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“When you see an opportunity, take it,” said Brady Dougan, AB ’81, MBA ’82, “and don’t be afraid to take it.”
That philosophy has worked for Dougan, who held top-level management jobs around the world at Credit Suisse before becoming their CEO of the investment banking division in 2004.
“There are lots of opportunities in this business because it recreates itself over and over,” Dougan said over lunch with students at the Hyde Park Center October 6. The event was co-hosted by the student-led Investment Banking Group and Credit Suisse.
“I’d say probably 90 percent of the revenues that we make in the business today come from businesses that didn’t exist when I started,” he said. New revenue generators within the past 25 years include derivatives, leveraged finance, high yields markets, and mortgage products, Dougan said. Even mergers and acquisitions didn’t exist before the late 1970s.
“I’ll guarantee you that the businesses that are mainstream businesses twenty five years from now don’t exist today,” Dougan said. “And to me that’s what’s really exciting about the investment business and industry.”
He predicted that the life insurance arbitrage business is one area that will grow, as could real estate derivatives. Commodities, too, will continue to grow, he said.
“All will be revealed in 20 years, but in the meantime, you have to push into those areas that you think will be growth areas and build them out. And as you do, you’ll see new areas come out of that, too.”
Change also is coming in terms of where business is being done and where revenue is hailing from. For instance, he pointed to China, which used to be a place to produce goods cheaply. “The big story is really about China becoming a consumer economy,” particularly as the wealth in China grows, Dougan said. “That’s going to have huge impacts on the overall global economy, and that’s going to present big opportunities for investment banks.” A similar trend is occurring in Brazil and Russia, he said.
Among emerging markets that Credit Suisse is watching are Indonesia, where the bank already does substantial business, and Kazakhstan, which could become a very important market because of its natural resources. He called Southeast Asia “a United States–size economy” in terms of population. Sub-Saharan Africa and the Middle East also pose an interest and the Balkan area is coming on strong, Dougan said. Still, the biggest gains will continue to come from the biggest markets, he said.
And there is the growing potential in the area of private equity, Dougan said, “We see many opportunities for private equity expansion as markets grow and expand globally.”
—Mary Sue Penn