| Peter Hancock | ||||||
Peter Hancock has made quite a name for himself as a talented banker, skillful innovator and determined risk-taker. So when he addressed Isda’s AGM in Washington last month, he was guaranteed a good turnout. But, as the audience quickly realized, Hancock has a talent for saying a lot while giving little away.
Hancock spent most of his career at JP Morgan, where he was head of fixed income in the latter part of the 1990s. He cut his teeth in derivatives and headed the division from 1990 to 1995 – this was a formative time in the credit derivatives market and JP Morgan is widely thought to have been one of the founding fathers of credit default swaps.
And it is that area he is returning to now. Or at least he’s trying to. He resigned from JP Morgan last after an unfulfilling spell as the bank’s chief financial officer, and just days before the merger with Chase was announced.
Hancock knew nothing of those plans. CEO Sandy Warner had kept him in the dark after realizing that Hancock had supported a failed coup against him earlier in the year.
When he left, Hancock talked about setting up a firm that would link risk management and insurance more closely. Five months later, he did, clubbing together with Warren Buffett and Roberto Mendoza, by then into his sixth month at Goldman Sachs. Mendoza, another former career JP Morganite, led the failed coup against Warner in 2000.
The plan was that Hancock and Mendoza buy General Re, the reinsurance arm of Buffett’s company, Berkshire Hathaway. General Re’s record is pretty poor, and analysts viewed its trading activities as a failure. But Hancock and Mendoza intended to remould it into a new kind of entity to provide advice on generating revenue via a proactive attitude to risk as well as managing exposure. But thus far nothing has happened – rumour has it they are still raising capital and seeking regulatory approval.
Hancock spoke of a utopian society in which financial innovation is as welcome as medical innovation and success requires clarity, an ethical approach, client focus and a commitment to innovation.
When pressed later about his new project, Hancock remained tight-lipped. He has an office in New York, as does Mendoza, but exactly what he spends his time doing these days is a mystery. Well almost. “My tennis game has improved a lot,” he concedes.
