Jim’s world tour
Some might see it as a perk of the job, others as an intolerable burden. Either way, Jim Wolfensohn must be one of the world’s most travelled people. Since he became president of the World Bank he’s been to over 30 countries and covered 111,803 miles, or 179,133 kilometres. That’s the equivalent of 11.3 times around the globe, or halfway to the moon all since June 1995.
The countries he’s visited are about as diverse as you can get, from Mali and Malawi, to Australia, Vietnam, the West Bank and Uzbekistan. In fact he’s travelled to all five continents first class, of course.
Wolfensohn makes a point of travelling extensively inside the countries too visiting organizations like church groups, as well as the usual business and government representatives.
Unfortunately Wolfensohn’s travelling was curtailed by illness in the summer. Apart from a trip this June to the g7 conference in Lyon, most of his journeys have been to his ranch in Wyoming. But with his health on the mend there are more trips in the pipeline current favourites are India and Nepal in October.
Antony Currie
The Old Lady’s Mr Cool
Bankers will be well advised to remember that the man now responsible for the uk’s borrowing never gets hot or cold. He has a medical condition which means he does not feel temperature differences. He even claims not to own a single long-sleeved shirt. So the uk’s reputation as the coolest, most calculating borrower in the market looks set to continue.
The new man is John Nugee, who as chief manager of reserves management also looks after the uk’s $47 billion portfolio of foreign exchange reserves. He has just returned from a four-year posting in Hong Kong, where he set up the territory’s reserve management operation. He succeeds Sue Camper, who has left to set up a Bank of England office in Wales.
“I’m very new to the borrowing side,” says Nugee. “Hong Kong did not borrow. So I can honestly say I’m a beginner, but eager to learn.” The uk has a reputation for being one of the Euromarket’s rarest and most sought-after borrowers. Its issue in July raised $2 billion and was the first since December 1992. The principal reason for the deal’s success was the secrecy that surrounded it. Even the sovereign’s closest relationship banks were not aware of its coming.
The uk’s benchmark $4 billion floating-rate note is due to mature at the end of September, so the uk is expected to borrow a further $2 billion, perhaps in the floating-rate note market. But Nugee is giving nothing away, even though he says he is advantaged as a borrower because he is also an investor and therefore knows what they want.
And what do investors want? “I can’t say that,” smiles the cool Nugee.
Steven Irvine
Drive-in dinner beats Paris
It is traditional for French franc bond deals to be signed in London, and commemorated with a dinner in Paris. But Abbey National broke with tradition this month when it told lead manager bnp that it was cost-cutting and couldn’t justify a trip to the world’s gastronomic capital.
So bnp suggested an evening of go-kart racing instead knowing full well that Abbey National’s borrowing supremo, Alex Braun, is as much an aficionado of burning rubber and the chequered flag, as he is of shaving off basis points. “People obviously like to do what they’re good at,” muses Chris Freeman, bnp’s head of debt origination. On the other hand, “I haven’t done this since I was 10,” he adds.
It showed. Freeman and his boss, Jim Saracusa, a man whose 6’6″ frame is hardly go-kart-friendly, crossed the line last out of eight. Braun won the event after 125 laps.
bnp’s only moment of glory came when its flying Finn, Maria Gripenberg, did the fastest lap in her go-kart debut.
“We gave it our best,” says Freeman, laughing at the suggestion that, because Abbey has raised ffr5 billion in French francs this year, it was too important to beat. He adds: “But then we retired to a French restaurant where we have more experience.”
Unfortunately the ffr1 billion deal’s joint bookrunner, jp Morgan, was unable to race. SI
More creativity at DMG
After the revelation that rogue fund manager Peter Young was long 13 holding companies in Luxembourg, you will be pleased to hear that creativity hasn’t quite been stifled at Deutsche Morgan Grenfell by the ensuing clampdown.
A Morgan Grenfell employee has just completed a first novel. John McLaren, a corporate finance director based in London, has written what he freely confesses is not a “city novel”. Press Send is a thriller. The only other thing known about the plot is that it has a high-tech venture-capital twist. Everything else, publishers Simon & Schuster are keeping closely under wraps ready for publication early next year.
The debonair McLaren nicknamed James Bond by some of his staff, since he used to work at the British foreign office wrote the novel, which is set in the us, after conversations with friends in Silicon Valley.
“My colleagues, by-and-large, don’t know about it,” says McLaren, who has been given a two-book contract up front. “Quite a few of them will be pretty surprised,” he adds.
He wrote the first book in Geneva in the space of a three-and-a-half week working holiday. The last week was spent closing an m&a transaction he put the final touches to his novel by night, and sold Mühlerbach, the Swiss paper distribution company, by day.
Suitably enough for a Deutsche employee, the book will be translated into German and published, simultaneously with the English version, by Heyne Verlag.
Steven Irvine
Late IMF booking for Massad
When Chilean central bank president Roberto Zahler resigned in June, the ruling coalition quickly came up with a new candidate: health minister, Carlos Massad. His confirmation by the senate as a central bank director was expected to be a formality.
Not so. On August 27 Massad made the journey to the senate chamber, in Valparaiso, and was rejected by a single vote. Afterwards Massad and a highly irritated looking finance minister Eduardo Aninat were left facing a barrage of journalists’ questions.
But the following day the government simply re-nominated Massad, having drummed up extra support among senators. “Unconstitutional,” said the opposition, sending the issue to a senate committee for a ruling. The government dismissed this as “delaying manoeuvres of the right” and in turn was accused of packing the five-person central bank council with centre-left allies, and of behaving “like an elephant in a china shop”.
Ironically, the 64-year-old candidate is widely respected on all sides. He’s also seen it all before, having done a previous stint as central bank president between 1967 and 1970, when president Eduardo Frei’s father was head of state.
On September 10 a second vote was held, and this time Massad squeaked through, winning his ticket to the imf meeting in Washington. But at the time of going to press a few senators were still muttering threats about challenging the entire process on constitutional grounds.
Michael Marray
Japan’s pit vipers
Who in Japan is enjoying double-digit loan growth? Not any of the big banks, now scrambling to raise capital after writing off huge bad debts.
Step forward the upstart consumer finance companies, of which the top four Takefuji, Promise, Sanyo Shinpan, Acom are now stock market darlings, where a decade ago they were treated as a social cancer.
Known as sarakin, a contraction of the Japanese words for salary man and cash, they lend money to the masses.
In the early 1980s they were plain loan sharks, able to charge usurious interest of up to 110%, and were blamed for a spate of suicides. Horror stories abounded of letters sent to the debtors’ children at school; and housewives pressed by sarakin into prostitution to pay back the money. One sarakin boss, who later made headlines for his purchase of expensive Western paintings, was nicknamed mamushi or pit viper.
In 1983 a law was passed that put a ceiling of 40.004% interest on loans by the sarakin, which began to clean up their act. Takefuji, the biggest with 83 branches in Tokyo and 45 in Osaka, has cut its loan rates from 36.5% in the mid-1980s to 27.375%, and plans to reach 24% by 1998.
Takefuji’s ipo last month gave it a market capitalization of over ¥1 trillion ($9 billion).
Sarakin generally lend up to ¥500,000 ($4,600) at a time, without any collateral or guarantor. To avoid face-to-face interviews, applicants can have their credit status checked on-line at unmanned offices. They fill out a list of basic questions, then wait 30 or 40 minutes for a credit card to pop out. At a Promise office above a Japanese sweetshop next to Shimbashi railway station there is pop music playing and a rack of magazines to read.
Strangely, Takefuji does not seem very good at assessing the risk of its other investments. ¥122 billion ($1.1 billion), or 9% of its balance sheet, is tied up in a 17,000 square metre plot of land it bought in Kyoto at the height of the late 1980s asset bubble. The land is now a car park.
Peter McGill
Hire Wars
Deutsche Morgan Grenfell is not the only alien wreaking havoc on Wall Street this year.
In July, Union Bank of Switzerland (ubs) Securities raided Chase Manhattan and jp Morgan to hire eight top emerging markets fixed-income experts, including a Chase star, Daniel Canel, who was formerly co-head of the emerging markets division.
In August ubs also snared James Mason, an m&a dealmaker from Chase, to head its new media and entertainment group. Then only days after Mason arrived, ubs announced yet another hire: Robert Nolan, a highly-regarded vice-president at Goldman Sachs. Nolan will launch ubs’s telecommunications investment banking division.
ubs attracted these names, not so much by waving a huge pay packet, as by offering them their own banking unit.
Canel, for example, found that post-Chase merger,he was a co-head alongside Jorge Jasson.
The raids are not over either. According to Gordon Burns, managing director and head of investment banking at ubs in New York, the company has about 125 investment bankers now, and will add another 40 over the next 18 months. Danielle Robinson
Speak IMF
At imf/World Bank cocktail parties this year you are likely to hear conversations on these lines:
I think nab’s going too far.
I agree, gab’s quite big enough. What do g7 think we’re made of? As I said in Halifax…
g7? I’m more worried about the g24, not to mention the g10 and the g30.
Do you think esafs and sals can do the job?
We want the ldcs to have more say, and the nies.
Especially the hpaes.
Get in more dfi, lift the ntbs and encourage a lot more smes. That’s the way to handle these emerging economies, except the fsu.
That’s what the wdr says, with heavy prodding from oed.
Of course, and Wappenhans, or Rovani at the idb…
