Wednesday, May 04, 2011

What ever happened to...?

My friend and eComm founder, Lee Dryburgh, recently made a very brave post, in which he sought to explain the personal background to his recent relative inactivity. It makes for tough reading, and it's not the sort of thing many people would be comfortable publishing into the wide world, but Lee's no ordinary guy, and I admire him tremendously for writing it.

It made me think that perhaps I should also attempt to explain my neglect of this blog and its (probably) declining, but loyal, readership. It's not that I don't love you all - it's just that life has been challenging over the past three years.

In summer 2008, my seemingly promising career was disrupted by the unravelling of Merrill Lynch. My role in the PCG principal investing unit was all about developing new investment opportunities, but with c.$10bn in (mostly) illiquid assets across its various principal investing groups, the Thundering Herd was obviously going to be in run-off mode (things obviously got much worse from there), so onto the street I went. At the time, I put a brave face on it, saying that I needed "THE job," not "A job."

This was a nice sentiment, but hugely overly optimistic, as I soon discovered through spending nearly two years engaged in an effort to launch a new fund. When we began, it seemed unthinkable that investors would not be falling over one another to back such a high-quality team, but for whatever reason, we struggled terribly. In retrospect, I should have left at the end of 2009, when the cash burn was still just about bearable, but I believed in the people and the proposition. Most of all, I believed I was doing the best thing to secure my family's financial situation in the long run - after all, I was a founding partner in a fund which was bound for greatness, right? Ultimately, as the launch date approached, it became clear that the economics were not going to be anything like what I had assumed. After two years of cash burn, rather than committing to something punitive which would have made me unhappy from day one, I decided to walk away. This was an extremely difficult choice to take, and it was an embittering experience, but I determined that I would be better off taking my chances alone.

During all this process, my marriage collapsed in August 2009, with all the pain, regret, disruption and stress unavoidable in such a situation, especially where young children are involved. I moved out, we sold our home, all very devastating stuff. As these things go, I think it has worked out about as well as one could hope, but it's been extremely tough for everyone, and one can never be absolutely sure whether the course taken was really the best one. I guess our kids will give us some idea when they're much older.

Beyond the emotional trials of all the above, it has genuinely been financially devastating. I had to laugh a couple of years back, when Andy Abramson referred to me in a post as "Mr. Money," or something along those lines. "If they only knew." Without the support of family and friends along the way, I'm not at all sure where I would be today. This kind of crisis also allows one to separate true friends from those who fall into other categories. Unsurprisingly, I now consider myself to have far fewer friends.

So, leaving the fund in December last year, I had to confront the lack of a Plan A, and began having interviews with various parts of the financial world. Unfortunately, these have largely consisted of time-wasters and boneheads: a team looking to recruit a TMT specialist with a lot of experience, who ultimately determined that my focus would be "too narrow," an accusation I have never encountered before (typically, it's just the opposite); an aggressive Etonian hedge fund analyst who laughingly dismissed credit analysis as an irrelevant exercise for equities analysts; the inevitable stupid questions about whether or not I still have a "franchise" as an equities analyst. Maybe my CV is just too odd, or maybe I'm too experienced, but so far there have been no obvious routes back into the finance arena.

Hard as these years have been, I wouldn't want to give the impression that I view them as a lost cause. Many valuable lessons have been learned. I've rediscovered some interests I had neglected previously. I have played a significant part in the recording of what I think is a truly great album. I have reunited with old friends to play music live. I have realized a long-held plan to create a purely personal blog with a focus on music and associated recollections. I have learned a lot about myself and human nature. My children have grown beautifully. The sun is shining today, and I am still alive.

Fortunately, my advisory/consulting activities have also heated up since the start of the year, and I'm involved in some really interesting projects, all around bringing fiber to market faster in countries where it has been woefully underdeveloped to date. Hopefully, I will be able to write about some of these explicitly in the future, but for now I can't really share any details. As we approach the third anniversary of life derailment, things feel as though they're finally starting to turn around.

So that's it in a nutshell. I often haven't felt like updating this blog, have been otherwise distracted, or have had something interesting to write about which I couldn't write for commercial reasons. I will work to rectify this situation, but probably only when I feel there is something genuinely interesting to say. There is far too much noise in the world, and not enough meaning.

Finally, so this doesn't end up as a purely self-indulgent exercise, have a look (if you haven't already seen it) at the announcement by KPN of its acquisition of cable company Caiway earlier this week. This is another typically market-leading step by the Dutch in the development of alternative approaches for funding fiber infrastructure: KPN commits to open-access as a network opco, but the passive network assets remain in the hands of the Common Infrastructure Fund. Thus, the long-term money aligns itself with assets whose return horizons match its own obligations, and strips out the service provision layer and customer relationships. KPN immediately gets access to incremental infrastructure without having to build or own it. Mark my words, in the long march to a fiber future, we are going to see much more of this. I just wish there were more infrastructure investors with the vision which CIF seems to possess.



Evert Bopp said...

James, thanks for a very open and interesting read. It takes guts to admit that things didn't work out the way you expected. It happens to us all but most tend to project an image of perpetual success online. Your post made a refreshing change and I can recognise quite a bit of it. The realisation (in retrospect) that you should have made a decision to walk away at an earlier point but that dogged determination and a belief in what you were doing stopped you from doing so.
Also being told that your CV/experience is "too broad", "too narrow" or "to experienced" sounds familair.
I am sorry to hear about your marriage breaking up and can't really offer any real words of consolation there.
Good to see that things are on the way up again and that direction is returning to your life. As cynical as it may sounds sometime falling deep makes you see with a clearer focus again.
Hope that we will be reading more of you in the future.

Thomas F. Anglero said...

Hi James,

Your greatness doesn't stop because the path you were on did.

I look forward to being inspired by you again in the future with your new life direction.

I and many of your loyal readers are here for you though we are silent, we are ever-present.

Thomas F. Anglero

James Enck said...

Thank you, friends. What else can I say?