(From KWR Special Report)
A conversation with David Grayson, Co-founder and CEO, Auerbach Grayson and Co.
Interview by Keith W. Rabin
Hello David, good to see you again. Can you tell us about your background and the work of Auerbach Grayson and Co. (AGCO)?
I started in the brokerage business in 1975 and before starting AGCO in 1993 I was CEO of a New York Stock Exchange (NYSE) member firm specializing in selling US equities to European institutions. We were probably the only NYSE firm that had no clients in the US. One of our minority shareholders was AMRO Bank, which merged with ABN Bank, and I become MD of ABN-AMRO Securities in New York. I then met Jonathan Auerbach who had the idea of establishing a brokerage to sell European equities into the US and we became partners and established this firm. We are best described today as a NY-based global firm that specializes in selling foreign securities to major institutions – 99% of what we do is selling securities from outside the US to US clients.
We started with Europe, but early on were introduced to a broker in South Africa. While there were sanctions on at that time, we knew things would change. Mandela was then released from prison. We did very well and decided to expand – and are now in 120+ countries, including both developed as well as frontier markets. Our niche is establishing a relationship with one leading broker in each country. Generally these are firms who seek to do business outside their country and to deal with US investors, but do not want to register with the SEC and set up a physical office.
Since we only do business with one broker in each country, the relationship is totally transparent between the local broker and the client. That allows complete transparency between our clients and the local broker partner. We always try to be the first or one of the first in a country after it opens and that is what initially attracted us to Myanmar.
You just returned from the launch of the new Yangon Stock Exchange (YSX) and in October hosted a luncheon meeting in New York to introduce Myanmar Deputy Finance Minister Dr. Maung Maung Thein to high profile US institutions and investors. What are your thoughts on the YSX and what are the impressions of institutions and other portfolio investors on this market?
I would say that most frontier and emerging market investors are very interested in Myanmar and the opportunities that are present there. One reason is that Myanmar is starting at such a low level and has so much growth potential – which is something you do not see often. Two years ago it was difficult to get mobile service and now the sector has experienced tremendous growth. There are also new car dealers, office buildings, shopping centers, hotels and restaurants as well as the development of large projects and special economic zones. When you couple that with 51 million people in a country about the size of Texas, which possess large reserves of natural resources, that is tremendous. Myanmar is also demonstrating a desire to get close to the West. When they were under sanctions China had an outside influence and now they are moving closer to Thailand, Singapore, Japan, Europe and the US. You are also seeing active efforts to develop an active liquid stock exchange. This is all very positive and attractive to investors. Read more