Chapter 67 AN OLD FASHIONED
Angus MacPherson was an old fashioned banker. He had started out as a
trainee at the Bank of Scotland on the Mound in Edinburgh. Fresh from
grammar school and without the benefit of a higher education, he slogged
his way through night school to obtain his banking qualifications, necessary at that
time for any young banker who wanted to advance in the profession. Even with his
excellent school results, university had not been an option; his family’s modest
means had closed that door.
He was accepted at the prestigious institution thanks to the recommendation of an
uncle, chief accountant at a shipping firm, an important client of the bank. Each
morning, as MacPherson made his way up Princes Street towards the bank’s
impressive Victorian headquarters, he thanked his good fortune. Many of his
background found themselves unemployed as traditional industries in Scotland
closed down, few lads of his background had a secure job, which made Angus
more determined than ever to succeed in his career at one of the two most
important banks in Scotland.
At that time banking was an unglamorous staid business and the days of the
financial and investment banking boom with its of traders and golden boys were
far off. In the early seventies, after a decade of Harold Wilson’s Labour
government and the decline of the industries that had made Britain great, the future
looked sombre as the nation entered a period of turbulence.
Then came Margret Thatcher, who undertook the reforms believed necessary for
transformation of Britain, side-lining industry in favour of the service and the
quaternary sectors. The Iron Lady’s Big Bang implemented major banking reforms
and promised Britons a better future. Angus MacPherson pursued his career,
climbing the ladder, as the Bank of Scotland underwent the same transformation as
many other British banks, abandoning its role as a traditional high street institution,
and what were perceived to be old fashioned banking methods.
A
In 2001, the bank merged with the Halifax to become HBOS, so as take
advantage of the new opportunities offered by innovative retail banking, where
traditional services were relegated in favour of high volume business. In addition
to the bank’s established services, it proposed a whole panoply of new products to
its customers: debit cards, credit cards, competitive mortgages; amongst which
were special interest-only deals, consumer loans, insurances and a whole range of
new and attractive facilities that encouraged many people to borrow without the
means to honour their obligations, a system that led to the credit binge, at the heart
of which was a sales culture motivated by the bonus system.
Prior to the merger, MacPherson had been promoted and transferred to Hong
Kong, where he took over property development services at the bank’s subsidiary,
then, in 2003 he became head of the Asia Pacific investment banking division of
HBOS. Business boomed as China became the world’s number one manufacturing
nation. When the crisis broke, HBOS was caught up in the meltdown of the UK
banking system, which ended up in the bank’s collapse and its effective
nationalization, McPherson was practically wiped-out with the value of the shares
he possessed becoming almost worthless overnight.
Given the disastrous situation of HBOS, MacPherson found himself suspended in
limbo as the bank went about disposing of its overseas operations. His job hung by
a thread and all that remained of the fortune he had accumulated was a painfully
thin share portfolio plus his property investments; a luxurious apartment in Stanley,
a pied-à-terre in Knightsbridge and a holiday home in Biarritz.
It was at that moment in time MacPherson met Tom Barton on his fact-finding
tour of China. Barton was impressed by his experience and understood the Scot’s
dilemma as HBOS started its retreat from Asia. Barton aware of the long and
difficult learning curve facing those entering China’s market, suggested the Scot
would be a valuable addition to the bank’s team.
A meeting was fixed up with Pat Kennedy on the Scot’s next visit to London and
the two men hit it off. It was not difficult to sense MacPherson’s disillusionment
with HBOS, and after a discussion with Fitzwilliams, he was offered the job of
setting up an INI base in Hong Kong.
The Scot’s knowledge of East Asia would open the door for business with North
East Asia and more specifically to China, where INI sorely lacked experience, and
more essentially, MacPherson’s guanxi network. INI’s traditional business base in
Asia had been built around the Nederlandsche Nassau Bank in Indonesia and
mostly limited to South East Asia.
MacPherson had developed HBOS operations along the same lines as the men
who had created the prosperity of the former colony in past generations. With ten
years in Hong Kong to his credit, he had gained the confidence of local Chinese
businessmen. By mastering more than passable Cantonese and Mandarin language
skills, he won admiration and appreciation in business circles for the daunting
efforts he had made to bridge the communication gap. It was a talent sadly lacking
in the local expatriate business community, which left many at the mercy of their
Chinese partners.
Fitzwilliams artfully presented the addition of MacPherson to the team as a
triumph, providing the Scot with a face saving alibi vis-à-vis his Chinese friends,
an astucious move, the Scot abandoning HBOS in favour of INI, a powerful new
player in banking, spanning the Eurasian continent.
After a shaky start in 2009, the INI Europa Property Fund was now posed to take
advantage of the market up-swing. Taking MacPherson on board for Hong Kong
was a masterful stroke, part of Fitzwilliams’ strategy, and thanks to Tom Barton’s
intuition, to attract wealthy individuals from the dynamic Pacific Rim region to
invest in prime property in London, Paris and New York.
At the London end, Alexis Sosnowksi was appointed Chief Investment Officer of
the Europa Fund, directly responsible to Fitzwilliams, under Pat Kennedy’s
watchful eye. A turn of fortune for Alexis, who had been one of the bank’s star
traders before the crisis hit.
Alexis had survived the worst of 2009, owing his remarkable comeback to an
introduction by Natasha Babkinova to Sergei Tarasov. Natasha had been packedoff to London to study the workings of the financial system by her father,
Vyacheslav Nikolayevich, another oligarch. The Russian hoped she would build a
network of insider friends, an insurance policy to protect the family from the kind
of pitfall that had almost bankrupted him eighteen months earlier.
Perhaps it had been because Alexis was a friend of Natasha, or because Tarasov
had registered Alexis’ Slavic name, in any case he mentioned his brief encounter to
Fitzwilliams, who remarked Alexis, with his track record, was being wasted in a
depressed stock market.
Sosnowksi’s grandparents had fled Poland in 1939, shortly before Hitler launched
his blitzkrieg. They had been amongst the lucky ones, as bankers they had had the
means to escape the genocide that was to hit their people. The family, apart from
the principal Jewish holidays and the occasional visit to the synagogue for one of
the rites de passage, had never really practised their religion and Alexis was
brought up broad minded and independent, free of conventional religious hang-ups.
His father had run a small brokerage firm in the City, which because of ill health
he was forced to sell to a banking group towards the end of 1986, soon after
Thatcher’s Big Bang. On graduating from the LSE, Alexis joined Lloyds He
moved on to the Irish Netherlands soon after Fitzwilliams took over in 2000,
following the disappearance of the banker’s uncle in the Caribbean.
Tarasov, like many Russian’s had a healthy respect for the talent of men of
Alexis’ background ― they had survived in adversity, and approved of
Fitzwilliams move to have him head-up the team they were putting together for
their Europa Property Fund.
At the end of the first year the fund returned a modest gain; the second year, even
as the global economy continued to suffer, it produced a spectacular return of over
twenty percent. Soon, after raising more than three billion dollars, the fund was
refusing new investors, as Kennedy along with and Clancy in tow, trawled for
potential properties to add to the fund’s growing investment portfolio.
