September 11 2017
I would enjoy quiet employment for three years before rebelling and quitting to work for a wealthy Chinese investor. The Firm I took the same bus to downtown, except this time, I arrived in a full suit and tie at Cathedral Place, swiped my keycard in the elevator, and rode up to the penthouse. I worked in the common area, initially in the inner bowels under a low overhang, and soon at a secluded desk next to the window under the soaring thirty-foot high steeple, an iconic and highly visible station that I would eagerly point out to others from the streets below. On weekends I would bring family and friends for a tour, grab a drink from the fully stocked pantry before walking down a flight of majestic mahogany stairs to the reception area below to admire the unencumbered view of downtown from the opulent board room. This level also had the trading floor with its myriad of Bloomberg terminals and omnipresent screens, just like in the movies. Here was the majestic sky palace where I began life as an investment banking analyst. The Firm had two main business units, one for retail investment management and one for serving the institutional capital markets. The retail side had an army of investment managers who handled money for thousands of individuals. They, along with operations and IT, occupied half of the lower floors in the building. The capital markets side, with its smaller team of finance professionals, took up the top two floors. Capital markets was divided into three divisions: research, sales and trading, and investment banking. The first two served large institutional clients who managed significant amounts of money, such as pension funds and university endowments. The research team used analytic methods such as those taught in the CFA program to evaluate publicly-traded companies and future prospects for their share prices. The sales and trading team used the research reports and the associated recommendations to solicit the buying and selling of these stocks from the fund managers. These two groups served what was called the "buy-side" of the market, while investment banking serviced the "sell-side", the listed companies themselves. Investment bankers sought to help public companies raise money from the capital markets, or to perform strategic transactions, such as mergers and acquisitions, taking a cut by commission if successful. The commission was usually determined as a percentage of the size of the deal. With public company transactions easily surpassing millions of dollars and the commission being shared by a small elite team of hard-working professionals, investment banking could be very lucrative if deal-flow was sustained. But the business of advising significant corporate transactions was extremely competitive and unpredictable, so team sizes were kept small to survive the boom-and-bust cycles of the financial markets and salaries kept to a minimum, with all of the upside being made up of the bonus pool of transaction commissions that were disbursed quarterly. It was a feast-or-famine industry where long-term careers were difficult to sustain. But the two-year apprenticeship as an investment banking analyst was prized for its training and exposure to a wide variety of significant business transactions which left candidates well-prepared to join the corporate world in the executive suite. Why two-years? Because at the largest and most prestigious firms, that is about how long a young person could last without suffering chronic ill-health from sleep deprivation and overwork. After the apprenticeship, candidates at the most cut-throat firms were pushed "up or out": either promoted or pushed out to make room for fresh blood. The reporting hierarchy in investment banking was rigid and stratified. At the top were the managing directors, each with absolute purview of the industries and companies they served, or "covered". Their jobs were to build and maintain relationships with the powers-that-be at the client companies, to convince them to use our services when the need arose, or to manufacture such need whenever possible. They were people-persons, the rainmakers. Below them were vice presidents, who hoped to retire into the managing director's shoes eventually, while establishing their own relationships and project managing deal execution. Below them still were the associates and analysts, who performed the actual numerical analysis and the presentation preparations which the rainmakers used to pitch services. Pitches were a constant feature of life, as we had to continuously recommend courses of strategic action to the companies to stay in the game, hoping they would reward us with a piece of the commission pie when an actual deal took place. The three parts of the capital markets division worked closely together. The pitches investment banking made often highlighted how strong our research with regards to the client company was and how much trading of their stock was performed through our Firm. So, if the need arose for raising more money by selling shares, we would argue that we were the logical choice to help them do it, since we already had the buy-side relationships with funds owning their stock. My team at The Firm was made up of a roster of stable members with low turn-over; they largely ignored the two-year up-or-out rule. The team had developed a stable deal-flow that gave everyone a decent work-life balance. I was fully expecting to pull all-nighters when required, but the opportunity only came once, during a fire-drill for a long-term client near the beginning of my tenure. Shortly after I began work, the housing bubble in the United States burst, resulting in a major financial crisis and a freeze of the capital markets. I was told business was slower than usual and it was a gentle way to be introduced to the industry. I watched in awe as the seasoned managing directors spent the day scooping up beat-up shares in their personal accounts, calmly assured of the inevitable return to normalcy. This was the period through which my family took two-and-a-half years to sell our Seattle bungalow. I may have been fortunate to have gotten a job before the crash, but I do not think it mattered for the analyst positions with entry-level pay. Managing directors controlled the distribution of the bonus pool, giving enough to maintain morale among the troops and keeping the rest for themselves. For the analysts roles at the bottom of the food chain with relatively little pay and abundant work, the hiring decision was mostly based on finding those who understood the bargain and were willing to perform their role with ability, dedication, and loyalty. Ironically, moving up in the up-or-out in the investment banking career ladder required a radically different set of attributes that were diametrically opposed to those valued in analysts. The grunts of the army were sought out for their numerical ability and sadistic tolerance of repetitive error-free pitch-book creation. In contrast, the managing directors needed to be relationship monsters, employing the human touch to get CEOs to "yes". The gap between these two job types was unbridgeable for many who would leave, either willingly or pushed out by the system. Even managing directors had to maintain their financial chops, and were hired for their experience in the industry through years of deal exposure. Everyone in the hierarchy was well-educated and carried full CFA charters, and I would soon get mine. I continued with my exam regiment and passed the level 2 and level 3 exams on the first try, committing even more time for the last one, up to 1,000 hours of dedicated study, to avoid having to go through the process again. Meanwhile, I diligently executed my half of the arrangement with The Firm, working on pitch-books and financial analyses for the entire team without complaint. The work turned out to be not particularly deep or difficult, and the full academic rigor of CFA studies were rarely meaningfully applied for smaller public companies with thinly traded stocks. Instead, I found myself tapping my artistic background, devoting as much effort towards the design of the presentations for clarity and cleanliness as towards the numbers themselves, as these I soon automated with expensive industry software The Firm paid for. At the end of two years, I was promoted to an associate position, continuing with the same work since I was the only one below the vice-presidents on the team, but handed a salary and morale boost. My experience at The Firm had surpassed those at MIT, Microsoft, and acting to become my longest professional tenure to date. By now, I had been to countless client meetings at offices all around downtown with my superiors, gotten used to the quirky closing dinners and commemorative deal plaques, and proudly carried my office-issued Blackberry phone which I custom-ordered to have a distinctive red face-plate. I grew into the role of the professional junior banker, with the perpetual suit-and-tie and happily attending industry events or even giving talks to university finance clubs about the banking career. Family During my employment at The Firm, I steadily filled my retirement accounts and helped my parents pay down their mortgage. For the last twenty-years, UBC explored developing its vast campus to enrich its endowment. As the land was provincially-endowed and could not be sold, UBC turned some it it into 99-year lease developments, beginning with the prototype residential complex at Hampton Place. My parents had sold their Hampton Place townhouse and moved to Dunbar when I left for MIT as my father was worried about leaky roofs and the leasehold ownership. Emboldened by the success of Hampton Place, UBC unveiled plans for a comprehensive greenfield development next to Hampton Place that was to be a full-fledged community, with housing, schools, and shops. To kick-start the master plan, UBC advertised that it would co-develop the first low-rise condominium. The price offered by UBC was a 20% discount to market, eligible only to UBC staff, with the restriction that the units could not be sold for five years after completion. By now, my parents were mortgage-free and were a weary of living in the badly insulated house, where the wind hissed through the 90-year old bedroom walls in the winter. So my father thought it would be a good idea to invest in the UBC condo, live there once it was completed until the five-year restriction was lifted, then use the 20% savings to help finance the tearing-down and rebuilding of the house in Dunbar. The UBC condo project generated significant interest and my father lined up all night in his car to get first choice of units. He picked the cheapest and most efficiently laid-out three-bedroom. My parents, my grandmother, and myself would move into unit 306 after its completion, and we would watch an entire community spring up around us. UBC had proven its vision and commercial developers joined the fray, leasing land and raising building after building. The shopping amenities, a retirement home, and student rental housing soon followed, with plenty of parks and playgrounds that enticed families to live in the academic setting. It was not as pedestrian-friendly as my childhood Acadia Park, but it was well designed and expensively maintained, especially the abundant streams and ponds loved by children. Eventually, the 20% became almost a rounding error as the value of the condo more than doubled at the end of the five years. During these years, the west-side public high-schools like University Hill of UBC and Lord Byng of Dunbar had consistently ranked as the best in the province. After the successful winter Olympics games raised Vancouver's global profile, a wave of Chinese immigrants arrived in the city. Seeking good school districts, the immigrants significantly bid up land prices in Dunbar and beyond. Those who did not buy rented. After moving to the UBC condo, my parents leased the Dunbar house to a single-mother whose child used the address to attend Lord Byng. They lived upstairs, where my family used to be, and sublet the basement suite to a rotating roster of Chinese international students attending UBC. One of these students would ultimately become my wife. She would join me on weekends at board game parties hosted by my Transition classmates. During the Olympics, I spent $1,000 on the secondary market for my parents to see the Chinese figure skating pair win gold at the Pacific Coliseum, where I had written my CFA exams. I also took my whole family and significant other to watch the China-Canada women's curling match. Through my work at The Firm, my vocabulary and oratorical skill in English had vastly improved, while my Chinese ability consistently declined from years of low use. With the arrival of a critical mass of Chinese immigrants in Vancouver, including my significant other, that was about to irreversibly change, along with my career projection. China The global economic recovery and China's insatiable appetite for natural resources to fuel its development led to a commodity markets boom. Money flowed out of China, seeking to secure assets from around the world to feed the need. Canada, with its large landmass and stable jurisdiction, had always had a large natural resources economy and became a favourite target. The Firm and its wizened managing directors had seen its share of fads before and were not moved to spend effort on soliciting this business, but eventually we would be unwittingly pulled into its orbit. A lawyer recommended The Firm to help a wealthy Chinese individual look for resource investments, and we acquiesced. From the get-go, the meetings were awkwardly conducted with English-Chinese translations which were eventually performed by me and my halting Chinese. I tapped my acting training and would come to translate intent rather than language to maintain the energy and flow of the meetings, though my Chinese steadily improved as well. The Chinese investor had an entourage of friends and informal advisers who attended all meetings and site visits with him. Feeling empowered by my new-found speaking-role in client meetings, I supported the Chinese group as best I could with valuation concepts and how the capital markets worked in Canada. I adopted a service attitude and ingratiated myself by holding doors open, pouring tea at meals, and even taking a keener on a trip to Warren Buffett's annual shareholder meeting in the United States. Initially, I was simply the messenger, passing requests and responses back and forth between the group and my superiors. Over time, as the correspondence became too numerous, I increasingly tried to handle what I could on my own, "covering" them as a managing director would, brokering services from The Firm to meet their investment needs. The Chinese gentleman's first substantial investment was in a mining project in the prairies. For this, I joined the group on numerous trips to the site, holding their bags and delivering water to their motel rooms along the way. The trip began with a five-hour flight eastward, followed by another one-hour long flight north, and ended with a further two-hour drive into the Canadian wilderness. At the mine site, we stayed in the trailer camp that could house fifty, ate at the canteen, and made the trek to the mine face 300-meters below the surface. There were two ways to get there. We took the vertical shaft for personnel on a rapid descent to the working level, toured the large storage and equipment caverns dug out of hard rock, and examined the workers in giant digging equipment working at brightly-lit nodes. Then we rode trucks in the pitch dark through wide winding tunnels that spiralled back to the surface. With the help of The Firm, the investor successfully took over the public corporate entity and poured millions of dollars into its operations before tumbling commodity prices put the project on hold indefinitely. The Firm began to treasure the gentleman, reported to own a billion-dollar enterprise in China, as a valuable asset. My managing directors introduced him to numerous other projects that were headquartered in Vancouver with the assets flung far across the world. He was beginning to develop a lumber business in China and was convinced to invest millions more into a Canadian forestry company. My affection for the investor became personal when he accepted my significant other as the third employee of his local Vancouver office, allowing the two of us to work together downtown and to attend many social functions as a couple. We were invited to the wedding banquet of the his oldest son, where he introduced me to his social circle as his investment banker and a very decent young man. The commission The Firm made from this gentleman became substantial. At year-end, the banking team met to dole out pricey Winter Olympics tickets to clients. Feeling protective of the Chinese group, I insisted they receive some of the best. My team disagreed, viewing them more as one-offs and incomparable to long-term clients who were well established in Vancouver. Undeterred, I spent my own money to send them gifts in The Firm's name, including $10,000 secondary market tickets to the marquee event: the gold-medal hockey game between Canada and the United States, which Canada would win in thrilling fashion. My bosses eventually made me whole through my personal year-end bonus, but it was an act of indiscretion that revealed an emerging divergence of interest between myself and The Firm. Striking Out I began to actively court Chinese business in Vancouver by tapping my circle of quickly expanding contacts. I allied with Chinese-Canadian lawyers who were the first point-of-contact for investor immigrants and gave seminars to pitch the services of The Firm, highlighting the work we had already completed for the wealthy Chinese investor. My team did not push back against my outreach efforts, though my ability and tolerance for analyst work declined. It had been three solid years of dedicated service, but the allure of chasing my own deals was a Pandora's box that could not be closed. As I had already been managing the relationship, I wanted official recognition of my expanded role and I wanted a free hand to build a roster of clients. I flew to Calgary to make the case to the head of investment banking in person but my efforts were not well-received either there or at home. The established order was not to be upset. It was only with the covert support of one of the Vancouver managing directors that I was essentially relieved of all analyst duties to focus on China full-time. The group hired two new analysts to take over my old work load and I began to work alone, spending more time with outside contacts than with my teammates at The Firm and I became increasingly viewed with suspicion by the vice presidents who were no longer able to assign me work. My network brought me in touch with a Chinese furniture manufacturer who wanted to publicly-list a Russian sawmill asset in Canada while raising some money. The Firm thought it was impossible to finance Russian assets in Canada, as there was largely no precedent, but we agreed to manage the listing process while they found Chinese investors to buy the shares. We would gain exposure to the project and be paid a service fee, but the asset and financing both came from Chinese sources. For a largely social due diligence trip, I joined the group on their visit to China and Russia. We first drove from Beijing to Shandong province to visit the furniture factory there, only about an hour by car from Dai Village where my father had grown up. Then we took a midnight flight from from Beijing to Irkutsk, where we squished into a large passenger van for the eight-hour drive to the Siberian forests next to Lake Baikal. There was not enough room in the van so I rode in the elevated rear luggage compartment with no seat or headroom. I laid on my back in the cramped space, holding my sensitive head off the floor by grabbing the handle bars above for the entire bumpy ride through the winter landscape. The sides of the highways had snow piled up and the road itself glistened white, making the trip feel like an Olympic toboggan ride down an icy half-pipe at breakneck speed. The two Russian drivers took turns for the long drive and blasted ear-piercing techno to stay alert. We arrived in the evening and passed the night at the small lumber mill town. The next day, we visited both the mill and the logging operations. The mill office did not have bathroom facilities, so we had to relieve ourselves in a wooden shack outhouse that was just a few wooden panels around a hole dug in the frozen ground. The floor was literally a frozen mound of discoloured ice, and I was glad I did not have to try to squat on the slippery surface. At the logging site, we joked around outside in the minus-forty temperature. I saw a waist-high axe, picked it up and swung it at a the standing log. In my bulky winter gear, I misjudged how heavy the axe was and missed. The axe swung heavily past the log and cut deep into the soft earth between my feet, missing my toes by inches. Foot intact, the trip back was much more leisurely, as we took a scenic route via Lake Baikal. At the edge of the expansive Lake, where we could not see the opposite shore, we marvelled at the cars that drove on its frozen surface. We were told the lake was as deep as it was long and contained three-quarters of Earth's surface fresh water. In its unexplored depths were numerous species of fish, many yet to be discovered. Our lunch was a feast of Baikal fish, one dish after another of more than two dozen that we eventually could only sample with tiny bites as we became luxuriously stuffed by mid-course. The listing was completed and I looked for more projects in China. One gentleman from the southern city of Nanjing had a tourist real-estate project he wanted to develop into a timeshare, a novel concept in China at the time. There had been a few recent Chinese hotel-chain success stories in which companies in the fast growing industry listed in the United States. I visited the project, helped the gentleman put together a professional presentation, and did research into the institutional funds that had funded the previous Chinese hotel stories, many of which were China-based. To reach these established players, I systematically collected contacts from my existing network and scoured the MIT alumni directory to setup appointments for the project. On a week-long trip, the entrepreneur and I swept through the cities of Beijing, Shanghai, and Hong Kong, meeting dozens of fund managers. The project did not garner funding, but I ended the trip with three books of business cards, a physical memento for a concerted and professional effort of striking out on my own. While in China, I worked late-nights confirming meetings and sending follow-up materials on my laptop. The Great Firewall of China made my foreign e-mail accounts unreliable, so I tethered my Canadian cell-phone signal to send documents. I returned home to a surprise $30,000 cell-phone roaming bill. The Firm's IT department helped me negotiate the charge down to a fraction and the supportive managing director approved my trip expenses. Crisscrossing the Pacific and roaming China to sniff out leads and build contacts was as exhilarating as it was exhausting. This would be the most socially active period of my business life, when I kept an open-mind and would take any meeting. My career would continue to develop after this, though with an sharply introspective turn. Resignation My stable roster of clients did not materialize, and my constant absence from The Firm led to an inevitable good-bye. Towards the end of my tenure, the pressure at work led to chronic back-aches as mental stress manifested itself through physical pain, exacerbated by the hockey injuries of my acting tour. I returned to the breathing and yoga-exercises of my theater training to cope and spent more time at the office of the wealthy Chinese investor than at The Firm. I worked with my significant other to setup the office, enjoying the feeling of control as we build the company's administrative functions from the ground up: setting up computers and getting everyone onto brand new email-enabled Blackberry devices. I talked the Chinese investor into letting me join his group full-time without a detailed discussion of role or compensation. I collected my things from The Firm, told the friendly managing director I was leaving, left my red-plated Blackberry on my desk, and walked out the door. I did not say good-bye to my other teammates and would never speak to any of them again. It was a tumultuous end to yet another career after three-and-a-half years as an investment banker. I had crossed one more item off my list of life, one hard-fought for and passionately ended, but the experience, true to its form, would empower me as I looked down the road ahead, more convinced than ever that family was the only thing worth working for.