For Isenberg MBA graduate Michael Philipp '80, financial acumen is essential in marshaling business as a positive force change. During his two-day visit to Isenberg on September 30 and October 1st, th
For Isenberg MBA graduate Michael Philipp '80, financial acumen is essential in marshaling business as a positive force change. During his two-day visit to Isenberg on September 30 and October 1st, the former Chairman and CEO of Credit Suisse Europe, Middle East, and Africa, described some of his current ventures to an MBA class and to a gathering of undergraduates, MBA students, and faculty. Philipp was also at Isenberg to honor finance professor Hossein Kazemi, who recently succeeded Thomas Schneeweis as the school's Michael and Cheryl Philipp Professor of Finance.
In his presentations, Philipp described the activities of his merchant bank, Ambata, where as chairman and managing partner he helps capitalize and bring best practices to projects in developing nations (principally in Africa, the Middle East and Latin America). Those undertakings, he emphasized, all focus on clean and sustainable energy, food, water, or waste. He and his oldest son, Kyle, discussed First Artists Bank, an initiative with British rock star Dave Stewart (co-founder of the Eurythmics) to empower artists and other innovators with financial leverage, transparency, and best practices. And he recounted some of his family foundation's activities on behalf of environment in Bhutan, Namibia, and Mozambique.
Making a Positive Difference in the Developing World
"I spend 80% of my time on Ambata, much of it on our principal project in Ethiopia to extract clean geothermal energy from the Rift Valley," noted Philipp. "Ethiopia ultimately wants to be an exporter of power throughout Africa's energy grids," he emphasized. "As the first independent energy producer in Ethiopia, we are building roads, installing drilling pads, and bringing in rigs from Iceland and New Zealand," Philipp told the students. The initiative, he said, will build two 500 megawatt geothermal power plants, the first which will be operational in 2018.
A milestone for Ambata was its acquisition in 2010 of 49% ownership in Reykjavik Geothermal, which has state-of-the-art competencies in geothermal extraction. Under the Reykjavik Geothermal moniker, the Rift Valley venture has gained leverage from the Obama Administration as the first and biggest project in its Power Africa initiative. "U.S. AID, OPIC [the Overseas Private Investment Corporation], the Export Import Bank, the State Department, the Department of Energy-they're all our best friends," Philipp remarked.
"My job is mostly about relationships," he continued. "I deal with heads of development banks as well as the presidents of Iceland, Ethiopia, and Tanzania." The Isenberg alumnus assembles waves of debt and equity financing that hedge against his projects' risks and bring leverage to their assets. At the end of the day, Philipp takes satisfaction in deploying his financial savvy and connections on behalf of sustainability and the developing world: "You feel like you're doing something good for the region. And finance is underneath all of these projects," he told his Isenberg audience.
The Isenberg graduate's accelerated involvement in developing nations dates to 2000-2002, when as one of the first two non-German board members at Deutsche Bank, he held responsibility for its businesses in the Middle East and Africa.* From 2005 to 2008, Philipp expanded his reach as Chairman and CEO of Credit Suisse Europe, Middle East, and Africa. And from 2000-2007 he was on the advisory board of the Dubai International Financial Center and the executive board of the Dubai International Financial Exchange.
Philipp's Back Pages
Philipp's first immersion in finance came during his MBA years as a research assistant for two Isenberg professors, Thomas Schneeweis and Joanne Hill. Their innovative work in futures and options and their industry connections helped launch him to a series of positions after graduation with Goldman Sachs. A decade later, the upwardly mobile graduate had become Global Head of Futures and Options with Merrill Lynch.
Passion for the Arts
Before joining Isenberg, Philipp told his audience that he had made a respectable living as a potter in Amherst for six years but wanted added security for his family. A graduate in fine arts who had excelled in painting, print making, and ceramics, he had initially planned to remain in the arts, leveraging his MBA degree toward a managerial position at a museum or foundation, he confessed.
That enduring passion is evident in his commitment to First Artist Bank-Philipp's venture with his son, Kyle, and Dave Stewart. The bank's principal outward face-a mobile app which has been beta-tested among 10,000 users since April and which will go public later this year-will serve fifteen categories of creative professionals. According to Philipp and his son, it will bring them bottom-up retail banking, financial management tools and analytics, new financial networking opportunities, and trusted, transparent financial advisory services. "As an artist there's a business skill set to manage. This tool will get you through it," Philipp told his Isenberg audience.
Reflecting on his own roots as an artist and his empowerment as a financial professional, Philipp encouraged his largely student audience: "You can go anywhere you want from sitting in these chairs!"
*At Deutsche Bank, Philipp had previously held a number of senior management positions, including Chairman and CEO of Deutsche Asset Management ($600+ billion of client assets).
