The man from the Pru: Brilliant or just lucky?
Tidjane Thiam was 'a dead man walking' after his $36bn bid for AIA foundered. But now he's the toast of the City
Thursday 14 March 2013
Tidjane Thiam wasn't always flavour of the month in the City of London. Three years ago it seemed his glittering career was about to end in tatters after Prudential, the insurance company he had run since 2009, pulled the plug on a $35.5bn (£23.8bn) deal for rival AIA, leaving investors nursing £377m in fees.
At the time, fund managers across the Square Mile called for his head, claiming in particular that his decision to pursue a non-executive directorship at Société Générale at the climax of the process was an example of why he should not be in charge of a FTSE 100 company.
Fast forward to March 2013 and the picture could not be any different. Prudential saw pre-tax profits rise 54 per cent to £2.8bn in 2012 on the back of impressive growth from its Asian business. After raising the company's full-year dividend by 16 per cent to 29.19p, Mr Thiam is now the toast of analysts and investors alike.
Such a dramatic turnaround raises the age-old question: is he brilliant or just plain old lucky?
He first came to the attention of the City in 2002 when he joined rival insurer Aviva from the management consultancy McKinsey. At the time, the Ivorian realised he was something out of the ordinary, with his domestic political career in Africa having been ended in a military coup. Reflecting on his appointment some years later, he said: "I was tired of the usual answer, which is 'we like you, you are a great guy, but this is a division with 10,000 employees, and we just don't think they would understand having someone like you at the helm.' I was told that a number of times and I was getting a bit tired."
"I said, 'Frankly, you need to tell them that you found someone who is black, African, Francophone and 6ft 4in."
His Aviva appointment did not go unnoticed and he was tipped for great things, having a rare mix of intelligence, wit and humour. He was swiftly promoted within Aviva, and even played a key role in the company's ill-fated acquisition of the US insurer AmerUs, which ironically led to Aviva posting a £3.3bn loss last week.
It wasn't long before Prudential came sniffing. Just months after joining Aviva he was appointed by Prudential as its finance director, in prime position to replace chief executive Mark Tucker.
The timing of Mr Thiam's arrival was a key moment. Not only did he join Prudential – a company that had built up a foothold in Asia under Mr Tucker – but he left behind Aviva, which would go on to flounder. Brilliant or lucky?
By 2009, Mr Thiam had succeeded Mr Tucker as boss of Britain's largest insurance company. Prudential was in much finer shape than its peers, and it became almost inevitable that it would make another move for Asia-focused rival AIA.
In March 2010 that $35.5bn deal was announced. It was the first real test of relations between a UK company, its advisers and shareholders since the onset of the financial crisis and, mindful of RBS's disastrous deal for ABN Amro, investors made it clear they would be no pushover.
Within months it was all off – ruined by executive mis-management and disagreements over price. Mr Thiam's SocGen debacle was a particular sticking point, with one investor at the time describing him as a "dead man walking". But he survived.
Yesterday's news showed just how far he has come over the last few months. A week after Aviva revealed a £3.3bn loss and deep cuts to its dividend, Prudential's share price now sits at more than £11, while Aviva's languishes at 324p.
Brilliant or lucky? The answer probably lies somewhere in the middle, according to experts.
"Tidjane inherited a business dominated by Asia put together by Mark Tucker, so in that respect he was lucky," one City expert said. "The Asian markets have also fared considerably better than in Europe. However, he's a hard worker and has taken the company to new levels. As well as being charming and personable on the outside, he is an internal taskmaster – the perfect mix. There's no doubt he has great talent."
Another source added: "I'd say he was certainly lucky to escape the vicious coup in the Ivory Coast.And he was unlucky not to get AIA. He's got clear ideas and a terrific grasp of numbers. The brilliance outweighs the luck, but both work hand in hand."
The next few months are likely to determine whether he can ultimately outdo his predecessor by delivering a lucrative break-up of the insurance group, widely expected once it meets the challenging Asian profit targets it set itself in late 2010.
Whether this happens or not, Mr Thiam's time as the Man from the Pru will be remembered for many years. Brilliant? Yes, but also pretty lucky.
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