Having worked as a commodities reporter in the pit of the London Metals Exchange for the past couple of years, the name "Glencore" and all the connotations associated with it became ubiquitous in my day to day life.
Then, in 2010, Glencore became the second biggest IPO of all time. I knew people who worked there who became fantastically rich. And I don't typically like boring biographies but when I read the book about the guy who founded it (Marc Rich), I found it absolutely fascinating. Unputdownable. It was an extremely well-written, well-researched account of one man's extraordinary life, and it stings of what's wrong with Western bureaucracy, particularly within the United States.
Although Ammann never answers the very deep, probing question, "Who is Marc Rich?" We nevertheless get a very good idea of the image this man wanted to portray to the rest of the world. But even if we are always scratching the glossy surface of a fugitive billionaire, this crafted persona is still absolutely thrilling and exotic in every way.
Ammann's book is also a tiny tribute to Switzerland and its resourceful and practical people. The Swiss protected Marc Rich from prosecution from the FBI at a time when many other countries wanted to see him become toast. As an American newly moved to Switzerland and working for a commodity hedge fund, I can not only identify with the challenges within his industry, but also with the cultural issues he encountered with leaving the US (Not the police chase, of course:) ... but the issues are divisive enough that one can feel the urge to relinquish citizenship just like he did.
This book is excellent. The narrative is clearly structured, relatively balanced in its tone and seems well researched. The book is well organized with chapters corresponding to each significant period or development in Rich's career. The access afforded to the author is clearly extensive; the quality and quantity of original sources, including interviews with Rich himself is impressive.
The central narrative is a classic American immigrant success story. Rich joins Phibro in the mail room, works his way up to run an office, becomes frustrated with the conservatism and short-termism of the firm, then leaves with a few partners to set up the firm (Marc Rich & Co. AG, latterly Glencore International AG) that will come to dominate the industry. The essential story is that of success of enormous proportions created by talent, hard work and a willingness to deal outside the usual channels of trade. Rich's long term perspective, and skill in building and maintaining relationships are identified as key factors in his success.
An under-current of amorality, rather than immorality, is acknowledged throughout the book. In interviews Rich appeals to the neutrality of commerce, leaving political judgments, such as which nation to trade with, outside his domain. Rich's personality never dominates, but comes through consistently. Over the course of the book you get a reasonably complete impression of the outer man. Rich's inner doubts and motivations emerge only fleetingly at key moments in his career; a probable consequence both of his reserved nature, and the time that had passed between the key events of his life and the interviews with him.
The tax evasion case brought by the US authorities occupies a large chunk of the book. The detail is well presented, and the arguments explored in a reasonably balanced way. The author does eventually reach a conclusion: That the prosecution was highly disproportionate, and the offense committed, if any relatively minor. Rich's alleged involvement with Mossad, and the campaign finance allegations raised in relation to his presidential pardon are also addressed in this section. The book concludes with an account of Rich's unfortunate second marriage, the 'coup' that ousted him and created Glencore, and his relatively(!) quiet life since then.
So far, so satisfying. The story is essentially positive, and the major questions over Rich's conduct seem to have been addressed. But... Having finished this book, I met by chance a friend who had dealt with some Rich-controlled companies in the metals business. The picture he painted of the business conduct of Rich's organisation could not be more different from the cute and cuddly, long term value orientated picture painted by this book. Which is the more true I do not know, but that conversation crystalised the doubts I had felt about the author's rosy view, and particularly his very heavy reliance on sources within the Rich / Glencore axis. When one looks at the extremely questionable business practices of some of Rich's disciples at Trafigura, it is hard to believe that his organisation shared none of their vices.
In summary, this is a good book, it is also an interesting story, but I don't think that it is the whole story.
In a world of cookie cutter financial market participants few people have the innovation, the charisma and the determination to stick out. Marc Rich was one of those people. I have read and reread this book a number of times - and frankly the personality of Marc Rich comes through. In parts it feels reflective - and there is a sense of brooding and sense of sadness as if Marc feels he was never properly appreciated by the US. Indeed the tax issues which ultimately led to him fleeing the US feel slightly flimsy.
Daniel Ammann has done an excellent job in laying out how an outsider, fleeing from Germany developed into a global titan striding the world of oil. And then how he fell - and the portrait of the death of Marc Rich's daughter and how he could only attend via conference call is heart-rending.
I was recently reading a Glencore presentation which described their business model (particularly for their marketing business) - and it was surprising how the principles of Marc Rich still permeate the business.
This is a must read for anyone interested in oil, markets or Glencore. But it is also a fantastic story well worth reading in its own right. Highly recommended