Peregrine’s last days, by Andre Lee
Pioneering the Asian bond business
Building the business at Peregrine
The approach of the Asian financial crisis
When did you get into investment banking? By 1988 I was really debating with myself as to whether or not I should go and get an MBA, as many of my friends were doing, or strike out on a completely new path. One area that began to interest me was finance because it seemed to encompass a survey of all things: politics, social culture, demographics, markets. So I tried to get into a few Wall Street firms at that time but I didn’t have an MBA and I didn’t have any experience. It wasn’t easy. So I responded to an ad in the paper from Shearson Lehman Hutton for financial consultants. I went for interviews and was accepted and went through their training programme. Coming out of the training programme I decided I would focus on trying to do business with Korean banks, which I think was a notch above what I guess, as a financial consultant, I was supposed to do.
You were supposed to be a retail broker?
Right. And here I was trying to contact Korean banks and do business with them, which would often lead to clashes with Lehman’s institutional sales desk who were also contacting these same clients.
So how did you manage to do that?
I just persisted. I didn’t really know much about fixed income or even equities but the Korean bankers I met felt that they could give me a chance and help me out.
How about internally within Lehman?
Finally I built some relationship with certain fixed-income traders who helped me to understand the business better. I started to sell some bonds after a certain period. I was later asked to join the institutional sales desks, which was a place where I wanted to go, so I was quite happy about that. That happened in late 1989. And then there was an opening in Hong Kong because one of the salesmen had left and I was asked whether I would be willing to go there for purposes of trying to build a sales network in Korea. I owe a lot to Jarret Wait, who was the international sales manager at that time, for giving me the chance to join fixed income and go to Hong Kong.
Was this the chance you had been hoping for?
I was very happy about the opportunity, even though I knew I wasn’t going over as an ex-pat for the benefits. I figured that if I could at least go to Hong Kong and maybe prove myself, better things could come my way. Although I realized when I landed in Hong Kong that it was not a cheap place to live even in 1990, so I did find myself in a position where I felt like I was once again struggling financially. Once you are out of the training programme at Shearson Lehman they pay you a very small base and you are dependent on commission. And when you don’t have any clients it’s kind of hard to make a living.
Did things start falling into place quickly for you?
It was difficult. Very few banks in Korea were actually buying bonds other than floating-rate notes, and Lehman decided to get out of that business about three months after I arrived in Hong Kong. The only thing I could sell was straight bonds and Koreans just wouldn’t buy straight bonds so I was left to my own devices to figure out ways to do business with Korea. I ended up taking the route whereby I tried to focus on doing private placements, which again, I guess, wasn’t supposed to be part of my menu.
I also spent a great deal of time trying to educate Korean banks about how the markets worked, based on my little understanding, and arguing the merits and virtues of buying fixed-rate bonds in a period when interest rates were definitely beginning to trend down. I began to have some success after a period of time and I was happy when Lehman began to give me more responsibilities and began to assign central-bank accounts over to me, because at that time central banks were the big accounts that senior salesman would get.
Was there a breakthrough account for you?
They assigned me to the Asian Development Bank (ADB), which had been a long-time Lehman client as an issuer but had not been on the map in terms of its treasury and bond portfolio management operation. I managed to forge a new relationship with the ADB with regards to its bond portfolio management.
