x Abu Dhabi, UAESaturday 20 January 2018

A career as a holistic adviser

In his work as debt adviser for Rothschild, helping clients with their financial obligations, investment banker Paul Reynolds applies lessons of sailing: patience, attention to detail and the ability to think on his feet.

Paul Reynolds has seen his share of collapses. His first was at the investment bank Barings in February 1995. Disappointed about their bonuses, Mr Reynolds and his colleagues complained to the directors, who convened in a separate room and never came back. A day later, Barings was bankrupt following huge losses by an individual trader.

Thirteen years later, in September last year amid the world financial crisis, the 41-year-old investment banker had just been promoted to lead Rothschild's equity and debt advisory in the Middle East. He arrived to a makeshift office in Dubai. "I had nothing in my office, no news terminal, nothing. The world around me was collapsing and I could not follow it on a screen." Through these ups and downs, Mr Reynolds has found a way to anchor his banking practice through skills he honed in his 30-plus years sailing: patience, an attention to detail and an ability to think on his feet.

"It is all about your skill and harnessing the power of the wind," he says. "But then it is also slightly dangerous and risk needs to be balanced constantly against speed." His experience in assessing risk will no doubt come in handy during his time in Dubai. Long before agreeing to lead Rothschild Middle East, Mr Reynolds had carved himself a professional niche: talking to clients about their debt. With the emirate's estimated debt of at least US$85 billion (Dh312.2bn), Dubai was a most suitable destination.

Mr Reynolds never intended to get into banking. After graduating from Durham University, friends and acquaintances recommended he make his career in the City, London's financial district. Twenty years later, he says advising clients on debt has become both his daily bread and a passion. In the past seven years alone, the Welshman has advised more than 83 governments and companies on refinancing, restructuring and fundraising in respect of more than $150bn of financing.

"There was definitely a period of denial here" in Dubai, he says. But, he says, that while Europe was in the trenches due to the downturn, "there was no doubt in my mind that this area would not decouple". For months after his arrival, Mr Reynolds talked to decision makers in Dubai about debt. After spending billions to transform itself into a major tourism and financial hub during an oil-induced economic boom, the emirate found itself saddled with an unprecedented debt burden.

In April, four months after his first meeting with the director of funds at the Treasury, the Ministry of Finance asked Mr Reynolds to help set up Dubai's $10bn support fund, aimed at helping Government-owned companies operate as usual and repay their debt. Mr Reynolds was elated that his patient advocacy had paid off. "Cultural differences definitely make it a difficult challenge to be successful. You have to be very patient," he says.

"This is certainly a mandate we were very proud of. It marks the evolution of our business here." To Mr Reynold's chagrin, the mandate ended in late June. Rothschild had to decline the offer to help distribute the funds because of a conflict: it already advises a client that is eligible for the money. "That was a real shame," he says. Although his firm can no longer advise directly on Dubai's debt, Mr Reynolds says he wants to stay in the emirate until "the job is done". That could take many years, he admits.

"We have not even started to do business with the vast hinterland of small businesses who would value our advice. There are very few people here who do what we do." To do that, Mr Reynolds says he realises it takes a long time to build relationships in the Gulf. "Culturally, it takes you far longer to get into the tent." Judging from the tone of his voice, it seems that Mr Reynolds has enjoyed making the effort. "The domestic hospitality is amazingly flattering, you feel so well looked after."

Dubai, and the region at large, is also a place where he believes he can help build a business climate from the ground up. "Institutional pillars still need to be put up," he says. "That is where the real juice is." Mr Reynolds got a brief glimpse of the UAE as a seven-year-old when he lived in Abu Dhabi while his father worked for the Abu Dhabi National Oil Company. He says he had always wanted to return.

But his childhood was spent in South Wales. Later he attended Malvern College, a conservative boarding school, in Worcestershire. It was there, at the age of eight, that he started sailing in a nearby lake. "It was really the only way to get away from everybody and get some personal privacy." Some 33 sailing years later, and despite a near-death experience sailing back from the Isle of Wight with fraternity brothers, Mr Reynolds still regularly takes to the water.

He says he pursued the classic sort of education and thought about joining the British cavalry after graduation. "But in 1989 I suddenly realised that the world had changed beyond recognition," Mr Reynolds says. "Few would still value that classic education in 1993." So he changed tack. A year at the Irish merchant bank Guinness Mahon, where he was quickly given all sorts of responsibilities, instilled in Mr Reynolds an appreciation of small organisations. "That set the tone for the rest of my career: I wanted to become a holistic adviser."

He joined Barings in 1991, where he remained throughout the firm's bankruptcy proceedings and the purchase by ING about a month later. But a desire to work for an independent, family-owned bank brought him to Cazenove, which was reputed to be a stockbroker to the British royal family. "I felt compelled to go to the last independent adviser." But Cazenove merged with JP Morgan, so shortly afterwards in 2005 he moved to Rothschild, one of the world's oldest independent banks whose roots go back to a money changer in 18th-century Frankfurt. "Independent advisers by nature have fewer celebrated rainmakers. Partnerships tend to be more homogenous by nature," Mr Reynolds says.

"Independent advisory banks are also less focused on quarterly profits. "In practical terms, that gives you the luxury to spend time with clients, even if there is no prospect of generating revenue in the next 18 months. Instead, here, you have a three to 10-year horizon." That sort of long-term view appeals to Mr Reynolds, who is the type to still wear a pair of antique-looking green felt braces, a present from his "Mum" 20 years ago, and something he considers his trademark. "You have not seen those for a while, have you?" he asks with a boyish smile.

Mr Reynolds is adamant that decision-making, while certainly lengthy here, can be far more tedious in Europe, where, for example, companies must comply with listing or procurement directives from the EU. "The driver here is trust between individuals, while in Europe and in the US it is more technical and the chemistry only plays a small role." When working on the funds package to help Dubai pay its debt, Mr Reynolds says there were seemingly endless meetings, some of which seemed exact repetitions of prior get-togethers.

"It is difficult to have robust conversations when you are in large groups because it affects the group dynamic," he says. "But you can have robust conversations privately, particularly with the younger generation." Despite his inclination towards tradition, he says he loves Dubai's embrace of the new, of its willingness to reinvent itself. "London is fettered by centuries of tradition and the social structure is slightly constraining," he says.

"Nobody here is interested in my past. Here, it is unconstrained, nobody asks 'which school did you go to'? Nobody is interested in my past, only in the future." Challenge at hand, Mr Reynolds enjoys the sunny days in Dubai. His large villa awaits the arrival of his wife and three children next spring. In the meantime, he plays cricket in Safa Park with his friends on weekends. "I love team games and would rather play hockey, football and rugby, all the things I used to do," he says.

"But I am no longer fast and good enough. Cricket is perfect as I get fatter and slower. Cricket is the sport you can excel when you are old and grumpy." When he is not in Dubai boardrooms helping executives navigate a new economic environment, Mr Reynolds is often on the Gulf sailing a shared 14-foot catamaran that is berthed at the Mina Seyahi sailing club. One of the emirate's original clubs, "next to a collapsed bridge, it seems like a place they forgot to develop", he says. "It feels like a beach in Bali and not like a sailing club."

Looking at the challenges and opportunities at hand, Mr Reynolds will probably have more than enough time to enjoy sailing the UAE's waters for a few more years yet. uharnischfeger@thenational.ae