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Online Original: Gyorgy Jaksity/Hungary: Independent Thinking


Cover Story -- Voices of the New Europe

ONLINE ORIGINAL: Gyorgy Jaksity/Hungary: Independent Thinking

Meet Gyorgy Jaksity, and you'd swear the political and economic changes that turned Eastern Europe upside down a decade ago were timed just for him. At 32, he's part of a generation that came of age just as Hungary became a multiparty democracy and opened fully to market economics. With no need to unlearn bad habits, Jaksity leapt straight from adolescence into a key role in giving birth to Hungary's capital markets. As chairman and managing director of Concorde Securities, Hungary's top independent brokerage, he's among the stars of the Budapest Stock Exchange.

There's a paradox here. Jaksity's swift rise is a byproduct of Hungary's gradual revolution. Unlike Poland or the former Czechoslovakia, where the shift to market economics was sudden, Hungary's transformation was one of subtle shifts and incremental freedoms, achieved throughout the 1980s. Budapest's political collapse of 1989-90 simply confirmed changes already under way. Jaksity had discovered corporate finance as a student well before the Berlin Wall fell. He began by devouring Western business publications in the library at the Karl Marx University of Economics, which had begun subscribing to them.

At 21, in 1989, Jaksity was a rarity -- a local expert in Western markets. Finance Ministry officials -- then drafting plans to create capital markets -- asked him to sift through and report on the reams of English-language advice streaming in from the West. Over the next three years, he was a part-time consultant at the Budapest office of Girozentrale Investment, the German investment bank, where he assisted in Hungary's first share listings; at ibuSz, a travel company; and at Fotex, a retailer. From there he moved on to a training stint at Price Waterhouse. Jaksity also married, and his wife, Kinga, gave birth to twins in October, 1990. A year later he earned his economics degree.

Those years were a true revolution, he recalls. "But I was so preoccupied with things going on around me, I didn't have time to think about it."

Concorde Securities was born in 1993, when Jaksity teamed up with two partners and a few local backers, who kicked in $600,000. The backers, who included Fotex, tripled their money in Concorde's first year. By concentrating on sound research and creating specialized products for institutional investors, Concorde's sales regularly rank in the top five among Budapest brokerages. Even last year, when the Russian crisis sent investors fleeing, Jaksity could boast profits of $1.3 million on revenues of $4 million, and a 28% return on equity. "His reputation is outstanding," says Tom Erdei, head of Hungarian research for Warburg Dillon Reed.

Having never taken orders, Jaksity fiercely guards his independence. Although he and his partners remain minority shareholders in Concorde, they constitute the entire board -- and insist on a no-meddling policy from their investors. The result was evident last year, when many brokerages cut staff following the Russian crisis. Jaksity, eager to protect his investment in trained employees, let go of no one. "We weren't ready to sacrifice people," he explains, "and our independence allowed us to act rationally."

Independent thinking was not exactly the key to the kingdom in the old Hungary. But Jaksity seems matter-of-fact about his self-reliance. He has used both his good timing and talents to go far in the new Hungary.By Christopher Condon in Budapest


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