Dr Satish Ramakrishna is the MD of Deutsche Bank AG in New York. He obtained his B.Tech in Electrical Engineering in 1987 from IIT Madras. His love for physics spurred him to attend physics classes at IIT that were not part of his course curriculum. He then went on to do his PhD in Theoretical Physics at Cornell University. He delves into nostalgia and tells us how life at IIT made him who he is, how he loved astronomy and went on to become secretary of the Astronomy club and how he made the transition to a career in finance. Read on to find more about his life and his love for everything from physics to finance.
Could you please succinctly describe your IIT Undergrad experience? What are the key takeaways from it that serve you in good stead even today?
Succinctly describing it would be hard, because it was a period of massive transformation over four years. At first I was awestruck by the environment, the professors and the seniors. It was a dramatic change from school life. At school I was the topper, but once I came here, everyone was used to being the topper, everyone was capable of studying very hard and some were studying harder than they ought to. It was a challenge. Everyone started figuring out what they liked and were good at. The most interesting thing for me was the diversity in the cultures and backgrounds and type of people I met. We literally grew up and became independent people, became men from boys and women from girls. The initial two years, we were tentative and awestruck. Beyond that we became confident individuals with lofty dreams and goals and a zeal to make them a reality.
Could you tell us any memorable incidents? Anything that stands out in your mind or impacted you deeply?
The cyclone in 1983 December was a memorable experience. The whole of Mandakini hostel ground floor was flooded and people moved from there to first floor. We saw insect species we had never seen before. However more than experiences, there were some people who really made an impact on me. One example is Professor Balki (Prof. V. Balakrishnan, Dept. of Physics). I was very interested in physics even then because of the Feynman Lectures and I went on to pursue PhD in physics. I used to even skip some classes that I had, to attend Professor Balki’ s lectures. Another professor in EE dept. – Anthony Reddy, was a phenomenal prof. His classes were not so much science as they were art. It seemed like he was painting a picture. The incidents and people that impacted me, shaping me to be the guy I am today are numerous.
How was your hostel life and ragging experience?
Hostel life was great. We had great fun, conversations about anything under the sun (not always civilised, sometimes it got pretty dirty), Chai at 11:30 at the place behind Alak hostel. My ragging experience was pretty strange. I was buying a bucket and returned to Mandak, when a guy with a big moustache looking like Veerappan went “Hey Bucket come here!” and I went. However at one point I walked out and that angered him because he had been snubbed by a first year. He never forgave me, I think, but I didn’t come across him much after that because he really wasn’t a very influential figure in college. I didn’t make friends just because of ragging per se. Hostel life also made us socially a lot more aware, which apart from academics at IIT is an essential part of personality development.
What Extra Curricular activities were you involved in during your time here?
I was a part of the astronomy club. There was an East German made telescope on top of the administrative block which we used to use occasionally to observe the skies, usually on Saturday nights. I went on to become the secretary and we even did a lot of outreach activities like going to schools and putting up slide shows and so on. In 1986 we saw the Halley’s Comet. We took the telescope in a jeep to VGP. Halley’s Comet is visible even through the naked eye but through the telescope it was exquisite, we could see clearly the tail of the comet. We returned to the hostel at 6 am next morning.
I was also interested in music. A few of us who were interested got together and arranged for somebody from Music College to come and teach us. He came once and said it was too much of a strain on him, because he was pretty old, so he sent his student. But beyond a point, he had a lot of commitments and we had a lot of other activities and so this arrangement died out gradually.
You did B-Tech in Electrical engineering here and went on to do a PhD in Theoretical Physics at Cornell University. And now you are MD in Deutsche Bank. How and why did you decide to shift to a career in Finance? How did the change come about? Was it a sudden change in interest? Or was that a plan you had for yourself?
My life changed when I read the Feynman Lectures during the first year. I was completely hooked and by the end of first year I had decided that I was going to do physics and that I was just stuck in the wrong place. I did as little of my EE courses as processes. I used to skip digital signal processing classes to attend Prof.Balki’s classes. I also did my final year project in Physics under Prof Balki trying to understand chaos. My first exposure to physicists doing front line research was at the end of third year when I was selected to go to TIFR to do research for two months. I then wrote my GRE and got into Cornell. I found out that mathematically I was very well equipped and was better prepared when it came to knowledge of physics because I had read a lot and done a lot of problems. The difference was that my knowledge of current physics was weak. Feynman was published in the 1960s.
Communication was also something that I learnt only after going there. In IIT we were evaluated based on steps and answers, but for research and publishing papers, we need to be able to explain ourselves clearly and succinctly. That we were never taught here. The skill that IIT makes sure we get is problem solving. Given a well-defined problem we are amazing at solving it. However that is not enough. In real life, we need to have the skill of defining the problem in the best way possible.
Around the time I was completing my PhD, Russia was essentially losing the war against the US for supremacy, and the world now had only one superpower. The defence budget and with it funding for science research was cut, which was a big blow to Physicists, and a career became outrageously difficult. Around 1991, a lot of my friends were moving to investment banks. I had no idea about that field whatsoever. That was just after the market crash in the US. So I came across intriguing market phenomena and so my interest in investment banking was cultivated. The relationship between options, prices and uncertainty in the market was very interesting because it was after all a math problem to me. I got a few job offers after my PhD but I didn’t take them because I felt the job market was not great. Around that time I read a book by John Hull. And I was fascinated by the field. Moreover people in physics research moving away from explaining phenomena and toward very non intuitive research which I did not really enjoy. It sort of seemed like a dead end. Now however after the LHC’s (large Hadron Collider)construction, there is a lot more to be done. So I read the book on finance, I applied to Citibank went for the interview and said “here’s what I know” and they said “yes, we need someone who knows what you know”. A few years later I moved to NatWest, which was taken over later by Deutsche Bank in 1996. I have been working here since
Could you please describe your work at Deutsche Bank? What do you love most about your work?
We try to understand the liquidity and market risks in the portfolios that funds borrow against to figure out what could happen in market meltdowns (which happen rather more often than they used to) and minimize our chances of loss, while staying commercially relevant. To put it in layman’s terms we essentially make money by lending money.
So my job is basically to figure out the right kind of people to lend the money to so that we gain maximum money. So we need to make a judgement call. It’s a job that needs experience and understanding. At some level it is an art and not a science. There is not a sure shot decision that you can take and say this is 100% going to work. There is a bit of gut feel associated with it, but that itself can be honed by years of experience. The decision has to be taken by actually meeting people and looking at their business plans, their portfolio and the risks associated with it and so on, for which I travel quite a bit.
Your advice for students aspiring for a career in Finance. What can an undergrad at IIT Madras do apart from his coursework to give himself/herself a head start for a career in Finance?
For a career in any field, communication is very important. However technically sound you are, if you cannot communicate what you know, it’s not going to be of use. So communication, soft skills, ability to negotiate politely and at the same time get what you want are very important. Specific to finance, quantitative aptitude and a flair for numbers and drawing meaningful results and patterns from seemingly random numbers are very important.Networking, bonding and building genuine connections is also very important. If one feels that they lack anyone of these, they need not fear, because these can all be cultivated with sufficient effort. Being an IITian is a definite indication of quantitative aptitude, and the other two can be built.