In this, the first full month of spring, the careful planting and judicious pruning of last autumn begin to repay attentive gardeners. Our April edition highlights the efforts of two financiers whose meticulous cultivation efforts, nourished by a yearlong stock market rally and global economic recovery, are starting to produce, well, spectacular shades of green. A third still has some tilling to do.
No sooner was he named UBS Global Asset Management’s global head of equities in March 2000 than Thomas Madsen undertook a bold restructuring of the giant Swiss asset manager by trimming the firm’s tangle of autonomous units and upgrading its research department to halt an alarming slide in investment performance and assets. Madsen’s revamping caused staff defections and drove a few customers out the door. But four years later, as Institutional Investor Senior Editor Andrew Capon reports (“Revaluing UBS,” page 85), UBS Global AM has been reborn as a top-performing money manager whose assets are growing again.
Just a few months before Madsen joined UBS, U.S.-based private equity firm Newbridge Capital took a calculated chance by putting roughly $500 million into a sickly Seoul-based bank, Korea First, thus becoming the first foreign firm to control a South Korean bank. Things were so bad after the Asian financial crisis that, other than his firm, “nobody was willing to take the risk,” Newbridge managing partner Weijian Shan explains to Contributor Donald Kirk (“Cleaning up at Korea First,” page 102). A new management team pruned the bank’s client roster of deadbeat corporate borrowers, centralized credit decision making and nurtured a fledgling consumer lending business. Today, as Newbridge prepares to sell Korea First, the local economy is growing apace, and foreign banks are eager to buy South Korean lenders.
David Mayhew, who runs one of the U.K.'s most storied investment banks, 181-year-old Cazenove & Co., is mulling ways to ensure his firm’s survival as an independent entity. As Contributor Rob Cox notes in “Founders’ Keepers,” beginning on page 56, tiny Cazenove dissolved its partnership three years ago and sold a stake to outside investors as a prelude to an IPO to fund expansion. The ill winds of the bear market battered Cazenove’s business and left that plan in tatters. With market conditions much improved, however, Mayhew must decide whether to revive the IPO, and thus keep the bank independent, or sell out to a bigger rival. His choice may well determine whether the venerable Cazenove name withers or flourishes.
