By Abigail Hofman
I was an investment banker for some 17 years, based in London. I loved my time in finance, but I always knew being a career banker in a corporate environment was not for me. I saved my bonuses assiduously and eventually believed that I had saved enough to walk away. How self-assured and cocky that seems to me now.
I had known the chairman of Euromoney, Padraic Fallon, during my banking years, and when Padraic heard that I had left Barclays Capital, he approached me to write an insider’s column for Euromoney. I joined the magazine in March 2006 and spent eight extraordinarily happy years commenting on the top people and firms in the global capital markets.
Of course, when I joined Euromoney I knew absolutely nothing about writing or investigative journalism. It was due to the generosity of colleagues such as Clive Horwood and Padraic himself that I learnt how to research and craft an interesting column.
“Always write something new,” Padraic would bark.
I may only have been a cub reporter. But because of my years as an investment banker, I had a feel for the self-deception and pomposity that the banking world could foster.
My Euromoney columns chronicled one of the most interesting periods of financial history: the heady days and excesses of 2006 and 2007, the uncertainty that started to unfold as sub-prime hit the buffers and stock markets spiralled lower, and then the halting recovery from 2010 onwards.
Probably, my favourite ‘Abigail with attitude’ column related to the investment bank at the epicentre of the drama – Lehman Brothers. Early on in my Euromoney tenure I was introduced to Jeremy Isaacs, Lehman’s Brothers’ astute and charming chief executive for Asia and Europe. We got on well and I still count Jeremy as a friend.
Our initial meeting led me to take a closer look at the Lehman Brothers’ main board in May 2006.
“Rarely, have I seen such a motley collection of the great and the good,” I wrote. “Nevertheless, Lehman is to be commended for at least one thing: in an industry that worships youth, the Brothers’ board is a shining beacon of non-ageism. Sprightly seniors abound and half the board are septuagenarians.”
I noticed that the Lehman’s board – supposedly a foil and check on the strong-willed Dick Fuld, Lehman’s chief executive – had few suitably qualified members. Indeed, one of the female board members, Marsha Johnson Evans, was a retired rear-admiral and a former national executive director of the Girl Scouts of the USA. These are admirable achievements but no substitute for actual financial experience.
That criticism would also apply to then 75-year old Lehman board member, Roger Berlind, a retired theatrical producer. Looking back, it is clear that such individuals were in an invidious position and lacked the skills to understand what was playing out beneath their noses.
The composition of the Lehman’s board was obviously a red flag. In September 2008, just after Lehman went bankrupt, the illustrious Wall Street Journal ran a piece entitled ‘Where was Lehman’s board?’ I am proud that I got there first.
At Euromoney, the demise of Lehman led me down several other intriguing paths: the fate of Barclays, which bought Lehman’s US broker dealer business; and the vicissitudes of Nomura, which absorbed most of Lehman’s European and Asian operations.
In both cases, I was sceptical that these decisions would be worthwhile for shareholders. And again, I feel that I have been proved right.
By the way, I would strongly recommend that readers see ‘The Lehman Trilogy’. Written by Stefano Massini, the play deals with the bankruptcy; it also describes the lives of the three Lehman brothers who emigrated from Germany to America in the mid 19th century, seeking a better life.
The brothers started with a clothing shop and due to tenacity and sagacity, ended up with an investment bank. I was struck by the huge, exogenous setbacks that the Lehman family suffered while building the business – the American Civil War and the 1929 Wall Street crash.
For the first time in my life, I feel that my livelihood and well-being are being affected by events outside my control. In my case, I am talking about Brexit, where a rabble of self-serving and intransigent politicians are threatening to endanger the economic future of the country. I feel humbled when I think about the difficulties other generations have had to endure.
One of the best parts of my job at Euromoney was meeting so many interesting individuals. Firm friendships were forged, especially during those perplexing years of 2007 to 2009, when even seasoned, intelligent chief executives were on the back foot.
I am very sad that certain of those friends will not be there to celebrate the 50th anniversary of Euromoney. I think of Paul Calello, the talented and extrovert chief executive of Credit Suisse’s investment bank who died so prematurely in 2010, my mentor; Padraic Fallon, who passed away in 2012; as well as my close friend Russell Julius, HSBC’s co-head of banking for North America, and Kevan Watts, my first boss at Merrill Lynch. They both died recently.
Abigail Hofman wrote the ‘Abigail with attitude’ column for Euromoney from 2006 to 2014.