Goodbye to greed (but not to good)

Wall Street may be coming back from the brink a year after it collapsed, but a clutch of one-time hotshot investment bankers has few regrets about bidding adieu to the greed-is-good culture to plough a new furrow.

Till last September, Shruti Aggarwal, investment banker in the infrastructure group of Merrill Lynch Inc. in New York, was busy advising her clients on managing funding gaps and refinancing mortgages on which they had defaulted. As rival firms like Bear Stearns collapsed and UBS shut its infrastructure advisory group, Shruti’s diary was choc-a-block with appointments with clients.

Around the same time, Rakesh Maini, a 23-year-old actuarial science graduate from New York University, was busy helping his senior portfolio managers at JP Morgan in New York bring down exposure to risky instruments, and convincing clients such as endowment funds that their money was safe with JP Morgan. It was a nerve-wracking period as Rakesh couldn’t afford to make any mistakes in punching trade orders of clients. It wasn’t, after all, a time to make mistakes.

Why They’ve Hung Up Their Pinstripes
Disillusioned after last year’s bust-up on Wall Street.
The credit crisis led to deep introspection about their career goals.
Eagerness to give back to society.
Jobs in I-banking have become scarce.
An opportune time to start out on one’s own.

Cut to September 2009. If you think Shruti is still burning rubber on Wall Street, well that’s not quite the case. Instead, she’s busy these days strolling on Fifth Avenue, checking out the latest fashion trends and swimwear brands. That’s because yesterday’s I-banker has turned entrepreneur: Shruti has launched an online swimwear store, Secret Cache, which supplies to premium hotels in India.

As for Rakesh, he’s thousands of miles away from the boroughs of New York, ensconced in a suburb in Mumbai. From the testosterone-fuelled air of Wall Street, Rakesh is now in a calmer zone—he’s a class teacher at Umedbhai Patel English school and his day starts with preparing lectures for 30-odd kids. He took up a fellowship with the two-year-old Teach for India initiative started by promoters of the Akanksha Foundation, a non-profit organisation that works with lessprivileged children.

Wall Street may have begun shaking off the past year’s blues, but for I-bankers like Shruti and Rakesh— and a score of others, the hurly-burly of financial markets is for all purposes baggage of the past. The burial of that baggage has been quick, and the move-on even quicker. Till only a couple of years ago, these whiz kids, armed with degrees from some of the best colleges in the US, set out to work with marquee names such as JP Morgan, Citibank and Merrill Lynch. Some joined amidst the bull run of 2007 and experienced the adrenalin rush of closing deals and making highrisk investments in fixed income markets. Fat pay checks and bonuses were the order of the day.

Then came the pain. As the subprime crisis took its toll and banks began falling like ninepins, the magic of Wall Street disappeared almost overnight. Dreams of glorious careers evaporated, as friends lost jobs, and their families drowned in debt. Wall Street suddenly wasn’t a great place to be on anymore.

India was—relatively. Shielded by a minimal exposure to the credit crisis and a still robust domestic consumption story, India beckoned. Along with Shruti and Rakesh, also headed home were Nikhil Lalwani and Rasika Sridhar, both of whom studied in the US and worked for Citibank in different functions. Interestingly, Nikhil and Rasika aren’t chasing the big bucks anymore—rather than sniffing for those much-bandied-about green shoots, these 20-somethings have chosen to be at the grassroots.

For 26-year-old Nikhil, the view from the Citibank office in downtown Manhattan was quite different from what he now sees from his office in Dadar, a central Mumbai area. After working in the internal strategy team for capital markets, banking, custodian and fund services group of Citi, he joined the Mumbai Public School (MPS) programme, a partnership between Hyderabad-based Naandi Foundation and Brihanmumbai Municipal Corporation (BMC), in July this year.

Under this programme, 25 English medium government schools in Mumbai are being run as a publicprivate partnership. From making client presentations, devising a framework for targeting mid-sized corporates as clients for Citibank, Nikhil’s job these days is to devise teaching methods, roll out new syllabi, monitor the facilitators in the classroom, and ensure parent-teacher interactions at regular intervals. Above all, he is learning tactful ways to convince the government school officials about MPS’s newer initiatives for the schools.

Even though his day starts as early as 6.30 a.m. with a visit to the school in Ghatkopar, brainstorming session with teachers and then strategy planning and curriculum planning happen in the later part of the day, Nikhil believes that he is putting to use the skills he acquired at Citigroup. “I manage to put to use the skills I acquired at Citigroup,” says Nikhil, as he shows this writer pictures of the school kids on his I-phone.

Rasika Sridhar, 24, who was a strategy and planning analyst for the CFO’s team at Citibank, couldn’t agree more. She quit Citi in May to work in the Delhi office of the international charity fund, Absolute Returns for Kids (ARK), which is funded and managed by a bunch of alternative asset class fund (or hedge fund) managers. The funds are deployed for betterment of children and education about diseases like HIV/AIDS.

Rasika’s current role at ARK requires her to undertake strategic and business planning, devise new programmes for government schools in Delhi and allocate resources for the new programmes. Clearly, the skills picked up at Citi are coming in handy. “Besides strategic and business planning, devising new programmes for government schools in Delhi and allocating resources for the new programmes, I am honing up my interpersonal and negotiation skills at ARK,” beams Rasika.

Along with the I-banking learnings, the memories of the previous year’s turbulence on Wall Street also linger. And that may have a lot to do with the decision of these youngsters to make such radical switches. “Those who witnessed the Great Depression in the US saw their attitude towards risk change forever. The same thing might have happened to today’s younger generation, which has seen this crisis so closely,” explains Rakesh.

The credit crisis certainly left an indelible mark on Rakesh—a mark enduring enough to make him not just hop on the next flight to India but also to look beyond greed and do something ‘good.’ To be sure, Rakesh joined up with JP Morgan’s fixed income practice in 2006 with the gung-ho-capitalist belief that “greed is good” deeply embedded in his psyche. Rakesh had in fact grown up walking the I-banking talk—his father is a UAE-based investment banker, and Rakesh was keen to fit into his illustrious pinstripes.

For three years at JP Morgan, his job was to support investment decisions of senior portfolio managers of large institutional fixed income funds of JP Morgan, and make investments in all kinds of fixed income bonds. When the subprime mess spread like a tide, Maini’s learning curve became shorter. After Lehman Brothers collapsed, the job became rigorous as his division had to reassure institutional clients, keep a close watch on the bond yields and look at every investment at the fundamental level. His seniors who had spent more than a decade in the industry would often tell him that he was lucky to learn from this crisis in such a short career. By then Rakesh had seen — and learnt — enough.

Today, Rakesh jokes that managing a classroom of 30 school kids is a cakewalk when compared to being in a boardroom with 30 head honchos. His American accent proves to be a disadvantage at times, but he is slowly picking up Hindi and Marathi. He feels content when the kids in school start speaking in English. Apart from teaching, he is also undertaking a computerisation process for report cards and an attendance system in the school.

The NGOs, for their part, couldn’t ask for anything more than such an influx of talent. And it’s not just former I-bankers who are joining up. Teach for India has enrolled 87 such professionals from different backgrounds to take up a two-year fellowship program. Shaheen Mistri, CEO, Teach for India, says that a set-up like hers has become professional, which makes it easier to attract talent from the corporate field. A strategic and policymaking mindset and a passion is what professionals like Rakesh bring to the table, she adds.

For people like Mistri—and many of the financial services professionals she is attracting—the credit crisis wasn’t such a bad thing to have happened. In fact, those who have been able to spread their wings into newer areas would have few regrets. For instance, former I-banker at Merrill Lynch, Shruti, a chartered accountant and alumnus of Columbia University, found an opportunity in the crisis to nurture her entrepreneurial ambitions. This happened three months after Lehman Brothers collapsed and Merrill Lynch was taken over by Bank of America.

The idea of Secret Cache struck when she came to India for a beach wedding and had to hunt far and wide for swimwear brands. Secret Cache has tied up with a large hotel chain in India, sells around 21 swimwear brands and takes orders from retail clients in India. “The recession worked in my favour as a lot of these brands witnessed a fall in sales and were therefore willing to listen to my story,” says Shruti.

Yet, as the global economy slowly but surely heads towards recovery, there’s always that lurking possibility of these high-fliers of yesterday being lured back by the big bucks. Sceptics also point out that an NGO stint looks good on CVs when these young folk head back to the financial markets. Nikhil sees himself working in the Indian development sector in the long haul but if he has to go back, he’d rather go back to Wall Street than work in a similar Indian set-up! Adds E. Balaji, CEO of headhunting firm Ma Foi Management Consultants: “The initial kneejerk reaction to quit the profession when Lehman Brothers went bankrupt has gone now.” Still, for those who did find their calling during the credit crisis, a recovery in financial markets may not seem as attractive and alluring anymore.