December 30, 2014 2:22 pm
When President Cristina Fernández explained her refusal to hire an investment bank to execute a complex but ultimately unsuccessful $10bn local debt deal this month, she described bankers as commission-hungry swindlers who inflict “permanent anguish” on Argentines.
The irony is that Argentina has a network of émigré financiers on Wall Street so dense and extensive that outsiders refer to it as a “club”. Ms Fernandez could have called on the club for advice and, what is more, it would have likely been only too willing to help.
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IN AMERICAS SOCIETY
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Having begun their careers in the 1990s, when Argentina had the largest capital markets presence of any emerging market, many of them have since been involved in trying to solve Argentina’s 13-year legal battle with a group of hedge fund holdout creditors. A potential solution, which many believe is possible in the new year, would enable the country to resume borrowing abroad and help reactivate its stuttering economy.
“You could say there is something of a rise of Argentine talent on Wall Street,” says Chris Gilfond, the Argentine head of Citigroup’s equity and capital markets division for the Americas.
The phenomenon is particularly apparent atJPMorgan, the largest US bank by assets, where Daniel Pinto is head of investment banking. Mentioned as a potential successor to Jamie Dimon, the chief executive, Mr Pinto also heads European and African banking at JPMorgan. Nicolás Aguzín, the head of JPMorgan Asia, is an Argentine, as is Martín Marrón, in charge of its Latin American operations.
Elsewhere, countryman Gerardo Mato is head of global banking in the America’s at HSBC.
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They pine for the debt policies of Argentina back then, and end up working for the bad guys, the holdouts
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| Agustín D’Attellis, economist |
The executives form part of an Argentine diaspora who left the country more than a decade ago to forge international careers. But unlike many of their Latin American peers who have returned to work in booming home countries such as Colombia, Argentina’s faltering economy has prompted many to remain abroad.
The success of its bankers stands in contrast to the country’s position as a near pariah on international financial markets since its 2001 default. Indeed, the country’s long history of economic instability has provided a natural learning ground for financiers, bankers say.
Mr Pinto described his background as an Argentine as helping him “to keep calm and maintain a cool head”.
“Argentines, because of the country’s history, are born to be economists,” says another senior Argentine banker on Wall Street. “You grow up learning about currencies, the macroeconomy and debt.”
“The mental flexibility [that dealing with Argentina always] requires puts them at an advantage over others and allows them to be better than average managers, risk-takers and problem solvers,” says a foreign executive working in Argentina.
Argentina’s huge presence on international capital markets in the 1990s, when the country was a market favourite, also helped develop local talent.
Between 1995 and 2001, Argentina issued almost $60bn in international bonds, roughly double that of emerging market giants like Brazil and Russia, according to Dealogic.
Although other Latin Americans also gained entry to banking at that time, the volume of Argentine talent in international finance is notable. Many of the country’s bankers moved abroad after investment banks shut local offices following the country’s financial crash in 2001.
Ms Fernandez continues to have a deep distrust of bankers, given the country’s 2001 sovereign debt default.
The question is how to get all those people to come back and work for Argentina
- Wall Street banker
“They pine for the debt policies of Argentina back then, and end up working for the bad guys, the holdouts,” said Agustín D’Attellis, an economist. “They want an end to the holdout situation as soon as possible, at any cost.”
That assessment is unlikely to be universally backed. Either way, the country’s deep need for fresh investment means Argentine financiers are likely to play a role in the country’s future, just as reimported talent has done elsewhere.
Miguel Galuccio, a former international executive at Schlumberger, the oil services group, has transformed YPF, the national oil company, since he returned to Argentina to become its chief executive two years ago.
“The question is how to get all those people to come back and work for Argentina,” said one Wall Street banker. “We can do much more of that.”
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