Ogunlesi, Adebayo 1953–
Adebayo Ogunlesi 1953–
Wall Street Belt-Tightening
Adebayo Ogunlesi is a leading executive at Credit Suisse First Boston Corporation (CSFB), an arm of the Zurich-based global investment bank with offices on six continents. In February of 2002 he was named head of CSFB’s investment banking group. The rise of this Harvard-educated lawyer prompted Time magazine to name him to its “People to Watch in International Business” list a few weeks later, and Ogunlesi was also ranked by Fortune magazine as the seventh most powerful black executive in the United States.
In a lengthy New York magazine feature titled “The New Color of Money,” writer Landon Thomas Jr. discussed the new, more multicultural atmosphere in the world of international finance at the start of the twenty-first century. Thomas wrote, “Call it the new face of Wall Street. More than ever now, a wave of Indians, Lebanese, Africans, and others from the farthest reaches of the globe are stepping into positions of the highest power at firms all across the Street. For years, these immigrant bankers have been the stars of their trading desks, raking in millions for themselves and their firms. For the first time, they are running the most profitable divisions of the Wall Street banks.”
Ogunlesi was born in 1953 in Nigeria. He traveled to England to earn an honors degree from Oxford University, then entered a joint law-business degree program at Harvard University in the late 1970s. At the law school, he was one of just three non-Americans in his class. “There only was a guy from Saudi Arabia, a guy from Iran and me,” he joked with the New York Times’s Andrew Ross Sorkin. “I assume Harvard thought that all of us would go back to our countries, become rich, and endow chairs. I hope the Iranian and Saudi did, because I never endowed a chair.”
Before he graduated magna cum laude in 1979, Ogunlesi served as editor of the prestigious Harvard Law Review at a historic moment when he, along with W. Randy Eaddy, were the first two blacks ever to become Review editors at the top-ranked law school. Following standard practice for such Ivy League law school students and recent graduates, Ogunlesi then clerked for U.S. Supreme Court Justice Thurgood Marshall. At the time, Ogunlesi was the first non-American clerk at the High Court. According to the New York Times report by Sorkin, Justice Marshall called him “Ooo-by-do-bee,” because he often stumbled over Ogunlesi’s first name.
After earning his law degree and a master’s degree in business administration, Ogunlesi entered private practice with the firm of Cravath, Swaine and Moore in New York City. In 1983, when he had been there less than a year, he received a phone call from a friend back in Nigeria who was working at the Ministry of Petroleum and Energy. The friend needed a financial adviser for a planned natural gas venture, and asked Ogunlesi for help. Credit Suisse First Boston Corporation (CSFB) was involved in the financing and, as Ogunlesi recalled to Sorkin, “somehow the guys at First Boston found out that this fellow was a friend of mine.” First
At a Glance…
Career: Staff member of U.S. Court of Appeals, Washington, D.C.; clerked for U.S. Supreme Court Justice Thurgood Marshall; Cravath, Swaine & Moore, New York City, attorney, c. 1983; joined Credit Suisse First Boston, Inc., c. 1983, managing director, 1993, headed global energy group, 1993-02, head of global investment banking, 2002-, board of directors, 2002-.
Address: Office— Credit Suisse First Boston, Inc., 11 Madison Ave., New York, NY 10010
Boston then asked the law firm if they could grant Ogunlesi leave for three months to help win the account.
Ogunlesi liked the world of international finance so much that he stayed on board at CSFB. “Of course, six months after I got hired here, there was a coup in Nigeria, the government got tossed out and my friend almost went to jail,” he recalled in the interview with Sorkin. Ogunlesi’s own career path was smoother: he rose through the company’s management ranks, eventually heading CSFB’s project finance group. When that group merged with the power-finance group, he remained in charge. Two other mergers, with CSFB’s oil and gas group and chemicals group, made the unit so large that it was—once again in reference to Ogunlesi’s given name—nicknamed the “Bayo-sphere,” according to Sorkin.
Ogunlesi was made a managing director at CSFB in 1993. His division, now called the global energy group, obtained financing for large-scale energy projects around the globe. For Texaco and Mission Energy, for example, Ogunlesi headed a team that raised $400 million for a Tri Energy project in Thailand. His division also came up with $100 million in financing for the Androscoggin Power Project in Maine, and helped a British firm break ground in China on the Mezhiou Wan power project.
With the onset of the bear market on Wall Street in mid-2000, Ogunlesi was one of an entire class of finance industry executives vulnerable to layoffs or even outright termination. Along with two other prominent Wall Street firms, Morgan Stanley and Merrill Lynch, CSFB began eliminating some longtime senior managers, while retaining many of the rising foreign-born stars like Ogunlesi. In February of 2002, he was made head of global investment banking at the firm, one of its most influential divisions, with assets of $2.8 billion. First Boston CEO John J. Mack, in a press release issued by the firm on news of Ogunlesi’s advancement, called him “a banker of powerful intellect, integrity and innovation.”
Ogunlesi was also given a seat on the CSFB board with his promotion, replacing Tony James, who became chair of global investment banking and private equity. Thomas, in the New York magazine article, compared Ogunlesi with his predecessor, asserting that, “as impressive as Ogunlesi is, the identity of the man he replaced ... is what gave his appointment a more profound resonance.” Thomas sketched James’s elite New England background and place in the upper echelons of New York society, and characterized Ogunlesi as an executive “known more for his money-spinning innovations in the bank’s project-finance division than for his fly-fishing skills.” Thomas also mentioned Ogunlesi along with Vikram Pandit, the Bombay-born co-head of institutional securities at Morgan Stanley, and Arshad Zakaria, Merrill Lynch’s co-head of global markets and investment banking, also a native of Bombay. The New York article noted that this combined trio had 25,000 bankers reporting to them, giving them authority of an unprecedented scope.
Nonetheless, Ogunlesi faced some daunting tasks in his first year on the job, not the least of which was to turn around CSFB’s global investment banking division, which had posted its first unprofitable quarter in four years. He announced a reorganization plan, telling several dozen CSFB executives that the company’s departments were overstaffed, and that changes would be forthcoming. “We’re going to break a lot of glass,” the New York Times’s Sorkin quoted him as saying. Some top executives balked at the plan and resigned, but the job-cutting was part of a wave of downsizing at many of Wall Street’s top firms at the time. A moribund economy and the aftermath of the September 11, 2001 attacks on the World Trade Center and Pentagon had spurred immense losses in the securities and banking sector. “Ogunlesi scolded bankers during the meeting for not paying enough attention to turning a profit, and encouraged employees to take taxis instead of limousines,” reported Sorkin.
True to his word, a round of cutbacks delivered pink slips to the desks of 300 bankers in March of 2002. Ogunlesi also decided, with the support of CSFB’s board of directors, to merge the company’s telecommunications and media groups. A few weeks later, in early April, more than four dozen managing directors were let go.
Ogunlesi has been hailed as one of Wall Street’s most influential new names and as one of its most impressive cost-cutters in recent memory. He told Sorkin in the New York Times, “I told you, I never wanted to be an investment banker.”
Corporate Financing Week, March 18, 2002, p. 1.
Financial News, February 25, 2002.
Fortune, July 22, 2002.
Harvard Law Bulletin, Summer 1998.
New York, May 27, 2002.
New York Post, March 6, 2002, p. 28; March 8, 2002, p. 34; March 9, 2002, p. 22; April 3, 2002, p. 29.
New York Times, March 2, 2002, p. C1; March 14, 2002, p. C1; April 3, 2002, p. C10; May 8, 2002, p. C10.
Time, March 25, 2002, p. B12.
Credit Suisse First Boston, http://www.csfb.com/news/html/2002/ (September 11, 2002).
Ogunlesi, Adebayo 1953–
Head of global investment banking, Credit Suisse First Boston
Born: 1953, in Nigeria.
Family: Married Amelia Quist (optometrist); children: two.
Career: U.S. Supreme Court, 1980–1983, clerk; Cravath, Swaine & Moore, 1983, associate; First Boston, Incorporated, 1983–?, associate; ?–1993, head of project finance group; 1993–1997, managing director of global energy group; Credit Suisse First Boston, 1997–2002, managing director of global energy group; 2002–, head of global investment banking and company director.
Awards: Seventh Most Powerful Black Executive, Fortune, 2002; International Center of New York Award, 2003.
■ Adebayo Ogunlesi was an innovative investment banker who arranged financing for $20 billion worth of industrial projects in a career that spanned over 20 years with Credit Suisse First Boston (CSFB). Many of his clients were governments and firms developing energy resources in emerging markets. In 2002 Ogunlesi became the head of CSFB's global investment banking division with 1,200 bankers and $2.8 billion in assets under his supervision.
Adebayo Ogunlesi, called "Bayo" by family and friends, was born in Nigeria in 1953, the son of the first Nigerian-born professor of medicine to earn tenure at a medical school in his own country. Ogunlesi went to England in the 1970s to study philosophy, politics, and economics at Oxford University, where he earned a bachelor's degree with honors. He was accepted by Harvard Law School as one of three foreign students in his class, even though the school did not usually admit students who had been born and educated outside the United States at the time. At Harvard, Ogunlesi and W. Randy Eaddy became the first two editors of African descent to serve together on the prestigious Harvard Law Review.
Ogunlesi also enrolled at the Harvard Business School at the same time that he was studying law. Although he did not intend to pursue a business career, he thought that courses in finance would help him overcome his fear of numbers. He finished his MBA program in 1978 and earned his law degree magna cum laude in 1979. Ogunlesi then served as a law clerk for U.S. Supreme Court Justice Thurgood Marshall from 1980 to 1983. He was the first non-American ever to clerk at the nation's highest court.
In 1983 Ogunlesi became an associate of the prestigious New York law firm Cravath, Swaine & Moore after having worked for the firm as an intern. He had been practicing law for only nine months, however, when he was called by First Boston, an investment bank. The bank was helping the Nigerian government finance a $6 billion liquefied natural gas project. Its contact in Nigeria was a personal friend of Ogunlesi. The bankers at First Boston asked Cravath, Swaine if they could borrow Ogunlesi for three months to facilitate the deal.
MOVING TO FIRST BOSTON
Three months at the investment bank turned into 20 years. Ogunlesi's superiors at First Boston were pleased with his work and offered him a permanent position even though his homeland was in turmoil. He told the New York Times on one occasion, "Six months after I got here, there was a coup in Nigeria, the government got tossed out and my friend almost went to jail" (March 14, 2002). He rose through the ranks at First Boston from associate to head of the project-finance group. Ogunlesi spent much of his time traveling through countries regarded as emerging markets, where he brokered deals among lenders, governments, and firms developing such large projects as oil refineries, natural gas plants, and mines. The lenders recovered their investments from the proceeds of the projects funded.
Ogunlesi built First Boston's project-finance business into the world's largest by using "money-spinning innovations" (New York, May 27, 2002) such as off-balance sheet financing and raising money through public debt markets. In off-balance-sheet financing, companies use sources other than equity or debt offerings to raise money; these sources can include joint ventures, operating leases, and research and development partnerships in which two companies, or a company and a university, share costs and resources to develop new products. Off-balance-sheet financing subsequently gained popularity in the 1990s. By raising money through public debt markets, companies could borrow money for longer terms than they would get from commercial lenders.
Ogunlesi was soon promoted to managing director of the project-finance group at First Boston. Over time his team absorbed several others, including the power, oil and gas, and chemicals groups. In 1993, this amalgamated unit was officially renamed the "Global Energy Group," but was informally dubbed "The Bayosphere." Known for his competitive spirit, Ogunlesi installed a foosball table in his office and had his name painted on one of the goalies—his way of saying that he was taking on the competition.
In 1997 First Boston was acquired by the Credit Suisse Group and renamed Credit Suisse First Boston, or CSFB. Ogunlesi became the head of the new firm's global investment banking division in 2002 at the age of 48. At that time global investment banking was one of CSFB's most influential divisions, employing 1,200 bankers and managing $2.8 billion in assets. Ogunlesi was also given seats on the bank's board of directors and its powerful 15-member operating committee. The chief executive of CSFB, John J. Mack, praised the new appointee in a press release. "Bayo Ogunlesi is a banker of powerful intellect, integrity and innovation. He has a broad global perspective and keen understanding of complex financial transactions. Our clients worldwide have benefited greatly from his strategic insight" (February 20, 2002). Another colleague put it more simply, "He's the smartest guy in the room" (New York Times, March 14, 2002).
Other accolades quickly followed the news of Ogunlesi's appointment. Time magazine named Ogunlesi to its "2002 Global Influentials" list of the 15 most-promising young executives, while Fortune ranked him as the "Seventh Most Powerful Black Executive" in the United States.
Ogunlesi's first task after his promotion was to cut costs in the investment banking division, which had lost nearly $1 billion the previous year. The division was overstaffed as well as ineffective. Ogunlesi furloughed 300 bankers and 50 managing directors in the first few weeks of his new job. He also asked the remaining staff to accept pay cuts and reduce expenses. His economy measures showed some success when the bank's revenues in the following quarter increased by 25 percent.
The early years of the twenty-first century brought more difficult challenges. First, a bear market that started in 2000 made new financing difficult to find. Next, off-balance-sheet financing lost public favor when the energy company Enron abused the technique in order to hide its debts and risky investments, which contributed to its collapse in the winter of 2001. Still another scandal erupted in 2002, when some analysts at CSFB and other large brokerage firms were accused of openly giving some stocks a "buy" rating while secretly telling their larger clients to steer clear of them. CSFB and nine other firms eventually paid out $1.4 billion in 2003 to settle the charges without admitting guilt. Ogunlesi told New Zealand's Dominion Post that new rules had been enacted to create a "very clear separation" between equity market research and investment banking functions. Those rule changes would limit future conflicts of interest and "help restore confidence" in broker recommendations (May 13, 2003).
In addition to Ogunlesi's work at CSFB, he served as cochair of the Global Economic Forum's 2003 Africa Economic Summit and as an informal adviser to the President of Nigeria, Olusegun Obasanjo. Ogunlesi also raised funds for education and African charities.
sources for further information
"CSFB Names Tony James Chairman of Global Investment Banking and Private Equity; Adebayo Ogunlesi to Become Head of Global Investment Banking," press release, February 20, 2002, http://www.csfb.com/news/html/2002/february_20_2002.shtml.
Gregory, Sean, "Adebayo Ogunlesi: CSFB's Global-Banking Chief. His Road from Nigerian Doctor's Son to Wall Street Boss Has Crossed Oil Fields, the Supreme Court and a Rifle or Two," Time, December 2, 2002, pp. 56–57.
Sorkin, Andrew Ross, "Accidental Investment Banker Shakes Up Credit Suisse Unit," New York Times, March 14, 2002.
Thomas, Landon Jr., "The New Color of Money," New York, May 27, 2002, pp. 32–35, 50.
Weir, James, "World Markets May Be on the Way Up," Dominion Post (Wellington, New Zealand), May 13, 2003.