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Cyrus Ardalan |
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Cyrus Ardalan
Vice-chairman, Barclays Capital
The latest high-profile recruit to arrive at the headquarters of Barclays Capital on London’s Canary Wharf is Cyrus Ardalan, a quietly charming Iranian-born former World Bank executive and subsequently one of the best-known coverage officials during his 10 years at Paribas where he ran the global bond business.
Ardalan becomes Barclays Capital’s third vice-chairman, joining Euan Harkness and Sir Brian Appleyard. His job will be to help – in a “hands-on, client-facing role” – the bank’s push into continental Europe, concentrating on Scandinavia, the Netherlands and southern Europe. He reports to Naguib Kheraj, global head of investment banking, and to chairman Hans-Joerg Rudloff.
Ardalan says he was attracted by what he calls Barclays Capital’s “fully-integrated debt business”. This, he says, “can provide clients with all debt-related products, looking after all their funding needs under one integrated platform. Very few banks do that. The approach here is to engage clients in strategic and corporate finance dialogue at the most senior level on financing and risk management. Again this is relatively rare.”
Cyrus Ardalan was born in 1950 in Tehran, but had a peripatetic childhood. His father was variously Iran’s ambassador to the Soviet Union, Germany, the US and the UN in New York. He also served as Iran’s foreign minister from 1955 to 1957, and was minister of court in the Shah’s last government before the 1979 revolution.
At 13, Cyrus Ardalan was sent to a boarding school in England, Lord Wandsworth College in Hampshire, where he was an enthusiastic cross-country runner and won the drama prize. He then read economics at University College London, following this with a two-year graduate degree in economics at Balliol College, Oxford.
In 1974, he became one of the youngest entrants through the World Bank young professionals programme in Washington. The World Bank – then under the presidency of Robert McNamara – is remembered by Ardalan as having “a real sense of mission” in promoting development. Ardalan spent much of his time working on Yugoslavia, and co-wrote a book entitled Workers’ Self-Management, an assessment, he says, of the country’s “unique blend of communism and capitalism”.
In 1980, Ardalan became chief of staff to the Bank’s chief financial officer, Moeen Qureshi (later interim prime minister of Pakistan), who had responsibility for the World Bank’s treasury functions, budgeting and strategic planning.
In 1982 Ardalan became a division chief in the treasury, shortly before the World Bank did the first publicly announced swap. “It really started the whole swap market,” he recalls. “As soon as it was announced people started focusing on it as a legitimate and credible market, and it started to grow very rapidly.”
During his time, his division executed some $2 billion a year of foreign exchange and interest rate swaps, and over $3 billion of annual borrowings from central banks and European markets, using cutting-edge borrowing and liability management techniques.
In 1986, deciding that he didn’t want to spend his entire life working in the public sector, Ardalan left to join Chemical Bank as managing director of the product development group, supporting various businesses in the bank, including mortgage-backed and asset-backed sales and trading, financial futures and derivatives.
Four years later, he moved on to Paribas as head of capital markets and CEO of Paribas’ US broker dealer, running fixed income and equity and merchant banking operations in North and South America. Over the next five years, his team grew from 30 to 300 people and he presided over the great strides that the bank took in emerging markets, equity derivatives and Latin American equities. He also built up the new-issue origination business, taking US institutions into the European market.
In 1995, the bank restructured and Ardalan came to London to run the global bond business, helping the bank to rebuild its business in high-grade Eurobonds, governments and emerging markets.
But probably his most notable achievement was to position the bank for the coming of the single currency. “In 1996/97,” he recalls, “we made a very conscious decision to start promoting the euro as a currency for issuing debt, two years before the actual arrival of the currency.”
Paribas obtained mandates first from EIB, then from Italy and Finland to launch euro-denominated bond issues, with the proviso that if the euro failed to come into existence, they would be converted into ecus.
It was the top house for euros in 1997/98. Paribas should really have come into its own in European bond markets following the launch of the euro last year. But in its moment of triumph, it was side-tracked into a prolonged merger battle along with its preferred partner Société Générale and its eventual acquirer BNP.
In 1998, Ardalan had taken over all client activities of the fixed-income group, including sales and origination. The merger with BNP led to a restructuring and he decided it was time to move on.
Philip Eade
| TJ Lim | ||||||
TJ Lim
Head of international debt markets, Merrill Lynch
TJ Lim has always been prepared to test himself. At the age of 19 he took himself off from his native Malaysia to study engineering at Glasgow University, in awe of the city’s association with James Watt and other pioneer engineers, but blissfully ignorant of its dismal weather.
As an investment banker, Lim is inclined to move on whenever he begins to feel unstretched, or that his job is done. He has, he says “never been bored”. When he left Merrill Lynch in 1995 for UBS he felt that over the previous seven years he had helped “put Merrill on the map” in fixed-income derivatives and foreign exchange. The opportunity to do the same for the Swiss bank was, he recalls, too tempting.
But one challenge that Lim does not relish is that of laying off staff following a merger. In 1998, after SBC bought UBS, Lim was one of the only UBS senior executives to be offered a role in managing a business, becoming global head of rates and derivatives and structured products. Nevertheless, he soon began to feel that he didn’t fit in the new set-up. “It’s one thing joining a firm when you’re building something,” he says. “It’s quite another when you have an overlap and you have to downsize.
At least half the fixed-income people were targeted for downsizing. Executing the plan was much tougher and psychologically draining than I had ever thought.”
Lim joined Dresdner Kleinwort Benson as co-head of global markets and helped establish the bank as one of the top underwriters of deals for European borrowers. But then Deutsche tried to merge with Dresdner earlier this year. An anonymous Deutsche Bank executive told journalists that the Dresdner businesses would be torched. “I was in a state of disbelief,” Lim recalls. “I thought how can this be happening to me again. What did I do wrong?”
It was abundantly clear that in the event of a merger, the DKB fixed-income group would cease to exist. Without waiting to see how he might figure in Edson Mitchell’s plans, Lim jumped ship back to Merrill. “People said I should have been relaxed because I used to work for Edson [at Merrill] but the overlap is huge. I wasn’t prepared to go through all that downsizing again.”
Somewhat cruelly, five days after he left the deal fell through. Lim’s reaction was calm. “One never looks back,” he says. And indeed he does seem cheerful to be back at his old firm, surrounded by a handful of his senior lieutenants from Dresdner.
TJ Lim was born in 1957 in Malaysia, the youngest of eight children. His five brothers and two sisters are still in Malaysia. “I’ve always been the different one,” he says. As a boy he was a good track athlete, and keen on badminton and field hockey. He spent his time from the age of 16 to 19 at Malaysia’s Royal Military College from where he could have graduated with a commission. “I wanted to be a fighter pilot,” he recalls, “but my eyesight set me back, maybe for the better.” The Army was another option. “If there had been a shortage of recruits they might have put pressure on me to stay in,” he says.
Instead he went to Glasgow University, where he met his future wife, a Glaswegian. After graduating top of his class, he was offered a place to study for a DPhil at Oxford, but decided that he was by now more interested in management and finance. As an undergraduate he had found himself increasingly fascinated by Wall Street. He took an accounting course to see whether he had an aptitude for this kind of thing.
He went to Canada to do a master’s degree in management science at the University of Waterloo in Ontario – an even chillier spot than Glasgow. “Minus 20 was considered perfectly normal,” he says. He then did an MBA at the New York University Graduate School of Business Administration. “It was right by Wall Street, and when I came down to check it out, I said that is my school.” Again he graduated top of his year.
Lim almost joined a manufacturing company, but instead, in 1983, went to JP Morgan and has “never looked back”. After his training programme he joined the highly regarded International Financial Management Group under the leadership of Roberto Mendoza. He was one of the first few to join the nascent swap group, responsible for building an extremely successful and profitable derivatives operation for JP Morgan.
JP Morgan, though, was still a commercial bank and the Glass-Steagall Act prevented it from properly participating in the US capital market and securities business. His former boss, Connie Volstad, had left to go to Merrill, and Volstad and Edson Mitchell jointly hired Lim in 1988 to focus on the non-US dollar swap business.
Over the next seven years, Lim did much to develop that business, playing a central role in the formation of the first separately capitalized swaps vehicle, Merrill Lynch Derivatives Products. He was an influential member of the management group who transformed Merrill’s international fixed income, foreign exchange and derivatives activities into a cohesive and successful division in the bank. By the early 1990s, Merrill was considered one of the leaders in debt markets.
When UBS offered him a job in 1995, Lim was lured by the idea of developing the derivatives side of this triple A firm. “I’ve always liked the idea of revamping something,” he says. “And I was ready for a bigger job than I had had. It was a very difficult decision to leave, but maybe Merrill should have come a bit earlier with a different sort of challenge for me.
“I wanted to try creating something on my own, to see if I would sink or swim. It was a real test of my character.” After struggling in the first year, towards the end of 1996 he was given the additional responsibility of restructuring the global foreign exchange operation, with a further 500 people. He was the first non-Swiss person to hold this position. Under his guidance, the fixed-income derivatives and global foreign exchange businesses posted record profits for UBS in 1997.
Now back at Merrill Lynch in London, Lim is excited by the task of “helping to position the bank for the new millennium”. Equally excited is his boss Kelly Martin, head of global debt markets, who describes Lim as “an exceptional person, […] the complete debt markets executive with a proven track record, capable of managing a far-flung international business.” Lim will need to be all those things if Merrill is to recover the ground lost in the debt markets to the likes of Deutsche Bank, Salomon Smith Barney and Morgan Stanley Dean Witter.
PE
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Wanda Rapaczynski |
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Wanda Rapaczynski
President and CEO, Agora
When in 1992 Wanda Rapaczynski announced that she was quitting her job as a senior executive at Citibank in New York to help run Poland’s first independent newspaper, her former Citibank colleagues might have assumed that she simply wanted to do her bit to help her country recover from decades of communism and martial law. Few would have predicted that the move would be a good one financially.
What has happened since represents one of the most staggering business success stories in the former Soviet bloc. The newspaper Gazeta Wyborcza (Electoral Gazette) is now the flagship of media giant Agora, which has diversified into radio, pay-TV and most recently the internet, and has a market capitalization of $1 billion (when the shares were at their height earlier this year, it was worth $2 billion).
Thanks to the staff shareholding plan devised by Rapaczynski and her colleagues Helena Luczywo (the editorial director) and Piotr Niemczycki, there are now reckoned to be some 400-dollar millionaires on the Agora payroll. (Gazeta’s editor-in-chief, historian Adam Michnik, refused to buy his allotment of shares, turning down the opportunity to become a millionaire several times over).
Wanda Rapaczynski was born in 1947 and grew up in Warsaw. Her father was Jewish, her mother a Catholic. As young girls, she and Helena Luczywo saw a lot of each other. They were brought together by their parents who had known each other since their days as refugees during World War II in the Soviet Union, where they had gone to escape the Nazi death camps in Poland.
Wanda studied psychology at the University of Warsaw. A student revolt in 1968, part of the general wave sweeping Europe, culminated in a vicious anti-semitic campaign sponsored by Poland’s communist government. The Rapaczynski parents were sacked from their jobs, and the family, like most of Poland’s remaining Jews, decided to emigrate. They went as a family to Sweden, but Wanda then travelled on to the US, where she married her Polish émigré boyfriend, had a child and did a doctorate in psychology at the City University of New York.
She then began work as a research psychologist at the Educational Testing Service. In 1980 she moved to Yale University to do research on the effects of television on young children, concluding that it tended to have a levelling effect. By 1982, however, she had decided that she wanted to “do something more practical, something that had a more immediate impact”.
So she enrolled on an MBA course at Yale, and two years later began working at Citibank in New York. Over the next seven years she rose to become head of development for new products, including ATMs and advice for high-net-worth individuals.
In 1990, business took her back to Poland where she looked up her old friend Helena Luczywo. The two had seen each other only twice since 1968. Luczywo had spent the previous 13 years under communist rule in Poland editing underground newspapers. In 1989 she had been offered the editorship of Gazeta Wyborcza, Solidarity’s newspaper, which had been sanctioned by General Wojciech Jaruzelski as a prelude to free elections. It became the first independent newspaper in the Soviet bloc.
But Luczywo needed someone to help with the business side of things, and within moments of their meeting, Rapaczynski had volunteered. “For a while I helped them out on a friendly basis,” she recalls. “But then after a while it became impossible to combine that with my job at Citibank.” So in 1992, with her daughter by then at boarding school, she left Citibank and moved back to Poland.
The following year US media company Cox Enterprises bought a 12% stake in Agora. “It was one of the critical steps,” recalls Rapaczynski, “allowing us to build our own printing plant.” It also provided the company with management training, consultants and a lot of free yet very valuable advice. Over the next three years Agora focused hard on making sure “everything in the paper worked perfectly,” she says, “and then in around 1996 we began to think that we could diversify. That’s when we started the radio project. In 1997 we invested in Pay-TV.”
In 1998, Agora brought in Credit Suisse First Boston to advise on a major capital reorganization and flotation. It was CSFB that suggested Rapaczynski should be named president. When the company went public, 1,600 members of staff were allowed to buy shares for Z1 each, with the allotments based on years of service. The shares were sold to institutional investors at Z104 each.
The enrichment that this has entailed has provoked a certain amount of negative comment in Poland. “Of course it creates jealousy,” says Rapaczynski. “Greed is a very unattractive thing. But even though staff have become millionaires, they aren’t leaving the company. The ethos remains the same.”
She is unapologetic about her own wealth, and is apt to tell people: “The best way to keep the devil at the door is to be rich. If you want to do good, you have to do well.”
PE
