credit suisse

For Strong and Weak, Debt Pressures Rattle Europe

August 4, 2011 by NewsMaker Leave a Comment

Come to Switzerland.

An avalanche of dollars and euros has been tumbling into this Alpine outpost at record rates, as investors see the franc as a haven from the twin debt crises in the United States and Europe. And the Swiss are not happy about it.

On Wednesday, the typically silent Swiss central bank declared the currency “massively overvalued” against the dollar and euro, and unexpectedly cut interest rates in an attempt to weaken the franc. The franc retreated slightly but is still too strong, as far as the Swiss are concerned.

“The franc is like the new gold,” said a Geneva banker who would give only his first name, Dmitri, insisting on the discretion that is the hallmark of this reserved nation. “It’s crazy and it’s all anyone is talking about, in the morning, at lunch, at dinner parties.”

It was certainly Topic A at the noon lunch hour recently in Geneva, where Dmitri and other dark-suited bankers had emerged from the doors of Credit Suisse, UBS, Goldman Sachs and many other wealthy banks to perch near the broad expanse of Lake Geneva to chew on grilled fish and the issues of the day.

Switzerland is vaunted as a country that attracts money for its secretive bank accounts and the less savory business of tax evasion. But it is also the home of “le franc fort,” a muscular currency long seen as second perhaps only to the dollar because this nation — unlike some others — tends to have its finances in order.

Now the Swiss franc is second no more.

Despite the passage at long last of a Washington deal to lift America’s debt ceiling, the dollar recently plunged to record lows against the Swiss franc on fears the American economy will slow further.

Even after the Swiss central bank’s announcement, the dollar was trading at 77 Swiss centimes, down about a third from the level of a year ago.

The euro has fared little better. As Europe succumbed to its own debt troubles last year, the franc took off against the euro. Now, as the latest European bailout for Greece fails to shield big countries like Italy and Spain from the credit contagion, the franc remains strong against the euro.

Despite the Swiss central bank’s Wednesday move, a euro will buy 1.10 Swiss francs — far less than the 1.38 francs that a euro was worth a year ago.

With the rest of the world so untidy, Switzerland looks pristine. Despite a generous safety net, this tiny nation does not have other onerous expenses, like a big military. Its current account surplus is an enviable 15 percent of gross domestic product, and it has low debt. The economy grew 2.6 percent last year; unemployment is around 3 percent.

Still, while it is easy for Switzerland to lure other people’s money, there may be such a thing as too much of it. Even for the Swiss.

The Swiss central bank sought to tamp down demand on Wednesday by narrowing its target band for a key rate, the 3-month Libor, to 0.00-0.25 percent from 0.00-0.75 percent to fight the franc’s appreciation.

Authorities declared they “won’t tolerate” a “tightening of monetary conditions,” and would take further steps as necessary to curb the franc’s rise.

The cost of fine Swiss-made goods, from watches to precision machinery, has gone from eye-popping to eye-watering, and Swiss companies are warning of peril.

“This is bad for the Swiss economy,” said Thomas Christen, the chief executive of Lucerne-based Reed Electronics, who has started buying cheaper materials to offset his costs.

Everything from a cup of coffee to a Swiss Alpine ski vacation has been priced to the stretching point or beyond reach for many tourists.

Mark Tompkins and Serena Koenig of Boston were stunned during a recent visit. “A mixed drink at an average bar,” Mr. Tompkins said, “was 18 to 20 Swiss francs” — $23 to $25 — “so two rounds of drinks for four people was crazy expensive.”

In downtown Geneva, where a phalanx of regal storefronts glitter with diamonds and gold, Jean Loichot said his business from Americans and Europeans had slowed to a trickle.

Article source: http://feeds.nytimes.com/click.phdo?i=8c5a3cb06e29cf1ace7ed2753714aba1

Filed Under: Business News Tagged With: credit suisse, dinner parties, outpost

DealBook: Fewer Perks and More Work for Wall St.’s Summer Interns

July 22, 2011 by NewsMaker Leave a Comment

Minh Uong

Wall Street interns have gone from pampered to pummeled.

In better days, college-age interns at the nation’s largest investment banks, known as summer analysts, were treated like young royalty. But shrinking profits and a spate of recent bank layoffs have forced this year’s interns to shoulder full-time workloads.

“I worked 85 hours last week!” said one Goldman Sachs summer analyst, a college senior who spoke on the condition of anonymity because she was not allowed to speak to the media.

“The last two days, I’ve been here until 3 a.m.,” said a Deutsche Bank analyst, who also spoke on the condition of anonymity to protect his job. “My weekends are fun, but that’s about it.”

While hard work has been customary among young finance workers for years, after-hours benefits once made the long days more palatable. In 2006, a group of JPMorgan Chase interns took a firm-sponsored trip in white Hummer limousines to the trendy NoHo nightclub Butter, where they partied before retiring to swank rooms at the Hudson Hotel, according to a person who was present. The next year Lehman Brothers took interns to Jones Beach for a concert featuring OK Go and the Fray, and Credit Suisse paid for its interns to take gourmet cooking classes, according to former interns at the banks.

Those extravagances are gone, experts say, victims of slashed entertainment budgets and increased sensitivity at banks whose reputations suffered during the financial crisis.

“Banks are trying to be a little bit more sensible,” said Geoff Robinson, head of investment banking at 7city Learning and lead author of “The Complete Intern: Navigating the Investment Banking Maze.” “If you look back three or four years at some of the perks, it’s certainly more economical now.”

Many summer analysts at large New York banks were issued smartphones, laptops, and corporate charge cards upon arriving in mid-June. They were assigned to divisions within the bank, and some were placed on desk rotations aimed at exposing them to different parts of the firm. Many interns attended a several-day workshop led by a specialized firm such as Training The Street or Adkins Matchett Toy, where they were taught accounting basics, Excel shortcuts and the fundamentals of corporate valuation.

Then the real work began. Analysts in the investment banking divisions of banks are said to have the longest hours, with many staying at their desks well past midnight to tweak pitch books or adjust spreadsheets.

“They are effectively treated just like analysts and associates,” said Scott Rostan, the founder of Training The Street, a firm that leads workshops for new finance workers.

Unexpected turbulence in the industry has hit this year’s interns, who say that fewer full-time employees has meant more work for them. UBS and Credit Suisse have both conducted layoffs this year, and Goldman Sachs and Morgan Stanley are cutting back as well.

“Managing directors are telling interns, ‘We’re going to need you to step up,’ ” said one bank recruiter, who spoke only anonymously because she was not authorized to speak to the media.

Anticipating an uptick in deal activity, some banks assembled larger intern classes this year. JPMorgan Chase, for example, increased its intern class to 1,500 from 1,250 positions nationwide, according to a company spokesman. And demand at top-flight colleges for the internships, which had tailed off slightly during the financial crisis, has come roaring back.

“It’s the best way to land a permanent position, it’s prestigious, and there’s a steep learning curve, so you come away having been quickly trained and assigned meaningful work,” said Patricia Rose, director of career services at the University of Pennsylvania.

For their long hours, Wall Street interns are rewarded handsomely. Summer analysts are generally paid based on the prorated salary of a first-year analyst. At Goldman Sachs, for example, a first-year analyst’s salary of $70,000 translates to a summer intern’s pay of about $15,000 for 10 weeks of work, which includes a $2,000 housing stipend, according to one current intern. Interns at the Manhattan offices of BlackRock, the asset management firm, are paid a prorated salary that comes out to around $33 an hour, with time and a half for overtime exceeding 40 hours a week, according to a company spokeswoman.

But for most interns, the real prize is an end-of-summer job offer. Investment banks stock their full-time ranks with former interns, and the pressure to create loyalty during a 10-week summer is palpable. This year, Goldman Sachs summer analysts are being addressed by executives such as David A. Viniar, the firm’s chief financial officer, and Gary D. Cohn, the firm’s president. The Goldman intern reported nervously sharing a silent elevator ride with Lloyd C. Blankfein, the firm’s chief executive.

“It’s a delicate dance,” Mr. Robinson said. “The banks are assessing them, and these kids are assessing what the banks are doing.”

Even in a 10-week summer, interns can stand out. Earlier this year, Sunjay Gorawara, an Indiana University student who is interning at JPMorgan Chase’s investment bank this summer, won the stock-picking contest at the annual Ira Sohn investing conference. Mr. Gorawara’s speech, an appraisal of the for-profit education company Bridgepoint Education, brought him to the attention of industry heavyweights, including the hedge fund manager Steve Eisman.

But there is also potential for costly mistakes. This summer, some young Morgan Stanley employees were disciplined for rowdy behavior and noise complaints at Mercedes House, a Midtown apartment building where the firm houses many of its young employees. No interns were involved, but one full-time analyst was fired, according to a person with knowledge of the incident. A Morgan Stanley spokeswoman declined to comment.

For interns who survive the summer, the payoff can be big. Top performers are often given offers in the fall for full-time positions that begin the following summer, freeing them from the stress of a senior-year job search.

And even for interns who don’t plan on returning full time next summer, like the overworked Deutsche Bank summer analyst, a Wall Street internship may be good preparation for the trials of working life.

“If I can get through this, I can get through anything,” the intern said.

Article source: http://feeds.nytimes.com/click.phdo?i=8561869cd05508af8c0d05ed60744007

Filed Under: Business News Tagged With: credit suisse, summer interns

Wall St. Banks Expected to Post Weak 2nd-Quarter Results

July 11, 2011 by NewsMaker Leave a Comment

But when the bank reports its second-quarter results this week, that hot streak will have come to an end. Analysts expect JPMorgan to count an almost 20 percent drop in its sales and trading revenues, reflecting a slowdown in investor activity and the dismal performance of its fixed-income and commodities groups.

Bank of America, Citigroup, Goldman Sachs and Morgan Stanley are expected to report similar news. After helping prop up Wall Street during the financial crisis, core trading revenue is projected to drop, on average, by as much as 25 percent from the first quarter, according to Credit Suisse research.

That will put further pressure on the banks’ growth prospects, which are already strained by stagnant loan growth and more stringent regulation. It is also prompting nearly every major Wall Street firm to contemplate another round of layoffs amid growing concerns that at least part of the weak results are permanent.

“We are undoubtedly being impacted by lower levels of activity,” said William Tanona, a financial services analyst with UBS. “There is a lot of uncertainty out there.”

Together, the five Wall Street banks are still going to take in more than $20 billion from their core trading operations, largely from business done on behalf of clients. For example, the banks routinely help airlines hedge oil prices or bring together buyers and sellers of stock, bonds and other complex securities — often putting their own money on the line to facilitate a trade. But during the second quarter, the business was particularly hard hit.

Trading volumes fell sharply as investors became unnerved by the running debt crisis in Europe, the political standoff over the debt ceiling in the United States, and lingering concerns over the anemic growth of the broader economy. Even when investors did place their bets, they were far more hesitant to take big risks — something known on Wall Street as lacking conviction. That meant the banks missed out on the lucrative fees they can generate by selling more high-octane products, like complex options and derivatives.

Fixed-income traders, among the biggest moneymakers for Wall Street, faced a bruising market. In the commodities business, for example, oil, gold and other metals prices had been rising quickly during the early part of the year as investors anticipated high demand for materials to keep the global economy humming. But as cracks in the recovery kept surfacing, prices headed south — and traders raced to the sidelines. That left most Wall Street desks, which had stocked up on inventory to facilitate trades, holding losing positions.

At JPMorgan, for instance, energy traders were having a gangbuster year, earning several hundred million dollars for its burgeoning commodities unit. Yet when the market turned in early May, they gave back some of those gains, according to market participants. Morgan Stanley, meanwhile, suffered tens of millions in losses on its interest rate desk when a bet on lower inflation turned against the bank’s position.

Mortgage trading did not fare much better. After rallying from highly depressed values for much the last two years, mortgage-backed securities prices fell sharply during the second quarter. The reason? The government started dumping into the market its vast portfolio of mortgage bonds acquired from its rescue of the American International Group, and investors believed the outsize supply would cause values to plummet. (Only recently, when the Treasury announced it was halting its auctions, did mortgage bond prices start to stabilize.)

Although the banks have slowed the spill of red ink from troubled mortgages and other bad loans, they are struggling to increase revenue in their more traditional banking businesses, too.

New financial regulations have chipped away at once-lucrative sources of income, like overdraft charges and credit card penalty fees. Starting this fall, banks are expecting to absorb a multibillion-dollar hit when they are forced to sharply lower the fees they charge each time consumers swipe their debit cards. Higher capital requirements, meanwhile, could further depress profits if some banks are forced to lighten their balance sheets or exit certain businesses altogether.

Article source: http://feeds.nytimes.com/click.phdo?i=dd4b04a82d472b19623e881ee961bf73

Filed Under: Business News Tagged With: credit suisse, goldman sachs, oil prices

China’s Boom Beginning to Show Cracks, Analysts Say

June 20, 2011 by NewsMaker Leave a Comment

Several economists in China have recently lowered their growth forecasts for this year and next year to about 8.5 percent, down from earlier forecasts of 9 to 10 percent, while also warning about the possibility of a sharp rise in nonperforming loans at the nation’s big state-owned banks.

On Monday, for instance, Credit Suisse said data recently released by the Chinese central bank showed that credit in China had expanded at “alarming levels,” far more than previous government estimates suggested. Credit Suisse downgraded its profit forecasts for Chinese companies and state-owned banks, as it warned of slowing growth for the overall economy.

The reports come at a time of heightened concern about slower growth in other parts of the world, including the United States, Europe and Japan.

Since the financial crisis, China has been the world’s leading growth engine. But for much of the past year, China has been trying to rein in overly aggressive bank lending as way to tame soaring inflation and property prices.

Those tightening measures have not only weakened growth in China, analysts say, but have also begun to expose a host of other problems in the nation’s financial system.

While few analysts expect China’s growth to slow to below 8 percent in the next year, they still paint a troubling picture. The Chinese stock market has been in a slump for much of the last two years, the property market looks weaker and inflation is running at a 34-month high.

Analysts said exports have begun to show signs of weakness in recent weeks. Credit Suisse said Monday that China’s export growth could be flat in the coming months, partly because of weaker demand in the United States and Europe.

Credit Suisse’s new figures also indicate that off-balance-sheet lending, much of which took place outside the banking system, pumped a large amount of additional credit into the financial system last year. As a result, Credit Suisse downgraded its ratings of Chinese companies and the big state-controlled banks, and warned of a possible rise in bad loans.

Vincent Chan, the head of China research at Credit Suisse, said that the nation’s economy might avoid a “hard landing” but that growth over the next year was likely to be less robust.

“The market consensus is for a soft landing and two or three quarters of slowing down, then a growth rebound,” Mr. Chan said in a telephone interview Monday. But, he said, “we’re saying that after that, the growth may not re-accelerate and the indebtedness may be more serious.”

Earlier this month, Wang Tao, the chief economist in China at UBS, said China’s economy was still strong but warned that over the next few years, loans to local government investment companies could result in as much as $460 billion in nonperforming loans.

Although Beijing used state-run banks to bolster growth after the financial crisis hit in late 2008, the central government is ordering them to help rein in growth.

Chinese banks have already raised interest rates and set aside larger reserves. The government is expected to announced additional measures in the coming months.

While those moves could help slow inflation, they will also probably weaken growth by driving up borrowing costs in China. That could hamper private companies and property developers, which have been among China’s biggest sources of growth.

Last week, Standard Poor’s, the credit ratings agency, lowered its outlook on Chinese property developers, predicting that in some parts of the country property sales could drop sharply as a result of tighter credit and government curbs.

Another growth driver — local government investment in infrastructure projects — has also come under scrutiny from regulators because of worries that overly aggressive spending on new roads, bridges, tunnels, subways and showpiece projects could lead to a wave of nonperforming loans to municipalities.

Businesses, meanwhile, are trying to cope with rising labor costs, energy shortages and higher borrowing costs.

Those conditions could change if the government decides to loosen monetary policies and ramp up growth, the way Beijing did in early 2009. But Mr. Chan at Credit Suisse says the size of China’s debt could restrain regulators and lead to a longer period of slower growth.

Asked whether nonperforming loans — or N.P.L.’s — are set to rise, Mr. Chan said: “A rise in N.P.L.’s is a must. The question is, how much will they rise?”

Article source: http://feeds.nytimes.com/click.phdo?i=535863fec5b81199797afa73416075cb

Filed Under: Business News Tagged With: banks, credit suisse, growth forecasts

DealBook: Energy Transfer to Buy Southern Union for $4.2 Billion

June 16, 2011 by NewsMaker Leave a Comment

Panhandle Energy/Associated PressSouthern Union Company’s Trunkline liquid natural gas terminal in Lake Charles, La.

Energy Transfer Equity announced on Thursday that it would buy the Southern Union Company for about $4.2 billion in stock, in a deal that will create one of the country’s biggest natural gas pipeline companies.

Under the terms of the acquisition, Energy Transfer will issue special new stock units worth $33 apiece for each share of Southern Union. After the deal closes, those units, which will pay at least an 8.25 percent annualized yield, can be exchanged for either cash or 0.77 Energy Transfer common units.

That is a nearly 17 percent premium to Southern Union’s closing price on Wednesday.

Energy Transfer will also assume about $3.7 billion of Southern Union’s debt.

The merger is the latest among energy companies, which have sought to consolidate over the last year in an effort to gain greater scale.

With the acquisition of Southern Union, Energy Transfer will expand its holdings to more than 44,000 miles of pipelines, with about 30.7 million cubic feet of natural gas capacity.

Energy Transfer said that the purchase would immediately add to its payouts to stockholders, having identified $100 million in operational cost savings and $25 million in additional one-time savings.

The deal is expected to close in the first quarter next year.

Energy Transfer was advised by Credit Suisse and the law firms Latham Watkins and Bingham McCutchen. Southern Union received advice from Evercore Partners and the law firms Locke Lord Bissell Liddell and Roberts Holland.

Article source: http://feeds.nytimes.com/click.phdo?i=b01f8b23e0780f11d5280b0ceb96aaee

Filed Under: Business News Tagged With: credit suisse, latham watkins, lord bissell

DealBook: Ex-BP Chief’s Investment Firm Files for I.P.O.

June 10, 2011 by NewsMaker Leave a Comment

7:29 p.m. | Updated

Tony Hayward, a former BP chief executive, aims to raise £1 billion, roughly $1.6 billion, in an initial public offering of the energy investment company Vallares, which he co-founded.

Vallares plans to use the proceeds to make a large acquisition in the oil and natural gas industry, the company said in a statement filed on Thursday with the London Stock Exchange.

Mr. Hayward set up Vallares with the financier Nathaniel Rothschild and Julian Metherell, a senior Goldman Sachs banker, after resigning from BP last year in the aftermath of the disastrous oil spill in the Gulf of Mexico.

“We will have the cash, access to funds and the capability to unlock value where the current owners have neither the capital nor technical expertise to develop the assets,” Mr. Hayward said.

Vallares said it planned to sell shares at £10 apiece on the London exchange and to allocate shares on or around June 20. The company would be structured like Mr. Rothschild’s investment vehicle Vallar, which raised £707 million in an initial share sale last July to buy a coal business in Indonesia.

Vallares said it intended to buy a company or assets worth £3 billion to £8 billion, focusing on areas like Russia, the Middle East, Africa, Asia or Latin America.

The share sale is being managed by Credit Suisse, JP Morgan Cazenove and Evolution Securities.

Article source: http://feeds.nytimes.com/click.phdo?i=b3de3e669f41286a883b575c00b7a5b6

Filed Under: Business News Tagged With: coal business, credit suisse, london stock exchange

DealBook: BATS Global Markets Files for $100 Million I.P.O.

May 14, 2011 by NewsMaker Leave a Comment

Natalie Behring/ReutersJoe Ratterman, chief executive of BATS Global Markets.

8:21 p.m. | Updated

BATS Global Markets filed on Friday to go public, after a wave of industry consolidation that has raised speculation that BATS could become a takeover target.

The company, an upstart operator of an electronic exchange, said it planned to sell an estimated $100 million in stock in its initial public offering and use the proceeds for “general corporate purposes.”

BATS, which is the third-largest stock exchange operator in the United States, after Nasdaq OMX and NYSE Euronext, is going public as many of its peers are seeking partners. NYSE Euronext, the owner of the New York Stock Exchange, recently agreed to be acquired by Deutsche Börse. That proposed $10.3 billion deal spurred an aggressive counterbid by two rivals, Nasdaq OMX and the IntercontinentalExchange, which have promised to take their hostile $11 billion offer to NYSE shareholders.

In this shifting landscape, there is increasing pressure on smaller exchange operators, like BATS, to raise capital and expand their businesses. A stock offering could help BATS bulk up, according to analysts.

“This is the next stage for them,” said Daniel T. Fannon, a Jefferies Company analyst. “Getting a public offering afloat gives them brand recognition and currency to expand into foreign markets.”

BATS, based in Lenexa, Kan., has grown rapidly since it was founded in 2005 as a response to the rising power of the Nasdaq and the New York Stock Exchange. At the time, the industry was undergoing significant consolidation. In 2005, both the Nasdaq and the Big Board acquired major electronic trading networks, raising concerns among traders about pricing.

The top shareholders of BATS include Citigroup, Morgan Stanley, Credit Suisse First Boston and Bank of America.

Since it was started, BATS has steadily taken business from its larger rivals. It is now the No. 3 player in the United States, with a 10.8 percent market share of domestic equity trading.

It has also become ambitious abroad. The company recently agreed to buy Chi-X Europe to bolster its trading operations on the Continent, a move that would make it one of the largest electronic exchanges in Europe.

Last year, BATS posted revenue of $834.8 million and profits of $19.8 million.

“They are part of the exchange scene, but they’re on the smaller side; in order for them to continue to grow they need capital,” said Sang Lee, a managing partner of the Aite Group, an advisory firm.

One possibility, according to analysts, is the sale of BATS, which could be an attractive candidate to an international exchange.

“If a foreign exchange wanted to get into the U.S. equity markets, it would buy BATS,” Michael Wong, a Morningstar analyst, said. “It would be a manageable deal that would instantly diversify them by asset class and geography.”

Article source: http://feeds.nytimes.com/click.phdo?i=9bad1bab1d60627ece40908b1133470e

Filed Under: Business News Tagged With: corporate purposes, credit suisse, takeover target

DealBook: Scarred by the Dot-Com Bust, Reinvented for Social Media

April 7, 2011 by NewsMaker Leave a Comment

Noah Berger/Bloomberg News Been there: Thomas Weisel scouted technology start-ups in the 1990s and is doing so again.

SAN FRANCISCO — Thomas Weisel doesn’t have much personal experience with social media. He has never opened a Facebook or Twitter account, and he has resisted buying an iPhone.

But Mr. Weisel knows a lot about overheated markets. His firm, Thomas Weisel Partners Group, was a dominant force in taking technology companies public during the dot-com boom and was hobbled when that bubble burst in 2000.

Today, Mr. Weisel, 70, is assessing the industry landscape from his corner office at the Stifel Financial Corporation, the brokerage firm that bought his struggling company in April 2010. Although the current frenzy raises concerns, he says he thinks it is unfair to compare Internet stocks during the late 1990s to social media companies now.

“In a sentence, the big difference is these companies, in many cases, are enormously profitable out of the gate,” he said.

Mr. Weisel, who as co-chairman of Stifel’s board is still out hustling banking business, is among the many heavyweights from the dot-com days who are reinventing themselves in the era of social media.

Mary Meeker, the research analyst who was called the Queen of the Internet, recently joined the venture capital giant Kleiner Perkins Caufield Byers. Frank Quattrone, the Wall Street investment banker who helped take Amazon.com public in 1997, now has his own boutique advisory group working with technology start-ups and stalwarts, including National Semiconductor on its recent deal with Texas Instruments. Sandy Robertson, previously a founder of Robertson Stephens, a technology banking firm, joined Francisco Partners, a private equity shop that focuses on technology.

Lise Buyer, a former Credit Suisse First Boston analyst who currently advises companies on potential public offerings at her firm, Class V Group, jokes that she is “running into everyone” she knew from the go-go period of the late 1990s.

Video: The Dot-com Boom, Then and Now.

These veterans offer a unique perspective, having survived the previous technology craze and now playing a role in the current one.

“Social media is a new frontier,” Mr. Robertson said.

Graphic: Click for a fuller picture of the Silicon Valley money network

Mr. Weisel, a Rochester, Minn., native who was once a competitive speed skater, rose to fame during the technology boom. In the early 1990s, he ran Montgomery Securities, one of the boutique banks known as the Four Horsemen that dominated technology underwriting during the decade. During his tenure, Mr. Weisel took Yahoo public and helped orchestrate StrataCom’s sale to Cisco for $4.7 billion, at the time the largest technology acquisition that year.

The Barons of Two Booms

Other major Wall Street players from the dot-com bubble have reinvented themselves.

Sandy Robertson

THEN: A founder of the boutique bank Robertson Stephens, he proclaimed in 1999 that tech companies were the most expensive stocks ever.

NOW: While he wonders if sites like Facebook are the modern equivalent of the defunct citizens’ band radio, Mr. Robertson, an executive at the private equity firm Francisco Partners and a director at the software company Salesforce.com, sees great potential.

Mary Meeker

THEN: As an analyst for the investment bank Morgan Stanley, Ms. Meeker was referred to as the Queen of the Internet for her bullish investment calls on technology companies like Amazon.com and eBay.

NOW: Ms. Meeker left her perch at Morgan Stanley in late 2010 to join Kleiner Perkins Caufield Byers, the venture capital firm based in San Francisco. An investor in the start-ups Groupon and Zynga, the firm recently introduced a $250 million social media fund.

Henry Blodget

THEN: Once a high-flying technology analyst at Merrill Lynch whose stock recommendations often moved the market, Mr. Blodget was accused by regulators of issuing positive ratings on stocks in public while deriding them in private e-mails. As part of a settlement, he was barred from the securities industry.

NOW: Mr. Blodget is currently the editor and chief executive of The Business Insider, a gossipy news site that covers Wall Street. He has more than 28,000 followers on Twitter.

– Susanne Craig

Article source: http://feeds.nytimes.com/click.phdo?i=c0ab83a75a0d0e60bfd224afb9deb11c

Filed Under: Business News Tagged With: credit suisse, noah berger, taking technology

I.H.T. Special Report: Net Worth: Business Dynasties Need to Plan for the Delicate Task of Succession

April 2, 2011 by NewsMaker Leave a Comment

Around 70 percent of Hong Kong’s listed companies are controlled either by their founders or by members of founding families, according to Joseph Fan, a co-director of the Institute of Economics and Finance at the Chinese University of Hong Kong. Similarly high percentages of family control can be found in Indonesia, Malaysia and South Korea, he said.

Successful succession within a family business involves not just deciding how the shares in the business will be divided, but also who will be in charge of the business and who will make the final decisions after the transfer.

Many older Asian business chiefs have traditionally resisted making a will, fearing that such documents might be a bad omen. Patriarchs — and in Asia, the head of the family typically is male — also tend to keep their cards close to their chest to retain control of their business and maintain their public standing.

Advisers agree, however, that succession planning should not be put off. They say it should be actively considered and the plans revised on a regular basis.

“Asia is facing generational transition in many family businesses right now,” said Bernard Fung, head of family office services for Singapore at Credit Suisse.

“Founders have been very successful at building their business,” Mr. Fung continued. “In most cases they are of Chinese origin and carry a very built-in culture of Confucian values, such as the greater good.”

“The second generation is highly educated, often in the West, and they come back with fresh, different ideas,” he added. “Very often, it’s hard to bridge both side’s views.”

One relatively new way the succession issue is tackled in Asia is through the establishment of a family council, which includes various members of the family, typically some involved in the business, and some not. The family council in turn devises a family constitution, or charter, that documents the family’s values, outlines how its members will interact with each other, and explains how to resolve business-related issues like ownership, voting control and employment.

Mr. Fung said a family council could help multigenerational families manage issues related to the business in the present, and also be a forum “where the family thinks about the next generation of family leaders and how to groom them and train them.”

Terry Alan Farris, head of family office services at DBS Private Bank, said the concept of a family charter and a family council was not new in the West, but in Asia “this concept is just coming of age.”

“A family council is about bringing in different generations into the decision-making process,” Mr. Farris said. “The council is typically a flat structure and decisions are made as a group. Sometimes the biggest challenge is for the patriarch to be willing to give up some decision-making control.”

Christian Stewart, managing director of Family Legacy Asia, a company based in Hong Kong that provides advice to Asian families on succession, suggested setting up a family council before setting up a charter.

“Family businesses all over the world are fundamentally the same: there is an overlap between the family system and the business system,” Mr. Stewart said.

“Within the Asian family system the rule tends to be to treat everybody equally,” he said. “But when these rules are applied to the business, sooner or later it will lead to internal conflicts.”

“The majority of Asian family businesses fail because of internal conflicts, and a lot of that stems from applying family-system rules in the business,” he added.

Article source: http://www.nytimes.com/2011/03/29/business/global/29iht-nwfamily29.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: credit suisse, dynasties, members of the family