New Development Bank CFO Leslie Maasdorp talks about living a life with purpose
Leslie says he hopes to use his international expertise to benefit South Africa in the years to come.
Leslie Maasdorp has worked in a number of senior positions both in business and government in South Africa. Having served his country and supported its economic growth, he is now the vice president and CFO of the New Development Bank (NDB), which funds infrastructure in the BRICS nations, based in Shanghai. His experience in both the public and private sector prepared him for this position, but he says that he’s learning so much more in the global business capital he now calls his home. Nonetheless, his thoughts are never far from South Africa and he plans to ultimately return and use his expanded expertise for the good of his home country.
He spoke to CFO.co.za about his government and private career, and his responsibilities at the NDB.
What’s it like working in Shanghai and how have you adapted to the different culture?
Shanghai is one of the largest cities in China with just north of 25 million people, and it has emerged as a leading financial hub. China has been through a period of significant economic reform and Shanghai has been a major beneficiary of that. It’s cosmopolitan, dynamic, vibrant and multinational. We’re situated in Lujiazui, which is a financial district with more than 400 banks and close to 5,000 companies, so it’s just a different order of magnitude to anything we have in South Africa. If I look out of the window, it’s just a sea of modern skyscrapers, but when I went to the local municipality museum, I learnt that before the 1990s, this area was just open fields of rice paddies. The development has been incredible and there are lots of initiatives underway to make sure that Shanghai lives up to its reputation as an international hub.
China’s economy has been growing at 10 or 11 percent until recently, and is now growing at six and seven percent.
So, yes, coming here was a bit of a culture shock.
What’s struck me about it all is the power of planning. They’ve been creating something from nothing in empty space with a long-term vision, planning and imagination. In Shanghai, they have formal five-year plans for development – of rail, of airports – and every year, they’re tracked. In South Africa, we just don’t have this kind of long-range planning. A mayor will implement a specific plan, but it’s not rolled out in the context of a broader plan that everyone’s agreed on.
In his latest SONA, President Ramaphosa said that South Africa has not created a new city, and Shanghai shows the power of a dream like that, creating a new area, with modern infrastructure.
Do you still consider South Africa your home and do you visit often?
Of course South Africa is and will always be home for me. South Africa is a member of the BRICS, and the five countries – Brazil, Russia, India, China and South Africa – created the bank. There were only five employees when I arrived in 2015 and now there are 165. We have 37 infrastructure projects in process, and have concluded $10.2 billion of loans so far.
Some of those projects are in South Africa. We issue loans to SOEs, we work with the Development Bank of South Africa, Eskom, Transnet and several of the leading State owned enterprises. One example of an infrastructure project we are funding in South Africa is a loan to Transnet which involves the expansion and deepening of the Port of Durban. Renewable energy projects are also expanding their footprint in South Africa. So I have lots of reasons to visit all the BRICS countries, including South Africa regularly.
My spouse Miriam Altman still lives there, but travels here often. And I have a grown-up son Mikhail and a grandchild Oliver back home, together with a Maasdorp clan of six siblings and my mum. So I try to travel home as often as possible. Moving here alone was difficult, but we work around it.
What are your focus areas in your current role?
I am responsible for finance, budget, accounting and treasury functions of the Bank. In this capacity I oversee the investment and portfolio management of the capital of the Bank. I also lead the process of raising capital in the domestic and international capital markets mainly through bond issuances. So far the Bank has successfully registered a RMB 10 billion programme in China and have raised RMB 6 billion in two issuances over the past few years. NDB was awarded a AAA domestic credit rating in China in 2016 by the two leading credit rating agencies. We are in the final stages of registering a bond program of R 10 billion on the JSE. The proceeds from this bond issue will be utilised to fund infrastructure projects in South Africa in local currency. Following these bond programmes we will aim to raise local currency financing in Russia, India and Brazil as part of the next phase of our activities. The bond markets, both local and international, are a crucial course of funding as governments, multilateral development banks as well commercial banks cannot provide the financing in the quantum required to close the financing gap for infrastructure. My role therefore is to look for the most optimal and cost-effective route for the bank to raise capital on local or international capital markets.
What opportunities and challenges are you faced within the current industry?
The opportunities are massive because all our member countries are still rapidly urbanising, so there’s an urgent need to upgrade existing infrastructure and build new ports, rail, roads, bridges and power stations. The bank is specifically committed to building green infrastructure which includes investments in renewable energy, energy efficiency, sustainable waste management and clean transportation. The essence of our model is to support activities that promote growth while reducing carbon emissions. The BRICS countries are at different stages of development but are all committed to building infrastructure that will be green and clean and contribute to cleaner air, clean water and oceans and enable the citizens to lead healthier lives. NDB is committed to providing financing for this sustainable agenda.
We have an AA-plus international credit rating from S&P and Fitch, which is considerably higher than the average of our member countries. This means we can raise money for a country more cheaply than if they raised the debt themselves, so we are able to provide them with funding and loans at competitive rates.
Our five member countries have deep and liquid capital markets. The NDB is therefore committed to provide loans in local currencies of BRICS as the bond markets are well developed. Multilateral development banks typically provide loans in US dollars or other hard currencies. For example, if South Africa takes a US dollar-based loan, this means that if the rand depreciates, even if the interest rate was competitive at the time of the loan signing, the country has to pay back increasing amounts as a result of the rand depreciation. So we can help borrowers avoid a foreign exchange mismatch by lending in Rand.
There is also a significant opportunity today to crowd in more private capital into infrastructure. NDB intends to use its capital as a catalyst to attract other long term investors in infrastructure assets.
What type of projects are you currently funding, and have any of them been completed?
We have funded a large number of infrastructure projects, with an average size of $200 million. Because of the nature of these projects – ports, airports, power stations, and railways – they take several years to construct, so we don’t have any completed projects as yet.
Our latest annual report shows that we have more than $10.4 billion worth of projects funded in areas like transport, road, rail, airports and renewable energy, specifically solar energy and offshore wind. We monitor and track our projects, but they are still in the early stages.
One example is that we’re funding a new metro in Mumbai. It’s currently causing huge disruption in the city, but it will make a massive difference to people’s lives when it’s complete.
That’s the key thing about working here – we have a meaningful impact on people’s lives and that’s what inspires us to come to work every day.
What was your hardest day professionally? Or your toughest lesson?
It was a huge adjustment to come live in China with little understanding of the local culture and nuances. I hope to still increase my vocabulary but the first major constraint has been language. The structure of the Chinese language is so different to English which makes it extremely challenging to learn. Language is a window into culture and traditions, so I often feel handicapped not understanding some cultural nuances.
However Chinese people are very friendly and Shanghai in particular has been a cosmopolitan city since early part of the last century.
The hardest day professionally was the first day as we arrived here as the founding management team of five arrived in Shanghai with little else but a mandate and strong support from our five Governments. We had no staff, no systems, and no infrastructure. We had to build this institution brick by brick. I have naturally learnt volumes over the past four years as we are now a fully functional Bank with high credit rating and international recognition among our peers like the World Bank and Asian Development Bank.
How did you choose a career in finance?
I didn’t have a linear journey into finance like many other bankers. In my formative years, I was a political activist in the youth and student movements during the anti-apartheid struggle. When I was at the University of the Western Cape, I was the president of the Student Representative Council and as result of resistance and protest activities, I spent 15 months in detention without trial during the state of emergency in 1985 and 1986. I wrote my final year examinations in prison at Victor Verster Prison in Paarl. Several years later I obtained a scholarship from the British Council which enabled me to pursue a Masters of Economics degree at the University of London.
When I was finished my undergraduate studies, after my release from detention, I was appointed as Regional Secretary for the Eastern Cape of the Garment and Allied Workers Union which later became SACTWU an affiliate of Cosatu. After the ANC was unbanned, I was recruited by former Minister Trevor Manuel to the Department of Economic Planning, where I worked until the transition to democracy. After the 1994 elections I joined the Department of Labour as special advisor to Minister Tito Mboweni. I subsequently spent several years in Government and was appointed as deputy director general of the Department of Public Enterprises, while Jeff Radebe was minister. I also learnt a great deal about business and corporate strategy at Deloitte Consulting where I worked as a senior manager.
In 2002, I was recruited by Goldman Sachs International as an international adviser and that was my entrée into global finance. Since then I have spent the past decade and a half in leadership roles of global financial institutions Following the Barclays acquisition of a majority stake in Absa, where I served as a non-executive director, I was appointed as vice chairman of Barclays Capital and Absa Capital. Towards the end of 2010, I was recruited to become the president of Bank of America Merrill Lynch for Southern Africa. I also served as the nonexecutive chairman of ADvTECH, the listed private education company and I was, for a very short time, the CEO there before I was approached for this role at New Development Bank.
What advice would you give to your younger self?
I am pretty much at ease with my younger self. I have had the benefit of several mentors in my life who have played a powerful role in shaping my life choices. In my formative years, I was more focused on what I could do to make a difference in South Africa at that point in time. South Africa had a specific set of challenges, and my involvement as an activist and my experiences all shaped me, and taught me the importance of living a life with a purpose. Don’t just focus on today, but look at your legacy and the difference you can make in society.
One towering and influential figure in my life was Michael Coetzee, who was Secretary of National Parliament until his death from cancer five years ago. He was a political activist and mentor who I worked with very closely during my formative years in Port Elizabeth and when we both worked in the trade union movement. Prof Derrick Swartz who was a leader in the UDF in the Eastern Cape at the time, played a critical role in shaping my ideas and sharpened my political consciousness. During my time at the University of Western Cape, the late Prof Jakes Gerwel with his sharp intellect and unassuming leadership style, was a mentor who influenced and shaped my thinking in many ways. Over the past two decades both Trevor Manuel and Tito Mboweni played critical roles in shaping my ideas and choices. Finally Mum and Dad really, provided the essential foundation as they, through grit, sweat and sacrifice managed to send all seven kids to university. Today all of my six siblings and I have postgraduate degrees. Our parents were of working-class stock committed to improving our lives through investing in education. So I am extremely blessed having had such powerful role models.
What is your leadership style?
From very early on in my career, I have recognised that individuals can play decisive roles in directing overall strategy, but ultimately it is teams and collectives, properly empowered who make things happen. People can take themselves very seriously, but everything is a result of teamwork. So my leadership style is to bring out the best in people by instilling a sense of the role that they can play to enhance the performance of the business by collaborating closely with others. Of course, individuals can be shining stars, but unless they can sell ideas and get buy-in from others and work in a collaborative manner, it doesn’t matter.
I also like to provide opportunities for learning, especially for young people – and we have a very young team in the bank. I’ve learnt over the years that a wonderful way for people to develop is to give them tasks above their level of competency. Throw them in the water to get them to learn how to swim. I’ve seen it in so many instances over my career, that when people are forced to learn, when they wake up early or stay up late at night to try to impress the boss, they are learning very important lessons.
Where do you see yourself in five years’ time?
I would like to continue to play a role within the international space, while at the same time staying very closely connected with home. Something in the soil makes me miss South Africa. I want to return, but I want to play a role that uses the global expertise that I’ve acquired for the benefit of the country. I believe I have a role to play, to give back, to help develop younger talent, and I hope that five years from now, I’ll find a way to do that.
What are your interests outside of work?
I try to stay fit by doing outdoor things like hiking, some yoga and swimming. These keep me physically fit and mentally alert. So I look for opportunities here in the region or when I am back in South Africa to do that.
Shanghai is located in a very advantageous position, where it’s convenient to so many destinations. We’re two hours from Japan and Hong Kong, and four hours from Bali or Vietnam. Asia is really exciting because there are so many fast-growing countries here, so I take the opportunity to make use of my environment to see and explore them.