Patrick Lynch left his associate trading job at Morgan Stanley in London to join a fast-growing start-up three years ago. This move is now so common that it’s bordering on cliché, but Lynch is not a typical Wall Street escapee.
For a start, Lynch was an evangelist for Morgan Stanley during his time there. He represented the bank at recruitment events and guided interns into full-time jobs. He’s even persuaded his younger brother, who is due to start at J.P. Morgan this year, that investment banking is the place to be.
“Unlike most people who leave investment banking, I loved it and continue to believe it’s a great place to start your career,” he says. Unfortunately for the banks, it also helps train people up for the demands of working for a start-up.
“It’s a great training ground, particularly the trading floor,” he says. “You learn professionalism, attention to detail, operating under pressure. Things come at you thick and fast and you learn to prioritise and make the right decisions. These are great skills to have in a start-up.”
When Lynch left Morgan Stanley in September 2014, he hopped on a plane to the Philippines to join former banking colleagues at CompareAsia – a MoneySuperMarket-like website for South East Asia. 11 months later, and he’s launched First Circle, the first online bank in the region that lends to SME companies in the Philippines.
But Lynch’s links to investment banking – and to London – persist. Jorrit Coop, his co-founder, also came from Morgan Stanley, while Tim Glynn, who works in finance for First Circle, was a former Goldman Sachs associate. Other senior members of the team came from Mckinsey and Accenture.
First Circle has 25 employees and is continuing to hire. But, unusually for an online corporate bank in Asia, it’s trying to hire from investment banks in London. It has a ‘venture associate’ recruitment program. The perfect hire, says Lynch, is someone who has two years investment banking experience under their belt in the UK. It's also hiring for a VP of finance and is seeking someone with at least four years' corporate finance experience.
“Part of this is practical – we need great Excel and financial modelling skills,” he says. “But it’s also because of their way of working – they’re used to working in an unstructured environment, they have the right energy and can hit the ground running.”
Lynch is hoping that investment bankers in London, tired of long hours, shaky job prospects and the looming impact of Brexit on financial services, will feel inspired to make the move to Asia.
It’s obviously a big gamble to quit a big bank for a start-up in Manila, but Lynch is appealing to a sense of adventure and bankers’ nose for an opportunity. The Philippines is woefully under-banked – Lynch estimates that 20% of the population have a bank account – and he’s counting on getting in early.
“Companies here generally grow through retained earnings and this is very slow,” he says. “If they want to borrow money now, they try a bank – which won’t lend to them because they have no collateral – or go to a loan shark that charges them 20% per month.”
First Circle is a commercial venture. It has around 200 clients currently and Lynch says that the aim is to have thousands before the end of the year. But, he says, it’s also a social enterprise – not only is the aim to keep small business owners away from exploitative loan sharks, but the money they lend will ultimately help these people feed their families and send their children to school.
How does it work? It has partnered with a lot of local e-commerce platforms to alert small business owners to First Circle's existence. SME business owners who have been refused credit from a traditional bank are sent an email encouraging them to apply to First Circle.
“We can underwrite a loan in the space of a few minutes, providing capital that can help a business grow,” he says. “The strange thing here is that the country is really under-banked, but because it’s a young population they’re also very tech-savvy.”
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