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Profile: from inside the Lehman crash to 'clearing up other's messes'
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by Elsa Buchanan on Jan 09, 2014 at 00:01
Hasley fund manager Alastair George witnessed the devastating collapse of Lehman Brothers from the inside, but while the event might be a low point in his career, it led him to Switzerland, where he launched a successful family office for UK clients.
An engineering science graduate from Oxford University, George began his financial career at Goldman Sachs as a European investment strategy associate. He then moved to Lehman Brothers’ global trading strategies desk, where he was responsible for the firm’s European risk arbitrage book until the credit crunch struck in 2008.
‘What happened in 2008 was a complete distraction for me. While I was working in the City, with access to up to $200 million, a lot of my entourage was losing large sums of money, even rather more than I earned for the business,’ he recalls.
After Lehman Brothers ran aground and five years of deferred compensation went up in smoke, George hit rock bottom. With nothing to lose, he moved his family to Switzerland with a plan: to raise funds from family members and help run their money.
‘I always wanted to be in the business of managing money rather than writing investment recommendations for other people. If you’re good enough to make money on your own account, why would you be discussing it with anyone else?’
The rationale was that with the onset of the financial crisis in late 2008, a number of his family members in the UK were asking him to review their portfolios held in various institutions. He remembers the shock he felt when he saw the combination of high charges, poor investment decisions and lack of active management that had led to very poor performance.
It was at that time he decided to ‘sort out the mess left by the other advisers’ and offer bespoke discretionary management and advisory services.
‘There were very few excuses for being invested in technology, media and telecommunications (TMT) names during 2000 and being overweight financials in the lead up to 2008. I understand that simplistically, these were the stocks paying the highest dividends at the time, but advisers weren’t looking at the sub-prime crisis growing in the US.’
In September 2009, he launched his Swiss-based family office, Infinite Variance, with CHF1 million (just over £500,000) seed capital.