Known around the world as “the good banker”, Derrill Allatt built a reputation as a financial troubleshooter. For more than 25 years he was a banking fireman who helped governments around the globe, particularly those of emerging nations. He advised them on how to manage their sovereign debt and how to rescue and stabilise their economies. Along the way, he won respect from both creditor and debtor negotiators, bringing them to agreement through charm, discretion, good manners, patience through all-night-sessions and, at least in the case of Russia, no small amount of vodka.
After the collapse of the Soviet Union, while he was with the investment bank SG Warburg, Allatt was the key adviser to the Russian government on restructuring Soviet-era debt. He drew up a strategy to reschedule debt owed to the Paris Club of leading economies or commercial bank creditors, and later negotiated Russia’s membership of the Paris Club as a creditor.
Allatt, who has died of heart failure aged only 57, spent most of his debt management career with SG Warburg, later part of UBS, where he was head of sovereign advisory practice. In 2009 he and a breakaway team from Warburg founded the financial advisers Newstate Partners. “He was a banker of the old style,” according to Jill Dauchy, one of his fellow managing partners at Newstate. “He was discreet, the opposite of self-promoting, and a trusted adviser, usually behind closed doors, to the highest levels of governments about extremely sensitive issues.”
Newstate, one of the leading players in sovereign debt management, still advises Russia. Allatt personally advised or negotiated substantial debt relief for the governments of a long list of countries, ranging from Liberia and Uganda to Pakistan, Serbia, Peru, Ecuador and Belize. After the Iraq war, he also advised the Iraqi central bank on restructuring loans that had been taken out by Saddam Hussein. By that time, he had left UBS for Houlihan Lokey Howard & Zukin, the international investment bank, until co-founding Newstate.
Just getting into some of the countries where he worked was dangerous in itself. Many of the Iraq negotiations were held in Jordan for the negotiators’ safety. While at UBS Warburg, Allatt and his team advised the Pakistani government and, in 1999, helped negotiate the first sovereign bond restructuring of modern times, setting the tone for all subsequent bond exchanges. In recent years, he was the key adviser to Antigua and Barbuda.
Allatt fondly recalled his debt negotiating days in Moscow after the collapse of the Soviet Union when “a lot of stamina, some elements of spy novels and a lot of alcohol” were involved. After one particularly long session, involving many nights with no sleep, a burly, vodka-fuelled Russian delegate wandered along corridors shouting: “Where is Derrill? I want to hug Derrill!” After another such session, a Russian delegate suggested Allatt leave his job and work for the Russian government. “I give you a million dollars . . . two million . . . 10 million!” No one was sure whether the delegate was serious but Allatt smilingly declined.
Just before Christmas 2001, Ms Dauchy, at the time Allatt’s colleague at UBS Warburg, was expecting a call to join him in Buenos Aires to help resolve Argentina’s financial crisis during violent street protests. “Don’t come,” he told me, “the ministry of finance is on fire!” She and Allatt had previously found themselves barricaded inside a hotel compound in Prague in 2000 for two days because of anti-globalisation riots during the annual meeting of the World Bank and International Monetary Fund. “I went to take pictures of the teargas, etc, but Derrill pulled me away and reminded me that it was us they were throwing rocks at. I had forgotten that we were wearing suits and looked like all the other bankers.”
An only child, Derrill Victor Allatt was born in Woking, Surrey in 1954. After attending Sherborne School in Dorset, he read history at Emmanuel College, Cambridge where he enjoyed acting and singing in the choir. His first job was a business manager at Sotheby’s auction house, where he developed a love of art. He left in 1980 to study for an MBA at Manchester Business School, during which he spent a term in Versailles.
He joined SG Warburg in 1985, when the investment bank was expanding after the “Big Bang” deregulation driven by the Thatcher government. He had his first taste of debt management providing financial advice to Gabon and remained with the bank after it was bought.
When not travelling, or at his holiday villa in Portugal, Allatt enjoyed visiting art galleries, the theatre, opera, ballet and horse racing. He was a regular at Royal Ascot and Glorious Goodwood.
He was unmarried.
By Phil Davison
© Financial Times Obituaries July 29, 2011