What does it take to achieve the perfect banking career arc – in at 20, out by 40? And is this still possible? We spoke to Adam Knight, who’s done it. After graduating from Cambridge in 1996, Knight joined Goldman Sachs as a commodities trader. He spent six years as an MD in commodities at Goldman Sachs before becoming global head of commodities at Credit Suisse for four years. He left the City in 2011 and is now an angel investor, working from home, doing the school run, and building a ‘portfolio career’ of stimulating, saintly and smart investments. If you want to be like Adam, this is what you need to know….
What made you decide to go for a career change out of banking?
It was mostly about opportunity. I didn’t make a conscious decision to leave, but the business I’d built –a partnership between Glencore and Credit Suisse – was dissolved as a joint venture and transferred to Credit Suisse and I suddenly had an opportunity to leave, which I decided to take.
Do you still trade?
Do you miss it (trading)?
Does that surprise you?
I loved trading while I did it and I was fortunate to work with great people at great organisations. At that time, trading fitted with my lifestyle, but now that I’ve got a young family being woken up in the night because I’ve got [trading] positions that have moved isn’t something I’d want.
I still get the intellectual challenge of backing my ideas as an angel investor, but I don’t have the 24 hour nature of trading and that suits me.
Before I left banking, I’d been transitioning away from being a trader anyway. – I’d been a trader and then a trader manager and then a manager with no direct trading responsibilities.
When you changed career, you set up Social and Sustainable Capital. Did you feel that you wanted to give something back?
I was very lucky in banking. I had a good career and rode the wave of the financial markets at a time when it was personally lucrative to do so. But I also saw how markets had been mismanaged by some in the lead up to the financial crisis and how this had damaged the reputation of financial services and the perception of markets. When I left, I wanted to show that capitalism and markets could be a powerful force for good that can generate specific beneficial social outcomes if they’re directed in a particular way.
So, SSC was set up with a political and intellectual purpose in mind?
Political no, but intellectual yes. We wanted to show that markets can help solve some of the issues that charities are currently engaged with. Charities can then focus resources on some of the more intractable problems that cannot be addressed through an adapted business model. For me, therefore, it was a business and intellectual challenge, but it was also pragmatic – about the most sustainable way to solve some of the big social issues of our time.
Did you know that you wanted to go into sustainable investing when you changed career?
No. I had a year’s non-compete, so I spent some time at home with my family. I also volunteered with some charities and realized that I couldn’t actually help them that much. After a career in trading, I didn’t really have the skills that a charity needs and I didn’t want to go back and develop new skills from scratch.
Instead, I decided to try and find a way to use the financial skills I’d developed to have a positive impact, and that was when I discovered Impact Investing. It allows me to maintain the intellectual challenge of investing, but to do so whilst benefiting more than just myself and my family.
What’s the long term plan with SCC?
Ultimately we’d like to deliver strong enough double bottom line returns (financial and social returns) to attract more investors to the sector to help social investment become a more established asset class and thus enable social enterprises to scale and deliver on their potential. At the moment we’re in the process of making our first investment and have already involved our first bank (soon to be announced), which is providing debt to the funds.
I suspect a lot of other bankers would like to do what you’ve achieved. What’s your advice to them?
I lucked out. I hit the jackpot early – I was 37 when I left the industry in 2011 and now I’m 40. I’ve just been incredibly lucky. It’s much harder to make money in banking now than it used to be. It’s a tougher industry – and that’s probably a good thing. However, while people who worked in banking for the easier times will probably say things aren’t so good, if you’re coming in fresh now it’s still a great career – particularly compared to many others. You’re at the cutting edge of the world economy and you’re working with some talented and interesting people and businesses.
You’ve also invested in Coinfloor, can you talk about that?
Coinfloor is a Bitcoin exchange. I think digital and crypto currencies offer a fascinating opportunity. I didn’t want to simply buy Bitcoins, I wanted to be involved in the development of the currency. Coinfloor have a very good model, with a lot of emphasis on security and compliance, which is important if you are trying to build mass acceptance for a new payment method – particularly one that is mostly being driven by start-ups.
Where do you see yourself in 5 years?
I am trying to build a portfolio career where I have active business, social investment and charitable roles. In addition to Social and Sustainable Capital and Coinfloor, I am a trustee at the Roundhouse and on the board of a couple of other companies I have invested in. Between these I feel that I have a good balance between using my existing skills whilst also having to learn about new sectors and new business models.
It’s very fulfilling. I’m busy, but I manage to keep a fairly flexible schedule. I take my children to school most days and then work from home and try to pick them up again as often as possible. If I could have designed my life, this is how I would have arranged it and I feel very privileged to be in such a position.
What advice would you offer to other bankers interested in angel investing?
There’s a pretty good network of angel investors in London, but the skills are quite different from liquid markets trading. As such, I don’t invest in companies unless I know someone who’s involved and I like to piggy back on other people who have better investing skills than me – VCs like Passion Capital and Dawn Capital for example.
Angel investing isn’t a short term way of supplementing your income – it’s a long term investment strategy. I haven’t had any exits from my investments yet. They mostly seem to be going well, but only time will tell whether I’m right about that…