Initially, I thought she was ringing about an opinion editorial the FT had published the day before written by my erudite sister, Tracy. However, Ms Chung was calling about an article that I wrote last year discussing my brief return to the City in 2005. Even though my colleagues were charming and inclusive, going back felt like going backwards. I resigned in early 2006 and started writing the Abigail With attitude column.
The topic of female financial recidivisim is hotter than a baked potato right now. I wont boast that I broke this story because it might not be true but I was certainly one of the first to climb on the bandwagon following my meeting in late April with Jeremy Isaacs, Lehman Brothers chief executive for Europe and Asia. I asked Ms Chung to send me an email listing her questions and hurried off for a series of appointments. After an alcoholfuelled dinner with one of president Nicolas Sarkozys advisers, I had completely forgotten the Financial Times.
Next morning, the paper ran a large article about the efforts of investment banks to lure female financiers back to the fold. I was used as a case study of a refusnik and dubbed independently wealthy. The implication was that I could afford to walk away from the City. Its so humiliating, I wailed to a girlfriend who effortlessly combines motherhood and Morgan Stanley. I have been reduced to a Paris Hilton wannabe.
People jest about the power of the pen. However, recently hedge fund managers have wielded literary and numerical skills to create weapons of financial destruction. Chris Hohn, the founder of the Childrens Investment Fund, astounded European markets when he wrote a letter in February to Rijkman Groenink, ABN Amros chief executive, stating: It would be in the best interests of all shareholders, other stakeholders and ABN Amro for the managing board of ABN Amro to actively pursue the potential break-up, spin-off, sale or merger of its various businesses (or as a whole). From his prose, it would appear that Mr Hohn does not believe in excluding any options.
My favourite hedgehog author is Daniel Loeb of Third Point. Loeb takes stakes in companies and writes scathing letters to chief executives who are depressing his alpha. Usually, the letters accompany Loebs government filings. If you buy in excess of 5% of a public American company, you must file with the SEC. Apparently, Loeb once increased his holdings, at a cost of more than $4 million, so he could file a letter. A flavour of Loebs style emerges from a letter he wrote last December to Mr Van Wagenen, chief executive of Pogo Producing Company. In the one and a half decades you have run Pogo, Loeb fumes, shareholders have suffered sub-par returns. Your track record is long and meagre, and it is time for change. A source who met Loeb several years ago claims: Hes done well for his investors. But he's very aggressive, I didnt warm to him.
If you want to laugh out loud, go to the following web-page: http://paul.kedrosky.com/archives/001219.html. Financial commentator Paul Kedrosky posts email correspondence between Loeb and a potential recruit that goes from application to altercation in eight taut exchanges. In the penultimate email, the recruit hisses: hubris. Loeb shoots back: Laziness. Delicious.
For some weeks now, I have been highlighting the fact that Chuck Prince is a sitting duck although ostrich might be a better choice of bird for activist hedge fund managers. It seems that alternative investor Eddie Lampert agrees. He has purchased an $800 million stake in Citigroup through his vehicle, ESL Investments. I do hope Lampert will write an open letter to Prince so we can all be spectators at the ensuing bullfight.
"What will Kims legacy be? He ought to be have a place in the Merrill Hall of Fame, as one of the chief lieutenants to Stan ONeal as he turned the firm around from its dark days at the turn of the decade"
Kims departure shows just how strong the lure of the hedge fund industry and perhaps being your own boss is. With Kim, it cant be all about the money. If you are earning $5 million as a trader, fine, go off and start a hedge fund, a mole said. But Kim earned $40 million last year, will that be so easy to replicate?
What will Kims legacy be? He ought to have a place in the Merrill Hall of Fame, as one of the chief lieutenants to Stan ONeal as he turned the firm around from its dark days at the turn of the decade. The one potential black mark against his name? In September 2006, it was announced that Merrill was acquiring the First Franklin mortgage origination franchise from National City Corporation for $1.3 billion. Was this a Kim initiative? He is quoted as stating: These leading mortgage origination and servicing franchises will add scale to our platform and create meaningful synergies with our securitization and trading operations. With hindsight Im not sure last September was the right moment to plunge into sub-prime.
A Merrill Lynch insider insisted that the firm was very happy with the First Franklin acquisition and its performance. Insider also stressed that the last two quarters were record ones for Dows division. It will be interesting to see where Semerci and DSouza, who inherit Dows trading responsibilities, will take the business. And even more interesting to see how many other trading chiefs follow Mr Kims example and quit Wall Street for Hedge Fund Alley.
Next week: the focus is on continental banks. Please send news and views to email@example.com.
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