Some Wall Street executives retire to play golf and spend more time with their families. Barton Biggs, 70, Morgan Stanleys chief global strategist, is retiring later this year after 30 years with the investment bank to lead a new firm,Traxis Partners.Traxis will manage a hedge fund portfolio for Morgan Stanley. Biggs also will serve as a consultant to Morgan Stanley. Biggs ran the investment banks tactical assetallocation business, with some $10 billion under management. Traxis Partners will be formed by Biggs, along with Cyril Moulle-Berteaux, 33, a managing director of Morgan Stanley Investment Management, and Madhav Dhar, 41. Dhar, a 15-year veteran of Morgan Stanley, left in 1999 after being in charge of its emerging markets investments.The new hedge fund is expected to invest in stocks, bonds and currencies worldwide.
The world has long been Biggss oyster. One of the leading experts in emerging markets, Biggs got his first real exposure to the business in the mid-1980s, when the International Finance Corporation asked Morgan Stanley to set up the first country funds.The firm launched funds under the IFCs auspices for Thailand, Malaysia and Turkey, among other countries. Biggs a value-oriented investor, joined the bank in 1973 as a managing director and general partner.He was the firms first research director. Morgan Stanley has been my investment home for three decades, and there has been no better crows nest from which to view the world, he says.
A long-term bear, he seems to have mellowed in recent years.I maintain that because everyone knows all the risks, they are pretty much discounted, he wrote in a commentary in early 2003. The biggest risk may be in not taking a risk.
ALL CHANGE AT LA CAIXA
Politics and business are inextricably interlinked in much of Continental Europe, something that Josep Vilarasau, the departing chairman of La Caixa, Spains third-largest bank, knows all too well. The 71-year-old has been forced out after a quarter of a cen-tury by a law passed with him as target.
Its the politicians that have done for Vilarasau. The cajas rep-resent a powerful accumulation of economic and political power, and the conservative Popular Party, which forms the government in Madrid, has its eyes firmly set on scaling the heights of La Caixa. Worried that it might lose its grip on power after ruling Catalonia since it gained regional autonomy, the nationalist party under Jordi Pujol passed legislation limiting to 20 years the period for which presidents of cajas could serve. Thats forced Vilarasau to resign this coming June. Presenting the Caixas annual report in Jan-uary, Vilarasau made no secret of his disap-pointment at having to retire.
Underlying the incident, however, lies the issue of whether the caja system, so effective at mobilizing regional pools of savings in the boom years after Spains return to democracy in the late 1980s, might prove as appropriate in the new century.
HIGH JINKS DOWN UNDER
HIGH JINKS DOWN UNDER Leaving school after 10th grade didnt preclude Ray Williams, the founder and former CEO of Australian insur-ance company HIH, from getting a doctorate. Monash Univer-sity, which received $1.3 mil-lion from Williams and his company, awarded him an honorary one.
At the end of February the commission will have to decide whether to recommend criminal charges against Williams and other senior managers. The counsels report flags more than 50 possible breaches of Aus-tralias corporations law. The main alleged offenses include fraudulent reinsurance con-tracts, irregular payments made to individu-als, and HIHs inadequate provisioning. Williams could be prosecuted for hiding reports of the companys losses.
Even if Australias public prosecutors dont chase up on what the commission has called Williamss dishonest actions, others will. A line of class suits is in place on behalf of the bankrupt groups shareholders and creditors. The repercussions of the collapse are continuing and will likely continue for some years to come, said the counsels QC at the commission.
KNAPP GETS SECOND CHANCE
Less the comeback kid, more the guy who never went away, Barclay Knapp has now got a whole new task on his hands.The man who spent more than $11 billion in building NTL into a symbol of cable industry hubris now has just $500 million in the bank to make a go of the new company.
In January the southern England-based company emerged from an eightmonth- long Chapter 11 process that swapped some $10.9 billion of debt for shares, handing the keys of the company to bondholders. Almost alone among NTL senior manage – m e n t , K n a p p kept his job through and out the other side of the bankruptcy proceeding.
The new owners will be watching closely how Knapp performs in his newly straitened circumstances, and the 46-year-old Nebraskan will certainly have his work cut out. Industry analysts doubt that NTL has a future as a standalone company. Its aim is squarely on converting customers into triple-users taking their phone, Internet and cable services from the same provider.
Knapp faces some formidable opponents in this new stage of the game, While NTL has been working through its debt problems, BskyB has firmed its market leadership in the UK cable market, while BT has rolled out harder-tobeat telephone packages.
But the toughest foe of all may prove to be Knapps own legacy. NTL snapped up as many as 20 companies while Knapp had the pocketbook jammed open. Failure to integrate those purchases contributed mightily to NTLs lingering reputation for rock-bottom customer service.
Knapp used to relish running the company from Princeton, New Jersey; the line was, he needed to be close to the money to fund his deals. Now hes in Chelsea, London. Call it an upscale way of living over the shop.