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Suddenly, Indians Are Hot Properties On The Street


International Finance

SUDDENLY, INDIANS ARE HOT PROPERTIES ON THE STREET

Swapan Bhattacharya was born in Bihar, one of India's most backward states. Determined to escape his humble origins, he worked his way through India's most prestigious engineering school and came to America. He took night classes at Northwestern University's business school in Chicago while working for a consulting firm during the day. To survive, he spent the summer of 1979 selling Bibles door-to-door in rural Texas, which, he jokes, is "to date the toughest job I have done." Today, at 37, Bhattacharya is a senior vice-president at PaineWebber Group Inc., working in the firm's international corporate-finance unit.

Madhav Dhar comes from a middle-class background in New Delhi. Despite protests from his father, a former Indian government official who did not want his son to join the "materialistic" rat race, he went to Pittsburgh and graduated from Carnegie Mellon's business school in 1984. To crack the world of American finance, he worked for Morgan Stanley & Co. as an informal trainee without pay for six months until the firm agreed to hire him. Now a 33-year-old managing director of Morgan Stanley Asset Management Inc., Dhar manages some $6.5 billion in emerging-market funds.

Indians such as Bhattacharya and Dhar, who arrived in the U.S. with only a couple of hundred dollars in their pockets, are suddenly hot properties on Wall Street. That's partly because India has the world's third-largest pool of technical talent, after the U.S. and Russia. The Indians also are English-speakers who are comfortable operating in Western-style bureaucracies.

NEWEST NICHES. Cashing in on these strengths, thousands of Indians have cracked Wall Street's performance-based world, one that is quite distinct from the classist, even castist, culture they grew up in. At thirtysomething, they have reached vice-president, managing director, and even partner levels. With many of the Street's newest niches--such as derivatives and mortgage-backed securities--depending heavily on mathematical formulas and computer knowhow, Indians have carved out roles for themselves at top firms including J.P. Morgan and Merrill Lynch & Co. (table).

Until a couple of years ago, professional opportunities in India were dismal for these science and engineering graduates. But American universities lapped up what they saw as a talented, inexpensive pool of English-speaking researchers and academicians. Soon, the Indians were looking for toeholds in finance. "Eight or 10 years ago, Indians and other foreigners were willing to take jobs in out-of-the-way areas, such as swaps and derivative securities, which required number-crunching," explains Pavan Sahgal, editor of Global Investment Technology, a New York-based securities and investment newsletter.

Since the market crash of 1987 forced greater attention to protecting against volatility, those risk-management products have become much more important on Wall Street. That, combined with the emerging-markets boom, helps explain why today Morgan Stanley has about 140 Indians working in its various divisions in New York. "They are real powerhouse people," says Barton M. Biggs, chairman of Morgan Stanley Asset Management and the man who hired Dhar 10 years ago.

No reliable statistics exist to compare how well the Indians have done on Wall Street compared with Chinese or Japanese counterparts, but most experts believe the Indians have done better. "What is interesting is not only their penetration at the managing director and partner level but also the breadth of their capabilities in asset management, sales and trading, research, and investment banking," says Joan C. Zimmerman of G.Z. Stephens Inc., an executive-recruitment firm specializing in Wall Street.

CONSCIOUSNESS-RAISING. They also possess international savvy. With India figuring more prominently on the world financial map, many of these Indians have helped guide their U.S.-based institutions into Bombay's rough-and-tumble capital markets. Dhar was one of the first asset managers from the U.S. to influence his seniors--Biggs is now a diehard Indophile--to take money there. In 1993, Morgan Stanley became the first U.S. investment bank to set up a wholly owned asset-management subsidiary in Bombay. Earlier this year, it raised a $300 million fund from domestic investors in India, followed by a $500 million offshore fund listed on the New York Stock Exchange.

Bhattacharya says he has also been actively raising the awareness level of his firm about doing business in India. "With India opening up, I finally saw the opportunity to combine my personal ties to home with my career interests," observes Bhattacharya, who is helping set up financial-services operations in Bombay for PaineWebber.

Karan Trehan, senior vice-president of Alliance Capital and president of its international unit, is helping his firm establish a much broader strategy. Forty-year-old Trehan, who grew up in north India, was a research assistant at the World Bank, worked in the corporate treasury department at American Express Co., sold fixed-income products for Goldman, Sachs & Co., and established his own asset-management boutique before being wooed by Alliance's chairman, Dave Williams, to direct its international operations.

Over the past two years, Trehan has set up Alliance Capital's offices in Bahrain, Singapore, and more recently, Bombay, where he sees a powerful equity cult waiting to be serviced. Trehan compares India with China: While China's takeoff was spurred by the diaspora of Chinese businesspeople, whose investments comprise 80% of the capital flowing into the mainland, "India's financial boom is being pushed along by Indian expatriates working on Wall Street," says Trehan.

In fact, as soon as Kidder Peabody Group Inc.'s executive managing director, Michael Madden, announced the

firm's intentions to set up an office in India, "at least 10 Kidder employees of Indian origin lined up outside my office seeking to be a part of it," he says. "They are very intense." Kidder is opening an office in Bombay that will be staffed by two Indian managers from its New York office and several more to be hired locally.

Indian professionals maintain that the Indian network on Wall Street is not at all incestuous. Most Indians say they have "mainstreamed" themselves when it comes to work--they don't do deals together, and there isn't an Indian professional organization for Wall Streeters. That leaves the emphasis on work, and lots of it. "Because Indians don't fit into the stereotypical GQ image of the investment banker, we have to work just that little bit harder to prove ourselves," adds Bhattacharya, who puts in a 16-hour day and travels abroad almost every month.

"FEW LIMITS." One question is how many of the Indians will take their Wall Street expertise and either go it alone or return home. Take Anurag Bhargava, a graduate of the University of Pennsylvania's management and technology program. He worked for Wasserstein Perella Securities Inc. for only two years before deciding to branch out on his own. So at the tender age of 27, he became a partner in a mergers-and-acquisitions boutique called Levin Group.

In two years, the two-partner firm has advised on close to $1 billion worth of transactions for clients that include Georgia-Pacific, Baring Capital Investors, and Del Monte Tropical Fruit. Bhargava argues that small firms can bring their expertise to bear on complex transactions better than bigger ones. "Basically, there are few limits to what we [Indians] can achieve here," he says, as he gazes out the window of his 52nd-floor office in Carnegie Towers, just south of Central Park.

Most Indians still prefer working at large firms, but recruiters on Wall Street are aware that with financial services in India opening up, it is becoming more difficult to attract the cream of the Indian crop to America.

Many Indian professionals in New York are already treading both worlds. As the pin-striped culture takes over Bombay's financial district, some Indians on Wall Street are opting to go home. But the sheer numbers of hard-charging Indians in America's top educational institutions are so huge that Wall Street is likely to feel their impact for years to come.FROM INDIA

TO THE STREET

Firm Firm's profile

Seniormost Indian, Title in India

ALLIANCE CAPITAL Fund

KARAN TREHAN, management

SENIOR VP

GE CAPITAL Consumer

PRAMOD BHASIN, finance,

PRESIDENT,GE CAPITAL other fields

INTERNATIONAL

J.P. MORGAN Securities/

SURESH CHUGH, finance

MANAGING DIRECTOR

MERRILL LYNCH Strategic

PURINDAR DAS, advisory

VICE CHAIRMAN services, debt

and equities,

others

MORGAN STANLEY Fund

MADHAV DHAR, management,

MANAGING DIRECTOR investment

banking

OPPENHEIMER Fund

ROHIT PHANSALKER, management

MANAGING DIRECTOR

PAINEWEBBER Financial

JOE JOSHI, Services

MANAGING DIRECTOR

DATA: BUSINESS WEEK

Namita Devidayal in New York


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