Supporting ‘The Family’
Historical data shows that most family businesses disintegrate by the third generation. LODH has survived seven generations. Pasha Bakhtiar, MD of LODH shares some home truths with OER’s Ramesh Kumar


Today, if you were to sit at the arrival lounge of Muscat International Airport you cannot miss the sight of those briefcase toting financial wizards from Dubai and beyond on frequent visits. It is said that a ripened fruit or flower in full-bloom attracts a lot of attention. The Sultanate of Oman is one such example. If it was Nigel Sillitoe of Thames Capital who came calling a few weeks ago (See OER, April 2008), now it is the turn of Pasha Bakhtiar.

Both have common goals: To target the Family Owned Businesses (FOBs). The only difference being perhaps that Pasha Bakhtiar, Managing Director of Lombard Odier Darier Hentsch & Cie (LODH) has no compunction chasing billionaires, while Sillitoe was keen on sidestepping the biggies to focus on the lower end of FOBs and pension funds.

The French Revolution Link
The lanky and multi-lingual Bakhtiar’s business card calls LODH the “Private bankers since 1796”. I re-read it to be doubly sure that it was not ‘1976’ but ‘1796’. Catching my curious expression, Bakhtiar says, “Yes, we are in business since the French Revolution.” At the height of that historic era, private capital was looking for outlets to move to safer havens which incidentally paved the way for LODH’s conception.

LODH’s private asset management skill sets led to the financing of American railroads even in the days of yore. “Preserve and grow,” is the simple motto for the residents of Ruede la Corraterie 11, 1204 Geneva, headquartering the ‘Private bankers since 1796’. Adds the visitor from Dubai (well, that’s where the cricket-loving, Swiss-born, Iranian-born Bakhtiar works from): “We’ve no compulsion to risk our clients’ hard earned money.” By the way, LODH boasts of US$135 billion assets under the management kitty.

Bakhtiar is proud that his company bosses did not spend sleepless nights when the subprime crisis loomed large on the global financial markets horizon and sent several financial giants belly up because LODH did not expose their clients’ money to such risks. A very cautious lot, indeed.

FOB to FOB
What’s so great about LODH? Is it not yet another entity soliciting business with a promise to help the target group? Bakhtiar clears his throat, takes a few sips of water and re-crosses his legs on the ground level seating arrangement at the Chedi in Muscat before responding: “I beg to differ with you. You have to understand that we have been in business for seven generations… We ourselves are an example of a family owned business. A successful one at that. Which means we understand the dynamics of FOBs from inside out. Others cannot claim to have this advantage.”

Since LODH is an FOB, it does not have the luxury of passing on losses to shareholders. “We are hit badly if our business is hit. We have to absorb the losses so that our clients remain risk-proof,” elaborates Bakhtiar. Moreover, there is an ethical dimension as well. With the world engrossed in fighting inflation and rising food prices being identified as one of the triggers, Bakhtiar’s bosses in Geneva have decreed that LODH will have no dealings in derivatives on food grain at all. Bakhtiar is proud of his company’s corporate social responsibility act and his face reveals the joy of helping the world indirectly!

Gore Connection
Bakhtiar is in town to push fresh financial products of Generation, an asset management company co-founded by Al Gore, the former US Vice President and David Blood, former CEO of Goldman Sachs Asset Management. LODH has been entrusted with the distribution Generation products in the Middle East. Generation’s corpus currently stands at approximately $350 million. Bakhtiar is currently soliciting business for PE funds to fund Small and Medium Enterprises across the globe that pay heed to global warming and are engaged in eco-friendly business. With Al Gore in the picture, a global warming rider is inevitable. An amount of $150 million is what is being targeted.

Another $100-million Green Technology Fund is also on the anvil to promote solar panels and other eco-friendly businesses. Right now the focus is on funding such businesses in Europe, but Bakhtiar claims this spread will be enlarged over a period of time.

Bakhtiar, who joined LODH in 2003, has been a regular visitor to Oman in search of business. He claims that he has a clutch of FOB clients in the Sultanate, but declines to share details. It takes him roughly six months to a year to woo and win over a client. But the time spent does not matter to him because, for Bakhtiar, patience is a virtue and he passionately chases it with full vigour.

History reveals that most family businesses disintegrate by the third generation. LODH has survived seven generations. Truly remarkable. Indeed, there is something special or unique about its ability to preserve and grow. No doubt, it has the right credentials to advise FOBs not only in the Sultanate. But everywhere.

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