Eulogy for Doug Metcalf:

A Life Well Lived

By

Bill Lawton

September 26, 2020

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Eulogy for Doug Metcalf: A Life Well Lived
We are all in shock about the untimely passing of Doug. Just no words.

Why?

So many people pass, but for me, this one is like losing a brother. A close friend.
A wise man. Many of you know Doug through his family, or his Church. He was
a devout family man and Christian. We can take comfort that Doug is in Heaven.
(Son-of-a-gun, we are all left here to battle Covid-19 and a bunch of other stuff.
Doug was always a good market timer.)

I was not family nor a member of his Church community, which I respect greatly.
No, I knew Doug as a boss and later as a business partner, and friend. So please
allow me to share a few memories and vignettes from his business life that most
of you will not know, but I am sure will confirm everyone’s experience that he
was a model human being.

Doug was the CFO of First Interstate Bank in Arizona. In 1983 he was asked to
come to HQ in LA to clean up a big mess. A hot dog investment banker had
started executing complex financial derivative trades that exposed the bank to
untold risk if bond markets moved even a little bit. It was such a Gordian Knot
that the bank was terrified. It is the kind of mess that has sunk numerous large
financial institutions, like Barings. Who ya gonna call? Senior management said
only one person can fix this: Metcalf, Metcalf! Nancy, his rock, agreed to the
move. Doug took the challenge. Just the kind of thing he thrived on.

After he got his arms around the unauthorized trades, he realized that indeed, the
bank had enormous unhedged exposure similar to futures contracts that were
highly leveraged. A large move in interest rates could sink the bank. He
determined how to hedge the exposure and put the pin back in the hand grenade of
live highly leveraged market exposure. He saved the bank from huge losses.

Most ordinary people would then report back to the bank President and ask what
to do next. Not Doug. He realized that the fixed income derivatives market,
especially interest rate swaps, were extremely useful instruments for financial
institutions to manage their risk, and if carefully developed, could become a
highly profitable low risk business for the bank. He pitched the bank President
and got a green light to develop the business for the bank if he could figure out
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how to manage the risks. Doug had an amazing nose for business opportunities.
Doug started putting together the best team he could find. That was another of his
many skills. He knew how to recruit and develop outstanding teams of people, a
skill needed to successfully undertake the high-wire act of global arbitrage.

My boss at Fireman’s Fund Insurance Company was a friend of Doug’s and I was
recommended to Doug by my boss for the position of Head Trader. I was pretty
comfortable in the Bay Area, but Doug put on the Doug Charm Offensive such
that it was impossible to say no. My wife Heidi and I moved to LA too. Doug
was an outstanding salesman in the highest sense of the word. He loved selling
great ideas and was one of the best presenters I know.

Doug recruited team of A players: Matt Bayles, sales; Brad McKinnon and John
Van Slooten as analysts and traders; David Blocker on systems; Joel Goldberger,
a brilliant financial programmer (father President of the Institute for Advanced
Studies at Princeton and later President of Cal Tech as an indication of the caliber
of the team). Plus, many other A players. A rare talent to be able to recruit and
manage such a talented team that traded in LA, NY, London, and Tokyo.

After two years, Doug’s team was cited by Euromoney Magazine as one of the top
five derivatives teams in the world. Just imagine, a regional bank being named
above most of the investment banks in the world as tops. A fantastic achievement
that Doug created through his many talents and vision.

Our team under Doug’s leadership developed ways to manage interest rate swaps
and invented the swaption. This is now a $350 trillion market. When Doug first
saw the opportunity, it was just beginning. Just stop and think about that. What
kind of mind could see that opportunity, and then more importantly, establish a
world class team and outperform Wall Street. Only a one in a million like Doug.
He printed almost $200 million in income over several years for FI.

Doug and I both left for bigger pastures, The Big Apple. Doug set up another
successful operation at Nomura Securities, one of the world’s largest investment
banks. He then wanted to return to California and took a job at TWC in LA to set
up a bond investment operation. After a year he hired me at TCW.

We worked together on the account for the central bank of China. Brilliant
positioning. PBOC has $10 billion in asset when we took on the assignment to
modernize China’s central bank. That grew to over $3 trillion, and Doug helped
me advise PBOC for 15 years, a spot few Westerners have ever had the privilege
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to hold. Doug and I both agreed, our work helped reduce poverty in China
dramatically. That is the kind of thing that motivated Doug, not just money.
I left TCW and started my own financial advisory firm, Seagate Global Advisors
in 1996. Doug joined Seagate as a Partner in 2000. He was instrumental in
helping Seagate be ranked as the #1 fixed income performer in 2004, and top 10 in
the world in both fixed income and emerging markets over a 3 year period. Let me
put that in perspective. #1 or in the top 10 in the world in a highly competitive
field that has the smartest of the smart with thousands of funds, wow.

After the crash of 2008 Doug and I moved more into private equity and direct
lending. Doug found it easy to pivot. We went to China and became financial
advisors to the Province of Yunnan in SW China. A province of 50 million
people. We helped raise money for investing in a free trade zone there to help
reduce the cost of food in China. As compensation for our efforts the government
gave Doug the chance to get a free bit of land to develop for Seagate.

The Chinese official had a map of Kunming and showed him around 30 pieces of
land he could choose from to develop. Doug said, “We will take all of them.” The
stunned official said, no, you can choose one. Doug looked at the map, pointed to
the largest track of land and said lot #29. The official, nonplussed said, “but that
is the largest track of land in downtown Kunming, 29 acres.” Doug said yes, I
know that is why I want #29! LOL. Just like Doug.

We travelled extensively throughout China together and were invited into places
and meetings that few Westerners are ever allowed. Doug always comported
himself with the utmost dignity in these situations. Plus, the Chinese were
intrigued by this big Western guy and his charisma.

Doug and I agreed that we would set up trading operations between China and
South East Asia, focusing on the Philippines and Malaysia. We met with
President Gloria Macapagal Arroyo in the Philippines at the Presidential Palace.
We brought groups of Chinese investors to the Philippines and conducted trading
operations. We were hosted at President Noy Noy Aquino’s family compound,
Hacienda Luisita, where Doug led strategy sessions with the Aquino government.

In Malaysia we set up similar trading operations.

We both found trying to build our business around China frustrating due to lack of
governance so Doug being Doug found a better opportunity. God bless him.
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Several years later Doug and I reconnected and started working on several deals
including exporting alfalfa from the US to China as well as the construction of
recycling plants. The kinds of things that help people and the planet, not just
make money.

We got a mandate to advise the Autonomous Region of Bougainville, a break

away country from Papua New Guinea. A pro-bono job trying to help the poor
people of war torn Bougainville. We set up the Seagate Bougainville
Development Corporation and Doug was the CFO. Only this week a new
President there was chosen, and after years of effort we can now start to move
forward on helping to build a sustainable economy for all people on the island. I
am going to miss my Partner on that project.

So, I knew Doug in a way many may not be aware of. Travelled all over the
world with him in all conditions. Great times when we both made a lot of money,
and some tough times when we didn’t. He took all outcomes with equanimity. I
never heard him utter a profanity. Take a drink. Touch coffee. Make even the
slightest off colored comment or make women uncomfortable in any way. He was
not a racist or misogynist to any degree. The exact opposite is true. Doug was a
gentleman. And he was fun to be around. He was scrupulously honest. Brilliant
in finance. A devoted family man (Nancy and kids, my heart goes out to you, he
devoted his life to you through every fiber in his being). He loved his Church.
Really, I just have no words to express what a model human being he was. He
contributed so much. Gave so much for others. Had the wisdom so lacking today
in the public domain.

All I can say is farewell to a great business partner, friend, and humanitarian.

You showed us how to do it. Great job. A life well lived. All I ask is one more
favor. You hired me several times. I am applying early for the position of your
wingman up there when my time comes. Save a spot. Love you man.

Bill Lawton

September 26, 2020

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A few pictures from the adventures of Doug Metcalf-

Boracay, Philippines

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China

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 Malacanang Palace, Philippines

Hacienda Luisita, family compound of President Aquino, Doug in charge:

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