The aftermath of the American subprime crisis. Discussion with Tiberius Vadan, Senior Director at Alvarez & Marsal, New York
 Mirela Ciucur |
Where did the Big Financial Mammoths go. Perspective for 2009. On September 15th 2008, Merrill Lynch was taken over by Bank of America in a $50 billion all-stock transaction, while was worth more than $100 billion during the last year. The same day, Lehman Brothers, one of the most prestigious players on Wall Street, filed for bankruptcy protection, after it failed to find a buyer. Washington Mutual the largest savings and loan holding company in the country, listed more than $8 billion in debt in its bankruptcy while JPMorgan Chase bought WaMu’s branches with a $1.9 billion payment to the Federal Deposit Insurance Corp. How were you and Alvarez & Marsal the well-known restructuring firm, involved in the process, as Bryan Marsal was appointed the Chief Restructuring, and then Chief Executive Officer by Lehman Brothers, and Bill Kosturos CEO of Wahington Mutual Bank? Or should I simply say: How is it to be involved in the rescue plan of the biggest bankruptcy in history?
The Lehman Brothers and Washington Mutual cases are indeed historical in magnitude and complexity. The urgency and gravity of the situation prompted in both cases for a firm which specializes in resolving these complex bankruptcies, and can do so rapidly, professionally, and on a global scale. Alvarez&Marsal is uniquely positioned and specializes in cases such as this one. The invitation to drive the bankruptcy process was not extended to any other firm other than A&M for several reasons. Our capabilities to address this situation are unique in the sense that our 1400 senior professionals span thirty five countries in four continents including Europe and Asia, where the Lehman case was unfolding. While the origin of the firm is pure restructuring and crisis management in highly visible, complex cases, the Firm has diversified into many disciplines including Tax, Dispute Analysis, Corporate Finance, Technology and Management Advisory, and Real Estate, and also in terms of industries to include a focus on Financial Services. These items are critical to the Lehman and any of these large cases. Of the hundreds of assets being divested/sold at Lehman, many are highly complex structured products and derivatives like Interest Swaps, and various Collaterized Loan Obligations. Our specialists in the financial services, along with our Forensic teams work day and night to assess value and disposition of each of those assets. The massive Hedge Fund and Private equity asset sales are driven by our own private equity team, who not only understands the intricate valuation and issues, but is very familiar with the individuals in those firms and their histories. Our real estate team is managing the divestiture of some $30 billion in real estate assets; our technology and management advisory teams are focused on ensuring the back office operations, and massive technology portfolio is managed through the transition of the assets. Agreements and projects have to be set in place for the businesses to be transitioned in stand-alone state or under a new acquirer’s umbrella. Our corporate finance/investment banking operation is focused on selling the assets. Having just the rapid and successful sale of the India and Hong Kong Lehman operations. And each of those 130 professionals work seamlessly as a part of the same family, and closely aligned with the human aspect of the Lehman organization. This is not a typical situation, given its complexity, but in most our cases, we have a key differentiator from any other firm in these superb cross functional capabilities and expertise. Whether it is in the public sector, managing the New Orleans School District in the middle of the Katrina Hurricane disaster, breaking up Arthur Andersen, turning around Levi Strauss, Healthsouth or other critical crises, our team is very efficient in quickly identifying the critical issues, and allowing our experts to do what they do best – “get it done – take care of it.” The financial tsunami sent shockwaves around the banking world, sending UK and other major economies into recession. Would you have any predictions on how soon you foresee any chance of recovering, especially for the European countries, thus they seem more vulnerable to financial crises than the US? Any thoughts about Romania in this scheme of things? I am certainly no economist and our firm is not recognized for our economics knowledge but for our execution expertise. That said, the restructuring firms like A&M are a leading indicator in many ways. Concern at the creditor level – the banks, surfaces pretty early on as companies fail to meet the commitments on the loans they borrowed. With our vast network of Private Equity and banking relationships, we usually get the call when the relationship between a company and its financial partners begins to deteriorate and there is room for concern – which is pretty early in the process. Chapter 11/ bankruptcy is never the first choice, in fact it is the least preferred option in many situations. We began to see the issues surface in early 2008 with the housing deterioration, which triggered the construction and housing company defaults. At that point we were looking at 2009 as a major year in failed companies. It became rapidly quite clear that 2008 will start the deterioration in credit process and accelerate it significantly. The credit crisis pushed the banks into capital calls, and the inability to gain liquidity/cash in other ways other than the governments certainly started a global domino effect. In my opinion, we will continue to see issues with the credit market in 2009 and 2010. These issues will make cash unavailable for companies to pay their people, their suppliers, and grow their business. Many big projects will be stopped, further slowing down development. All this will continue pushing up unemployment – currently at two decade high in the US – which will decrease consumption/spend at the stores. This scenario is fairly certain in the US, and is highly likely in Europe and Asia, much more aggravated in emerging markets like China, India and Romania. Those countries are the suppliers to the West in many ways, and then the West is not buying, the factories have to stop producing. It doesn’t help that the Romanian real estate market got over heated and now people have major assets frozen and projects unsold or unfinished. The much needed cash infusion will likely not come from the banking system. Without proper government infusion in both creation of jobs, social help, and stimulus packages this situation will be significantly aggravated. What is your current position in the company? How have you decided to join the field of restructuring, mergers and acquisitions? Would you please talk a bit about your professional background? My background has been in professional services my entire career. Having started working on large scale corporate restructuring projects like Rockwell Collins/Rockwell International, Lockheed Martin, JP Morgan/Chase, Capital One, Nationwide Insurance, I had the chance to learn a lot of different industries and business models. Those transactions introduced the complexity of working with thousands of employees, customers, suppliers and stakeholders. In thinking about my transition to Alvarez & Marsal from Morgan Stanley and Deloitte Consulting I knew I wanted to keep working on deals on one side (mergers, acquisitions, divestitures) and on the other side was really attracted by the “action” of restructuring and crisis management. I also wanted a leadership position and the ability to be promoted rapidly based on my performance. Those attributes continue to be true today in what I seek in my professional life. A&M is a unique set of capabilities and people which fit perfectly with my goals four years ago when I joined the firm. Since then, I have originated millions of dollars in business for our various teams, delivered millions of dollars in cost savings and top line improvement for numerous clients, served as diligence, post acquisition cost takeouts, integrations, and carve-outs and have done so by working with some of the smartest people I have ever met. As head of our Strategy team in the US North-East, member of our Performance Improvement global leadership team, and leader in our Private Equity team, I have been able to demonstrate my leadership and business development skills, which resulted in rapid promotion from Manager to Director and then Senior Director in less than four years. At this time, I think I am the youngest Senior Director in the firm, and there is a lot more to come! It has been exciting to have discussions on various deals which touch Romania and Eastern Europe. Nothing would please me more than working on one of our industries in Romania. I see a tremendous amount of opportunity to better use bank credit in driving corporate growth in Romania, and the banks need the ability to step in when their more active help is needed. At this time, that capability is weak in Romania and firms like ours can help. Another important part of my job and my activity is to build our team and manage our people. As a Senior Director, I am a membe r of the leadership team making all critical decisions from staffing and staff development to business development and training. Often it includes promotions or termination decisions. In addition, I run our recruiting team for Harvard, which does not only mean identifying bright new team members but also speaking at conferences and working with professors there on various projects. Finally, part of my responsibilities include working with our many Private Equity partners and put deals together. This could include an outside in look at an industry, or specific opportunity discussions based on what I see.
Personal note:
I am 35 and came to the US to learn English in High school when I was 15 – just passed “treapta doua” at Informatica in CJ. I followed by graduating High school here, in a very large school in Franklin Tennessee (1,600 high school students). I was offered several full/Presidential scholarships and chose to go to two private schools, a small College called Belmont – see American Idol for one of our students - winners along with Trisha Yearwood, Steve Gill, and several dozen other famous singers (yes – a business and music school). Then Georgetown University in Washington DC (yes, I wanted to be the President of Romania until I learned about politics…). My family is still in Romania today where many of my friends still reside, but my career started and continues in the US and on a global basis (any week I find myself in NY, Los Angeles, Hong Kong, London, or any other crazy city). I don’t think there is such a thing as “I chose to live here or there.”
Once my career in restructuring and acquisitions took off I decided to go to Harvard Business School. While Harvard may be recognized around the world, but it is most valued and valuable in the US. In addition my business offers global opportunities, and it is exciting to think of oneself as a “citizen of the world” not bound to some specific geography. As such, I have family, friends, investments and property in various countries and that keeps things very exciting. I particularly love what we are doing at home, in Romania, and will always continue to be a part of each aspect – my family, education, politics, business, friends and culture. I never stopped and I don’t see any reason not to push ourselves even further. It is a good time to be Romanian in NY. I think people are finally catching on to that at least in NY. It used to be like: “Where is Romania?” and now people ask “How can we invest there?”
Personally I hope we continue this journey as a country and a culture and spread our wings even further. I have always been proud of who we are and what we do, and it just keeps getting better. There are no obstacles – just yourself. If I can do it, anyone can. The copy of the interview in Evenimentul Zilei: http://www.evz.ro/articole/detalii-articol/839991/Un-roman-implicat-in-criza-financiara-din-SUA/
|
 Letitia Grigoriu |
Un interesting update la magnitudinea situatiei creeate de Lehman Brothers si efectele ei. in viziunea lui George Soros, se pare ca, efectul dezintegrarii atat de rapide a intregului sistem financiar mondial nu are precedent, acesta fiind chiar mai sever compromis decat in timpul Great Depression. http://www.reuters.com/article/wtMostRead/idUSTRE51K0A920090221
Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union. He said the bankruptcy of Lehman Brothers in September marked a turning point in the functioning of the market system. "We witnessed the collapse of the financial system," Soros said at a Columbia University dinner. "It was placed on life support, and it's still on life support. There's no sign that we are anywhere near a bottom." His comments echoed those made earlier at the same conference by Paul Volcker, a former Federal Reserve chairman who is now a top adviser to President Barack Obama. Volcker said industrial production around the world was declining even more rapidly than in the United States, which is itself under severe strain. "I don't remember any time, maybe even in the Great Depression, when things went down quite so fast, quite so uniformly around the world," Volcker said. (Reporting by Pedro Nicolaci da Costa and Juan Lagorio; Editing by Gary Hill)
© Thomson Reuters 2009 All rights reserved
|
 Liviana Mustafa |
Noi predictii despre evolutia in diverse sectoare ale economiei si finantelor sunt oferite de Tiberiu Vadan intr-un interviu facilitat de Strada32.com, pentru Business Standard. Tiberiu Vadan, senior director Alvarez&Marsal: "Multe fonduri de investitii in care ne-am plasat pensiile private vor falimenta si vor disparea" "Tiberiu Vadan, senior director la Alvarez&Marsal, cea mai importanta companie de restructurari corporative din New York, implicata in cazurile rasunatoare de faliment ale bancilor americane Lehman Brothers si Washington Mutual, considera ca recesiunea economica se va resimti si anul urmator atat in SUA, cat si in Romania, iar efectele acesteia vor fi puternice fara un sprijin adecvat din partea statului. Vadan spune ca autoritatile romane nu se implica suficient pentru a face cunoscute oportunitatile economice pe care le ofera tara, care astfel „ramane un secret bine pastrat pentru Statele Unite“. >Sa ne asteptam la mai multe falimente sau fuziuni in sectorul financiar in 2009? Sentimentul meu este ca se va continua consolidarea sistemului bancar din SUA si, in consecinta, a sistemului bancar global. La fel de important, probabil, este faptul ca multe dintre fondurile de investitii, acolo unde ne-am plasat pensiile private si investitiile individuale, vor falimenta si vor disparea. Catastrofa de 50 mld. dolari in cazul Madoff este unul dintre exemplele-cheie in acest sens. Cazuri in care banii clientilor s-au evaporat peste noapte din cauza unor scheme de investitii cu scopul de a profita de mediul economic si de piata de credite. Fonduri mari de investitii precum Harvard Management, Yale Management si alte fonduri mari ca Fidelity, ING au suferit toate pierderi de 10–50% din fonduri. Acele fonduri trebuie fie sa dispara, fie sa fuzioneze, din cauza constrangerilor de capital si a scaderii taxelor de management. >Ati fost implicat in diferite procese de restructurare. Puteti detalia ce s-a intamplat mai exact in cazurile Lehman Broathers si Washington Mutual si care a fost rolul companiei Alvarez&Marshal? Cazurile Lehman Brothers si Washington Mutual sunt intr-adevar istorice prin magnitudine si complexitate, dar nu vorbim, totusi, nici despre primele si nici despre ultimele falimente. Urgenta si gravitatea situatiilor au impus, in ambele cazuri, necesitatea unei companii specializate in rezolvarea unor astfel de cazuri de faliment complexe, intr-o maniera rapida, profesionala si la scara globala.Dintre sute de bunuri financiare vandute la Lehman, multe sunt produse extrem de complex structurate. Specialistii nostri in servicii financiare, impreuna cu echipele noastre de evaluare, lucreaza zi si noapte ca sa determine valoarea si natura bunurilor.Echipa noastra de specialisti supervizeaza vanzarea de bunuri imobiliare in valoare de 30 miliarde dolari; echipele de tehnologie si management sunt concentrate in a asigura operatiunile de back office si un portofoliu masiv de tehnologie este implicat in procesul de tranzitie a bunurilor.Contractele si proiectele trebuie stabilite, pentru ca afacerile sa devina independente sau sa fie transferate sub umbrela unui nou cumparator. Operatiunile noastre financiare si de investitii bancare se concentreaza pe vanzarea bunurilor financiare. De exemplu, vanzarea cu succes a operatiunilor Lehman din India si Hong Kong, la care lucreaza 130 de profesionisti. >Care este starea actuala a economiei din SUA? Care sunt consecintele crizei financiare? Economia Statelor Unite este inca in declin. Unul dintre parametrii pe care ne bazam in analiza cresterii economice in SUA este dat de rata somajului, alaturi de alti indicatori ca productia, exporturile si altele.In ceea ce priveste numarul de cereri de somaj in Statele Unite, rata a ajuns la 7,6% in ianuarie, iar conform predictiilor unor experti americani in economie va ajunge la 9%. In opinia mea, o sa continuam sa vedem probleme in piata de credite in 2009 si in 2010. Aceste aspecte vor face dificil accesul companiilor la fonduri, pentru a-si plati oamenii, furnizorii si a creste afacerile. Multe proiecte majore vor fi stopate, incetinind dezvoltarea.Toate acestea vor afecta cresterea somajului, in SUA, la momentul acesta, fiind la cel mai ridicat nivel de doua decenii incoace, ceea ce va determina scaderea puterii de cumparare. Acest scenariu este destul de sigur in SUA, si este foarte probabil in Europa si Asia, fiind mult mai accentuat in piete emergente precum China, India si Romania. Aceste tari reprezinta furnizorii catre Vest in multe privinte, iar daca Vestul nu cumpara, intreprinderile trebuie sa inceteze productia.Nu ajuta deloc ca piata imobiliara din Romania „s-a infierbantat“, si acum oamenii au bunuri majore inghetate si proiecte nevandute sau neterminate. Nevoia atat de stringenta a unei infuzii de numerar mai mult ca sigur nu va veni de la sistemul bancar. Fara o implicare potrivita a statului in crearea de locuri de munca, ajutor social si pachete stimulante, aceasta situatie va fi agravata. >Cum vedeti evolutia economica in Romania, in acest an? Economia Romaniei creste si scade in functie de consumul intern, de exporturi si de investitii. Exporturile vor fi semnificativ afectate in acest an si, in aceeasi masura, investitiile isi vor incetini dezvoltarea economica.Unele industrii vor fi mai grav afectate decat altele, acelea care depind de exporturi vor fi afectate major, in timp ce acelea care tin de consumul intern – alimente, bauturi, energie – vor suferi mai putin. Romania nu este la fel de dependenta de exporturi cum sunt, de pilda, China sau India, unde criza ar fi putut ajunge la dimensiuni remarcabile daca nu ar fi fost interventia guvernului. >Credeti ca bancile vor debloca creditarea si se vor implica mai consistent in finantarea economiei reale? Vor fi nevoite sa o faca. Dar disponibilitatea totala a creditelor care le sunt acordate de catre guvern alaturi de cele pe care le detin (si toate solicitarile sistemelor bancare pentru denuntarea imprumuturilor esuate si a deprecierii unor active) vor fi importante pentru a determina cand si cum se va intampla acest lucru. >Ce parere aveti despre profitabilitatea din sectorul bancar in acest an? Nu sunt expert, dar din punctul meu de vedere, in acest an vor fi putine – poate chiar deloc – banci profitabile la nivel mondial. Unele vor reusi mai bine decat altele, iar bancile private mici, care sunt de fapt banci private de investitii, vor vedea desigur partea mai buna a situatiei, dar in general, 2009 va fi un an marcat de minimizarea pierderilor, si nu de obtinerea de profit. Acestea fiind spuse, fuziunile, reducerea costurilor, controlarea riscurilor vor fi initiative extrem de utile si necesare pentru a ajunge la acel profit, relativ vorbind. Bancile care au sau au avut o politica agresiva in aceste directii au cea mai mare sansa de a ajunge la profit si de a achizitiona alte banci sau de a beneficia in urma suportului acordat de catre guvernele Statelor Unite, europene sau asiatice. >In cazul in care veti reveni in Romania, ce functie sau domeniu v-ar tenta? Faptul ca am posibilitatea sa folosesc ceea ce am invatat si inca invat aici in State si sa aplic aceste informatii in diferite directii si oportunitati in Romania inseamna un proces fascinant, care imi ofera multe satisfactii. Lucrez la diverse cazuri de afaceri in Romania de cativa ani incoace, unele au avut mai mult succes, altele mai putin. Bineinteles, voi continua sa ma implic. Romania este o oportunitate in sine. In fiecare saptamana avem discutii cu investitori de pretutindeni despre mediul romanesc si despre posibilitati de investitii.Personal, sunt de parere ca dezvoltarea va continua si se va consolida in aproape toate tipurile de industrii. Tara noastra este inca, din pacate, un secret bine pastrat pentru Statele Unite, efortul de a comunica oportunitatile economice din Romania este destul de putin vizibil. In ciuda acestor lucruri, suntem recunoscuti prin productia de imbracaminte/textile, de mobila, in constructii, agricultura si produsele de industrie grea. Este momentul perfect sa fii roman la New York. Cred ca in sfarsit oamenii incep sa inteleaga acest lucru, cel putin in New York. Inainte se intrebau: „Unde e Romania?“, iar acum toti intreaba: „Cum pot sa investesc acolo?“. Ar fi grozav daca guvernul ar intelege mai bine mecanismele economice si de business, astfel ar contribui la scaderea nivelului de coruptie, care nu face decat sa ne afecteze. Aceasta realitate este, din pacate, cea mai mediatizata si cunoscuta chiar si in Statele Unite. CV Tiberiu Vadan
Profil Alvarez&Marsal
Sursa: Business Standard |
 |
