"Nonperforming loans in China are not a business opportunity but a lifetime career," says Craig Blomquist. The 53-year-old American investment banker has got that right: A staggering $300 billion in Chinese bank loans are seriously in arrears.
None too soon, Blomquist, who was at one time president of Morgan Stanley's Japanese nonperforming loan servicer, Lombard, has become CEO of China's first independent NPL servicer, Fan Ya Tai Asset Management. The name means "pan-Pacific."
A Guangzhou-based joint venture between state-owned conglomerate GDH and AMRI Financial, owned by former Goldman Sachs partner Steven Shafran, Fan Ya Tai is an outgrowth of Guangdong Assets Management. GAM, created in 2000 to recover assets from Guangdong province's failed trading and investment arm, Guangdong Enterprises, has retrieved more than $370 million of the $400 million in bad debts it was assigned. One of Fan Ya Tai's first clients: GAM, which is still trying to dispose of about $90 million in assets.
Blomquist, ensconced in a Guangzhou apartment overlooking the Pearl River, says the only thing he misses about America is driving -- in particular, driving convertibles.
"There's no way I will drive in Guangzhou, ever," he says, explaining that China's first-generation drivers treat "the white lines as just suggestions and the traffic lights as mere recommendations."