frame for traders to prove
themselves: whereas two to three years is an eternity for a pure commodity fund, we can be more patient in
allowing talent to flourish, she says. The human side is also relevant: trading is what Crocker views as a rather
lonely business, so a robust platform provides some camaraderie. Yet she is under no illusions that 95% of
returns are down to the individual trader, with perhaps 5% arising from a supportive environment.
We provide doors, and they walk through the doors, she says, and this applies beyond trading. In areas like
legal, risk, operations, technology and execution, there are a lot of creative jobs where learning and growing each
year makes you happy. Moores average job tenure is seven years, with managers generally having been with
the firm between five and 20 years, and an average age of 40. Crocker herself has been at Moore for 18 years,
having spent even longer at CC.
Crocker was not the only woman in trading in the 1970s. She recalls how one of CCs first hires was a female PhD
mathematician. More recently, Crocker congratulates the work done by women recognised by 100 Women in
Hedge Funds, which has played a huge role in advancing women by providing a tremendous network of
resources globally run by ber-bright ladies. These networks encourage connectivity so that it is great to talk
broadly about issues and get other peoples points of view, making people available and visible even if only by
email. Moore Capital has many women across the organisation in management roles. Bacon, Crocker notes, has
often said he has many women to whom he reports his president, his vice president of corporate accounting, his
charitable foundation head. Two key strategists of his are also women. Investing in itself is a truly equal
opportunity profession, so few can do it successfully, says Crocker. It does not matter if you are male, female
what matters is what you can produce. Moore is happy to count several women as portfolio managers. While a
minority are women, significant opportunities exist for those who choose investing as a career.
The inevitability of failures
The saddest thing is when some very bright people come in and are very knowledgeable about markets, but do
not succeed as traders; Moore tries to integrate these people into other areas of the company so they can remain
as part of the team. The culture is one where portfolio managers remember who gave them a chance and who
was supportive during bad times. Crocker feels that empathetic counseling, spending time with those who are
struggling, is an important part of the role.
Even with her remarkable track record of spotting and developing some of the hedge fund industrys leading
managers, and even after filtering out inexperienced traders, the search for trader talent still entails trial and error.
The universe of opportunities is limited so we appreciate good traders there are not thousands of people who
can make money trading, asserts Crocker. In part this is because the opportunity set for different asset classes or
strategies can be ephemeral: Many portfolio managers can be successful during certain market cycles and in
certain asset classes, but it is unusual to be able to transfer those skills and adapt to all market cycles and many
asset classes. Crocker says those portfolio managers are rareand it is quite difficult to ascertain early in their
careers. Crocker cites commodities as recently offering a dearth of profit opportunities. Moore can afford to bide
its time awaiting a better climate for these traders but we cannot turn commodity traders into credit traders if
credit is where the opportunity is. And not every manager has the stamina and the flexibility to adapt to a
changing market environment. Risk management is, in fact, the one skill that Crocker does think is trainable its
the rest that is not so trainable, she cautions.
From spin-outs to in-house wrapping
Historically Moore is known to have spun some managers out, having seeded Jens-Peter Steins macro and Tim
Leslies credit funds. Crocker recognises that some people want to create their own culture, be captain of their
own ship and have their name on the door. Going forward, however, Moore may cease seeding and instead
create Moore-branded funds, perhaps pursuing equity or credit strategies to complement the macro focus of MGI
and Remington. Former PM Henry Bedford has been lured back out of retirement to co-manage the Moore Macro
Managers Fund with Bacon and also helps with identifying talent in London. Other specialists recruit in New York
and Hong Kong. Even with Moores macro funds well established in the market, the firm is still hungry to grow into
different directions. Moore has 80 risk-takers, although the number of independent decision-makers is smaller as
some teams contain seven people or may be analysts assisting PMs. We are more likely now to wrap funds

around portfolio managers rather than spin managers out to seed them to begin their own funds, says Crocker.
Crocker reflects that the most successful traders are, like Louis M. Bacon, the least challenging to deal with, as
they are fully engaged with the markets. So, the word is out that the hunt for talent is ongoing as ever at Moore. In
another 18 years time our guess is that Moore will have built a suite of funds spanning multiple strategies.