Life in the Financial Markets - Lacalle Daniel

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questions and to turn balance sheets, ideas, forecasts, past performances and the like on their heads. At first I wondered: “How dare they speak so frankly and so directly to our chairman, CEO, CFO, who within the company and the country are treated almost like royalty?” But these were our clients, current or prospective. They had every right to do so, and were only expressing their concerns. They wanted to analyse and understand what could happen, not what had already happened.

      An investor is your client. He is not doing you a favour or making a donation. He is taking a risk: investing his money and seeking to maximise the possibilities of obtaining a profit with respect to the risk he takes. And our product is one of thousands from which he can choose on the world market. Not only must we outshine the others in image and in current figures; we must lend credibility to our “proud father” expectations that our product will grow into something strong and healthy.

      I remember a meeting with a leading international investor. His biggest worry was not “How much will I make?” but “How much do I stand to lose?”

      It was during this learning curve that I realised that in continental Europe the concept of open and transparent communication was still rather rudimentary. This was perhaps due to the existence of majority shareholders and the generalised absence of mutual interests between actors on the buy-side (above all, companies) and clients (minority shareholders). The protectionist environment had not changed.

      This experience led me to seek an opportunity to change my career and attempt to go over to the investor side: to become a client, a risk-taker. I also considered my career and my professional profile. I had spent the last 12 years at two companies and felt the need to branch out, add experiences and gain knowledge that could lead me to positions where I might improve my independence and, naturally, earn more money.

      The opportunity to put this decision into action came from the market.

      After three months of fruitless searches, I was contacted by a head-hunter to discuss the possibility of leaving Spain in order to work as an analyst in a London investment bank, in the City.

      It was an opportunity worth considering. To gain a foothold in the financial markets, in particular in the City, is incredibly difficult. If you're given the possibility to get into that environment, you should think seriously about the answer you will give. To let that train pass by could have closed up a direct avenue to securing my long-term goal.

      During the interview with the head-hunter, he asked me where I saw myself five years from now, and I replied, “Working in a hedge fund.” The head-hunter looked at me in amazement. He told me it was a very ambitious and terribly difficult goal. Not only that, he warned me that more than half the hedge fund managers are fired every two years. “Be careful what you wish for”, he said.

      The decision was not easy. From my secure position as a director at a good company, with little risk and a stable environment, I was to become an analyst, which meant taking a step down the hierarchical ladder and moving into an extremely competitive sector, fraught with risk and with much of my salary dependent on bonuses for meeting targets.

      I would be taking one step back in order to take three steps forward in the medium term. It was a risky decision, but one that would allow me to be what I wanted to be: an investor (and, of course, enjoy the remuneration that came with it). My decision process was undeniably influenced by this over-arching personal ambition.

      If you want to get into the financial world, you have to like money and you have to want to earn lots of it. If your aims are to “broaden my experience”, “meet people” and “study other sectors in detail”, there are thousands of jobs out there. You must know why you are there and what other people are there for. All of them. I was not going to work for an NGO or for an engineering firm. I was about to enter the “money-making market”.

      I recall the conversation with my family when I announced that, at my age (late thirties), with three newborn babies (triplets), I was renouncing a cushy, secure, well-paid executive position in the corporate world, the dream of any son's mother, in order to try my luck in London. Of course, everyone I knew told me it was a mistake, that it was risky, that I should not give up a certain quantity for the great unknown… the usual clichés.

      In the book The New Market Wizards: Conversations with America's Top Traders, by Jack D. Schwager, all the participants agree that to be successful one needs to have a magnificent relationship with, and the support of, one's partner. My own experience supported this finding. My wife and I had to have a common goal and a clear objective and to be willing to take risks, even be separated for a time, if I was to be ultimately successful with my career change.

      At that time everyone told us it was crazy, but I had made up my mind.

      I flew to London, leaving my family in Spain. At the weekends, whenever I could, I would get up at four in the morning and fly back to see them for a few hours, then return to London on the Sunday at midnight. After two years of weekly commuting, my wife gave up her job as a manager at an investment firm to look after the children and come to London, where it's almost impossible to combine work and family life on account of the timetables, holidays and demands of the British private school system. We went from having two sizeable steady incomes to the uncertainty of the City and the gamble of annual bonuses and variable remuneration.

      You may have read the sad story of a bank intern in the City of London who died in 2013 after allegedly working 72 hours straight. If you read about it in the papers, you will probably have been horrified by the description of “inhuman hours”, deaths and suicide in the financial sector. Nothing could be further from the truth.

      Life in the City is tough, and employers demand results, as it should be. Imagine for a second that the person who manages your savings or your pension fund was remunerated by any other measure than profitability. Would you invest in this fund? Work can be strenuous, but slavery-type hours and inhuman conditions are a fiction. Yes, the day begins very early, at six or seven o'clock. But anyone who takes the train at Waterloo Station or the tube at Bank or Liverpool Street knows that at five or six p.m. the vast majority of people are on their way home.

      Everyone in the City has had to work long hours and several weekends, but so do entrepreneurs, writers, musicians and journalists.

      I'm afraid that behind the controversy over the City's death lies more demagoguery than real concern for working too hard. In the same way that no one questions an elite athlete who trains aggressively or a singer who performs at 250 concerts in a row, few question the long hours required of skilled professionals giving of their best in a highly competitive industry.

      Professionals who go through a very thorough selection process freely take the responsibility, because it is also a passion. This is not just work. It is a meritocracy and competition is encouraged. The same thing that many call sacrifice is, for the vast majority in the City, a pleasure.

      Working in the City is a conscious and free decision. Whoever does not like the system should not worry, because they would probably never be hired. However, between a free and competitive work environment and a safe but frustrating one, there is something about which I am very clear: I would not trade freedom for security. Never.

      Today, we are told that we were very lucky and that it was a good move. It was neither luck nor madness. It was about taking risks and being prepared to make sacrifices. More than ten years later, I can say that I have a full life, a wonderful family and my work is not a burden, because I love it. The day it becomes a burden I will quit, and I'm sure there will be dozens of candidates happy to take my place. Freely.

      Chapter Three

      Welcome to London

      I left my family in Madrid and rented a tiny apartment next to the London Stock Exchange that had no central heating, and where on at least one occasion I was visited by some mice from the kitchen of the coffee shop below. Far from glamorous. But I had to save, as I had three newborns. The aim of this adventure was not to live the life of a character out of Oliver Stone's Wall Street. It was about work, work and then some more work.

      I was hired as a financial analyst. I had barely any experience in the field. Of course, I had read thousands of reports and knew many analysts, but I lacked expertise,

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