Winter 2009: Features

The Business Man

For more than two decades, Rick Rieder 83B has proven his worth on Wall Street

By Paige P. Parvin 96G

 Rick Rieder 83B was still an undergraduate at Goizueta Business School when he got his first taste of success in the stock market.

During the on-campus career interview process, someone gave Rieder a tip on a promising company that produced secure seals for prescription drug containers. Although he didn’t have a lot of money to invest, Rieder took a chance.

“The stock did extremely well, and it helped to hook me on investing,” he says. “The investment classes at Emory were fascinating to me. I didn’t have much money at the time but did start buying some stocks based on the principles that I had picked up in these classes. The dynamic nature of the process, plus the ability to take risks, was fascinating.”

The son of entrepreneurs, Rieder grew up in Scarsdale, New York, in a home where the language of business was spoken fluently. His father built an office products company and his mother opened a series of chocolate stores. “Their encouraging me to take on numerous jobs through high school and college helped form my interest in business,” Rieder says.

Even in high school, subjects like history seemed foreign, while accounting came naturally. Business school was the clear choice. “I visited Emory and loved the campus, the city, and most important, the curriculum,” he says.

After graduating from Emory with a BBA, winning the Wall Street Journal Outstanding Student in Finance Award and the Professors Award for Outstanding Finance Student, Rieder spent two years as a financial analyst with SunTrust before earning his MBA from the Wharton School of the University of Pennsylvania. He planned to return to financial analysis and nearly accepted an offer from Chemical Bank (now Chase Manhattan). But, he recalls, the day before taking the job, the head of recruiting at E. F. Hutton (later Lehman Brothers) convinced him to spend the day on the trading floor in the fixed income department.

“I did, and fell in love with the concept of taking risk after sitting with several of their traders,” he says. “I completely reversed course that day and decided to pursue a career in trading.”

Rieder joined Lehman Brothers, where he would spend nearly two decades as a bond trader, head of the corporate bond desk, head of credit businesses, and finally head of GPS business, a global proprietary investment platform. He also played leadership roles as a member of the Management Committee and the Board of Trustees for Lehman Brothers’ corporate pension fund. Rieder was widely noted for creating and presenting the Tuesday Morning Call, an effort to share critical information with shareholders—with as many as 2,500 listening in.

With its lightning pace, cutthroat climate, and breathtaking stakes, the investment banking industry is not for the faint of heart. For Rieder, the pressure cooker quickly became his comfort zone. “The dynamic nature of the markets and economic conditions were fascinating to me,” he says. “I loved the ability to prepare for each day’s challenges and receive a new set of data to work with and try to assimilate the meaning of that data in order to create profitability. The pressure can be quite intense at times, yet I do like that pressure.”

But Rieder did have a trick or two to learn. Before arriving on Wall Street, he had often heard that successful traders are masters at hiding their feelings on the job, perfecting poker faces that never betray whether they’re making money or losing.

“I definitely failed at that aspect of the business,” he says ruefully. “In fact, it took my boss telling me that I had to pay for the newly installed electronic phone system that I shattered in the first week that taught me that masking my emotions a bit better might be less costly.”

Rieder also shattered the myth that traders are utterly spontaneous in their work, constantly making rapid-fire decisions regarding trading and investments. While it’s true that they may make hundreds of decisions a day at seemingly dizzying speed, Rieder says, most have done their homework.

“I never understood how people could react so quickly to the tremendous amount of data thrown at them all day and make market-making trading decisions,” he says. “I spent hours preparing the night before for each subsequent trading day and still do that today. I have seen a couple of traders over the years who are amazing at reacting to data on the fly. I am clearly not, and most of the better traders I have seen do a tremendous amount of preparation beforehand.”

But no amount of preparation can offset the pressure of being asked to make choices of consequence all day, every day. Rieder once told a writer that by the end of the week, he’s so tired that he can be flummoxed by making change at the tollbooth on the way home. (The writer, he recalls, quipped, “Thank goodness for E-Z Pass.”)

Last spring, Rieder left Lehman Brothers to launch his own company, R3 Capital, a multistrategy global hedge fund with offices in New York, London, and Singapore. Running his own firm is rewarding, but it hasn’t exactly allowed him to relax. “I have a crazy schedule,” he admits. “I wake up at 3:45 in the morning and work pretty late each day.”

Rieder’s range of experience in the credit markets has led the Federal Reserve Board of Governors to consult with him periodically during the economic crisis. He serves as vice chair of the Borrowing Committee for the U.S. Treasury and served as a delegate to the Council on Foreign Relations.

During more than two decades in the financial industry, Rieder has seen the U.S. slowly begin to lose its edge in the global economy. One reason for this, he believes, is the decline of American secondary school education. A product of high-quality public schools, Rieder worries that the system today is increasingly ill-equipped to prepare students for college and the career challenges beyond. He recently became chair of the board of the North Star Academy Charter Public School in Newark, New Jersey, and was named to the National Council for the Communities in Schools Foundation, the nation’s largest dropout prevention organization. Rieder also was recently appointed to Emory’s Board of Trustees.

“My greatest passion today is playing a small role in creating a construct for children in urban settings, giving those students an opportunity to compete and succeed on an equal footing with those who have the benefit of superior education,” he says. “I think what will allow this country to compete with developing and emerging countries in the coming years will be whether we have a superior education foundation.”