Forbes Russia: Russian rivers in America

Forbes Russia recently published a profile of Teza Technologies CEO Misha Malyshev.

Forbes Russia
September 2014        
Investments/Business in the West
Teza Technologies

There is a small town of Shuya located in the area of the Teza River, which is in the Ivanovo region. That’s where Mikhail (Misha) Malyshev grew up. He named his company – Teza Technologies – after that river, and it is one of the top companies in the high frequency trading (HFT) field.

Malyshev never even dreamed about America during his childhood, growing up in a house that was heated with wood. His father was a driver and his mother was an elementary school teacher. Misha was mostly like his peers. The only difference was that Misha won his town competitions in math and physics.

“While in the eighth grade, my math teacher suggested that I solve problems she brought from the Physics and Technology University. I refused at first but then I realized that it was extremely interesting,” said Malyshev.

In 1986, Malyshev was enrolled to MPTI to become a student of general and applied physics. He studied plasma physics, and during his practice at the Kurchatov Institute he was studying stellarators – reactors for controlled thermonuclear fusion.

Upon the collapse of the USSR, Malyshev together with his spouse, Oksana, were considering whether they should continue their scientific studies at MPTI with a meager scholarship, or if they were better off trying to go to the Unites States to earn money for an apartment in Russia. They chose the United States.

For starters, Malyshev had to purchase plane tickets, pass an English exam and be enrolled to a University in the United States. He did not have any money and he borrowed $100.00 from his cousin who had already moved to the United States. Ukrainian relatives provided financial support to Malyshev’s spouse. Plane tickets were provided by the Fullbright organization that was giving grants to scientists and students.

The Malyshevs were enrolled in the University of Arizona in 1993, where their scholarship was $9,000.00 a year. Later, Misha transferred to the more prestigious Princeton University. The Malyshevs could not save money for an apartment as they had to pay their loan for a used Toyota. The first restaurant they could afford was an Indian place with an all-you-can-eat buffet for $7.00.

During university studies Malyshev got a job at Bell Labs, a company that produced a number of transistor technologies for the Operating System UNIX. He stayed with Bell Labs for a couple of years and, upon completion of his project on low-temperature plasma for computer chips, he began his searches for something new.

By this time Oksana was working at the consulting company Mitchel Madison Group. Malyshev became a consultant himself in 2000. He worked for McKinsey & Company and he enjoyed it a lot, although he felt there was a lack of analytical work.

“Then I ran a project for McKinsey on hedge funds and I realized that was exactly what I wanted to do,” said Malyshev.

After leaving the company in 2003, Malyshev secured a job at the hedge fund office of Kenneth Griffin in Chicago, where Malyshev created a new business in the HFT space.

Eventually, Malyshev decided to start his own business, Teza Technologies. The staff of the company expanded from 3 to 60 people within the last five years, and Teza now has offices in Chicago, New York and London. There are no traders at Teza, and hundreds of its automatic strategies are developed by mathematicians and physicists, or “quants.”

Malyshev stated that his company makes profits out of market liquidity provision. Teza, as well as its competitors in the high frequency trading field, do not disclose any financial figures.

He has not been in Russia for a long time as his business requires his constant involvement. Maybe that’s why the native of Shuya named his business after a Russian river.

*Abridged version of the original article in Russian