Mr Vikram Pandit strides in and even as he affects a New Yorker's bluff demeanour, your first instinct upon taking in his slight frame and academic don looks is to wonder: Did the fortunes of Citigroup, the world's largest financial services company, really rest on these slim shoulders for five critical years from 2007, when the global financial crisis brought it to its knees?
The story of those times has been well told. Mr Sandy Weill, the long- serving boss of Citi, had turned it into a sprawling conglomerate on the likes of what Jack Welch did with the engineering giant General Electric. The unwieldy empire - it apparently even owned BMW dealerships in China - sorely needed top management talent and had acquired the hedge fund Old Lane LP primarily, it is said, because then Citi chairman Robert Rubin wanted to get Mr Pandit and partner John Havens on board.
Sure enough, seven months after that transaction closed in April 2007 - Mr Pandit himself reportedly netted some US$165 million from selling Old Lane - he was given charge of Citigroup.
Mr Pandit, 50 years old at the time, took control of Citi just as the crisis smacked straight into its gut, roiling its stock and compelling it to go hat in hand to the United States government for a US$45 billion bailout. In the austere tradition of the sages of India, the land of his birth, Mr Pandit, whose name translates as religious scholar, said he would accept no more than US$1 a year until he'd turned the group around.
That did happen. Some US$800 billion of non-core assets were sold on his watch as he pursued a back-to-banking basics strategy. The US Treasury Department, which in 2009 had converted US$25 billion of the bailout funds into an equity stake in Citi, walked away with a US$12 billion profit when the shares were sold the following year.
In January 2011, a Citigroup filing to the Securities and Exchange Commission said Mr Pandit's base salary had been lifted from US$1 to US$1.75 million since "the board is very pleased with the progress that the company has made under Vikram's leadership".
As much as performance, who you know matters in the high reaches of corporate life. Mr Pandit lost an ally when Mr Richard Parsons stepped down as Citi's chairman in early 2012, making way for Mr Michael O'Neill, who'd apparently once been considered for the CEO's job. According to The New York Times, after months of quiet manoeuvring with other directors, Mr O'Neill summoned Mr Pandit to his office and told him he'd have to leave. Mr Pandit did not fight and both sides put out word that the parting was voluntary.
I was curious to know what Mr Pandit had been up to since and I recently got the opportunity to ask him directly when he was in Singapore to speak at the GIC Insights Conference.
"The innovation and business formation around financial services have been incredible," he told me. "In many ways, I've been right in the middle of that change and watching. It has been an exciting time."
Orogen Group, which he now heads, is an operating company that was created by Mr Pandit and Atairos Group to identify and leverage the unique opportunities created by this shift in the financial services landscape.
It sees itself as both investor and builder in an environment where all the regulations since the financial crisis have created a much more level playing field for both incumbents and challengers. At the same time, all the technologies that have affected other industries - artificial intelligence included - have arrived in finance as well.
Mr Pandit explains that banking is going through a process of "unbundling", moving from large, vertically integrated structures to decentralised, specialist providers that cater to particular customer needs. It is akin to what happened in mobile telephony, once dominated by Nokia Oyj of Finland, a vertically integrated firm that not only created its own hardware but also the software and most else besides.
"And then this computer company called Apple comes along and turns the model around saying it's really about an operating system, technology providers and apps," he says. "Something similar is happening in banking and we want to invest in those operating systems, those apps."
Clearly, Mr Pandit sees an opportunity to best Citi, some of whose stock he apparently still holds, at its own game. I tease him with the suggestion that fintech is really nothing but regulatory arbitrage.
"Those that are inside the banks think that," he responds strongly. "Where you stand depends on where you sit. Those outside think fintech is about serving customers. None of the companies I have invested in would exist if it was truly just arbitrage."
While the talk is all about disruption, incumbent players, needless to say, have the opportunity to modernise in time. Disruption, after all, does not happen in a day.
I asked which banks, and territories, he reckons are best positioned in the current landscape and he mentions Sweden, the Netherlands and Estonia.
Mr Vikram S. Pandit, 60, is chief executive officer and founder of Orogen. He was previously CEO of Citigroup from 2007 to 2012.
Prior to that he was a founder of Old Lane LP hedge fund, acquired by Citigroup in 2007, and president and CEO of Morgan Stanley's institutional securities and investment banking division.
A naturalised American who was born in India, and raised in India and Kenya, he moved to the US at age 16 to study engineering at Columbia University, finishing with an MS in Engineering at age 20. He later did an MBA and PhD at the same university.
He and his wife, Swati, have two children, Rahul and Maya.
The Orogen Group is an operating company created by Mr Pandit and Atairos Group to identify and leverage the unique opportunities created by the shift in the financial services landscape. Its approach is to make significant long-term strategic investments in growth companies with proven business models and build value as the industry evolves.
"In Singapore, Piyush Gupta and DBS have done a terrific job at modernising," he says.
What of the other key element in the equation, the regulators? Monetary Authority of Singapore (MAS) managing director Ravi Menon is often heard saying people don't need banks, only banking services.
"I am not saying this because I am in Singapore," he says. "But with their regulatory sandboxes (that allow experimentation), Singapore is in the top decile of locations interested in guiding the future. MAS has embraced the notion of competition being good for the customer."
He also has praise for forward-looking Bank of England regulators, who, he says, will hand out a bank licence if you produce a credible business plan. The Reserve Bank of India too is highly accommodative of innovation and the nationwide unique user identity system as well as a common tax code now in place will help things along in that country. As for China, its scale dwarfs anything happening elsewhere.
Through Orogen, and on his own, Mr Pandit has invested in a clutch of companies and he makes particular mention of a few. There is Virtusa, a Boston-based IT-services consulting company with marquee clients that he thinks is at the cutting edge of the tech revolution in financial services. Another is JM Financial, a rapidly growing Indian non-bank financial services group now elevated by the regulator to the status of Sifi - systematically important financial institution. A third is a US credit card business called Fair Square Financial being built from scratch.
Fair Square is pitched at 75 million underserved American households that fall between the prime 125 million most banks target and the 50 million sub-prime they tend to ignore.
"They are good credits but not just prime, and where they used to have three cards in their wallet, they now have just one or two. In this age of digital marketing, data and cloud, we think we can create the stack very well. It's making very steady progress and I am very excited about the business."
As a vaunted hedge fund boss, Mr Pandit is in some ways a guru of risk. The Chicago Board Options Exchange Volatility Index, better known as VIX, is treading at levels just above that seen in early 2007, suggesting investors may be sanguine about risk.
Mr Pandit notes that a period of prolonged post-global-financial- crisis optimism, sustained central bank buying and low interest rates may indeed have pushed stock markets up.
"There may be some over-valuations here and there but the kind of risks we are concerned about are not systemic ones."
Married to Swati, a housewife, Mr Pandit says he feels no less invigorated now that he's turned 60. He says he loves to travel in his spare time - Myanmar is one country he hasn't yet been to - and spend time with his children.
Both kids, it would appear, have a social conscience. Son Rahul, after two years as an analyst at Morgan Stanley, is now at Harvard Business School and focused on the social aspects of development. His daughter Maya is at Columbia University's School of Public Health, and deeply involved with mental health issues in the developing world.
Were the five years at Citi the period in his life he'd worked the hardest for the least reward?
Mr Pandit says it was a time everyone was called upon to make sacrifices, starting with customers who lost homes. As for himself, he is grateful he had the personal means to work for no compensation.
What about the manner of his departure from Citi - does it rankle?
"Frankly, the job I had to get done was done and it was time for a transition," he says. "Perhaps the way it happened wasn't the way I would have chosen it. But that's ancient history. I can only look back with a sense of pride that I left the bank with all the strategy and structure in place. And that's still there. That sense of accomplishment dominates anything else."
A version of this article appeared in the print edition of The Sunday Times on September 24, 2017, with the headline 'Ex-Citi boss eyes Apple of banking'. Print Edition | Subscribe
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