Squash in Lagos, Beers in Lusaka

On Working with Jonathan Auerbach (1942-2012), a Tribute

Ryan Floyd

Sep 20, 2024

At a mere 23 years old, newly engaged, I spoke to Jonathan Auerbach on the phone and eventually in his offices in New York. I didn’t know much about finance or investing, or the difference between the income statement and the statement of cash flows. But he and David Grayson were willing to hire me and give me a remarkable chance in life.

Backing up, I had been working in Mumbai for Mahindra and Mahindra, a big industrial Indian company. I was helping set up an international business exporting high quality pomegranates and grapes from Maharashtra to continental Europe and Southeast Asia. I liked my work, but I knew that eventually I had to get back to the USA. I was engaged with a plan to get married when I returned. And my country called to me. I had the wild dream to try to live in America while working in international business in some capacity, harder than it sounds.

I had been spending about an hour each evening after my long bus rides back to my Ghatkopar apartment calling companies, investment funds, and brokerage businesses in USA that might be willing to hire me. I was trying every contact that I could find in the days before LinkedIn. In each case, once I reached a decision-maker, he or she never understood why I had chosen this unusual path, moving to Mumbai right after college rather than working like my peers in consulting or investment banking. I wasn’t very good at Microsoft Excel and couldn’t make any “models.” But I had energy, and I was able to learn. I think I was spending about a third of my very modest income after tax and rent on Skype, calling hundreds of people in America from my hot Mumbai living room, mapping out the people’s names on a spreadsheet of whom I should call back and when. I remember taking one promising call from a VP of “Strategy” while I was shopping for mangoes from my Nokia cell phone in a wet market and the guy had no idea how to place me in the universe. I didn’t get a call back. One person (thanks, Jim!) introduced me to Jonathan Auerbach at Auerbach Grayson who immediately understood what I had been trying to do. When I talked about wanting to get “on the ground” experience in life, he recognized a kindred spirit.

Jonathan had been working as an institutional broker in New York for a long time. He founded Auerbach Grayson with David Grayson and took the company to impressive levels. As an American business, his firm had relationships with brokers in over 100 countries and enabled American institutional investors to trade with them wherever they wanted. As I later learned, they were one of the early pioneers investing in South Africa after apartheid ended and Eastern Europe after the Berlin Wall fell. I ended up getting a job with Jonathan’s firm as a salesman covering Sub Saharan Africa and eventually South Asia.

I appreciated that Jonathan gave me that opportunity on that desk. Before I took the Series 7, I really didn’t know very much about investing. I remember asking someone what a “Security” was and how the word was something different than “Stock.” But I knew how to work hard, and I liked to listen (and talk). I studied hard for the Series 7, read hundreds of books on investing (and sales), later enrolled in the CFA program, and jumped into the role with energy and gusto.

When I started on the job, Jonathan and I embarked on a four-week trip through Sub Saharan Africa. I could see his enthusiasm at work. We began in Mauritius and worked our way through Nairobi, Kampala, Dar Es Salaam, Johannesburg, Lusaka, Harare, Lagos, and Accra and met with CFOs and CEOs of so many different businesses. I was so inspired by all of the economic activity happening in each place. I began to learn quickly. In each case, we tried to have a “real” meal, not just fancy food at the hotel. We played squash in Lagos many times, a great highlight of life. He liked a good beer or glass of wine, always remarking in the weak currency countries how cheap things were. He often would write that a steak dinner with a glass of wine in the country only cost around $20.00 or so. And I appreciated the lesson that prices of things as you touch and feel them give some indication as to the strength or weakness of a country’s “real effective exchange rate,” although he didn’t use the language. In Tanzania, I remember so vividly, we went to a clothing market. He bought a flashy jacket and encouraged me to do so. I think it was black with Tiger’s stripes. Somehow, he looked incredible in the jacket while my friends and wife thought I looked completely ridiculous. We tried to go to a local art gallery in each place to see the pieces, check out the prices, and also perhaps purchase them. I still have some art from those trips on my walls.

During our first trip to Nairobi, we had dinner with various business leaders and their spouses. Someone brought up some opinion about government ownership or globalization, and I didn’t agree with the comment at the time. I felt the childish need to disagree with the person and prove my point. Like a papa bear to a cub, Jonathan didn’t rebuke me for my tone but gave me a gentle look and quiet comment. I quickly got the point: we may not necessarily know the truth, and we shouldn’t show up as Americans in other countries as if our perspective or opinions are any better than theirs. Each country has its own culture and history that we should respect. And, of course, arguing or debating in the company of strangers is extremely bad manners. The lessons stuck.

I liked his little newsletter called “Emerging Bits and Pieces,” where he would write a quick note to people about the prices of this and that from his travels. He always included local color about the place which made the reader impressed both with his then-location and also his zest for life. He saw that each country had something almost ageless and permanent that made it special and worth notice to a traveler or businessperson. Ivory Coast boasted the largest port in West Africa. Istanbul held ancient roots as a regional trading hub. Nigeria had so many hard-working entrepreneurs. Jonathan encouraged me to travel to Sri Lanka during the civil war and Pakistan and Bangladesh too, trips that I thoroughly enjoyed. The lesson was that reality and American perception are often very different from one another. He taught a lesson that there was always something going on in the world. You just had to look for it. These lessons were incredibly helpful when I started my own asset management business in 2008. He gave me many lessons and words of encouragement.

Jonathan gave me an incredible amount of autonomy and support as a young man at his firm, and I loved it. I enjoyed calling the world’s greatest fund managers to talk to them about my new crazy ideas and also to listen. I asked them what they liked about their jobs and their lives, their favorite places in the world, and the financial ratios that they appreciated the most. And sure enough, you can learn a lot about people and an industry if you just listen. I met some incredible people with fascinating perspectives on life and thank Jonathan for this experience.

I liked Jonathan’s mantra that you had to “reinvent yourself” sometimes. When he had hired me, he had a thick beard and looked a little bit like Vladimir Lenin. One day he came into the office without a beard, clean shaven, and everyone was shocked. Just like wearing his Tanzania jacket, he said “sometimes you have to reinvent yourself.” He hadn’t really changed his values or anything like that, but the new look seemed to provide some new energy to the next chapter of life.

I remember vividly when I learned that he had lung cancer. Jonathan called to let me know. I was shocked. I wrote him a short note of encouragement, not realizing the pace of these things. And within months, he had passed away. He was a very special person to me, and I think about him often. His energy and zest for life were infections, and something that I was lucky enough to catch early.

A tribute to Jonathan Auerbach, 1942-2012

This document is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase any securities or investment advisory services. I am the Portfolio Manager of Barca Capital, LLC, but the views I express are my own, not necessarily those of my firm. This post is intended to be light-hearted. Please don’t make actual posts here about contemporary politics.