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.
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 packed-off 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.
Chapter 68 HONG KONG
The Plan Page 68