Why you should care
Because winning Super Bowls and jump-starting African banks have more in common than you might think — starting with Will McDonough.
Minutes into the New England Patriots’ home opener on Sept. 7, 2008, the team’s star quarterback and the 2007 NFL MVP, Tom Brady, crumpled into a heap, clutching his left knee. That day, a torn ACL and MCL would abruptly end the three-time Super Bowl champion’s season, his streak of 111 consecutive starts and, many feared, his career.
Later that same Sunday, U.S. Treasury Secretary Hank Paulson and New York Fed President Tim Geithner unveiled the government’s extraordinary takeover of the struggling mortgage giants Fannie Mae and Freddie Mac. In the week that followed, Lehman Brothers collapsed, the Dow plunged over 500 points, and the global economy’s knees buckled along with Brady.
But for millions of Americans watching the morning shows buzz about Sarah Palin’s convention speech and oblivious to the imminent financial crisis, September 7 was a fine day, even if they don’t particularly recall it.
For Will McDonough, it was unforgettable.
Will McDonough? If you’d read Boston Magazine on that epic Sunday in September 2008, you’d have seen references to a “baby-faced 28-year-old” variously described as Tom Brady’s “best friend,” “agent,” “fixer” and “consigliere” — a “savvy” manager and investor who parlayed his connection to the New England quarterback into a “glittering palace” of A-list celebrities and Wall Street clients.
But the curly-haired 33-year-old’s latest move may be his most audacious yet. McDonough may in effect become one of Africa’s biggest bankers. Along with former Barclays chief Bob Diamond, he is a founding partner in Atlas Merchant Capital, which takes an old-fashioned merchant bank approach to financial services acquisition. Its first venture, in partnership with Africa’s youngest billionaire, Ashish Thakkar, is an investment vehicle called Atlas Mara, which raised $325 million in an IPO on the London Stock Exchange last December. Atlas Mara expects to focus its investment on the African banking sector, particularly companies with operations in sub-Saharan Africa.
It’s not hard to see why Atlas is high on sub-Saharan Africa: Just a quarter of the population has a bank account and fewer than one in 20 has a credit card, but the IMF forecasts economic growth of 6.1 percent this year in the region, with investment expected to rise to 23.2 percent of GDP. And given the expected growth — and the Chinese and Indian investors increasingly making a play on the continent — how and through whom African businesses and consumers gain access to capital will be huge.
It wasn’t long before the rookie caught the eye of the Patriots’ front office — by eating their lunch.
Which is one reason why the descriptions of McDonough as a “fixer” or “go-between” merely scratch the surface of his mysterious, but meteoric rise. For one thing, you don’t go from handing out bumper stickers at Red Sox games to presiding over one of the world’s most ambitious investment vehicles merely by hanging out with Tom Brady. So the question remains: How did one man wind up straddling the incongruous worlds of pro football and high finance?
Precisely what Will McDonough was asking himself in September 2008.
A Kid in the Front Office
McDonough’s entrepreneurial streak began early. At age 5, the Westwood, Mass., native prodded his mother to let him charge residents at his family’s condo complex to move their clothes from the washer to the dryer. By 16, he had converted a $5 per hour job doing promotions for a local sports radio station, WEEI in Boston, into his own event-staffing business that earned him twice that by hiring his own team of high school buddies.
It wasn’t long before the promotions rookie caught the eye of the Patriots’ front office — by eating their lunch. At the 1996 AFC Championship game between the Pats and Ravens, team officials planned to fill the old Foxboro Stadium with placards promoting a local banking sponsor. But come game time, they were greeted by a sea of fans waving “Go Pats!” WEEI cards handed out by McDonough & Co., who had beaten the team’s marketing crew.
“I kind of got yelled at,” recalls McDonough with a hint of a Boston accent. But by his senior year in high school, the teenager was running promotions for the Pats and learning the value of persistence. Later that year, when he was rejected by Boston College, he wrote a letter to the school’s dean providing him with “five reasons he was wrong for denying me entry.” Sure enough, the dean agreed, and McDonough attended BC while continuing to work part-time for the Pats throughout college.
McDonough was earning a reputation as a go-to guy to get things done.
During this time, McDonough befriended an unassuming backup quarterback from San Mateo, Calif. And while Tom Brady was leading the upstart Pats to the 2001 NFL title, McDonough was finishing college and starting full-time with the team, working with the ownership and earning a reputation as a go-to guy to get things done.
McDonough was just 22, “just a kid in the front office,” as he says, but he was getting unbelievable on-the-job training, negotiating endorsement deals and partnerships on behalf of Pats players. When the team’s 6-foot-5 linebacker Willie McGinest, who grew up with Snoop Dogg in Long Beach, needed to sit down with the CEO of Gillette, McDonough was called on to broker the deal and bridge the two worlds.
And when fame flushed Tom Brady from the pocket of his old life in 2002, he too sought out McDonough to be his blocking back. “His life was more and more complicated, his agents were in Los Angeles, his family was in San Francisco,” says McDonough. “So he asked me if I would help him navigate this new world of his stardom.”
McDonough soon started his own management company, negotiating endorsements, partnerships and other deals for Brady and other players and parties, including Brady’s wife, supermodel Gisele Bundchen (McDonough is credited with introducing the two).
Bubbles in Finance and Football
Between 2001 and 2007, Tom Brady and the U.S. economy seemed unstoppable. But the career of a professional athlete, even one as gifted as Brady, is an economic bubble in miniature: a volatile asset inflated by hype, cheered on by adoring beneficiaries, and driven by short-term gains — an asset that will always and inevitably lose value.
Lehman collapsed basically a week after Tom’s knee collapsed.
– Will McDonough
Even before Brady blew out his knee, McDonough had begun to diversify his career portfolio by leaving Boston for New York to start a fund of funds with former Clinton adviser Doug Band at Avenue Capital Group, a $20 billion hedge fund.
“I went from thinking that management and being an agent was my path to realizing that it was only as good as the day before,” he explains. “It could all go away.” McDonough turned his attention to assets and wealth “because if that’s managed appropriately, [then] that compounds and continues to grow, as opposed to an athlete or entertainer whose income or profitability is a decreasing asset.”
But come September 2008, even McDonough’s revamped portfolio looked shaky.
“Lehman collapsed basically a week after Tom’s knee collapsed,” he remembers. “And so, here I was working at a hedge fund and managing Tom Brady, and all of a sudden his knee was gone and the economy was crumbling. And it forced me, and a lot of people, to look around and assess value and long-term security.”
In response, McDonough and his colleagues at Avenue turned increasingly to distressed debt and value investing. In 2010, he ceased managing Brady and left Avenue to plant his flag at Goldman Sachs, where, among other things, he was tasked with managing the money of the firm’s partners and where he befriended another hugely competitive playmaker (and not just OZY’s own Carlos Watson).
Going Long in Africa
Bob Diamond was also very busy in the wake of Lehman Brothers’ 2008 collapse. In his case, the Boston-born investment banker and longtime Pats fan was negotiating Barclays $1.75 billion acquisition of Lehman’s U.S. brokerage arm, a deal that “catapulted Barclays into the top league of global investment banks.”
The deal would also catapult the then 60-year-old Diamond into the CEO’s chair at Barclays in 2011, only to be forced out 19 months later, when the bank was fined $450 million for manipulating the Libor interbank lending rate.
Where others saw disaster, McDonough saw opportunity for a man he had met while at Goldman. As McDonough knew better than most, when an established banker bows out, unlike an athlete, potential opportunities abound.
By all appearances, Diamond embraced not only McDonough’s optimism but also McDonough himself, whom he invited to join him as a founding partner at Atlas.
“We’re operators more than investors,” Diamond insists about the duo’s venture in Africa. “This is a very long-term investment.” Which is why Arnold Ekpe, the former head of the African banking group Ecobank, was appointed Atlas Mara’s chairman and why the company is focused on putting together an experienced team that “lives and breathes the continent.” McDonough in particular has been instrumental in raising money, identifying opportunities and bringing in key personnel.
As usual, McDonough downplays his role, describing his partnership with Diamond as “one thousand percent focused on team-building, on maximizing his reach and his benefit” and ensuring that the Atlas CEO is not “worrying about some blocking and tackling.”
Atlas’ African ambitions give McDonough a chance to test that theory of teamwork on a global scale while embarking on something he sorely missed in the worlds of sports and fund management: a long-term deal.
Still, McDonough is not in Foxboro anymore, and he will need to face the doubts about his own readiness to play at the next level as well as the controversy still swirling around his new quarterback. In some regard, he has traded Brady’s All-American face and reputation for “the unacceptable face of banking,” as Peter Mandelson memorably condemned Diamond for his excessive pay package at Barclays, even before the Libor scandal broke.
But McDonough is nothing if not a team player, and he’s learned firsthand that it’s the regular guys, the role players, who make a championship team. “As good as Tom Brady can ever be as a quarterback,” he observes, “if he doesn’t have wide receivers to get the ball to, he’s not going to succeed.”