Cyrus Ardalan
Cyrus Ardalan, the 40-year capital markets veteran who retired in June as vice chairman of Barclays, has joined new UK challenger bank OakNorth as chairman.
He joins Adair Turner, former head of the FSA and OakNorth’s senior independent director, as well as Robert Burgess (former CEO of Alliance Trust Savings) as a non-executive director of the bank.
In the four years prior to his retirement, Ardalan was responsible for Barclays’ engagement with key government stakeholders and the bank’s regulatory and public policy. Before his most recent role, he spent 12 years at Barclays Capital, latterly as vice chairman of investment banking.
OakNorth will be a change of pace for Ardalan, as the chairman’s role will not be a full-time role. OakNorth will specialise in lending to SMEs with a special focus on growth companies and entrepreneurs. The bank will lend on the basis not just of property but a much wider range of collateral. Ardalan will lead the board and advise the executive team, including CEO Rishi Khosla.
“Cyrus has wide and deep banking experience, a strong track-record for working with policymakers and is a particularly significant addition to our leadership team,” Khosla said. “He completes a very well-balanced leadership team, both in terms of experience and skill-set, which will deliver the vision we have to better serve small and medium-sized companies. His appointment comes at an important time for the bank as we prepare to open our doors for business and kick-start lending in a pivotally important part of the economy.”
Ardalan certainly has a wealth of banking experience both on the sell-side and on the issuing side and he was there at the birth of some of the capital markets’ most memorable and historic moments. His investment banking career spanned the decades that saw the capital markets transform from their fragmented early days into today’s globalised multi-trillion dollar industry.
He joined the World Bank in 1974. In his first four or five years, he was an economist working on the assets side; one of his early projects was conducting research for the board on Yugoslavia’s access to international markets. Over the dozen years he spent at the World Bank, Ardalan worked his way up and was latterly division chief of treasury operations. During his tenure, he worked for Gene Rotberg, the bank’s legendary treasurer.
Ardalan moved to Chemical Bank (a forerunner to today’s JP Morgan) in 1986 to run product development followed by a decade at Paribas Capital Markets (now BNP Paribas) from 1990. He had a variety of roles at Paribas, including global head of bonds and head of the bank’s broker-dealer in the US. He joined Barclays in 2000.
As well as his senior executive responsibilities, Ardalan has been a tireless advocate for industry issues. Until his retirement from Barclays, he was chairman of the International Capital Market Association and also served on several boards, including the International Financing Facility for Immunisation (IFFIm), a multilateral development agency whose vaccine bonds fund immunisation programmes in developing countries in support of Gavi, the public-private vaccines agency.
First-ever euro bond
Ardalan can lay claim for coming up with the idea for the world’s first bond denominated in euros. This came while he was working for Paribas. The ECU bond market had been going since 1979 and had become a regular currency for bond issuers world-wide. However, it was an artificial currency used only for internal accounting purposes by its core European Community constituents.
Ardalan delights in telling the story where the Paribas debt team was discussing what to do with the European Investment Bank, a core client and then as now a bellwether issuer. The proposal on the table was to go to market with a traditional ECU transaction but Ardalan suggested they go with a euro bond. At the time the currency didn’t exist and wouldn’t for another four or five years but Ardalan was adamant it could be a flier.
At worst, he thought, if the euro didn’t come to exist, the bond could convert back to Ecu. He took it to the European Investment Bank, where treasurer Rene Karsenti jumped on with the idea. Karsenti liked the fact that doing it this way would avoid re-denomination from ECU into euros. But perhaps more important was the strong signal it sent in official circles that the euro was going to be a reality.
Ardalan was also actively involved with the world’s first ever cross-currency swap transaction, which emerged in 1982 following a long period of planning. The landmark deal saw the World Bank issuing in dollars and IBM issuing in Swiss francs in back-to-back trades then switching cashflows to provide each with a funding advantage they could not have accessed in their own names. It is one of the most memorable pieces of financing in bond market history.