|
"I was looking at 52 empty sets on the trading floor." This remark from Tim von Halle, formerly with Merrill Lynch and now in charge of building an international fixed-income business for West Merchant Bank, spread like bushfire throughout the Euromarkets. Head-hunters swarmed around, sensing the smell of easy fare. Resumés landed thick and fast on his desk.
Why did the personable von Halle leave the financial security of the league-topping Merrill Lynch for the WestLB group, whose Euromarket star had faded? In fact, von Halle, a Brit who speaks German, was the ideal choice. At Merrill Lynch he had achieved superstar status by being a member of the group (including Edson Mitchell, Grant Kvalheim and John McNiven) that made the firm the premier Euromarket new-issue house. Did he feel that his Merrill career had reached a plateau when he was moved to Frankfurt? Certainly within the fiercely competitive Merrill the power centres are clearly recognized as New York and London.
Now von Halle is back in London, which he far prefers, with a mandate to build West Merchant into a serious international fixed-income player rather than a niche trading house. Does this seem a tall order? West Merchant Bank is a relative newcomer. The parent, WestLB, has a good reputation in Deutschmark bonds but limited capabilities in alternative currencies. Von Halle isn't unduly concerned. He points out WestLB's financial resources and its credit rating Aa1 from Moody's and AA+ from Standard & Poor's. He also has the full support of West Merchant's chief executive, Patrick MacDougall, himself a veteran deal-maker and Far East specialist.
Skilful poaching
What progress has von Halle made so far? He hit the headlines last month when he attempted to poach a team of six traders from CSFB, led by the highly regarded Tony Maude. CSFB was caught sound asleep. Only after frantic negotiations did it manage to keep two of the team (Adrian Kidd and Dena Merson). But von Halle bagged four, including the all-important Maude. A fortnight ago he also recruited Merope Sylvester from BZW to build up trading in non-Deutschmark government bonds.
Although the head-hunters will have rich pickings from West Merchant, don't expect a hiring frenzy à la Deutsche Morgan Grenfell in 1995. Von Halle's strategy is to build product and then sales. Syndicate and origination specialists will probably not be added until next year.
West Merchant's strategy for building its international fixed-income business is being modelled at least in part on Merrill Lynch. That's no surprise given von Halle's background, and his high regard for the firm as a whole and many of his former colleagues. "If there was ever a house which one would wish to emulate then Merrill Lynch would be top of the list," he says. Does that mean that West Merchant would poach from Merrill? Von Halle wouldn't be drawn on this subject but market observers say that hirings from his old firm are "inevitable", especially when building up the syndication and origination groups.
Von Halle will have little time to relax in the next year. In addition to fixed income in London he has to beef up the bank's presence in Tokyo, New York and Singapore. Clearly there's a long way to go before West Merchant can hope to compete in capital markets with rivals such as DMG, which von Halle acknowledges "stands out ahead of all other German banks". However, his timetable warns me to wait only six months "at which time you will notice a major difference".
For a man who is clearly in a hurry, von Halle has tastes and pastimes to match. He is an avid motor enthusiast who collects both cars and bikes. Clearly someone in the family shares his enthusiasm as he has just added a sidecar to his Harley-Davidson. Away from high-performance engines he enjoys another noisy hobby shooting. "Standing in a winter field in the sun, rain or snow is the perfect antidote to sitting at a desk or travelling all week," he says. However, if West Merchant's expansion runs to schedule, the birds may rest easier.
Ian Boxall
Senior partner, Ian Boxall & Co, attorneys at law, Georgetown, Grand Cayman
Think of the perfect working life in a tropical paradise. You drive to work, but you drive a 40mph Sea Wolf speedboat across the crystal-clear North Sound from Cayman Kai to the yacht club. There you moor and jump into your waiting Mercedes-Benz 500 sports coupé. Ten minutes later you are in the office. The "office" is your own highly regarded and very profitable law practice. At 45, you were so successful that you retired. Boredom and client demand brought you back. Do you ever get fed up with the Caribbean sunshine and all those gently swaying palm trees? Don't worry. Your idyllic house in Burgundy, next to some of the world's finest vineyards, awaits. Visits to the UK cleverly coincide with Royal Ascot, Wimbledon and Henley.
Is this the hero of a new John Grisham novel? No: the man who must make people working in Canary Wharf want to eat their hearts out is Ian Boxall. He is one of Cayman's foremost lawyers and the senior partner of his own firm Ian Boxall & Co formed in 1991, which today has three partners, three associates and 18 support staff in offices located in Georgetown's CIBC financial centre.
Captivated by Cayman
Boxall had a vision as far back as 1969. He was a recently qualified solicitor for whom City of London law practices held little appeal. He wanted to work in the sun. Bermuda beckoned but just two law firms dominated most of the island's business. The Bahamas was an option but emerging nationalism clouded future prospects and threatened political stability. Over a drink in a bar in Salcombe, a picturesque seaside town in Devon, Boxall talked about larger prospects with his friend Bruce Campbell, who was working for the respected law firm of WS Walker in Grand Cayman.
In 1969 Grand Cayman was mainly known for its swarms of mosquitoes and its history as a former refuge for pirates. The journey from London took around 24 hours via Kingston, Jamaica. There were only four main banks CIBC, Bank of Nova Scotia, Royal Bank of Canada and Barclays DCO. But Campbell was optimistic and when he called Boxall to say that Arthur Hunter at the local law firm of Hunter & Hunter had a vacancy Bagnall didn't hesitate.
Arthur Hunter, who is still practising, became Boxall's close friend and mentor. Despite the mosquitoes and constant shortages even telexes hadn't been installed when he arrived Boxall was captivated by Cayman and was granted full Caymanian status in 1972. Hunter & Hunter, where Boxall became a partner in 1972, prospered. Foreign investment capital poured into the island. Land values soared. The fading attraction of the Bahamas as an international financial centre focused more and more attention on Grand Cayman. Banks began to proliferate.
But what sets Cayman apart from other Caribbean financial centres? First there is political stability unwavering for 150 years as a British Crown Colony. Nor is this stability likely to disappear the highest respect of any Caymanian is usually reserved for the Queen.
Second, there is the legal system: British, of course. It is not just the quality of the lawyers in Grand Cayman. Of more importance is the government's long-standing policy of permitting any litigant to select the counsel of his choice, provided that lawyer is qualified in the UK or a Commonwealth country. Therefore, when a major trust case is being heard in the Grand Court, it is not unusual to see as many as six top London QCs arguing the outcome. Such recourse to the best legal skills available has been an important factor in attracting new trust and corporate business to Cayman.
Third, Cayman has become the jurisdiction for major privately held Wall Street houses, such as Goldman Sachs, to set up corporations as borrowing entities. The prospectuses that accompany Goldman's "vanilla" Euromarket new-issue business are eagerly scoured by Wall Street analysts for details of the firm's earnings progress. Goldman Sachs has a bustling local office and, like Morgan Grenfell, Schroders, MeesPierson and Bank of Bermuda, is rapidly expanding its Cayman operations to take on the work generated by the booming unit trust and mutual fund business flowing to Cayman. Ian Boxall & Co has a team of lawyers that works specifically on international financial transactions, such as Eurodollar syndicated loans, commercial paper programmes, unit trusts and mutual funds. "This sector will grow even faster now that legislation has been enacted for the opening of an official Cayman Stock Exchange," says Boxall.
What about the money-laundering, the drugs and the crime? The reality is very different from the popular image conveyed in the film The Firm or by the local collapse of BCCI. Opening a bank account in Cayman requires more disclosures than in almost any European country. When the account is open, don't think you can deposit large amounts of cash. You can't. "It's rare to see two one-hundred-dollar bills in Georgetown let alone a suitcaseful," says Boxall. As for crime and drugs, these two are invariably connected with other countries. However, in Cayman there is virtually no crime burglar alarms and security systems are absent on most of the multi-million dollar villas you pass and if a luxury car is stolen, the news may make the front page of the local newspaper the following day. The large shipments of cocaine that have been seized were all in transit to the US.
What's the future for Boxall? Don't bet on another early retirement. The firm is "his baby" and he is clearly impressed with the quality of his partners and associates. When travelling he remains in constant touch with his colleagues. Sir Vassal Johnson, the Caymans' highly respected former financial secretary. has described Boxall as "one of the principal contributors towards Cayman's growth as a banking and international financial centre". In typically modest fashion Boxall responds: "The mosquitoes have gone, but the opportunities in Cayman are all still here!"
Philip Porter
Senior managing director, Tokyo Mitsubishi International Bank
"I thought Philip was with Daiwa for the duration," says a friend from Merrill Lynch. Indeed, to many people in the international capital markets the debonair Porter was the most visible face of Daiwa in Europe and one of the driving forces behind the firm's recent success.
The news that he was leaving to become head of syndication and debt origination at Tokyo Mitsubishi International (TMI) shook the market out of its summer torpor. The merger of Bank of Tokyo and Mitsubishi may have created the world's largest bank but industry observers say it may be years before the two are successfully integrated. In the Euromarkets, Bank of Tokyo Capital Markets and Mitsubishi were strictly second-division players with no discernible ambition to move higher. However, that's probably the precise attraction for Porter, who drove Daiwa into the top six new-issue houses last year and collected a fistful of awards a rare occurrence for a Japanese house. "Tokyo Mitsubishi is a sprawling mass which could go on chasing its own tails indefinitely. Philip will bring a new vision and he will be unconcerned about the internal politics. Also, he comes from a top issuing house, which Bank of Tokyo or Mitsubishi have never been," says a former colleague at Daiwa.
This is a major challenge for Porter, who will no doubt be handing out his new business cards at the IMF meeting in Washington. His mandate includes debt-origination responsibility for the entire world outside Japan, and the combined bank's huge client base will provide invaluable introductions. There is also great potential for increasing bond sales via the combined bank's vast branch network.
But size isn't everything Porter will be aware that the main psychological problem will be to convince the supranationals, the sovereigns and the main frequent borrowers that TMI should be taken seriously in the primary market. At Daiwa, that process took years and culminated in the 1995 award triumphs. Now he will have to persuade clients he can repeat the Daiwa success story with TMI. That may not be easy, since global and frequent borrowers are becoming increasingly reluctant to give mandates to houses outside the top dozen in the league tables, let alone to TMI which isn't in the first 25.
Maybe top 10 in 1998
What about Daiwa post-Porter? Former colleagues say he is a "major loss". But Porter is not Daiwa's only loss. Also leaving is Paul Morganti, the highly regarded link man to many of Daiwa's top capital-markets clients, including the Republic of Italy and the Kingdom of Sweden. He's off to HSBC Markets and his hiring is a coup for the charismatic Robert Gray, head of global capital markets and vice-chairman of the International Primary Markets Association. With the recent departure of Porter and Morganti, as well as the head of bond sales, Martin Davies, Daiwa's managing director Alex Monnas needs to stem this outflow.
Porter himself may quickly introduce new blood at TMI. Friends say he will miss Morganti and, in particular, his close Daiwa colleague, Dennis Kelleher. But don't expect instant change he knows that TMI, with its huge balance sheet and capital resources, can afford to take a long view. "We won't be in the top-10 lead-managers by the end of this year," he says, but adds: "I'm not making the same promise for 1998."
|