Career Path: Cairn Capital director Tim Frost

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I confess that banking wasn't my first choice of career. I grew up in Nottinghamshire, where mining was the career of choice. Hence, I intended to work in mining too. I had plans to study mining engineering at Newcastle University, but the mines closed before I had a chance to put them into effect, so I changed tack. I joined the army for a year, and then went south to the London School of Economics (LSE), where I read economics instead.

My year in the army was spent in the Falkland Islands. It was 1984 and the war with Argentina was over, but I was part of a lingering air defence force. Had there been aerial attacks, it would have been my job to shoot the planes down. There weren't, fortunately.

After a year scouring the skies in the South Atlantic, I went to London and the LSE. I got a part time position as research assistant for David Thompson, a conservative MP. He was working on the 1986 Financial Services Act. I sat through the committee stages and helped him advise on the Act's contents. It gave me an insight into banks and regulators which has stood me in good stead ever since.

While I was at the LSE I also did a stint with Cargill Investor Services, the financial services arm of the US food and agricultural company. Cargill gave me a short internship on the Chicago Mercantile Exchange. It was great experience; I learnt about the futures market almost before anyone in London even knew it existed.

Cargill was great, but the bulk of their activities concerned agricultural commodities, and by that time I'd decided I wanted to work with financial derivatives. In 1987, and in the last of year of my course at the LSE, I began applying to investment banks.

I was offered, and I accepted, a place as a bond trader at Salomon Brothers in New York. Michael Lewis, author of Liar's Poker was my contemporary, and I'm proud to say I feature somewhere in the book, although I'm not saying precisely where.

I stayed at Salomon's exactly two years. It was a great place to work, but the vibrant atmosphere was a little too vibrant and I decided to move on. In 1989 I joined JP Morgan, and I stayed there for 15 years.

With the obvious exception of Cairn Capital, JP Morgan is the best firm in the world. From 1989 to 1994 I traded bonds for them, until in 1994 I was asked to set up the credit derivatives business. I headed that for ten years, until in September 2004 I left to set up Cairn Capital with Paul Campbell, an old colleague from JP Morgan, and an array of other friends who also happened to be leading lights in the structured finance and fund management markets.

Why did I go it alone? I decided it was time to do something different, and had an inkling it was now or never. I'm working harder than I've ever worked before, but it's worth every minute: building your own company is extremely rewarding.

If you are to do well in banking, hard work is fundamental to success; a quick wit and a ready repartee are no bad thing either. You need to enjoy what you do; the money is nice, but it's by no means the only good thing about this career. Banking is a great industry, and one of the best parts is the vast number of intelligent, stimulating, and fascinating people that inhabit this space.

sbutcher@efinancialcareers.com

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