Score one for entrepreneurship: Another derivatives trader has left to start his own hedge fund. David DeRosa, who spent the last three years as a proprietary FX trader at Swiss Bank Corp., recently left the firm to launch Quadrangle Investments, the manager of Versailles, a $50 million Cayman Islands­based fund.

The fund, which DeRosa will manage with former Swiss Bank colleague Jennifer DeGrasse, will trade FX options and equity derivatives as well as do yield curve, interest rate and relative value plays. DeRosa and DeGrasse plan to launch an onshore version, which they're funding themselves.

Now that he's on the buy side, DeRosa says he's looking forward to receiving research reports from companies other than Swiss Bank and to talking with brokers from many different institutions. He's also anticipating a more flexible work schedule that will give him more time to teach arithmetic to his five-year-old daughter, Julia.

DeRosa got his AB and doctorate at the University of Chicago in the golden years when Myron Scholes, Fisher Black, Merton Miller, Milton Friedman and Gary Becker were on the faculty. It was "an outrageous piece of good luck," he says. Before Swiss Bank, he served as an investment advisor to the Saudi Arabian Ministry of Finance and as portfolio manager at Alliance Capital and BEA Associates.

In recent months, a number of technology consultants have been predicting a mass Wall Street migration from UNIX-based platforms to those based on Windows NT. That helps explain the migration of Kelsey Biggers from Bankers Trust to Micro Modeling Associates, a leading NT consulting firm.

At Bankers Trust, Biggers adapted the firm's RAROC internal risk management system for sale to the external world. The result is Raroc 2020, a high-end system designed for institutional investors with big pocketbooks. While Biggers is a NT-enthusiast to his fingertips, he also says that there is short supply of NT expertise on the Street. He is betting this scarcity will create engagements for his firm as a systems integrator at major derivatives dealers. "NT is becoming the dominant platform on Wall Street and the Internet will be the dominant distribution channel," he predicts. Biggers has spent recent weeks hiring experts in derivatives pricing and risk evaluation, and hints his firm may join forces with a major independent risk management consulting firm next year.

An eclectic background is great preparation for a career in risk management, according to Joan Varrone. Currently treasurer at semiconductor manufacturer Watkins Johnson, Varrone is a lady who has been around the block many times. She was the first woman to work at Exxon's crude oil trading area, becoming one of four women there who moved oil all around the world. After a job evaluating computer systems, she switched to Raychem as assistant treasurer. There she ran corporate planning and international tax management, and initiated the semiconductor company's first hedging program, which by the time she left had $4 billion under management. She kept her tactics simple, using FX forwards to offset payables and receivables risk. Only occasionally did she use swaps. Varrone also built Raychem's netting center for FX flows.

Varrone is a strong believer in networking with other women finance professionals. She has organized an FX hedging discussion group for women treasurers in the San Francisco Bay Area and recently was on an all-women finance panel at Berkeley College. Varrone's 16-year-old daughter was in the audience. "I wanted her to see and hear what I do, and see me as a role model," says Varrone. "I thought she might be bored, but she really liked it."

At Watkins Johnson, which she joined two years ago, she spends a lot of time indoctrinating line executives on FX. At one point, she recalls, "Senior management was very concerned because of a big appreciation in the yen. But I could show them that it wasn't an issue for us because I'd locked in a hedge by selling forwards."

Fascination with risk goes back a long way for Albert Hsu, senior analyst at the Common Fund. At the age of 12 he began investing his pocket money in a valuable stamp collection. Fortunately for him that pocket money was not chicken feed, as his father worked for 15 years for Millburn, a New York hedge fund. While attending Bronx Science, a high school for the gifted where he studied archaeology and economics, Albert Hsu added to his hoard. "Instead of collecting baseball cards, I invested in stamps that had great value at the time. I'd create arbitrage scenarios and tallied the market value of what I had. It was a numbers game."

Numbers have been good to Hsu, who is still a keen philatelist. He joined the Common Fund a year ago, coming from RXR, a hedge fund. Led by CEO Todd Petzel, Hsu is part of the new guard at the $18 billion Common Fund, helping to institute new systems and guidelines for monitoring the many funds that the fund deploys. "We look carefully at every portfolio on an intraday or T+1 basis," says Hsu. "There is less volatility because we offset the managers by lining them up together. If we looked only at one side of the picture, it would look like a high-risk portfolio of hedge funds."

The Common Fund now monitors managers by linking their systems to the managers' back offices. They have also set up separate accounts for managers such as First Quadrant, Analytic·TSA and Levin & Co. "Some macro funds such as Kingdon and Tiger Management are paranoid about letting us hook into their back office, but we're working on them," he says.

Hsu has a strong background in systems. One of his first jobs, with Chemical Bank, was in settlements, linking front and back office. Thereafter he switched to Bridge Systems, the subcontractor to the Chicago Board of Trade's after-hours electronic trading system, Project A.

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