Every once in a while, says New York magazine, there appears a character who floats above “the wretched, amoral, meatheads” of Wall Street. Andrew J Hall is such a man.
The UK-born commodities trader, who heads a “secretive unit” at Citigroup known as Phibro (so secretive there are no publicly available pictures of him), has made a personal $250m killing from oil futures as well as generating 10% of the bank’s total net income last year.
Yet he maintains a wonderfully eccentric lifestyle. Not only is he one of the world’s most obsessive art collectors, but he regularly leaves the office early either to row “or to practice calisthenics with a ballet teacher”.
“Trading” may be the wrong word to describe what Hall, 57, does best, says Portfolio.com: he makes very large long-term bets, and sits back. The genesis of his latest punt came in 2003 when he anticipated “an important shift in the way the world valued oil”, says the Wall Street Journal. Prices had ranged from $10 to $30 a barrel for more than a decade, with the trend so pronounced that contracts on future prices were some 20% cheaper than the “spot”, or current, price.
Hall was convinced that growth in demand, from China and India was starting to outstrip supply and that “long-term and short-term energy prices would soon abandon” this relationship. He “bet big”, buying up every long-term contract going. By 2005 he had made a fortune. Citigroup is lucky to have him.
Yet Andy Hall has been operating in relative obscurity for years. Most of his recent press coverage homes in on his career as an art collector, notably on the controversial installation (and subsequent forced removal) of a massive, 80-foot long concrete artwork in the back garden of his Connecticut mansion (above), which one neighbour compared to “a bad chunk of Interstate 95”.
A naturalised US citizen, Hall is married to Christine, “a slim, fashionable and slightly giddy Englishwoman” who shares his passion for art and advises on purchases, notes the New Yorker.
Details of Hall’s early career are sketchy. An Oxford chemistry graduate, he started at BP before joining Phibro, then owned by Salomon Brothers, in 1982. It went well. By 1991, he boasted a $23m pay packet and a seat on the board and had made Phibro much more than just a trading outfit: it also had sizeable physical assets, including four oil refineries, and Hall harboured ambitions to build it into an “oil well to petrol pump” operation to rival the leading majors. Those plans were scuppered when he was wrong-footed during the first Gulf War, losing some $100m when the oil price plunged.
A weakened Salomon Brothers was eventually sold to Travelers Group in 1997, becoming part of Citigroup a year later. Since then, Citigroup’s “stepchild” has thrived on a policy of “benign neglect”, says the Wall Street Journal. Run in a former dairy farm in Westport, Connecticut, Phibro has been scaled back to “a skeletal crew” and keeps 20%-30% of its trading gains.
Citi’s new chief, Vikram Pandit, is reportedly keen to rein in this “under-leveraged brand” and fold it into Citi’s asset management arm – an idea Hall has dismissed as “a complete non-starter”. More fool Pandit if he persists, says Portfolio.com. “Has he never heard of what happened to the goose that laid the golden eggs?” If push comes to shove, Hall may well break out on his own.
Andrew J Hall’s off-the-wall punts – from rhodium to neo-expressionism
Hall doesn’t just confine his bets to oil and gas, says The Wall Street Journal. In the late 1990s, he was big on silver (numbering Warren Buffett’s Berkshire Hathaway among his clients) and has been active in unusual commodities, too. “Twice in the past decade he has assembled big stockpiles of rhodium [used in catalytic converters]. He got out both times at around ten times his money.” His secret, says a fellow oil man, is an ability to block out noise. When Hall “locks in on an idea, he’ll take it to the extreme”.
The same is true of his $100m art collection. “As with oil, he sometimes zeroes in on out-of-favour artists, often… snapping up entire shows.” Hall loves taking bets on contemporary US work, but his current obsession is for German neo-expressionists, such as Georg Baselitz. He so rates the latter that he not only has many of Baselitz’s canvasses, but has also acquired his 1,000-year-old German castle to keep them in.
Hall approaches art collecting “with the fanatical dedication of an oarsman”, says the New Yorker. But he hates galleries. “I hate shopping, I hate salespeople, and I had this feeling that gallerists were salespeople. There’s a whole in-ness, with regard to which galleries are hot; that I can’t stand.”
The chief beneficiary of his largesse is enfant terrible of the New York art world, Leo Koenig – a softly-softly-approach German-born dealer with connections to some of Hall’s favourite artists. Much of the collection is housed in a New York storage facility. When Hall visits, he seems to lose himself. “Wow, we have great stuff,” he is said to murmur.