Xavier Fixaris, PhD (EDHEC)

Xavier, could you tell us about your background and what you are doing today? 

My career began during the 2008 financial crisis, armed with an engineering degree from Ecole Centrale Paris and further education from Berkeley's MFE program. I started as an intern in equity derivatives at BNP and later Goldman Sachs. Amidst the crisis, I landed a full-time role as a financial analyst at Total, a major oil company in Geneva.

Although the position was less "front office," it was a pivotal move. At Total, I learned about risk management and quantitative challenges in oil and refined product markets. By 2010, I became a junior trader and was sent to Singapore in 2011 to start a derivatives desk. Over time, I grew our Asian portfolio, focusing on trading swaps and futures while also handling options.

To deepen my knowledge, I pursued further education, completing a CFA program and a Bachelor's in economics from Paris-Sud. This led to a PhD from EDHEC in 2022.
In 2020, I joined the gasoline desk at TOTSA in Geneva, gaining insights into the physical side of the business. Then, in 2022, I was approached by Ocean Leonid Investment, a hedge fund specializing in energy trading, to serve as a senior portfolio manager. There, I played a key role in establishing analytics from the ground up.

Today, I trade oil and refined products alongside a dedicated team of three other traders, always hungry for new knowledge and growth opportunities.

How much do you feel a PhD degree is relevant to a senior commodity trader like you? How the PhD in Finance programme has impacted your day-today work?
 

I find it hard to quantify the value of a PhD degree. It's changed my outlook in two big ways: first, it's made me understand concepts much better than before. Second, it's improved my skill at tackling tough, open-ended problems. During my Master's, problems usually had known solutions, even if they were tough. But with a PhD, research often leads to situations where answers aren't straightforward, and problems require reformulation. It's been a fantastic learning journey, teaching me to be more creative and independent, especially in my work at a startup fund.

The PhD programme is challenging by its nature and format. In your opinion, what is its major challenge?

The time commitment needed for a PhD is substantial. I joined the program just as we welcomed our third child, and it certainly added strain to my family life, especially given the demands of my job. I'm incredibly grateful to my wife for her patience during this time. There were moments when I even considered giving up, particularly about six months into my dissertation work. I struggled with numerical issues and wasted a lot of time trying to solve a problem that wasn't well-defined. It was disheartening to invest so much time without seeing tangible results for a while. Thankfully, my supervisor, Raman Uppal, was incredibly supportive and understanding. He remained patient and provided me with numerous reading references to help me through the challenges.

Have you found benefits in interacting with other programme participants and of having a majority of professionals in the class?

The program attracts individuals from diverse backgrounds and cultures. Some specialize in other asset classes and work for entirely different institutions. Among the students, there are incredibly bright individuals. I have particularly fond memories of collaborating with Juan Carlos Quintero on homework assignments. He was based in Bogota while I was in Singapore, and we essentially worked around the clock on discrete time finance assignments. The time difference worked to our advantage, as one of us would pick up where the other left off, allowing us to complete tasks in record time.
 

Could you please introduce the topic and research insights of your PhD thesis?

My thesis "Dynamic Models of Oil Forward Curves" delves into the dynamics of risk premiums and spot-price processes within the oil market. A forward price is a price agreed today about the spot price at a future date. The forward price reflects two components: The expected spot price at that future date, plus or minus a risk premium. The fact that the oil price is so correlated with macroeconomic events suggests the risk premium on oil is important. 
In the first chapter, I analyze these dynamics using analyst forecasts from Bloomberg, Reuters, and the U.S. Energy Information Administration. The findings align with conclusions drawn in previous research by Cortazar et al. (2022), utilizing a fresh set of analyst forecasts. 
In the second chapter, I explore different approaches to characterizing the underlying spot market. Specifically, I compare models where the spot price is represented as an autoregressive process of order one (AR(1)) in price levels to models using the log of the spot price. Price level models, later referred to as "normal," offer symmetry, accommodating both high and low prices, while log-based models tend to exhibit skewness. The study conducts a comparative analysis of these models, highlighting their respective advantages and limitations. Furthermore, the thesis presents closed-form formulas for evaluating the value of various physical assets commonly found on the balance sheets of oil majors, offering practical insights into asset valuation within the oil industry.

You recently taught a course on commodities & natural resources to the students of the EDHEC Master in Financial Engineering. What would you share with us on this teaching experience?
 

I must admit that I greatly underestimated the effort needed to teach this course. Being less familiar with commodities beyond my expertise in oil, such as agricultural products, metals, and power, I had to dedicate myself to extensive reading and research to develop the course material. My hope is that the students found the course valuable and that it will serve them well as they take their first steps into their careers. 
This experience proved to be a valuable learning opportunity for me, pushing me beyond my comfort zone as it was my first teaching experience. I enjoyed it, especially when students asked smart questions and came up with great ideas in their homework.
 

Abstract of Xavier's thesis 

Class profile of currently enrolled PhD in Finance students