Luqman ArnoldLuqman Arnold

Luqman Arnold has been at the forefront of the global financial services sector for more than three decades, holding leadership roles in a number of internationally admired businesses. On a pro bono basis he has been active in the design and architecture field.

On Design and Architecture

"For the past fifteen years I have been privileged to work with and learn from many talented individuals in the field of.."

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On Design and Architecture

"For the past fifteen years I have been privileged to work with and learn from many talented individuals in the field of design and architecture. I have developed an appreciation for their contribution and for the difference that good design makes in our lives and environment."

On the UBS/SBC merger

“One of the most satisfying periods of my professional life…

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On the UBS/SBC merger

“One of the most satisfying periods of my professional life. From the fragility of a difficult post merger period, UBS emerged transformed, into one of the most consistently and globally admired financial services firms for a number of years”.

On banking

“Banking is very different from most businesses because it deals directly with money and thus the temptations always exist…

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On banking

“Banking is very different from most businesses because it deals directly with money and thus the temptations always exist in close proximity to the workforce. Without a strong culture supported by equally strong central controls, banks are extremely vulnerable”.

Values and beliefs

“I have learnt that loyalty should be to one’s own values and beliefs. One naturally feels loyalty to individuals with whom one works…

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Values and beliefs

“I have learnt that loyalty should be to one’s own values and beliefs. One naturally feels loyalty to individuals with whom one works. However, when working in any institution, one owes a duty and loyalty to that institution, its objectives and values. I have observed that for some leaders, their position defines their sense of self-worth and they genuinely come to believe that they embody the institution and that loyalty is therefore due to them – a loyalty that is often confused with fealty or an expectation of obedience. I have never expected nor offered this type of loyalty to an individual in his or her individual position in an institution”.

Career

Luqman Philip Vasa Arnold
Born 16 April 1950, Calcutta

Educated at Oundle School, Bristol University and as external self-read student of University of London.

Worked in London, Singapore, Hong Kong, Tokyo, Paris, Zurich, Bangkok and also lived in India, Australia and Indonesia.
1950
1951
1952
1953
1954
1955
1956
1957 – 1967
UK boarding schools with holidays in India and Andalucia
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
Bristol University
Part 1 BSc SocSc
1968
1969 – 1972
Gatton, Queensland, Australia
Bandung and Jakarta, Indonesia

1972
London University
BSc Econ Honours external degree
1969
1970
January
MAS established by Singapore

November
End of Bretton Woods System – US ends $/gold convertibility
1971
1972 – 1973
William & Glynn’s Bank
Graduate Trainee, annual salary £1,250
Prudential Insurance
Food Equity Analyst, annual salary £1,450

In 1970 Luqman Arnold took his first step on the career ladder as a graduate trainee, gaining experience with William & Glyn’s Bank then as a food sector equity analyst with Prudential before joining the London branch of First National Bank in Dallas
1972
1972 – 1976
First National Bank in Dallas (London and Singapore)
Head of Credit and Marketing S.E. Asia

In 1973 Arnold joined the London branch of First National Bank in Dallas (FNBD), which was active in financing the development of the North Sea oil reserves, the European credit markets...
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1972 – 1976

First National Bank in Dallas (London and Singapore)
Head of Credit and Marketing S.E. Asia

In 1973 Arnold joined the London branch of First National Bank in Dallas (FNBD), which was active in financing the development of the North Sea oil reserves, the European credit markets and the then fast growing foreign exchange markets. He then moved on to the Singapore branch.

“It was like a huge breath of fresh air working in the meritocratic, positive environment of this highly successful Texan bank alongside talented people like Craig Collins (who gave me master classes in credit for which I remain indebted to him), Hans-Henning Erdmann and Jim Erwin in London, Bob Hudspeth and Bob Theleen in Singapore. I started in the London branch during the grey days of the UK miners’ strike, working part of each week with gas lamps. I trained in then glamorous-by-comparison Dallas. It was here that I learned from the experience of the Hunts and others that cornering a market, in their case silver, is one thing, getting out with the paper profits is quite another! I also learned that a bank can prudently finance real estate, ships and rigs but this is no guarantee against being hit by losses subsequently as a result of imprudent lending by others.”

January
UK stock market crash/Secondary banking crisis
UK joins EEC

October
OPEC oil price shock
1973
1974
February
Pertamina default

December
Great Britain's annual inflation peaks at 24.9%
Average annual inflation 1974-1981 15.4%
1975
December
UK bailout by IMF
Base rate peaks at 15%
1976
1976 – 1982
Manufacturers Hanover Group (Singapore, HK and London)
Manufacturers Hanover Limited
Executive Director

In 1976 Arnold was recruited by David Anderson, the Singapore Branch head of Manufacturers Hanover Trust (‘MHT’), a major global player in the 1970’s with a strong Asian franchise. In 1989, Arnold was transferred to Hong Kong where…
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1976 – 1982

Manufacturers Hanover Group (Singapore, HK and London)
Manufacturers Hanover Limited
Executive Director

In 1976 Arnold was recruited by David Anderson, the Singapore Branch head of Manufacturers Hanover Trust (‘MHT’), a major global player in the 1970’s with a strong Asian franchise. In 1989, Arnold was transferred to Hong Kong where he joined Frank Bradbury and Peter Rigg (who became his best man) in the Asian arm of the merchant bank, Manufacturers Hanover Limited (‘MHL’). MHL was a leading Yankee merchant bank and had built its reputation with banks and sovereigns and as a leader in the Eurobond, syndicated loan, private placement and early swap markets. From Hong Kong, Arnold was transferred to MHL in London, which was headed by Tony Constance – a highly talented South African who was the inspiration and driving force behind the introduction of much of the Warburg discipline and culture in MHL.

“For me, in the seventies, Asia was the place to be. With Michael Wong and Elizabeth Sam at the MAS creating this emerging financial centre – The business included syndicated loans, US$ and S$ fixed rate private placements up to 15 years, export credits, project finance, Eurobond issues and asset management. It was here that I recruited Ng Siew Lim, who I later worked with in different firms. In London, the open and collegiate environment that Constance did so much to foster was an absolute inspiration until the heavy hand of the parent bank in New York began to have a deteriorating effect on the freedom and culture of the merchant bank”.

1976
1977
1978
May
2nd oil price shock
1979
March
Silver Thursday
Base rate peaks at 17%

October
UK joins ERM
European Exchange Rate Mechanism
1980
French Government nationalization of banks and industrial companies

August
First formal swap agreement - IBM + World Bank (Salomon)
1981
August
Mexico defaults: start of Latin American debt crisis
1982
October 1982 – February 1992
Credit Suisse First Boston (London and Tokyo)
Head of Investment Banking New Business
Member of Operating Committee

Arnold was recruited away from Manufacturers Hanover Limited in 1982 by Michael Dobbs-Higginson at Credit Suisse First Boston. Dobbs-Higginson, a larger-than-life character in a firm full of outstanding bankers and traders…
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October 1982 – February 1992

Credit Suisse First Boston (London and Tokyo)
Head of Investment Banking New Business
Member of Operating Committee

Arnold was recruited away from Manufacturers Hanover Limited in 1982 by Michael Dobbs-Higginson at Credit Suisse First Boston. Dobbs-Higginson, a larger-than-life character in a firm full of outstanding bankers and traders, had targeted Arnold with the intention of having an ‘alter ego’ in the Asia-Pacific business.

Arnold picks up the story; “Michael had this great plan whereby one of us would be in the air at any one time. Within months though he left for Merrill, leaving me in charge of the Asia Pacific desk. This was without doubt a defining point in my career. The opportunity to work with bosses like Hans-Joerg Rudloff, Jack Hennessy, and Michael von Clemm, and other professionals like Ossie Gruebel, Richard Briance, Manfred Adami, Takuma Amano, Stephen Hester, Francois von Hurter, Michel de Carvahlo, Ian Molson, Charlie Nettlefold, Simon Prior-Palmer, Philip Colebatch and so many others was, quite simply, a dream come true”.

Much of the Asian business was raising capital for Asian sovereigns, banks and companies from FRNs to convertibles. Another notable achievement for Arnold, working with Peter Thomas from First Boston Sydney, was the establishment of the firm’s Australasian franchise. Together they built relationships with the Commonwealth, New Zealand government, the Australian States, the Australian and New Zealand semi-governments, and blue-chip companies. With Rudloff’s imaginative approach to the markets, this was also the time when they were able to launch multi-currency convertibles and exchangeable preference share issues for companies like Newscorp, MIM, Coles-Myer, BHP and MIM.

A short time later Arnold, was handed a new brief, reporting directly to Jack Hennessy, to head up the combined CS First Boston Pacific investment banking and structured placement group in Tokyo, where for a brief time he had a desk on the floor opposite Brady Dougan who had only recently, along with Alan Wheat and thirty other colleagues, joined from Bankers Trust.

A return to London beckoned when Arnold was appointed to lead Hans-Joerg Rudloff’s new brainchild, the Central European initiative. Working with Charles Harman and new recruits such as Zdenek Bakala and Peter Kadas, Arnold helped establish CSFB’s Moscow, Prague, Budapest and Warsaw offices and generate a wide range of M&A transactions through the privatization processes including Skoda/VW.

The culmination of Arnold’s career at CSFB saw him as Head of Investment Banking (excluding M&A). His resignation came in 1992 when, he says “the complexity of the group made the task of managing increasingly difficult and un-enjoyable. I had no desire to join any other large institution and had no set plans other than to explore the alternative of creating an investment banking partnership focused on the pan-European market” , he looks back on this ten-year period still, with genuine excitement;

“It was an incredible time when our experience and expertise were continually evolving – the markets were expanding from the Eurobond and swaps markets to include the Euro Equity markets. Throughout this period CSFB excelled through a potent mixture of Hans-Joerg’s amazing foresight and the extraordinary self-confidence of the firm as a whole”.

1983
1984
1985
October
Big Bang in UK
1986
October
Black Monday
1987
1988
Married
1988
Resolution Trust Corp (US Savings and Loans crisis)

October
Friday the 13th mini crash
1989
October
German reunification
1990
BCCI

Japanese bubble bursts
1991
September
Black Wednesday: Sterling leaves the ERM

Maastricht Treaty Creates EU

Swedish banking crisis

1992
February 1992 – February 1993
First time out of regular employment

In the weeks following his departure from CSFB, Arnold became convinced it was time to pause and to take stock. He took a year out to establish Olivant and…
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February 1992 – February 1993

First time out of regular employment

In the weeks following his departure from CSFB, Arnold became convinced it was time to pause and to take stock. He took a year out to establish Olivant and Co employing a PA and MBA graduates from LBS and Harvard to research the impact of demographics, technology and regulatory directives on cross border institutional flows, the expected evolution of pan-European sectors and indices, and the implications for the investment and banking markets. It was a decision he says that had a big impact on his future career;

“In the course of this project I had the opportunity to visit at the highest level, over 100 institutions to discuss their strategy and view of the world and our industry. These firms included insurance companies, mutual funds, hedge funds, commercial and investment banks, venture capital firms and research organizations across Europe, the USA and Asia. I learnt that when one is out of employment it is possible to be more informed than those in employment who are naturally limited by the necessity to focus on their own company and its strategy. It is for this reason that only a handful of firms declined meetings and that the vast majority were generous with their time and open with their views.”

“This research year deepened my understanding of markets and institutions as well as future trends. In particular, we were very early in our understanding of the enormous consequences for markets and economies of demographic change – a factor of increasing importance even today.”

“After a fascinating year I was reenergized and ready to return to the markets. I recognized that the growing power of the global firms was unstoppable and I looked for a natural European challenger to the US bulge bracket firms”.

February 1993 – December 1996
Banque Paribas (London and Paris)
Member of the Executive Committee and Board, Global Head of Business Development

Arnold was recruited by Patrick Stevenson, one of the leading visionaries of the Euromarkets, to head investment banking at Paribas Capital Markets, working with Alec de Lezardiere, Alain Kokocinski, Michel Peretie, Jacques d’Estais, Tony Bourne and many others…
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February 1993 – December 1996

Banque Paribas (London and Paris)
Member of the Executive Committee and Board, Global Head of Business Development

Arnold was recruited by Patrick Stevenson, one of the leading visionaries of the Euromarkets, to head investment banking at Paribas Capital Markets, working with Alec de Lezardiere, Alain Kokocinski, Michel Peretie, Jacques d’Estais, Tony Bourne and many others. It was abundantly clear to Arnold that Paribas had the haute banque d’affaires heritage, the financial resources and the international culture to succeed.

After Stevenson’s departure, Arnold was asked by Andre Levy-Lang to move to Paris and join the Executive Committee and Board of Banque Paribas with responsibility for the Business Development Department.

“The move to the firm’s historic 3 Rue d’Antin offices exposed me to a European view of Europe and the world and a firm of élites sitting at the head of the French financial establishment. The Executive Committee operated on a bilingual basis and comprised in addition to Levy-Lang: Philippe Dulac, Alec de Lezardiere, Philippe Blavier and Dominic Hoenn. The Paribas culture was for me the most perfect blend of any institution in which I have worked. It combined a strong client culture, ambition for the firm, professionalism and a balanced, long-term view of compensation that was entirely absent in the major competitors”.

The firm’s ‘esprit’ meant that its top talent was all intensely loyal despite compensation levels that were lower than many of their direct competitors. Much of Arnold’s work at Paribas was related to the establishment of the senior banker corps, which included the senior relationship managers and the country and French region heads, and a continued role in active client marketing and pitching.

This allowed Arnold to work with bankers like Dominic Bazin, Remy Caillaux, Monique Cohen and country heads including Denis Antoine. His role also included involvement in the development of strategy and meetings with potential non-French merger partners, to build on Paribas’ previous experience with Warburg Becker. Arnold was able to introduce his former CSFB colleague, Charlie Ryan and Boris Federov to Paribas who backed them in the establishment of UFG, a highly successful Russian investment firm whose investment banking activity was subsequently sold to Deutsche.

However the pressures to grow and merge became stronger and the threat to Paribas’ international outlook, unique to French banks at that time, grew. It was with genuine regret that Arnold tendered his resignation to Levy-Lang;

“I do not know what the future of Paribas would have been had it not merged with BNP or, as originally planned, Société Générale, but I believe that I do know what might have been – Paribas had all the elements to have succeeded as the premier European-based banque d’affaires competing at the highest level with the bulge bracket investment banks”.

1993
January
NAFTA

December
Netscape browser released

Mexican peso crisis
1994
1995
April
Shanghai Cooperation Organisation
1996
December 1996 – December 2001
SBC Warburg/UBS AG (Singapore, London and Zurich)
President and Chairman of Group Executive Board

Arnold’s continuing desire to be part of a leading European investment bank, was behind his next move – to Swiss Bank Corporation – instigated by Hans de Gier. De Gier and Marcel Ospel with their strategic insight and considerable courage, were transforming…
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December 1996 – December 2001

SBC Warburg/UBS AG (Singapore, London and Zurich)
President and Chairman of Group Executive Board

Arnold’s continuing desire to be part of a leading European investment bank, was behind his next move – to Swiss Bank Corporation – instigated by Hans de Gier. De Gier and Marcel Ospel with their strategic insight and considerable courage, were transforming SBC’s culture and capabilities including through the acquisition of Brinson Partners in asset management, O’Connor Partners in derivatives, and Dominguez Barry, S.G. Warburg and Dillon Read in investment banking.

Arnold joined an executive team at SBC Warburg chaired by De Gier comprising Markus Granziol, David Solo, Roland Wojewodzki and Andy Siciliano. Rudi Bogni headed the SBC branch in London.

“I was exposed to the still strong Warburg culture with its host of talented investment bankers including Robert Gillespie, Ken Costa and many others. I had the extraordinary privilege of sitting a few doors away from Henry Grunfeld, Eric Roll and David Scholey. Such was the attraction of SBC Warburg at that time, that I agreed to join without a clear role and was initially appointed as Chairman of Asia to lead the strategy and the network of offices in the Asia-Pacific region”.

Throughout 1997, he commuted between Singapore and Tokyo before moving to Tokyo. He worked with Vittorio Volpi and the team on the proposed take-over of Long Term Credit Bank of Japan: “Our strategy was to build on LTCB’s strong client franchise amongst the regional banks, its debenture based funding capability and network of 15 regional offices - an ideal distribution capacity from our viewpoint to create a wholesale bank leveraging LTCB’s historical strengths and retaining its franchises. In the end, we were no match for the political strength of the US and lost out to Tim Collins and Chris Flowers who moved the bank into the retail area. We retained the Japanese investment banking and asset management joint ventures we had in the meantime created with LTCB”.

Then, at the end of 1997, the SBC/UBS merger was announced. After completing the merger of the SBC and UBS Asia Pacific arms, Arnold returned to Warburg in London as COO and shortly afterwards moved to Zurich as CFO of the Group.

The management team Arnold joined comprised Marcel Ospel, as Chairman of the Group Executive Board, Hans de Gier, Stephan Haeringer, Rudi Bogni, Pierre de Weck and Peter Wuffli. Later changes saw the arrival of Markus Granziol, Joe Grano and Georges Gagnebin.

This was without doubt a fragile moment – the over-optimistic claims of what the SBC/UBS merger would deliver had been discredited, analysts were up-in-arms and the management team was in some turmoil after the forced departure of several of the top management team from the former UBS following the Long Term Capital Management losses.

Arnold continues; “We formulated a clear ‘one bank’ strategy highlighting the value of the wealth management and retail businesses and encouraged interdivisional cooperation. While I supported independence of the four business divisions I recognized that this had to be counterbalanced by a rigorous strategic planning, reporting and control framework. We established a lean but strong corporate centre with all the central functions working to a single agenda along with a communications philosophy based on total internal and external transparency with the business heads accepting the importance of looking at the figures provided to shareholders rather than just internal management numbers. To drive a performance culture we introduced consistent internal/external metrics, hurdle rates and capital allocation”.

Arnold uses the analogy of the tobacco industry when discussing the offshore private banking business and the need to use the cash flow from what would be a dying business to invest in the strategy initiated by Rudi Bogni to develop European on-shore private banking both organically and through acquisition.

Arnold describes his time at UBS AG as one of “intense activity”. He says; “the “Repositioning of UBS’s strategy and boosting its rating, establishing its leading financial and risk control reputation, creation and sale of a non-core book of loans and other assets, the strategic move to build and acquire on-shore private banking capabilities in Europe, and the Paine Webber acquisition to create a third home market in the USA”

He continues; “The Paine Webber acquisition was the largest cross border financial services deal and was executed contemporaneously with the listing of UBS on the NYSE; although not successful in some measures it succeeded in the core objectives to lay the foundation of a third home market, raising UBS’ profile in the USA and strengthening its global investment banking capability and assets under management. The European on-shore private banking strategy was primarily organic resulting in investment that showed up as losses in the accounts – this created some angst with analysts; the strategy has since delivered outstanding asset in-flows and has successfully mitigated against the impact of European tax amnesties”.

1996
July
Asian financial crisis

October
Mini-crash
1997
April
Citicorp/Travelers merger (incl Salomon Smith Barney) breaching Glass Steagall

August
Russian financial crisis

September
Long Term Capital Management failure
1998
January
Euro born

May
Goldman Sachs – last Wall St partnership – goes public

November
Gramm-Leach-Biley Act partial repeal of Glass-Steagall
1999
October
Dot-com bubble burst

November
Swiss bank holocaust class action settlement
2000
September 11 attack

October
Enron scandal and collapse triggers credit market implosion
2001
2001
Unsurprisingly Arnold describes his time at UBS as;

“One of the most satisfying periods of my professional life. From the fragility of a difficult post-merger period UBS emerged, transformed by the end of 2001 into...
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2001

Unsurprisingly Arnold describes his time at UBS as;

“One of the most satisfying periods of my professional life. From the fragility of a difficult post-merger period UBS emerged, transformed by the end of 2001 into one of the most consistently and globally admired financial services firms for a number of years until the governance and control risks he had foreseen developed”.

It follows that Arnold refers to his departure from UBS shortly before Christmas 2001 as, “The second worst experience of my business career. On my side, this was a fundamental issue of governance and how the bank would be run in the future taking into account the lessons of the Swiss Air debacle”. He strongly believed that the direction that Marcel Ospel was taking – to increase rather than restrict the authority of the Chairman – would blur the responsibility and accountability of the Supervisory Board of Directors of which Ospel was chair, and the Group Executive Board of which Arnold was chair; without giving sufficient consideration to the valid rationale for the governance arrangements prescribed by Swiss banking regulation.

Arnold saw that the expanded ‘Chairman’s Office’ that Ospel appeared intent on establishing would in effect become a shadow management board.

“The Supervisory board took a contrary view. I only regret that I could not continue playing a part in the development of the bank and that other colleagues were in due course forced out for the stand they had taken”.

Arnold learnt from this and his subsequent Abbey National experience that it can take many years of mismanagement to destroy a bank. Equally, once a bank is restored, it can prosper for many years despite poor management. The architects of the successes and failures of banks are usually long gone by the time their work yields a profit or loss.

He recalls memorable words from Granziol, on the subject of risk, that have, he says stayed long in his memory; “Imagine if 1 or 2 percent of our employees could be tempted by a fraudulent opportunity. That would mean that there are up to 1,500 people, and we don’t know which”.

Arnold supports this view; “Banking is very different from most businesses because it deals directly with money and the temptations always exist in close proximity to the workface. Without a strong culture supported by equally strong central controls, banks are extremely vulnerable”.

Stock market downturn of 2002

July
Sarbanes-Oxley Act
2002
2002
Second time out of regular employment

During 2002 Arnold reactivated his private firm, Olivant & Co and was looking for investment opportunities. UBS Warburg introduced and advised Olivant on a buyout of Amvescap…
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2002

Second time out of regular employment

During 2002 Arnold reactivated his private firm, Olivant & Co and was looking for investment opportunities. UBS Warburg introduced and advised Olivant on a buyout of Amvescap supported by several private equity firms. Prolonged discussions came to an end when the Amvescap board sensibly appointed a new CEO, who was well qualified to take the steps that Arnold and his team had been proposing.

October 2002 – December 2004
Abbey National Plc. (London)
Chief Executive Officer

In October 2002 Arnold took a call from Jan Hall asking if he would meet with Lord (Terry) Burns, the recently appointed…
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October 2002 – December 2004

Abbey National Plc. (London)
Chief Executive Officer

In October 2002 Arnold took a call from Jan Hall asking if he would meet with Lord (Terry) Burns, the recently appointed Chair of Abbey National.

Arnold remembers his research ahead of the meeting;

“The website had about ten different logos representing the different businesses in the group, which gave a clear indication of the lack of any focused strategy. I liked Terry, was attracted by the chance to do something serious in Britain with a British firm and thought the challenge interesting. I started work within weeks of meeting Terry. In fact, Abbey’s situation was direr than any of us realised and as with many projects in life one would not take them on if one understood ex ante the difficulties. Equally, such opportunities often turn out to be the best experiences of one’s life”.

Arnold says; “This was the start of the best collaboration experience of my career working with Terry and Stephen Hester. Other members of our management team comprised Priscilla Vacassin, Yasmin Jetha, Mark Pain, Angus Porter and Tony Wyatt. Abbey had pursued a management consultant approved strategy to become the fifth largest financial services firm by 2005. This resulted in an indiscriminate use of the balance sheet to get profits. It also meant that there was zero apparent focus on the core retail franchise, which was underinvested in every sense”.

Arnold describes the strategy they followed; “Stage one was crisis management led by Stephen with Nathan Bostock’s support to protect value as much as possible. Abbey had become the best client of the investment banks and had accumulated a £60 million wholesale portfolio covering everything from overlarge bond positions to CDOs and aircraft leases. As this portfolio was being rigorously managed down it also became necessary to cover the unhedged equity exposure in the life insurance companies at a time that the market in early 2003 was weak. The final risk element was settlement over an extended period of regulatory risks, mis-selling, KYC, complaints handling and negotiations with the FSA on the new realistic balance sheet rules of life companies”. Arnold recruited PIMCO to help with the modelling of the portfolio risks, management of part of the portfolio and assistance in selling large pieces of the illiquid and structured assets.

Throughout each and every stage, Arnold and the team pursued a communications strategy based on consistent and transparent reporting internally and to all stakeholders; shareholders, regulators, rating agencies, media, customers and staff.

Arnold continues; “Stage two of the strategy was to achieve value and return Abbey to its roots as a successful and innovative retail bank. All retail banks were pursuing similar strategies based on aggressive selling and there was little room for Abbey to compete unless it adopted a radical and differentiated strategy. A positive factor was the mutual DNA that had survived since Abbey’s building society days, which meant that the branch staff were still minded to serve customers in a human way. And as in all institutions there were numerous talented individuals who rose to the challenge”.

Together the management team overhauled the management, implemented new recruitment, training and retention policies; redesigned the products, pricing, service, brand proposition and customer communications, including rewriting standard letters in plain English; began optimization of the branch network; re-branded to ‘Abbey’ to signal fundamental change, appeal to consumers and to become a distinctive brand once more.

On the operational side, Arnold says; “We consolidated operations and call centres into five major hubs; rolled out bank-wide CRM and IP telephony systems; closed Scottish Mutual and Scottish Provident to new business; restructured the underperforming asset management business through a barbell approach, increasing allocation to passive management, which was outsourced and allocating the balance to a multi-manager strategy under the leadership of James Bevan”.

The final stage in the strategy is described by Arnold; “The final stage was to extract value through investing in the core business; divesting assets from the wholesale portfolio and non-core businesses in the ring-fenced ‘for sale’ unit; negotiating the sale of Abbey with US, UK and Spanish bidders and UK/EU regulators and competition authorities. When the bank looked safe and the transformation had begun we were then visited by Emilio Botin and Juan Inciarte who moved with great determination, outclassing the US and UK banks that approached us around the same time”.

The sale of Abbey to Santander in a deal with no regulatory or competition risk represented the final value realisation. The price represented over a 100% increase from the low 19 months earlier when the true financial position of Abbey National had been established and disclosed to shareholders. This was the largest European cross-border financial services deal and was executed contemporaneously with the London listing of Santander, which succeeded in retaining over one million Abbey shareholders.

Arnold talks about the sale; “The sale meant that our vision of creating a highly differentiated, genuinely customer-friendly bank could not be realised. However, it was always going to be tough in a market where our major competitor, Halifax, and others were pursuing a pure product sales strategy. This was the right deal for shareholders and staff since Santander had the resources and technology that Abbey could not afford. On my side I had enjoyed doing something in Britain, learning more about retail banking and visiting countless branches across the UK”.

The whole exercise took 2 years and 1 month leaving Arnold very unexpectedly out of regular employment for the third time in his career although he stayed on with Santander.

2003
April
SEC permits large broker-dealers to use models to calculate haircuts
2004
2005 – 2006
Grupo Santander
Senior Adviser to Emilio Botin, Chairman

Following the acquisition by Santander, Arnold remained as senior adviser to Emilio Botin and engaged also with Juan Inciarte providing international strategic advice to Grupo…
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2005 – 2006

Grupo Santander
Senior Adviser to Emilio Botin, Chairman

Following the acquisition by Santander, Arnold remained as senior adviser to Emilio Botin and engaged also with Juan Inciarte providing international strategic advice to Grupo Santander. He then reactivated his private company, Olivant and Co. Arnold met with Alan Morgan who, as Head of FIG at McKinsey had been the lead partner advising Abbey on transformation issues. Together they saw the opportunity to invest in the financial services sector in a highly differentiated way and developed plans for what was to become Olivant Limited.

2005
2007 – 2012
Olivant Limited (London)
Chairman

Together Arnold and Alan Morgan cofounded Olivant Limited, which was incorporated in 2007, as an investment company focused exclusively on the financial services sector in Europe, MENA and Asia-Pacific. “Key differentiators of the Olivant model were the mandate to invest in private and listed companies and across…
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2007 – 2012

Olivant Limited (London)
Chairman

Together Arnold and Alan Morgan cofounded Olivant Limited, which was incorporated in 2007, as an investment company focused exclusively on the financial services sector in Europe, MENA and Asia-Pacific. “Key differentiators of the Olivant model were the mandate to invest in private and listed companies and across the capital structure, and the strong operational skills and experience needed to deliver ‘operational alpha’. Olivant was an active investor seeking to influence positive change and was well supported by other institutional investors, particularly in the case of the UBS investment”.

The team included partners with experience in commercial, retail and investment banking; life insurance; wealth management and management consultancy. Their first investment was in unlisted MDM Bank in Russia in 2007. Also, Olivant developed a strong reputation in the public markets through interventions in the Northern Rock negotiations prior to its privatisation, and the investment in UBS AG where Olivant influenced the strategic changes. However, Olivant had only been established for eighteen months when Lehman failed and it became one of the casualties. Olivant remained transparent to the end – it was one of the only institutions to declare its position publicly on its website but it was unable to recover from this blow.

According to Arnold; “Our structure and investment strategies were well designed. We delivered on our commitment to ‘operational alpha’ in our proposals to investee companies. Our timing was unfortunate. This was the worst experience of my career, first and foremost since our shareholders suffered losses, which I shared proportionately. With hindsight, had we waited several years we would have recovered our investment since the Lehman entity ended the whole process with surplus funds.

The team held together through the aftermath and did its best to manage the post-Lehman situation over several years. I finally resigned from the Olivant Limited board in 2012. At some point in late 2008 I remember asking my wife; ’”Why did this happen to us? We are good people.”’ My wife gave me a dose of tough love and said, ‘”It’s not about you, look around you”’. And it was certainly true – we were not alone”.

He describes the aftermath of a financial crisis of this magnitude as being the equivalent in financial terms to the aftermath of a war. “The destruction is widespread and random. Everyone is affected in some way and few institutions escape completely unscathed. The clean up takes years and results in new approaches to address inadequacies in legal, governance and regulatory frameworks”.

Links to public statements and letters:

Press releases and statements re UBS AG
4 April 2008
16 April 2008
23 April 2008
1 July 2008

Letters to Mr Marchionne
3 April 2008
7 April 2008

Press releases re Northern Rock
12 November 2007
16 November 2007
7 December 2007
21 January 2008
4 February 2008

2007
January
US Subprime mortgage crisis

February
Chinese bearmarket

August
European money market freezes up following suspension of BNP funds
read more

2007 January
Start of US Subprime mortgage crisis

2007 February
Chinese equity bear market begins; peak in global credit markets

2007 August
European money market freezes up following suspension of BNP funds

2007 September
Run on Northern Rock leading to nationalization in February 2008

2007 November
FAS 157 fair value/mark to market accounting introduced

2007
March
Bear Stearns rescue acquisition by JP Morgan Chase

September
Lehman failure

October
Troubled Asset Relief Program (TARP)
2008
January
Bitcoin released

4trn stimulus package from China; commodities/breakeven inflation bottom

February
UBS settlement with US
read more

2009 January
Bitcoin released
4trn stimulus package from China; commodities/breakeven inflation bottom

2009 February
UBS settlement with US marks start of US tax-evasion attack on Swiss banking secrecy

2009 March
Base rate bottoms at 0.5%
BoE QE

2009 November
Dubai standstill

2009
March FATCA US

April Greece bailout

May US Flash Crash

May ESFF

July Dodd Frank

October China monetary policy
read more

2010 March
Foreign Account Tax Compliance Act (FATCA) US

2010 April
Greece bail out signals start of the European sovereign debt crisis

2010 May
US Flash Crash

2010 May
European Financial Stability Facility (EFSF) established

2010 July
Dodd Frank Wall Street Reform and Consumer Protection Act

2010 October
China announces 'more prudent' monetary policy for 2011 (commodities top May 2011)

2010 November
Fed announces second round of QE – QE2

2010 December
European Council established European Stability Mechanism (ESM)

2010
2013 – 2017
Cartesius S.A.

Together with Mitchel Lenson, Vittoro Volpi, who were both former colleagues at SBC/UBS and Olivant, co-founded Cartesius – an advisory and entrepreneurial company focused on the services…
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2010 – 2017

Cartesius S.A.

Together with Mitchel Lenson, Vittorio Volpi, who were both former colleagues at SBC/UBS and Olivant, co-founded Cartesius – an advisory and entrepreneurial company focused on the services sector. Other former partners of Olivant, Ng Siew Mun, Sahil Bhandari and Peter Strafford joined too to consider investments and management buy-ins in a number of private banking firms and de novo situations in Europe and Asia. The regulatory uncertainties in the banking sector led them to consider non-banking opportunities and at the end of 2012 they incorporated Cartesius Advisory Network A.G (‘CAN’) as a pure advisory firm majority controlled by Cartesius S.A.

August
US downgraded

September
Swiss National Bank 1.20 downside-limit for EUR/CH

October
ECB first long-term refinancing
read more

2011 August
S&P downgrades US from AAA

2011 September
Swiss National Bank announces 1.20 downside-limit for EUR/CH

2011 October
ECB announces first long-term refinancing operations (LTRO)

2011
June Barclays Libor

July Denmark interest rates

July EBA

September Fed QE3

September ECB outright purchases
read more

2012 June
Barclays LIBOR settlement marks start of regulatory actions against banks

2012 July
Denmark sets negative interest rates for first time

2012 July
Completion of European Banking Authority capital exercise

2012 September
Fed announces QE3

2012 September
ECB announces outright purchases of peripheral debt

2012 November
BoE cancels QE debt

2012 December
Greece downgraded to selective default following exchange offer

2012
January
Baasel liquidity coverage ratio loosened

February
UK loses AAA Moodys rating
2013
2014
March
Ukraine/Crimea annexation

May
BJP/Modi elected

June
ECB adopts negative interest rate policy

read more

2014 March
Ukraine/Crimea annexation

2014 May
BJP/Modi elected

2014 June
ECB adopts negative interest rate policy

2014 September
US coalition begins attack on Islamic State of Iraq and Levant inside Syria

2014 October
Automatic Tax Information Exchange Agreement (to be implemented 2018) ECB begins buying covered bonds

2014 December
Switzerland adopts negative interest rate policy - first time since 1970s

2014
March
UK applies to join the Asian Infrastructure Investment Bank

February
First Fed hike since 2006

Asian Infrastructure Investment Bank articles signed
2015
2016
January
BoJ adopts negative interest rate policy

February
TPP signed

April
UN Paris Climate accord
read more

2016 January
BoJ adopts negative interest rate policy

2016 February
TPP signed

2016 April
UN Paris Climate accord

2016 June
ECB begins buying corporate bonds

2016 June
Brexit

2016 October
RMB joins IMF SDR basket

2016 November
India – demonetization

2016 November
US becomes net exporter of natural gas
Tight oil reduces imports Nov 2016

2016 November
President Trump

2016 December
Syria ceasefire negotiated by Russia/Turkey

2016
2014 – 2017
Cartesius Advisory Network AG

"My partners and I founded this international partnership, which has provided clients through partners based in Asia and Europe with strategic and financial advice across a broad range of sectors. However, on a personal basis I came to realise that a pure advisory role, which I had found fulfilling twenty five years earlier as an investment banker, no longer held my interest."
Past member of industry bodies including:

European Securities Forum
Practitioners Panel of the Financial Services Authority
Financial Capability Steering Group of the Financial Services Authority
Board of the Association of British Insurers
Board of the British Bankers Association

Of these, Arnold says: “The Financial Capability Steering Group was the closest to my heart, as I had learnt from my Abbey experience of the phobia felt by most people for financial matters and the widespread lack of understanding…
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Past member of industry bodies including:

European Securities Forum
Practitioners Panel of the Financial Services Authority
Financial Capability Steering Group of the Financial Services Authority
Board of the Association of British Insurers
Board of the British Bankers Association

Of these, Arnold says: “The Financial Capability Steering Group was the closest to my heart, as I had learnt from my Abbey experience of the phobia felt by most people for financial matters and the widespread lack of understanding. The Group was assembled by the FSA and chaired by John Tiner, its CEO, to find ways to improve financial literacy of students and adults alike and to develop products and services that could be more transparent for consumers and perhaps carry kitemarks. Treating customers fairly was the strategy to counterbalance the product pushing strategies adopted uniformly by the banks”.

Arnold believes it is difficult to grade all but the most standard financial products. “Investment products are particularly problematic to grade from the viewpoint of their riskiness for savers and investors. My own family suffered in India from a combination of inflation, devaluation, stock market declines, taxes and capital controls. To this one has to add credit and interest rate risk. It is quite possible that the years ahead will see the return of greater exchange rate risk and geopolitical uncertainty on top of the heightened tax pressures. Savers and investors are already suffering from the financial repression imposed by governments stimulating economies in part through quantitative easing and the maintenance of artificially low rates of interest. Most of the population in the West is still not aware of the dangerously unfunded national pension, social security and healthcare plans and what this means for them unless growth rates increase and/or a nation’s demographic profile is adjusted through higher birth rates or the positive impact of immigration. In Britain we have also seen retroactive legislation of trusts and Theresa May’s proposed ‘dementia tax’ proposal, both signalling the types of measure that will be inevitable in future decades if governments are forced to renege on social compacts. The greatest risks usually arise from the actions of governments”.

“The relative importance of these risk factors changes in unpredictable ways and all such changes impact the risk level. The appropriateness of any investment depends on the personal situation of the individual, which changes as a result of ageing and life events such as marriage, children, unemployment and illness; these cannot be easily assessed by generic means. This does not mean that the attempt should not be made, indeed it is essential; however, the best approach is through addressing financial literacy alongside consistent and transparent government policies”.

Interests

From early memories of sleeping in a type of couchette in the Lockheed Super Constellation to the gentle humour of Wodehouse; from the chairs of Eames and Roberts to the utter simplicity and ecosystem of Apple's devices, my interests are as much part of my life as my work.

Architecture
Architecture
Architecture
Architecture

“We live in a world of architectural icons, which make a short selection challenging if not impossible. The most impressive I have visited would be…

Liebeskind’s Holocaust museum

Extraordinary fulfillment of an extraordinarily difficult brief

RMJM’s Commonwealth Institute

50 years old and designed then, as if the brief had always been for a 21st century home for the Design Museum, rather than the Commonwealth Institute…

The new Design Museum Now benefiting from John Pawson’s transformation of the interior…

Gehry’s Bilbao Guggenheim

Because the building, albeit a destination, does not detract from its contents. It is also proof of the regenerative power of architecture…

Diller Scofidio + Renfro/Field Operations’ High Line in New York

Providing new public spaces in an urban environment and probably influencing other such ventures including the Singapore sky park

Most architects see their work as a vocation rather than just a career, a vocation, which is accompanied by social awareness. Clearly, this is also true of other vocations like education and nursing. Vocational professions play an enormous role in the wellbeing of society and their contribution will be even more important given future demographic challenges. Our society could do better in recognizing and rewarding the importance of such activities.

Membership of cultural bodies

Past Chairman of the Design Museum
Past trustee of the Architecture Foundation
Past member of the Development Committee of the University of the Arts

Design
Art and design
Design
Art and design

Painters

“As is probably true of most people my tastes have changed over time. However, my endearing favourite has been Joan Miro. My modern favourites are:“

Gillian Ayres
Marjetica Potrc

Three chairs

Eames La Chaise
Kjaerholm Chaise longue
Emrys Roberts Phantom chair

“These are three great chairs. I always sit on an Eames alu chair in the office. The 1948 La Chaise makes some modern chairs look less extraordinary. The Phantom looks great and is comfortable”.

Design Museum

“The most fulfilling non-work activity has been my role as Chair of the Design Museum from 2005 to 2017 when I stepped down following the opening of the new Design Museum. This all started in 2002 with the design and architectural work we undertook during the rescue and transformation of Abbey National, with Brian Boylan and Robert Jones at Wolff Olins, David Adjaye, Erica Bolton, TBWA and others. It opened up a new world for me. My experience of design had been primarily as a corporate and private client. I learnt a great deal from a very low base also from my time as a trustee of the Architectural Association and member of the Development Committee of the University of the Arts.

However, the most important outcome was being selected to chair the Design Museum with a clear vision and commitment by the trustees that we would make it the world’s leading museum of contemporary design and architecture. I remember looking down from the top floor of the Gherkin and seeing clearly that the Shad Thames site was three bridges too far to the East and that our ambition would require not just greater scale but also relocation.

"We were building on thirty innovative years of the museum’s history since its establishment by Terence Conran in the basement of the V&A. The museum has always punched above its weight and with our fabulously passionate management and staff led by Deyan Sudjic and Alice Black, and our equally passionate and hard working trustees, this vision was finally fulfilled with the opening in November 2016 of the new Design Museum in the former Commonwealth Institute, which has been beautifully repurposed by John Pawson. “
www.designmuseum.org

Authors and books
Authors and books
Authors and books
Authors and books

“I love the gentle humour of Wodehouse, Guareschi and Goscinny; Character detectives like Campion, Fandorin, Montalbano; Understanding history and nationalism; Cultural and political insights like Enigma and The Party; Comparative accounts of historical contemporaries, Mandela and de Klerk; Wisdom like Smith and Eliot; Evocative novels like The Leopard, Birds without Wings, Wizard of the Crow; Understanding through Isaacson’s biography of Jobs that simplicity comes from dealing with complexity and an obsession with perfection.”

Iain McGilchrist The Master and his Emissary
Sandra Halperin War and Social Change in Modern Europe
Amitav Ghosh Ibis Triology
George Orwell Burmese Days and Nineteen Eighty Four
Philip Dick The Man in the High Castle
Will Durant The Case for India
Martin Wiener English Culture and the Decline of the Industrial Spirit
Chris Hayes A Colony in a Nation
Iris Origo The Merchant of Prato
Lala Lajpat Rai Unhappy India
AJP Taylor How wars begin
Adam Smith The wealth of nations
Barbara Tuchman The Guns of August
Amitav Ghosh The Glass Palace
Elie Kedourie Nationalism
EJ Hobsbawm Nations and Nationalism
Amartya Sen The Argumentative Indian
John Maynard Keynes The Economic Consequences of the Peace
Perry Anderson Lineages of the Absolutist State
T.S. Eliot  
Karel van Wolferen The Enigma of Japanese Power
Victoria Chick The Theory of Monetary Policy
Nelson Mandela Long walk to freedom
De Klerk The Last Treck
Evers and Thoenes Ed. Architectural Theory: From the Renaissance to the Present
Richard McGregor The Party
Vittorio Volpi Il visitatore, Alessandro Valignano
Walter Isaacson Steve Jobs
Robert Jones The Big Idea
Charles Seife Zero
Giuseppe Tomasi di Lampedusa The Leopard
Louis de Bernieres Birds without wings
Ngugi wa Thiong’O Wizard of the Crow
PJ Wodehouse Jeeves and Wooster
Giovanni Guareschi Don Camillo novels
Goscinny and Uderzo Asterix and Obelix
Andrea Camilleri Montalbano novels
Margery Allingham Albert Campion novels – Flowers for the Judge etc
Josephine Tey Alan Grant novels – A Shilling For Candles etc
Boris Akunin Erast Fandorin novels
Cars and planes
Cars and planes
Cars and planes
Cars

“Cars form milestones in one’s life and reflect one’s changing aspirations and practical needs. My first car as a student in Bristol was a ‘several times previously owned’ red convertible Triumph Herald Vitesse, which broke down on its first major outing. I remember our Studebaker and Humber in India, our Land Rover on the farm in Indonesia, my now embarrassing Starsky and Hutch colour-scheme Ford in Singapore, my previously owned BMW 2002 and Opel Monza in HK, a Lotus Esprit and Mercedes AMG in London, a Renault Twingo in Paris, a series of family 4x4s primarily the spectacularly reliable Toyotas. However, the very best are… a Hans Ledwinka Tatra T87 – really original, like the supercars I drew as a child; the Toyota RAV4: practical, reliable, all-purpose and the Porsche 911: a sports car that is not too refined to deal even with urban traffic”.

Planes

Douglas Dakota DC3
Boeing 747
Lockheed Super Constellation

“Flying has been a big part of my life since the fifties. My earliest memory is sleeping in a type of couchette in the Super Constellation. In India I was lucky to fly in a Dakota, a perfectly fit-for-multi-purpose workhorse. The 747 is simply the best long-haul aircraft ever”.

Painters
Inspiring quotes
Painters
Inspiring quotes

“Where is the life we have lost in living? Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information?”
TS Eliot, Choruses from the Rock, 1934

“This quote was undoubtedly true of his time and the rapid evolution of society and technology makes it ever more relevant”.


“Verweile doch du bist so schoen”.
Goethe’s Faust 1828

“This was a favourite quote of my father and has extraordinary depths of meaning and relevance as to how we choose to live our lives.”


“Simplicity isn’t just a visual style. It’s not just minimalism or the absence of clutter. It involves digging through the depth of the complexity. To be truly simple, you have to go really deep.”
Jonathan (Jony) Ive


“The Macintosh would not have emerged from focus groups and committees”. “Did Alexander Graham Bell do any market research before he invented the telephone?”
Steve Jobs


“The present letter is a very long one, simply because I had no leisure to make it shorter.”
Blaise Pascal c. 1650


“Who really knows? Who will here proclaim it? Whence was it produced? Whence is this creation? The gods came afterwards, with the creation of this universe. Who then knows whence it has arisen? Whence this creation has arisen – perhaps it formed itself, or perhaps it did not – the one who looks down on it, in the highest heaven, only he knows – or perhaps he does not know.”
Rigveda c 1,500 BC


“Go placidly amidst the noise and haste, and remember what peace there may be in silence. As far as possible without surrender be on good terms with all persons. Speak your truth quietly and clearly; and listen to others, even the dull and the ignorant; they too have their story.

Avoid loud and aggressive persons, they are vexatious to the spirit. If you compare yourself with others, you may become vain or bitter; for always there will be greater and lesser persons than yourself.

Enjoy your achievements as well as your plans. Keep interested in your own career, however humble; it is a real possession in the changing fortunes of time.

Exercise caution in your business affairs; for the world is full of trickery. But let this not blind you to what virtue there is; many persons strive for high ideals; and everywhere life is full of heroism.

Be yourself. Especially, do not feign affection. Neither be cynical about love; for in the face of all aridity and disenchantment it is as perennial as the grass.

Take kindly the counsel of the years, gracefully surrendering the things of youth. Nurture strength of spirit to shield you in sudden misfortune. But do not distress yourself with dark imaginings. Many fears are born of fatigue and loneliness.

Beyond a wholesome discipline, be gentle with yourself. You are a child of the universe, no less than the trees and the stars; you have a right to be here.

And whether or not it is clear to you, no doubt the universe is unfolding as it should. Therefore be at peace with God, whatever you conceive Him to be, and whatever your labors and aspirations, in the noisy confusion of life keep peace with your soul. With all its shams, drudgery, and broken dreams, it is still a beautiful world. Be cheerful. Strive to be happy.”

Desiderata by Max Ehrmann 1927

Movies and TV series
Movies and TV series
Movies and TV series
Movies and TV series
Metropolis Futuristic, evocative, societal commentary
The City of God Epic that respects the history, cultures and participants on both sides of the crusades including Saladin.
Matrix Challenged our perception of reality
Mephisto The path to self-betrayal
Subway Excitement
Bladerunner Futuristic excitement
Wallander The Sweden TV series
Poirot
Crown Netflix
Big Bang Theory
The IT Crowd
Music
Music
Music
Music
Bach Violin Concertos
Chopin Nocturnes
Rachmaninov Piano Concertos
Gounod Ave Maria
Paganini Violin Concertos
 
Blondie
Maroon 5
Sting
Macy Gray
Bob Marley
Amy Winehouse
Norah Jones
Sophie Milman
Diane Krall
Sports
Sports
Sports
Sports
Riding
Skiing
Tennis
Swimming
Technology
Technology
Technology
Technology

“Apple’s devices changed the world and the integrated hardware/software/cloud experience has changed my working life”.

Contact

Contact Luqman Arnold

For further enquiries about Luqman Arnold

General enquiries

Amy English

E: english_amy@icloud.com

I have been fortunate to have worked with and learnt from countless extraordinary individuals. To those whom I have named who would have wished not to be named and to those I have not named who would have wished to be named, I apologise. For the latter group I blame my memory and would be more than happy to make amends.