Bruce Cairnduff, head of MTNs at Sumitomo in 1996. Bruce Cairnduff arrives for his interview with MTNWeek straight from the gym. And despite the fact he is in an Irish bar, he orders a diet coke. There can be little doubt that, for someone whose expanding waistline has occasionally been a market joke, he is fighting fit. But, though he left the market in 1998, his appetite for MTNs is growing. He says: "I desperately enjoyed the EMTN market and I'd love to be part of it again." But he claims he is not actively looking for a position at the moment. He is presently working from his South Kensington home as one of the directors and founders of iBrax, an online auction house and shopping site. It was set up in the summer of 1999 by Cairnduff, an ex-auctioneer and two ex-bankers. One of these was Mike Thoms, Cairnduff's boss at Sumitomo. The project is self-capitalized and Cairnduff believes this has given the business enormous freedom. On the site, as well as being able to auction off a mahogany desk or a television, you can buy a box of chocolates from one of the featured shops. And Cairnduff is only too happy to be thought of as a glorified shopkeeper. "I'd prefer to be a very successful shopkeeper than an unsuccessful city trader." And the early signs are that iBrax is a success. He says: "Our investment banking background means we know how to manage a long-term strategy. The fiscal mismanagement of people like boo.com is despicable. It brings down the reputation of the whole industry." Now the site is up and running Cairnduff, 32, says he only works a 20-hour week for it. The rest of his time is spent on personal projects such as Cairnduff Inc, a wine-importing business that Cairnduff claims is more about having fun than making a profit. And he insists it makes enough to fund his own expensive palate. He also owns three racehorses, which have been entered for next year's Derby races. But back in 1996 such a life of leisure was far away. He had just left Lehman Brothers, where he ran the desk with the help of Tiina Lee. He makes no secret of his enjoyment of that period and the people he worked with. He says: "Tiina Lee is still the most talented person in the MTN market." Lee has been running the Deutsche Bank desk since 1997 and has been credited with building up its MTN business from scratch. He had worked with her at Hill Samuel Bank, where he started his banking career in 1989, after completing a business degree at Trinity College Dublin. But after three years at Lehman he was poached to set up an MTN business at Sumitomo. When he is asked to comment on the rumours that he was paid $2.5 million over three years for moving to Sumitomo, he smiles and says: "If I say it's not true you'll just have to guess whether I was paid more or paid less. Let's just say at the time the MTN market was at its peak. City payments were very high and Japanese banks were bidding aggressively." Setting up a desk as opposed to running an already successful operation was a challenge for Cairnduff. But again he was working with people he respected, in this case Kirsty Traill. He left Sumitomo in 1998 before the Russian crisis hit and the Japanese houses started to suffer. He says this was more a matter of luck than judgement. He was offered a job running Deutsche Bank's US MTN business, and, wanting to work in New York, he accepted. But he admits that he was not very happy at the German bank. He says: "The Euromarket, in comparison to the US market, had a much better crowd of people, a better atmosphere. The people in the US market never really socialized together." And it was not just the people he found less interesting. He continues: "The Euromarket, being a multi-currency market, is more intellectually stimulating. The market in the US is 99% vanilla. Their idea of a structure is to throw in a call option." So, missing London and his racehorses he returned to become a dotcomer. He says: "I came back to London because of the iBrax project. But I always thought that when it was taken care of I would rejoin the market. The intention was never to leave the MTN market or banking." He refuses to comment on the rumours that were circulating in May and June that he and Chase were in negotiations about running its Euro-MTN desk. Chase has subsequently employed Garrath Fulford, from UBS Japan, to set up its desk. But he is still excited about rejoining the market, which he thinks is a likelihood next year. And he has strong opinions about which houses will be the next market leaders. He says: "The best need to have good distribution, good derivatives capabilities, good origination and a good trading desk. You cannot survive without all four, especially the trading desk. I've seen individuals leave a banks and its business deteriorate. And as far as who will be big next year, I don't think technology will have anything to do with it. Distribution is the key."
October 06, 2000
