A Conversation with Mat Halsall

Trader and Teacher

I do way more learning than teaching.

You spent 12 years with Louis Dreyfus. Where were you based, and what did you trade?

I did a two-year graduate training programme in London that involved energy, ethanol, sugar, and coffee. I then spent nine months in Paris on ocean freight. At the end of the programme, I had a choice between sugar and freight. I chose freight and moved to Connecticut, taking my girlfriend and young daughter. We were about to get married and had complications with visas and stuff. But we figured it out. I spent ten years with LDC's Ocean Freight Department, including a stint in Melbourne setting up a new freight desk.

Whilst we were in Australia, my brother committed suicide, and we had to return to the UK. I mention it because it has been a defining factor in my career over the last 15 years. Dreyfus was terrific in helping me out with everything. They could not have treated me better throughout the process, especially my boss at the time, Kevin Grimes.

We spent six months in the UK and were supposed to return to Melbourne, but it was too far from my parents. In hindsight, I probably should have gone back, and we would have figured it out, but everything was so raw at the time.

We went back to what we knew, the safety of the US. We had a home there. Over the next few years, Dreyfus promoted me to run the desk in North America. There was a lot of upheaval and politics in the company at this time, not only on the freight desk but also companywide. I felt that I no longer belonged there anymore.

I left Dreyfus. I had had ten fantastic years with them, but the last two were challenging. I was devastated to leave. I had naively thought I would stay at LDC for my whole career.

Do you think that your brother's suicide affected you in your decision to leave and the way you looked at life?

My brother's suicide affected everything and changed everything. Looking back, I wasn't the same person, nor was the company. It's still surreal. I get emotional about it fifteen years later, just explaining it to you.

Okay, let's move on to happier times. You left LDC to become head of sugar trading at BTG Pactual. It seems a random move to go from freight to sugar.

I was never supposed to go to BTG to be the head of sugar. I knew Larry Greenhall, BTG's head of grains, oilseeds, and sugar, from his time at Dreyfus. I had spent a lot of time in grain and oilseed supply and demand meetings trying to reverse engineer the physical freight business.

We had many arguments at Dreyfus between the trading desks and the freight department. I felt traders showed a lack of trust in the department when they disputed the freight rate without understanding what freight is or the components that go in it. I told them that if we want to get better at doing C&F business together, I'll learn your business and teach you mine. And that is what I did; I learned their business.

I went to BTG to be in a junior beans position. However, they were looking for someone to head their sugar desk, and all the other candidates were probably more expensive than me. So, they gave me the job. We did some good things, but ultimately, the business plan was not what I had signed up for, and it was a good time to leave.

You then moved to COFCO to be head of the corn desk.

COFCO/ Noble Agri had approached me previously, and we had had a couple of meetings to discuss building a business. A few years earlier, they had once flown me to Hong Kong to discuss me becoming their head of freight, but we couldn't agree on terms.

I was still talking with them when I realised that my days at BTG were numbered. Corn has a lot of embedded freight involved in the physical business, and spread trading was something I picked up during my time at LDC. I knew freight like the back of my hand, and the company had two fantastic corn traders in Kim Kurstjens and Testuya Watanabe, so the team worked well. It was some of the best trading I'd been involved in.

You then joined Freepoint as managing director and stayed for six years. Is it easier to be a managing director or a trader?

Although I had an MD title at Freepoint, it was more like being a senior trader or a desk manager in a more established trade house. A traditional managing director is more like managing a team of traders—just like a coach in a sports team. We were a new department in Freepoint, purely prop trading for me and managing some junior traders.

Freepoint is probably the most professional company I have ever worked for, with some of the best and most talented people I’ve worked with. We made a few mistakes trying to get the business model right inside an energy company. Still, it is difficult as the margins are few and far between in agricultural businesses without assets. Other energy companies have made similar mistakes. They are different markets. Things can get lost in translation unless you have someone who fully understands what you're trying to do.

I spent six years with Freepoint. It wasn't a bad stint, but I wanted to return to Liverpool to be with my family. We had had plenty of upheavals already with family, and I was spending too much time away from the kids.

You then moved from being a managing director and head trader to becoming a consultant and a non-executive. How easy was the move to an advisory role?

It's not for everyone. You're still making many independent decisions, but you are making them for yourself and your family. It's a different kind of pressure. There's no stability. There's no salary. You must prove to people that you're good at what you do, and they need you. It requires a lot of effort and motivation. It's much harder being a consultant than an MD.

But there's a lot of freedom. There's a lot of excitement. And you start to realise that everything you do in life is a trade, whether going long sugar or jumping on a plane to go and speak to someone, hoping to win some business. You're still making decisions; you're still planning; you're taking a bet on yourself, hoping it pays off.

You have set up LMH Academy and become involved with John Moore's University in Liverpool. Can you explain that to me?

I've worked with Danny Donachie, a top performance coach, for the last two years. I brought him in six months before the end of FreePoint. I wasn't happy with the way I was performing. He was previously with Everton Football Club as a medical physio and now works with many top sportspeople and high-performing businesspeople. He's been in and around goal-orientated athletes but had no view or clue of trading. During that process, we got into the why? Why am I doing what I am doing? Why am I not at my best? Why am I not happy? What's missing?

Looking in from the outside, I was successful with a big title at a big company, but it couldn't have been further from the truth. I realised that I was happiest when I was part of a team, learning from them and teaching them. I was happiest when I was developing, mentoring and coaching people.

The sessions were heavy and dark, as a lot of personal tragedy had to be shared. I probably cried for the first seven sessions. It can make some people in the industry uncomfortable when you talk about these things to people, but it has indeed been life-changing. Danny and I have become very close.

A Welsh friend, Chris Lewis, who is well-connected to the Liverpool community, runs the Big Onion programme. This local business incubator has 15 to 20 businesses inside it, mainly sole traders, but in the past 3 or 4 years, he has helped close to 200 start-ups. We talked about raising aspirations in the local area and bringing commodities back to Liverpool.

We approached John Moores University, where I am an alumnus, but they said they had no budget and couldn't fund the programme. I told them I would fund it myself if they gave me a room and their name. They agreed.

We presented to 50 accountancy and finance undergraduates and 25 master's students. Five master's students and 11 undergraduates signed up, and we started with 16 in the group.

It then started to go crazy. So many of my contacts and friends in the sector wanted to help and contribute their time to the programme. We are now in our second year, with 29 students. Two out of the first group took job offers as brokers; one became a coffee trader; one joined a freight company, and another a Commodity Contract management business. Ultimately, we had nine job offers for the students in the first year.

The programme is not yet well established, and it's been a bit of a struggle to get noticed by some of the more prominent trading companies, but that will improve. We are already seeing companies getting interested in what we are doing. They are asking if we can develop a programme for their in-house talent. It potentially leads to another career or business opportunity for us.

When you look at your students, can you tell which ones will be successful in the commodity sector – and how do you tell?

I think it's the curiosity, drive, ambition, and asking 'why'—always asking the next question. None of us were born the finished article. If you're a professional, you're continuously improving. Even you, Jonathan, with all your years of experience, are improving as long as you stay curious and driven.

For me, the definition of success is far more about getting the best out of the individual than just about the company. As a manager, there is a balance between managing individuals and organisations. I care more about the individuals because they are the ones who take care of the business. If people are unhappy in the workplace, they will get in the way no matter how hard you try to improve the business.

How would a young person know whether they would be a good trader?

Having the necessary skill set does not guarantee success, and having specific traits does not necessarily mean you'll be a successful trader.

There are moments in your career where you can be crushed. Every top trader goes through anxiety, fear, and sleepless nights. You get stopped out of a position. You get fired for losing money. It is when you will find out what you're made of.

I can get my students to the front door and give them the tools and the education to guide them in their careers. You can practice all you want, but until you are in an actual game situation, you don't know if you are any good.

You have to say, "I love what I am doing." I've made a mistake, but I'll figure it out, learn from it, and change. The market will always be there. There is always tomorrow. Maybe you are at a different company, but the market continues, and there is always a new contract month to trade.

It's highly competitive when you work for a big trading company. You think the P&L is essential, and you know each level is getting more challenging. It's an ego thing; it's almost an image thing. You experience shame or guilt if you fail to live up to your or the company's expectations or if you have the perception of not being successful.

Every young trader falls into the trap. Do you make enough money compared to the profits you make for the company? Is your bonus more than this person's and that person's?

You don't appreciate success properly because you measure success by the biggest number. It couldn't be further from the truth. The most significant numbers we ever made were when the market gave us the opportunity. I'm sure companies are breaking records this year trading cocoa, but is that because people are trading better or because of market conditions? We are too quick to rate our success on the absolute number as opposed to how well we did in the market conditions.

However, there are other professions within trading organisations other than trading.

Our objective at John Moores is not simply to produce traders; it's about producing commodity professionals. It's about working with individuals who come in the door with talent. We say, "Listen, even if you want to be an accountant, you'll be a better-paid accountant in commodities than in the NHS. And you'll go around the world and meet amazing people."

I'm not getting that message across as well as I would like, as some of the most talented people in year one turned down better-paid jobs in commodities and took less-well-paid jobs elsewhere. They were unsure and maybe a little afraid of commodities. They were primarily women, and they didn't believe they belonged. It was a tragedy because four or five got first-class honours degrees; they would have been phenomenal in the commodity business. They just felt the sector was not for them.

Is trading a young person's game?

No. Experience counts for a lot. Energy is a prerequisite. If you have the energy to get up and go at 55, you can still compete with the younger traders.

That leads me to my next question. I'm an old guy, and it's been 12 years since I've been out of the markets. How do I stay relevant and up-to-date?

Jonathan, how many people have you met who are very good but didn't ever want anyone to get past them? They suppressed talent. And how many people loved to see talent surpass them? You must ask yourself the question: Are you elevating or suppressing talent? If you suppress it, then they're going to go around you. They're going to go past you. If you elevate talent, they will always come back to you. You're always stay relevant as long as you're elevating talent. It is something we are working on closely with Andy Kerr and OCR commodities, who share the vision of growing opportunities for the next generation of talent.

I've been covering burnout a bit. Do you have any advice for people who can't cope with their jobs?

Burnout happens when you push yourself to do things you don't want to do. I find I have limitless energy when doing something I want to do. You don't create the boundaries of anxiety and fear that you have when you do things you don't like. There is no wasted energy when you are doing what you love.

What three pieces of advice would you give to a young person on their first day on a trading desk?

First, be patient. Don't put too much pressure on yourself as, at some point, you'll fail, and there's nothing worse than feeling a failure when you've only just started. Don't be worried about where you are right now. We all have moments where the photograph is not what we thought it would be. There are many ways to get where you want to get to.

Second, use your eyes and your ears far more than your mouth. Be observant and trust your instincts around that observation. If you feel something is not right, then say. Speak last.

Third, be authentic. I know it's a cliche, but the best things happen when you're true to yourself. You can't be something you're not. You can try hard to change it, but if you don't honestly believe in it, you won't have that internal feeling of success.

And what do you tell your students?

I tell my students two things. First, you are never too young to teach and never too old to learn. The second is that you are where you're supposed to be. By that, I mean you shouldn't be too quick to make judgments about yourself when you fail - accept that you're here for a reason, probably to learn something. Likewise, when you have success, bloody celebrate. Don't move past it too fast, expecting the next celebration to be even bigger. Take stock of where you are; enjoy and appreciate it.

Fernando Alonso, the F1 driver, recently said he is driving better than ever because he's enjoying it. He said he was never satisfied when winning because he was always trying to get to the successive win. It struck a chord with me.

Anything you want to add?

I'm open to collaborating with people and organisations to help more kids get jobs. It's not about money. Anyone in this industry for 20-odd years has probably made a decent living; we must help those struggling or having difficulties finding opportunities. We can do better with this, especially with getting more women in the industry. Let's do it.

© Commodity Conversations® 2024

My latest book, Commodity Professionals – The People Behind the Trade, is now available on Amazon.