Lou vitas currency trader
O'BRIEN MAY 10, LEWIS is a private man. He lives regally, but quietly, in a low-slung, beachfront manse that abuts a golf course and a yacht-filled marina in this luxurious, palm-swept enclave. His neighbors include others who value their privacy, and the island's tax-haven status: Like many of these men, Mr. Lewis's public acts make waves. Lewis is also the owner of a world-class art collection, which includes a Picasso and a Miro, and owns Isleworth, a Windermere, Fla.
Lewis is among the world's most formidable currency traders, having grown rich by winning huge bets that have shaken the British pound and the Mexican peso, among others. Yet for all this, Mr. Lewis remains largely unknown, rarely mentioned in the same breath as well-known currency-trading peers like George Soros and Julian H. Even within the rarefied realms of high finance and high-priced art, a sense of mystery accompanies discussions of Mr.
Lewis, a situation he is in no hurry to remedy. Until now, he had never granted a newspaper interview. Lewis, who is 61, during a recent conversation here. Cordial and self-effacing, Mr. Lewis hastened to add that ''the mystery to me is why there's anything of particular interest about me. Of course, there is much of interest about Mr. BEYOND the substantial influence he wields in the art world, his role as a speculator highlights the increasing economic impact of currency trading in the brave new world of computerized, global finance.
In the last few years, the rapid-fire movement of capital across international borders has helped fuel sudden, vicious economic meltdowns in such far-flung places as Mexico, Thailand and South Korea and forced the hands of European central bankers, most notably in Britain, in response to speculative attacks.
Little of this was apparent when the world's industrial powers first allowed exchange rates to float in Even after that, currency trading remained a quiet backwater until about , when central banks around the globe began trying to drive down the dollar's value to stimulate American exports. Traders then began exploiting profitable differences among international currencies, a game that grew more heated as country after country opened its borders to international trade in the next 13 years.
Propped up by lush lines of bank credit, currency speculators can trade billions of dollars while putting up only a fraction of that in their own cash. And the world can only guess what they are doing: Unlike stock trading, which occurs on public exchanges, currency trading is loosely regulated, conducted over private telephone lines and computerized networks operated by bank dealers.
Insiders may know of one another's positions, but the public has a more difficult time divining what currency traders are up to until exchange rates start yo-yoing. As traders pounce on country after country, attacking weak currencies en masse, they have become the favorite bogymen of the elites in developing lands. The leaders of Malaysia, India and Zimbabwe have all recently called for restrictions on currency trading, saying rampant speculation has made it impossible for their countries to get their economies on track.
Soros, whose fortune was spun from hefty currency gambits, has spent much of the last year decrying the problems of unregulated markets and free-wheeling speculation. For their part, traders -- who tend to be a pragmatic and apolitical lot -- say they are merely responding to flawed economic policies reflected in currencies. Six years ago, for instance, as Europe tried to lay the groundwork for a common currency, traders set a target on the British pound after deeming it overvalued relative to the German mark.
Lewis is said by fellow traders to have made hundreds of millions of dollars speculating against the pound. While he confirms that a succesful wager against the pound netted him one of his biggest windfalls, Mr. Lewis declined to quantify how much he actually made. But he waved off his critics' assertions that picking on the Bank of England was somehow unfair. It's the free flow of cash around the world.
And few currency traders wheel and deal with the panache of Mr. Lewis's path to the top of the currency and art markets began modestly.
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He was born in in London's gritty, dockside district, the East End, where his father owned a pub. That is where Mr. Lewis went to work shortly after dropping out of school at By the early 's, he had parlayed his father's grubstake into a group of warehouse-size theme restaurants catering to tourists. The restaurants, which bore names like Shakespeare's Tavern and the Beefeater, were decidedly low-brow, offering entertainment that included sword swallowers and knights in armor. They helped unleash a whole dining genre; one Lewis protege, Robert Earl, later helped found the Planet Hollywood restaurant chain.
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Earl, though he briefly stopped speaking to Mr. Lewis in the early 's, after he had begun competing with him. The restaurants were tremendously lucrative, and their success financed an array of other enterprises in England, including travel agencies and fashion, real estate and foreign exchange businesses.
Already a stock market speculator and an avid gambler -- at one point he indulged his passion for horse racing by buying thoroughbreds -- Mr. Lewis used his foreign exchange operations to gain a bird's-eye view of the daily fluctuations in currency rates and the opportunities for profiting from them.
By the late 's, Mr. Lewis had a substantial fortune, most of it tied up in his British holding company, Hanover Grand P. He declines to say how much he was worth at the time, but it was enough to persuade him to become a tax exile, decamping to the Bahamas when he sold Hanover Grand in Lewis's move, which allowed him to forgo huge capital gains and income taxes in Britain, was entirely legal under the British tax laws. In return for gaining a new, tax-free existence in the Bahamas, Mr.
Lewis cannot return to Britain for more than three months a year, on average, over any five-year period. He still maintains an estate in England, as well as homes in Argentina and Florida. It was upon Mr. Lewis's arrival in the Bahamas -- flush with cash, unencumbered by his old businesses, newly wed to his second wife, Jane -- that he began to devote his full attention to currency trading. The timing was impeccable. By the mid's, currency traders were a force to contend with on Wall Street and around the world.
THE strength of currency traders perhaps first became publicly apparent when Andrew J. Krieger's gains derived in part from a speculative attack on the New Zealand kiwi.
Forced to spend precious foreign reserves defending the currency's value, New Zealand officials threatened to raise interest rates, which would have forced Mr. Krieger and the bank to eat large losses.
Central bank officials did not follow through on the threat, and Mr. Krieger resigned from Bankers Trust shortly thereafter for undisclosed reasons. One overanimated French official, angered by speculation against the franc around the same time, called for currency traders to be beheaded. View all New York Times newsletters.
The meteoric rise of some traders has been matched by some equally precipitous falls. Victor Niederhoffer, a protege of Mr.
For his part, Mr. Lewis approached trading methodically, gradually building up a war chest from a computerized trading room at his Bahamian estate. By the early 's, currency trading was responsible for the bulk of Mr.
Lewis's wealth, which now was measured in the billions of dollars rather than the hundreds of millions.
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Lewis declined to say how much money he had earned from various currency plays. But he said that in addition to winning his own bet against the pound in , his other biggest gain came from speculating against the Mexican peso in early Mexico had run up a huge deficit by late , and speculators began betting that the currency, lacking support from the Government, would fall.
Indeed, by late December and early January, the peso had been routed, and traders like Mr. Lewis reaped lush profits. THERE were rumors that Mr. Lewis was actively involved in Asian currency markets last fall and winter, during the economic crisis there, but he said the chatter was unfounded. Lewis claimed to be poorly informed about Southeast Asian markets, when asked what currency he saw as particularly vulnerable right now, he did not miss a beat: Lewis is correct and the Hong Kong dollar falls this year, it would likely ignite anew the economic troubles in East Asia, prompting other countries in the region to pursue competitive devaluations that would compound the difficulty of paying off external debts.
Lewis is more optimistic about the prospects of the euro, the currency that will eventually replace the separate currencies of 11 European countries.
He sees few opportunities for traders to exploit weaknesses in the new currency. Lewis declined to confirm or deny. So far, he's been a very quiet trader. Lewis manages his currency operations under the umbrella of a holding company, Tavistock Group, and has made acquisitions through another vehicle, the English National Investment Company.
Earlier this month, he transferred his controlling stake in English National to his year-old son, Charles, and others at the company. His trading coups have become legend among a small group of traders privy to the identity of the man behind them. These traders have bestowed one of their highest accolades upon Mr. They refer to him as the Boxer, in recognition of both his heavyweight status in currency markets and the similarity of his name to that of Joe Louis, the boxing legend.
Lewis, hoping not only to snag fees from him but also to gain insight into his trading practices. Traders have linked Mr. Lewis to a trading cabal made up of Kerry Packer, the Australian media giant; Sir James Goldsmith, the late corporate raider, and an Irish trio comprised of Dermot Desmond, a property magnate and stockbroker; J.
McManus, a kingpin of the legal bookmaking business, and John Magnier, a horse breeder. Lewis said that he had traded only for his own account. He acknowledges, though, that Messrs. Desmond, McManus, and Magnier are his friends. And those relationships placed him in an uncomfortable spotlight on one occasion. In , investigators for the Irish Government began looking into the circumstances surrounding the sale of land to Telecomm Eireann, the state-owned telecommunications concern.
The investigation was prompted by concerns that the land -- jointly owned by Mr. Lewis, the three Irishmen and others -- was sold at a vastly inflated price, a result of the group's influence with the administration of Charles Haughey, then the Prime Minister. None of the men was ever charged with any wrongdoing in the matter, although a report issued in by John Glackin, a special investigator for the Irish Government, was highly critical of almost all those involved.
The report included a series of rancorous letters between Mr. Lewis's lawyer, regarding Mr. Lewis's unwillingness to provide information about his role in the affair. Lewis declined to comment about his involvement in the land deal. IN any event, Mr. Lewis clearly had bigger projects in mind than land deals in Ireland.
In , he quietly began buying shares of Christie's, the legendary British auction house. His stake in the company was slightly less than the 30 percent threshold that would have triggered a formal takeover offer under British securities laws.
Lewis owns an impressive collection of modern art, including major works by Matisse and Magritte as well as Picasso and Miro, he is a relative newcomer to the art world, having begun building his collection in the early 's. Moreover, his resume lacks the social cachet of the British blue bloods who oversee Christie's, and his interest in the legendary auction house stirred an anxious debate within the company about his intentions.
Lewis and the investment banking firm SBC Warburg Dillon Read sought to take Christie's private, a move that Mr. Lewis said would give the auction house greater flexibility in managing its financial affairs and allow it to take more risks. Foiled in that effort, he sold his stake last Tuesday to Mr.
Pinault, who, like Mr. Lewis, dropped out of school as a teen-ager and made a fortune assembling a hodgepodge of businesses in markets like footwear, luggage, real estate, retailing and wine.
Terms of the transaction were not disclosed, and Mr. Lewis declined to comment on them, citing confidentiality agreements.
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None of this has distracted Mr. Lewis from his main love -- currency trading -- nor has it kept him from buying other companies. He has added to his real estate holdings in Florida and owns one of the most popular rugby teams in Britain. But even with such high-profile investments, Mr. Lewis says he is content to remain in the shadows. Tell us what you think. Please upgrade your browser. Sections Home Search Skip to content Skip to navigation View mobile version.
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