(originally written May 29, 2020)
I’m wearing this watch today, Rolex Submariner ref. 116610V, as a bit of a reminder. We had a trade execution call scheduled with a west coast client that is somewhat sentimental for me.
Here’s the backstory: When we restarted our primary market derivative marketing effort, this client was one of the first that I visited in person, as a member the Capital Solutions Team. It was 2016. For years following the financial crisis, Citi was in wind-down mode with respect to our municipal issuer derivative portfolio. There was almost no new execution during that period. I held various roles on the desk, all within munis, covering the structured reinvest portfolio, trading derivatives to hedge our issuer book, covering the Citi muni bond investment portfolio hedge program day-to-day, but almost nothing in terms of new issuer derivatives.
Then we started to see trickles of new issuer derivative activity starting around late 2014, early 2015. Clients were coming to us asking if we could execute trades on their behalf. Most clients were burned by trades that went sideways during the crisis, almost no one wanted back in. Citi didn’t want back in. But clients were asking if we could trade with them. New business! We didn’t know how to execute new business! 90% of our derivative marketers were gone. No new marketing materials has been produced in years. Literally, the pitch decks that we needed to create to pitch and market new transactions were all pre-crisis, dating back to 2005, 2006, 2007. Everything felt outdated and foreign.
We didn’t really have a plan to execute new business either. We needed to go for special one-off approval. Our senior managers literally said “you guys really have guts coming here to try to get this approved.” Citi had been burned during the crisis as well. CVA, DVA, OIS, EUR/USD, FVA, FVL, CSA… none of those concepts existed pre-crisis, but they became all too real during and after. Derivatives went from being simple and vanilla to complex and complicated, unknown modeling risk reared its ugly head. Everything became exotic. Managing and hedging the exotic. The entire book was moved into Citi Holdings… to let the P&L gyrations, the reserves, the risk management reside somewhere else. Not in our core business. It was toxic. Too hard to manage. Too many unknowns. Too unwieldy. Not core. So when we came back and said, “we want to do this again, clients are asking, we can do negotiated business, we can manage the risk,” they were skeptical. But they approved.
We put our toe back into the water. Most of our activity in those days was reactive, in response to client inquiries, or managing existing trades in legacy portfolios. But starting in 2016 we saw opportunities for new business and we went on the offensive. I’d had a few meetings, with varying degrees of success (read: no success). I honed in on a target and we pushed a banker for an in-person meeting with our west coast client. We were their senior banker for years. They had an existing deriv portfolio with Citibank (and no other CPs). There were good opportunities. We wanted a meeting to talk to them about those opportunities. After a lot of internal pleading and back and forth, a meeting was scheduled. We created new materials, I booked my flight to southern California.
Let me digress again: I decided to wear my 116610V on that trip and to that meeting. It’s a big watch, both in terms of size and personality. My father had recently given me that watch. I asked him if I could borrow it. I had recently purchased a Rolex Air-King to celebrate the birth of my son Daniel. That’s a great watch, but it wears more like a vintage piece at 34mm in diameter and about 12mm thick. I saw the green sub at my father’s apartment, sitting in a change bin, seemingly discarded. I noticed it and picked it up. Was this a Rolex sub? A green sub? What was it doing here, amongst the change and pens and scattered paper clips? Where did it come from? My dad, a sub? He’s much more of a dress watch guy. It just seemed so out of place.
I tried it on. It felt huge, but it felt sharp and robust as well. It felt solid and heavy. There was a tactile satisfaction. The hands and indices popped. The date magnifier was pronounced. This was unmistakably a Rolex. It was green? Why? It was curious. I left it in the change bin and let it be. But it festered in my mind. Some weeks later, I engaged my father in a discussion over text about that watch. I inquired if I may be able to borrow it. Here was my story: I was thinking about the possibility adding a sport watch to my collection and I was interested in getting a feel for the size. Again, it felt large for me at 40mm in diameter and 13mm thick. That would be my largest watch up to that point in my life by far. Somewhat surprisingly, my father agreed to allow me to borrow the watch, and the next time I saw him, which happened to be at a gathering at my Uncle’s home in Keyport, NJ, on Father’s Day, my dad pulled the watch from his pocket, unadorned, and handed it to me. That was in June of 2015. My first father’s day as a dad myself (my son was born that January).
I wore the watch from time to time. It felt large and it felt like it wasn’t really mine. Felt too big and too blingy for the office. Wasn’t my style. I wore it on the weekend, in the pool, at the beach. It’s a sub, wear it in the water! It grew on me a bit. At some point months later, my dad asked me to keep the watch, to take care of it, and to give it to Daniel (my son) at the appropriate time. I don’t think he felt like the Air-King was worthy. Well, whatever the reason, the Green Rolex Sub was now really mine (for now)!
So in mid-2016, when I was planning this trip out to the west coast to see a client, I decided to put on the sub. Was it me? What would the client think? Was it “too much?” What, exactly was this projecting about me? I told myself that I needed to be confident enough to wear it. I deserved it. It was a gift from my father, that would someday be given to my son. I never would have picked it. It picked me. This is who I was. I could deflect any criticism about it. I could wear it well. I could be professional and polished and put together. I could have taste and grace and humility. I could pull it off. I could be that guy. So I wore the watch.
I remember the meeting well. I got into town the night before, met one of our bankers who was also traveling into town for a drink at the hotel bar (I also had dinner there). We had a few beers, caught up. Got to bed early to rest up for the early meeting the next day. When we got to the client’s office in the morning, they came into the room and asked, out loud, “I’m wondering why we are meeting.” It was as if to say, you had better be here for a reason. Our clients’ time is valuable and it mustn’t be wasted. Yes, we flew in 2 directors from NY and 1 from Chicago, but that’s our time. That’s not the clients’ time. This is what we do.
It struck me in that moment that we had an opportunity to frame “why we were there.” The comment could have been taken as a jab, but I saw it as an opening. We were able to frame the conversation. There are opportunities. We are here to talk to you about them. We walked them through our materials, which created a framework for “why we were there.” We look at markets. We look for opportunities. We see them. We overlay those opportunities against your goals and existing capital structure. This is where we see applications. They liked the ideas. They told us “great work” as we left. We had follow ups. We had a trade. We executed later that year on the ideas we presented that day. It felt like a new era was upon us. We could craft our narrative, present ideas, win business, execute on our clients behalf, earn trust. We created that opportunity. We got the meeting. We developed the materials. We presented it, explained it, brought it home, got it approved, and executed. We could do this. We can pull this off.
Today, this morning, we did another trade with that client, our third since that trip. I wore my green sub. It felt fitting.
