Bernardo Vega, W’59: Promoting the Dominican Republic
Back home, says Bernardo Vega, the Dominican Republic’s ambassador to Washington, D.C., “I felt like the head of the mouse. Here I am like the tail of the elephant. Washington is a very big city with many different interests, and I represent a relatively small country. But it’s a country that has now gone through a political process which makes it much more attractive to investors.”
Accordingly Vega, former governor of the Central Bank of the Dominican Republic, is concentrating on promoting his country’s exports and encouraging U.S. investment.
His timing, he feels, couldn’t be better. With the presidential election of Leonel Fernandez 17 months ago, the Dominican Republic went from having the oldest president in the hemisphere (age 89) to the youngest (age 43). But more important than the age difference is the change in politics. “We now have a truly democratic regime,” says Vega. The president has already made 13 trips abroad as part of the country’s efforts to shed its isolationist image.
There is much to promote about the Dominican Republic, notes Vega. Besides its popularity as a tourist destination, the country is a major source of apparel made from U.S. cloth. Raw material is shipped to the Dominican Republic where it is cut, sewn and assembled and then returned to the U.S. as clothing and shoes.
In addition, “we feel our future is to become the back office of North America,” Vega says, referring to the many services that are performed in the Dominican Republic — ranging from accounting and data processing to claims handling and clerical work — for American corporations. “When you call American Airlines to make a plane reservation, you are talking to someone in the Dominican Republic,” he says. “All these services can be done more efficiently because of the country’s excellent communications facilities.”
Inside the Beltway, Vega is lobbying hard for what he calls “NAFTA parity. We want the goods assembled in the Dominican Republic, the rest of the Caribbean and Central America to receive the same treatment at U.S. customs as goods coming out of Mexico. Because Mexico is a member of NAFTA (The North American Free Trade Agreement), plants in that country aren’t required to pay taxes on goods shipped into the U.S. We are.” The NAFTA parity bill has been approved by the U.S. House of Representatives but not the U.S. Senate.
Vega was born in the Dominican Republic, attended school in London where his father was a diplomat, and earned his BS from Wharton. He is well-known in his home country as a scholar, businessman, author and government official. He has been an economics professor at two universities and was affiliated with the Central Bank of the Dominican Republic for 19 years, his last two as governor. He has written more than 40 books on economics, history and archaeology, four of which won the National History Prize. He has been president of the Fundacion Cultural Dominicana, an advisor to the government on reform of its tax laws, a frequent press commentator on the economy and politics of the Dominican Republic, founder of a local industrial consortium, and spokesperson for his country at numerous international economic meetings, among other accomplishments.
But Vega would rather talk about his country than himself. He mentions that the Dominican Republic has 42 major league baseball players in the U.S., and that it is trying to become a “tropical Silicon Valley” spurred on by its burgeoning microchip and electrical goods assembly work.
And last, but not least, cigars. We are the “biggest and best supplier of cigars to the U.S. It’s a booming industry,” notes Vega, who does not smoke — “I drink rum, that offsets it” — but does attend many of Washington’s social functions as a way of promoting what could be his country’s most recognized export. “It’s true,” he says, “that things get done in Washington in smoke-filled rooms.”
Beth Starr, W’87: On the A-Team in Asset-Backed Bonds
Eleven years ago, when Beth Starr graduated from Wharton, it wasn’t at all clear that asset-backed bonds would eventually become one of the hottest segments of the securities business.
What a difference a decade makes. “In 1987 the sale of new issues was about $10 billion a year. In 1997 alone, that figure exceeded $200 billion,” notes Starr, senior vice president and head of asset-backed research at Lehman Brothers, Inc.
“Even when I was at Wharton, I was interested in structured finance, which includes mortgage and asset-backed securities. It seemed more complex than straight corporate finance,” notes Starr, who spent four years in a similar position at Merrill Lynch before moving to Lehman Brothers in 1991.
Asset-backed bonds, Starr says, started out being backed by payments on consumer debt, such as credit cards and auto loans. “But recently we are seeing more complex products backed, for example, by aircraft leasing or utility receivables. As the market has grown, investors have become more comfortable. There was even a transaction last year backed by royalties on David Bowie recordings.
“Most recently, the new growth sector is the securitization by commercial banks of their commercial lending portfolios. It will be a huge market going forward, with $40 billion expected in 1998 alone. And that’s only a subsector of the asset-backed market.”
Newspaper articles have noted the unusually large number of senior-level women in asset-backed bond departments, suggesting that the area was ignored by men until the 1990s when it became a hot, high-growth market. Starr is more circumspect. Asset-backed bond departments still have more men than women, she notes, although “more women are in senior positions here than you typically see in other finance areas.”
Starr, who grew up in Silver Spring, Md., and went to high school in Clearwater, Fla., lives in Manhattan with her husband and two-month-old baby. She spends most of her time at work talking to institutional investors, “helping them figure out why they should be buying asset-backed bonds and where they should be putting them in their portfolios. I also help them determine where there is the most relative value as well as write research reports and develop trading strategies.”
Starr’s expertise in the field of asset-backed securities has landed her on Institutional Investor magazine’s all-American research team for the past six years.
Her advice for Wharton graduates is straightforward: “Don’t always look for jobs in whatever the hot area is at the moment. It’s not necessarily where the most opportunities will be down the road. Instead, focus on the businesses that interest and excite you, and make your own opportunities there.”
Robert Bynum, W’80: Food, Fun, and All That Jazz
In other countries, says Robert Bynum, “the restaurant business is a more accepted profession. In this country, waiters, bartenders and people who work in the kitchen typically tend to be there because they are in-between jobs … That makes it difficult to find people who are truly committed to the business and who want to make it a career.”
That said, Bynum is clearly one of the committed. As owner of Zanzibar Blue, an elegant jazz restaurant; Warmdaddy’s, a more downhome blues restaurant, and Brave New World, a “world music” dance club, Bynum is one of Philadelphia’s most successful businessmen in what is generally viewed as a tough restaurant/entertainment environment. He has been credited with everything from increasing the city’s appeal as a travel destination for African Americans to improving race relations by offering upscale sophisticated venues that attract both black and white professionals.
Bynum himself is not your stereotypical restaurateur. “I’m not a schmoozer,” he says. “I try to hire people who can do that.” But he does appreciate a business that “allows you to express yourself creatively. What’s great is that you can see the impact of a new idea — whether it’s a different type of food, beverage, entertainment or direct mail campaign — in a fairly short period of time.”
What Bynum finds difficult is delegating. He and his brother Benjamin have run the business together since the establishment of Zanzibar Blue in 1990. They have 140 employees and a business plan that calls for opening another Warmdaddy’s in Baltimore’s Inner Harbor this spring, plus a Warmdaddy’s Comfort Food take-out restaurant at the Philadelphia airport next summer (one such take-out is already up and running in Philadelphia’s Bellevue Hotel). They also operate a cabaret lounge called Deluxe.
“It’s difficult to maintain control and grow at the same time,” says Bynum, who typically works 12- to 18-hour days and was recently listed in Philadelphia magazine as one of 20 people responsible for reviving the city’s downtown. “It’s about making sure people do things the way you want them to. Inevitably they don’t, whether it’s providing good service to the customer, buying a new phone system, devising creative ads and so forth. I’m kind of particular.”
Bynum grew up in the business. His father owned several well-known nightspots, including the Cadillac Club in north Philadelphia. “My mother worked in the bar there. I would go in after school and see people who had been drinking a lot. It left me with a negative impression,” says Bynum, whose favorite drink is orange juice.
After Wharton he worked and traveled for an import-export business. “When I was in Togo, I remember being amazed at how much more nightlife there was in this small African country than in Philadelphia,” says Bynum. He and his brother, who went to Morehouse College and Philadelphia’s Restaurant School, felt they had a shot at changing that. “It’s difficult to get this city to buy into new ideas, so we had to decide whether our concepts were sellable.” They were, although Brave New World, which opened in October and features reggae, Haitian and African music, among others, “will be a challenge,” Bynum says. “We were a little more confident with Zanzibar Blue, because Philadelphia has a jazz background. Brave New World’s world music concept is more foreign.”