April 8, 2013
As part of our ongoing series to celebrate the Lebanese diaspora around the world, Executive recently travelled to New York to meet the expats that make the US tick. Over the course of a week we shall highlight cases of successful Lebanese across the Big Apple – in retail, food, advertising and even diplomacy.
In this first article, we highlight eight of the most successful Lebanese working on Wall Street – NYC’s financial district.
Name: Anwar Zakkour
Company: JP Morgan
Title: Vice-chairman of investment banking
Would you move back to Lebanon: “I would consider experimenting with a move, probably after retirement”
Will you vote in next elections: “No”
Over lunch on the 49th floor of JP Morgan’s (JPM) investment banking offices on Park Avenue, Anwar Zakkour, considered a rainmaker on Wall Street, runs me through his life story from being born in Beirut to becoming the vice chairman of one of the world’s most powerful financial institutions.
His Lebanese father, a professional backgammon gambler, wins a trip to Scandinavia. There he meets a Danish woman who falls in love with him, and soon after his return to Lebanon, she buys a one-way ticket to Beirut and tracks him down at Casino Du Liban. The couple marries and gives birth to Anwar and his twin sister in Beirut in 1963. Attending Collège des Frères Maristes Champville until the age of 12, the Zakkour family moves to Copenhagen at the onset of the Lebanese civil war. “We thought we were going for just three months, and then three months turned into 12 years in Copenhagen,” says Zakkour.
After completing studies in medicine and working in hospitals, he decided healthcare was not for him and went back to study business at Copenhagen Business School. He then studied at the European School of Management (now known as ESCP Europe), a program which required mastering three languages as a year was spent in each of the United Kingdom, France and Germany, with studies held in the native language.
An internship in mergers and acquisitions (M&A) at Citigroup in Frankfurt convinced Zakkour of what he wanted to become in life: a banker. In 1989, he kicked off his career with American investment bank Morgan Stanley in London and after a one-year expat transfer to New York, he decided to move to a city he loved both “socially and professionally”.
After working at several investment banks on Wall Street, Zakkour eventually joined the M&A group of JPM in 2005 with a focus on technology, media and telecommunication (TMT). He was named vice chairman of investment banking in 2011.
Throughout his career, Zakkour has worked on several high profile deals such as media behemoth News Corporation’s $5 billion acquisition of Dow Jones and ticket sales company Ticketmaster’s $1.5 billion merger with events company Live Nation. While he says he has liked all his deals, Zakkour highlights the $14 billion acquisition by Comcast, the United States’ largest cable operator, of a majority stake in NBC Universal as his proudest, as it was “one of the most complicated, highest-profile landmark deals and it was transformative in many ways, structurally and strategically [in terms of the impact] on the sector.”
Several high-value deals this year boosted JPM in its competition with Goldman Sachs in the M&A league tables, a spot that Goldman has held in the past several years. “The gap has been narrowing, and I think it is just a matter of time before we get to an inflection point and we beat them,” says Zakkour.
Going forward, he expects a big resurgence in M&A activity due to the growth of the economy, the strength of the equity markets, the all-time low rates in the debt markets and the abundance of cash on company balance sheets. “We are seeing a lot of dialogue behind the scenes, it is just a question of time” says Zakkour. As for the Middle East, he foresees deal activity coming from the sovereign wealth funds, which have historically acquired minority stakes in public companies but are now more likely to go for controlling investments in real operating companies, such as in the media and industrial sectors.
“I think it will be slow but we are going to see some examples this year and as they get comfortable with making relatively sizable controlling investments ($2 billion to $10 billion), and assuming these turn out to be successful, it might pave way for more activity.”
Does Zakkour aspire to be chief executive? He says “not at all”. There are several cards to choose from in his deck of future plans: a move to London, staying in New York as a senior deals guy, or working in the industry trying something completely different. With shareholder activism being a big theme in the M&A industry, Zakkour says he would consider launching a fund focused on investing with an activist orientation.
As for a return to Lebanon, he may experiment with a move back after retirement to try it out for six months, given that he has family and friends back home. He is a fan of the “amazing lifestyle”. Until then, he’s sticking with the capital city of international finance.
Advice to graduates in Lebanon?
You have to be passionate about your job. Don’t chase success or money. It will come if you are very good at what you do. To be a banker, I really think a broad set of skills are required and a lot of energy. This is a very demanding job even at senior level. You have to be willing to make sacrifices with your lifestyle. You don’t have control on whether a deal will be announced tomorrow, after tomorrow, in a week or two weeks from now.
What are your hopes for Lebanon?
I would like Lebanon to be the center for capital markets in the Middle East so we need to make sure there are regulations in place preventing insider trading, that there are clear rules on disclosure of companies, etcetera.
What is hurting Lebanon now?
My generation has an emotional attachment to Lebanon because we remember it how it was. The next generation is not going to know Lebanon from pre-1975 and there will be less and less attachment from the expat community 20 years from now than you see today. It is an unfortunate trend if my theory plays out.
Name: Rudolph-Riad Younes
Company: Artio Global Investors
Title: Head of International Equity
Would you move back to Lebanon: “Very difficult to do anything constructive in our field in Lebanon”
Will you vote in next elections: “I should”
At its peak in 2007, the assets of Artio Global Investors, co-founded by Rudolph Riad Younes, crossed $75 billion. That’s almost twice the size of Lebanon’s current economy. As I sat with Younes in his offices on Madison Avenue, the total assets of the firm had shrunk to $14 billion and the firm had been sold in February this year to British fund manager Aberdeen Asset Management for $175 million, down from a $650 million valuation when it listed more than three years ago. “People told us don’t go public, it is a huge mistake. In hindsight, they were right,” says Younes.
As equity markets plummeted during the financial crisis, clients were shedding capital out of risky asset classes, resulting in significant outflows for Artio’s funds. They were pulling out of Artio’s stock as well, with its share price tumbling from $26, its IPO price, to its final sale price of $2.75 per share. The two international equities mutual funds managed by Younes, head of international equities at Artio since 1995, dropped from $45 billion at the time of listing, to $4 billion this year.
It wasn’t always bad news for Younes, though. Often awarded for his stock selection — from being named Morningstar Fund Manager of the Year in the international stock manager category to winning the Standard & Poor’s/BusinessWeek Excellence in Fund Management award in international equity — and regularly featured in international media — from CNBC to the Wall Street Journal — Younes’ awards and media exposure attracted more and more assets to the funds throughout the years. His efforts culminated with his ringing of the NYSE bell on September 25, 2009, netting him $30 million in the listing.
Younes’ career on Wall Street started off with Swiss Bank Corporation, which merged in 1998 with Union Bank of Switzerland to form UBS, Switzerland’s largest bank. A few years later he moved to another Swiss bank, Julius Baer Group and it was with his new employer that he set up, along with another partner, the Artio funds. “Our country, even though we complain about it a lot, trains us very well for Wall Street because there is a lot of chaos and disorder in the financial markets and in Lebanon we live in disorder so it is a natural home for us,” says Younes.
When he left Lebanon in the midst of the civil war to pursue his studies in the US, his initial plan was to become an engineer. Born in Nigeria in 1961, Younes was raised in Lebanon, attending a boarding school run by nuns in Tripoli, then studying at Collège des Frères Maristes Champville and at Saint Coeur, before crossing 5,600 miles to complete an engineering degree at Columbia University in New York. Soon after starting a job in the field of his studies, he decided it wasn’t for him and went back to school to study business. “Business is a normal fit for many Lebanese because we have trading [capacity] in our nature, we are entrepreneurial, we are good with mathematics and with logic and illogic,” he jokes.
After spending more than 20 years managing funds, he is not giving up on Wall Street and is entertaining several opportunities with his partners, which he will pursue once the handover of Artio is completed by the beginning of the third quarter. As for the shape of his next endeavor, he says it is still too early now. “Maybe we will work with a sovereign wealth fund from the Gulf or maybe it will be us on our own,” he says.
Whatever it is, his asset allocation will be based on a bearish market outlook. “I don’t think we have seen the last of the crises; there are many more to come,” warns Younes. With interest rates at all-time lows in most of the Western world, investors are having to pursue opportunities in “places they should not go, taking risk they should not take”. He recommends investing in countries where the crisis has already hit, such as Western Europe, Eastern Europe and Japan. “There is a lot of debt and a lot of inequality in the world. Globalization has favored the rich over the middle class and the poor. Social instability and fiscal fragility is a recipe for instability and correction,” he says.
As for Lebanon, and despite Artio’s paltry $5 million investment in Lebanon’s real estate developer Solidere — accounting for just 0.2 percent of the firm’s international equity funds as of October 2012 — Younes remains bearish on the country. “Lebanon is complicated; it’s in a state of war.” He wants to see Lebanese political leaders entirely focused on creating jobs and deploying their energy on domestic issues and not regional conflicts. Until then, he is staying in New York. But he ends on a bright note: “I am sure Lebanon will always win at the end of the day because we have the necessary ingredients, the right culture and intellectual wealth.”
Would you recommend the financial sector for Lebanese graduates starting their careers?
There are a lot of people unemployed in the industry. It is shrinking because it over expanded. I think it is going to be harder to get a job in the industry. Those who are in it and are successful will be making tons of money but 20 years ago, if you were average you could still make good money. Now, you have to be really good. It is not as easy as before. The major goal for a young person should be to see what you are good at and what you enjoy.
Would you recommend the US for launching a career?
Go where there is opportunity. The opportunity is huge here. In Lebanon, the opportunities are very few but coming to the US is not that easy, there are barriers to work. Most people come for education. That’s how my doors opened.
What would attract foreign investors to Lebanon?
If I am not Lebanese, why would I invest in Lebanon when I can invest in other countries without the worry of a blowup the next day? Lebanese leaders have to change their agendas and priorities. The government should be 100 percent focused on creating jobs. There is a lot of pent-up demand to come to Lebanon from regional players and business people, but we need a stable and peaceful country and not a country at war.
Name: Habib Kairouz
Company: RHO Ventures
Title: Managing partners
Would you move back to Lebanon: “Definitely after retiring. Question is if I would consider going back while working”
Will you vote in next elections: “Yes”
When he is not looking for the next entrepreneur to invest in, Habib Kairouz is looking for solutions to keep Lebanon’s young graduates from leaving the country — and for him to consider a return someday. “To be honest, today I cannot consciously tell a young graduate that opportunities in Lebanon are at par with the opportunities overseas, but I will once we have alternatives for them,” he says.
While his family hails from Bcharre in the mountains of Northern Lebanon, Kairouz was born in Beirut in 1966 and moved to New York in 1984 to pursue his studies at Cornell University, followed by a Masters in business administration at Columbia.
His initial plan was to work a few years and then come back to Lebanon; a plan that did not come to fruition as Kairouz has been in New York since. His attraction to the financial industry was a natural one. Besides New York offering him access to the world of global finance, his family used to own the Banque du Credit Populaire, later sold off to become IBL Bank.
Currently managing partner at Rho Capital Partners, a venture capital firm he joined in 1993, Kairouz has been on the lookout for high-growth startups to invest in. Founded in 1981 with German family money, Rho Capital Partners has since expanded and raised a series of funds through two categories, run by 35 investment professionals out of three offices, New York, Palo Alto and Montreal. Rho Ventures, the direct venture capital arm, has close to $2 billion under management in six funds and Rho Fund Investors invests in third party private equity (PE) funds. The amount of the latter is not disclosed, but Rho manages the original family capital and some other managed accounts of PE funds and large family offices.
While the funds are sector agnostic, the targets are high-growth sectors in the US, mainly information technology, new media (such as Internet and advertising), communication (such as telecommunication operators and infrastructure), biotechnology and alternative energy, with an average ticket size of $25 million to $40 million.
Kairouz has been on the lookout for the next disruption in these spaces, and for now, he is convinced it is coming from television. “I think the entire TV industry is just starting to be disrupted. We haven’t seen a single application for the connected TV. I think we will see tremendous revolution in programming taking advantage of the TV set,” says Kairouz. To play this theme, he has invested in GetGlue, a social networking website for television fans.
Besides stating that the performance of the funds were in the “top 25 percent relative to the benchmark”, Kairouz would not shed more light on fund performance, as “the information is not available to anyone in the industry.” The $500 million capital in the latest fund was raised in the midst of the financial crisis in 2008, and plans for a seventh fund are scheduled for later this year or beginning next year. “I’m sure it will be challenging; it is a tough fundraising environment but so was 2008,” says Kairouz.
With approximately 70 percent of the funds’ sources from US institutions and the remainder from European ones, Middle East investors don’t feature on their roster. “The biggest source of capital for PE in the Middle East is the sovereign wealth funds. They have so much capital to manage that they have to write substantial checks and for VC funds its difficult. If you invest in [PE firms] KKR or Blackstone, they take $200 million to $300 million checks. The biggest check we take is $50 million,” he says.
One of the main challenges of the VC sector in the US is immigration laws, according to Kairouz. “Our companies used to recruit some of the brightest talent and engineers in the world but now it is tougher and tougher to get working permits.” Another challenge he flags is the increased regulatory scrutiny that followed the financial crisis, making it difficult for companies to raise capital and go public. “In the mid 1990s, in our [VC] world, 50 percent of companies went public, 50 percent [went for] M&A. Today 10 percent go public, 90 percent go to M&A,” says Kairouz.
Other issues that he tackles head-on are closer to his heart as they concern his home country. Through his involvement in several organizations looking to support Lebanon — such LIFE, SEAL and Endeavor Lebanon, an organization that supports high-impact entrepreneurs in emerging markets — Kairouz’s main objective is to work with the expat community to bring back expertise, network and capital from outside Lebanon into the country. “I think it is absolutely critical to repatriate brain power for the benefit of the country. We are increasingly dependent on people that are investing in the country for their own interests and asking for a lot of things in return. Its time to say the Lebanese are here for the Lebanese,” says Kairouz.
As for a return to Lebanon: “Absolutely,” he answers initially, but then adds, “Today I won’t go back. I cannot think of what I would do to work in Lebanon equivalent to what I am doing here, but I would love to go back.”
Thoughts on Lebanon
Would you recommend New York for Lebanese graduates starting careers in finance?
I don’t want to encourage people to follow my path. I want people to stay in Lebanon. I am involved in several organizations in order to convince people to stay but if my son was graduating today in Lebanon, could I consciously tell him to put his career path in the country today? It’s a tough one.
What are the key reforms you would like to see tackled?
The enforceability of contracts is the single biggest. When I sign something on paper, it should be enforceable and enforceable in our lifetime. The second is bankruptcy laws, and then capital markets laws and broadband bandwidth.
Do you invest in Lebanese entrepreneurs?
I have not invested personally in Lebanese entrepreneurs. Given our set up, we do things through the funds and not personally. I would love to invest in Lebanon but for me to do that it has to fit the investment criteria of the fund. I have not found a single company in Lebanon or the Middle East that has the billion-dollar potential. Our average ticket size is $25 million to $40 million per company and that is too much for the opportunities we see today.
Name: Wissam Kairouz
Company: Morgan Stanley
Title: Managing Director in Leverage and Acquisition Finance
Would you move back to Lebanon: “I always think and still hope I will”
Will you vote in next elections: “I hope so. I think so”
“When I came to the US in 1989, I didn’t think I would still be here in 2013,” says Beirut-born Wissam Kairouz as we meet for coffee close to the offices of his firm, Morgan Stanley, on Broadway. From the Bcharre Mountains in Northern Lebanon, Kairouz attended Collège Notre Dame De Jamhour along with his brother Habib and left Lebanon in 1989 to pursue his studies in Montreal, Canada, an emigration destination favored by many Lebanese at the time.
Right after graduating from McGill University in 1993, Kairouz moved to New York. At that point, he had not secured a job yet and was exploring opportunities in consulting and finance. “I figured New York was where most of the opportunities would be,” he says.
His career was launched with a job at BlackRock, the world’s largest asset manager, where he worked in fixed income investment management for four years. He went on to complete an MBA at Columbia University. His decision to move to the investment banking side of the business was then made, and that’s when his career in the world of leverage finance — the financing of a deal with debt — kicked off. “I think of it as financial engineering and I find it exciting” he says.
Initially at Merrill Lynch, where he stayed until the firm’s acquisition by Bank of America in 2009, Kairouz has been managing director at Morgan Stanley’s leverage and acquisition finance group for more than three years. Working with a team of 40 to 50 bankers, he focuses on the US media and financial sectors.
As the financial crisis brought the economy to its knees, companies were reluctant to deploy their cash on M&A, and deals were put on the back burner. This year, big deals seem to be back with a flurry of headlines hitting the tape: from the $24.4 billion buyout of computer maker Dell, led by its founder Michael Dell and a private equity group, to the $23 billion buyout of ketchup maker H.J Heinz by billionaire investor Warren Buffett’s Berkshire Hathaway and other private equity groups, to the $11 billion merger between US Airways and American Airlines, set to create the US’ largest airline, mega deals are back on.
“My personal view is that we will see more and more mergers and acquisitions. How quickly and how much deal volumes [increase] remains to be seen but looking ahead I am more bullish than I was in the last couple of years,” says Kairouz. Regarding the Middle East, he is more positive as well given the abundance of liquidity in the hands of sovereign wealth funds and other institutions and he expects activity to pick up this year. “There is less volatility and more liquidity,” he says.
As for his home country, which he visits on a regular basis, he is positive on its future, a fresh perspective after most of the expats I met with had a more pessimistic outlook. “I would never encourage anyone to leave. Maybe it’s a bit hypocritical of me given I am in the US now but I am bullish on Lebanon,” says Kairouz.
When it comes to the key elements he wants to see in Lebanon to attract capital to the country, his top priorities are transparency and accountability; for foreign investors to deploy capital they need to be able to trust the stability of the financial system.
For young Lebanese graduates looking to launch their career, Kairouz’s recommendations would be to not “get into the financial industry for headline reasons: because you may make more money or because you will work on headline deals you see on the front page of the Financial Times. Get into industry if you have done enough homework and know the pros and cons of getting into it.”
As for a return to his home country, he says: “I always think and still hope that one day I will. I hope I will.I don’t know where life will take me,” he says as we end our coffee, and he walks back down a few blocks to Morgan Stanley’s offices.
Name: Marc Malek
Company: Conquest Capital Group
Title: Founder and Managing Partner
Would you move back to Lebanon: “I consider it every day. It boils down to a security question”
Will you vote in next elections: “Yes”
Mark Malek literally shot himself in the foot at the age of 16. In 1987, in the midst of the Lebanese civil war, this incident was what finally convinced Malek’s parents to ship him off to the United States. After jumping from one school to another — Lycée Abdel Kader, Grand Lycée Franco-Libanais and Sagesse High School— Malek then did a bigger leap across the Atlantic and landed at University of Portland, a private Catholic institution in the state of Oregon and the only place he could get into at the time.
“I was so upset about leaving Beirut and everyone behind, I thought if I have to be in the United States then I might as well go to a decent school,” says Malek. He transferred across town to Reed College which had a program with California Institute of Technology (Caltech), one of the top US engineering schools, and so Malek eventually graduated with a liberal arts degree from Reed and an engineering degree from Caltech.
In his junior year at Caltech, through one of the NASA Centers run by the university, he received a grant from the US Department of Defense to undertake a study on a mathematical technique called “scenario analysis”, which involved optimizing the locations of tanks in battlefields.
“The person leading the research said ‘having come from a war zone, do you really want to spend the whole term doing research on tanks and battle fields? Instead of applying it on tanks, you can apply it on stocks, bonds and commodities — the math is the same’.”
That’s how Malek ended up publishing a report that landed him a job on Wall Street. A Solomon Brothers’ (now part of Citigroup) employee read the paper and eventually offered him a job in 1992 at the age of 21.
“The razzle and dazzle” convinced him to join Wall Street instead of Silicon Valley, where he had a job offer from technology company Oracle. “I still have the offer letter signed by [CEO] Larry Ellison — it was a smaller company back then,” he says.
In those days, an interview in Silicon Valley meant staying in a “crappy motel, spending the night coding and going in the next day to defend your code,” says Malek. On Wall Street “they fly you in first class, pick you up with a limousine, put you in a nice hotel.” That, plus a more lucrative salary, and Malek’s mind was set.
From a research role at Solomon Brothers, Malek then moved on to a trading role in 1993 by joining KB Currency advisors. Two years later he left for Swiss bank UBS to run their global group in exotic derivatives on foreign exchanges, where he remained until 1999, working between New York, London and Tokyo.
He then decided it was time to set up his own firm. After an unsuccessful attempt to partner with a friend, he decided to go it alone; that’s how the hedge fund Conquest Capital came into existence in 2001.
Focused on alternative assets, he set up the firm initially with his own funds by putting in $2.5 million. Currently, Conquest’s assets under management amount to just more than a billion dollars, mainly sourced from US and European institutions and spread over two funds.
“No funds from the Middle East and that is partly my fault for not putting in the time. The lower hanging fruits were here but hopefully that is changing soon,” says Malek. The investment strategy is largely quantitative, meaning analysts apply mathematics to make investment decisions. The 11-person investment team is comprised of analysts with degrees in engineering, science and physics. “We don’t have anyone here with an MBA, including myself,” he says.
The funds have had some good years, most notably 2008, at the height of the global financial crisis when the funds returned more than 45 percent. There have also been the bad years, 2012 being one of them, with the funds down 8 percent and 34 percent, respectively.
The best environment for their strategy is an environment of normal market operation, and with the rise of global intervention from central banks’ monetary policies to government bailouts and stimulus, the funds have a had a tough time generating returns.
Going further however, Malek believes that governments have used all their ammunition and that markets will eventually stand on their own feet. Despite the challenging performance in 2012, Malek does not seem likely to pack his bags and return to Lebanon anytime soon.
“If I decide tomorrow I want to shut everything here and go back to Lebanon and just dedicate my life to public service and do it for free, I won’t be allowed because I am from a minority Christian sect, Syriac Orthodox. In 2013, we should know better than to do this.”
Advice to young people in Lebanon
“The majority of people in this world are miserable in their daily life because they are not doing something they love. To be really successful you really have to love what you are doing, otherwise you are clocking in and out and waiting until five o’clock to leave. If you have passion for it, you should go into it. If you are not interested in it, the worst thing is to go into it if you think it can make you rich.”
Name: Jimmy Traboulsi
Company: Capital E Group
Would you move back to Lebanon: “I don’t think so, I never really lived there”
Will you vote in next elections: “Yes, if I can vote for anyone I want and not just for someone from my own religion”
Sitting in his office on Madison Avenue and just back from a trip to Lebanon, Jimmy Traboulsi seems quite pessimistic about the future of his native country. Regarding the reforms he thinks should be tackled, he says “the list is too long”.
Born in Beirut in 1968, Traboulsi left at the age of four and grew up in Paris and Switzerland. With an economics degree from the American University of Paris, he headed off to New York to kick-start his career in finance. After working in the M&A arm of a small investment bank then completing an MBA at New York University and working for another nine years in the hedge fund industry, Traboulsi ventured out on his own and set up Capital E, a private equity (PE) firm in 2001.
“I became interested in private equity midway through the 1990s, but the partners at my previous firm, a hedge fund of funds group, were not interested in creating a private equity vertical so my family started making private equity investments on an ad-hoc basis” says Traboulsi.
Mostly focused on venture capital, the investments undertaken were very successful “due to timing on one hand — it was the beginning of the technology revolution — and investing with the right fund managers on the other,” he says. This provided the impetus to launch Capital E.
With sources of capital largely from European institutions and family offices, Capital E has three distinct activities today: a fund of funds vertical, which invests in buyout, growth equity and venture capital funds; a direct investment vertical, which opportunistically invests in privately-owned companies across sectors; and a real estate vertical, started in 2009 after the credit crisis when a number of opportunities emerged in the field. The size and the performance of the funds were not disclosed.
“There will always be opportunities in private equity and real estate,” but for smaller firms to seize these opportunities, “one needs to think outside of the box and focus on areas where some of the larger participants aren’t necessarily active,” says Traboulsi. Capital E’s latest real estate fund, for example, purchases properties out of the Low-Income Housing Tax Credit (or LIHTC) funds.
The LIHTC is a US government program created in the 1980s. Its aim is to encourage private investors to deploy capital in housing properties dedicated to medium-income Americans with stable jobs (such as government employees) who are priced out of the main urban employment hubs. Aggregators of LIHTC properties offer the tax credits to investors as an incentive to generate capital for their projects. By receiving these credits, investors are eligible for an annual dollar-for-dollar credit against their federal tax liability over 10 years, as long as the property meets the program requirements.
“Our fund buys properties from LIHTC funds as they near the end of their 10-year compliance period. Institutional investors are not looking at this area due to some misperceptions associated with it and a relatively burdensome compliance element. But it is one of the most interesting areas in US real estate because of its historical full-occupancy rate in all economic cycles and the higher entry cap rates that it offers,” says Traboulsi as he explains the key benefits of Capital E’s latest fund.
When Traboulsi is not deploying his energy in seeking opportunities in the financial industry, he turns it to the art world. He sits on the board of trustees of New York-based Dia Art Foundation, a contemporary art institution established in 1974. Lebanese art has caught his attention as well, and he also sits on the board of Ashkal Alwan, the Lebanese Association for Plastic Arts established in 1994. Traboulsi is keen to help bring Lebanese art to the forefront. He is helping the institution promote the upcoming sixth edition of Home Works Forum — a platform for the exchange of cultural practices in the region — taking place in Beirut in May this year.
For young Lebanese graduates looking to join the financial industry today, Traboulsi is cautious. He believes it is “not a good time to venture in this industry as it is challenging and shrinking”. As for his top tips for Lebanese youth looking to launch a career in finance, they would be as follows: work hard, think outside the box, be opportunistic and probably go to Asia.
Name: Charles Boorady
Company: Triple Tree Capital Partners
Title: Managing Partner
Would you move back to Lebanon: “I spend four weeks a year in Lebanon and hope to spend more time there”
Will you vote in next elections: “I don’t know”
Beirut-born Wall Street veteran Charles Boorady has earned his accolades, featuring in Forbes’ “Dazzling Dozen” list of America’s stock analysts and ranked among the top three best US healthcare analysts by Institutional Investor Magazine for several years in a row. With his specialization in the healthcare sector, Boorady decided in September last year to make the move from the high-powered financial markets to join Triple Tree, a specialized boutique investment bank.
“[President Barack] Obama drove legislation that is bringing lots of changes in the healthcare sector now. With this new wave of opportunity, I chose to pivot my career,” says Boorady, adding that he is leveraging 20 years spent researching healthcare companies to now start investing in them instead.
Boorady’s introduction to the space started at a young age: his mother was a nurse specializing in the thyroid gland. His professional affiliation with healthcare started after completing an MBA at the University of Chicago in 1994, as the Health Security Act initiated by former President Bill Clinton in order to provide universal health care for all America “failed to pass but steered a lot of change in the industry,” he says. And that’s when Boorady went from one investment bank to another — Goldman Sachs to Citigroup to Credit Suisse — as a healthcare research analyst and eventually as head of healthcare research.
His career didn’t start in this industry though. After graduating with an engineering degree from Cornell, he kicked off his career at IT consulting firm Accenture, designing and writing computer systems and re-engineering business processes to make companies more efficient, an experience he is convinced is critical in his next endeavor. “Healthcare is now ready to adopt technology. The sector still hasn’t adopted batch systems [a system by which the computer programs of several users are submitted as a single batch without manual intervention]; physicians are still writing notes on paper,” says Boorady.
He sees the US healthcare system on the cusp of transformational change due to fiscal pressures, as Americans pay 50 percent more for healthcare, or 18 percent of gross domestic product, than the next biggest spender, the Netherlands, at 12 percent of GDP, and 100 percent more than the average Organization for Economic Cooperation and Development citizenry, at 9 percent of GDP. “This represents a potential for the US to cut at least $750 billion in annual health spending,” says Boorady.
While many healthcare companies will face increased revenue and margin pressure, he sees tremendous investment opportunities in cost containment and in information technology companies that will enable disruptive change. Boorady predicts two waves of technology adoption that will reshape healthcare: the deployment of “batch” electronic medical records to paper-based physicians, followed by a period of evolving the healthcare delivery model around real-time information and decision support tools in the hands of patients and physicians.
Boorady’s eagerness to invest in these long-term growth trends has led him to join Triple Tree, a merchant bank with some 35 professionals focused on healthcare services and information technology, and to launch a fund dedicated to providing growth equity to private companies in the space, the first one of this sort for the firm. The fund will invest $200 million to $300 million in approximately 10 companies, and exits will likely target healthcare companies with a strategic interest in owning the assets long-term.
Geographically, his investments are focused on the US. When it comes to investments in the Middle East, he says he has not looked closely enough at the region but is keen on bringing his industry expertise and investment acumen to help countries in the region develop sustainable high quality and affordable healthcare systems. He sees several challenges affecting the sector in the region, from access to healthcare to awareness of the harms of diabetes, obesity and smoking, to affordability of healthcare in the long term. “The region should be mindful of that now and build systems that wont lead down the path that the US is in,” adds Boorady.
As for Lebanon, a country he moved from in 1967 at the age of three, he does not have plans to move back anytime soon, but he visits every summer with his Lebanese wife and their three children. For the youth back home looking to launch a career in finance, Boorady recommends “following your dream no matter what it is.”
Name: Samer Nsouli
Company: Lyford Group International
Title: Chief Investment Office
Would you move back to Lebanon: “The problem is [foreign] investors frown upon you being in Lebanon”
Will you vote in next elections: “Yes”
Tennis player, government bond trader, hedge fund manager — these are among the roles that Samer Nsouli has assumed over his career, which spanned the Bahamas, Paris and New York. Born in Beirut in 1966, he moved to Washington at the age of 15 after his father received an offer to work at the World Bank. Just one year after moving to the United States, the family decided to come back to Lebanon but Nsouli, a professional tennis player at the time, decided to stay to pursue his dream of playing in competitive tournaments. He has not moved back to Lebanon since.
He did drop the racket and his tennis dreams, however, and opted instead for a finance degree from Boston College. After graduating in 1988, he moved to Paris to kick off his career as a foreign exchange trader for investment bank Drexel Burnham Lambert, but when the firm went bankrupt two years later, Nsouli headed back across the pond to complete an MBA at Columbia and joined Lehman Brothers after graduating. That’s when his career in the Big Apple kicked off.
As we sit in a conference room overlooking Park Avenue and its commercial skyscrapers, Nsouli explains to me how he has spent the past 20 years moving from one tower to the next. From trading government bonds at the now-defunct investment bank Lehman Brothers and at Swiss investment bank UBS, to undertaking proprietary trading at Japanese Fuji Bank, to unsuccessfully attempting to launch his own fund for high net worth individuals, to trading equities at JP Morgan, Nsouli was approached to manage Lyford Group International, a Swiss family office. There was one condition: he had to move to the Bahamas.
And that’s where Nsouli — appointed chief investment officer of the group — spent the next two and half years, managing a $100 million fund with a short-term investment horizon and a $1 billion advisory business for the family’s longer term trades. Investment bank JP Morgan then imposed Nsouli’s return to New York as a condition to deploy capital into the fund. He came back with his then-expanded family — two kids were born on the islands — and has since been running the group’s assets along with a team of seven from the offices in New York.
Performance of the short-term horizon fund, which invests in equity indices, foreign exchange, fixed income and commodities, has been lackluster over the last couple of years. After returning an average of 10 percent annually until 2008 and a 15 percent return in 2008 — a stellar performance considering the markets were crashing that year — the fund opened to institutional investors. Attempting to raise capital since then has fallen on deaf ears, as performance of the fund has disappointed since 2009.
Nsouli says the Middle East was not considered as a source of capital for several reasons: their requirement for bigger assets under management, the longer time needed to invest and a lack of strong connections in the region. The size of the fund has not changed much since its launching, and with 2012 as the worst year ever, down 7 percent, the focus now is on improving the performance before attempting to raise capital again.
Would Nsouli recommend young Lebanese graduates to join the financial industry? He does not seem too enthusiastic as he says, “I think the promises of a career in finance are poor. A few years ago, I could have told you your progression — now I can’t. The work is very hard and stressful and the pay is much less”. He would recommend joining a Russian bank such as VTB or Brazilian banks or even Arab Banks instead.
Having been overseas for more than 23 years, Nsouli still does not feel American. He considered a move back to Lebanon over the past year but dismissed the idea. “I thought I could do the trading I do now from Lebanon and it would cost so much less, but the problem is investors frown upon you being based in Lebanon,” says Nsouli with sorrow on his face. “Every time I go back to Lebanon, I feel this is my country but I feel I don’t belong there either.”