Home Wires Success and More Interesting Stuff Education

How Olev Rahn helped Bankers Trust survive the 1987 crash (and where he sees markets in 2024)

How to spot a bubble with a market veteran who saw the big one coming in 1987
Matthew Kidman

Centennial Asset Management

In 1987, Olev Rahn was pounding the streets of New York's financial district, meeting with Wall Street's best strategists. Rahn, who was running BT Financial's institutional business Pendal, felt distinctly uneasy about the exuberance gripping financial markets. It felt like a giant bubble, and the deeper he dug, the more convinced he became that a reckoning was just around the corner.

Rahn's instincts proved spot on as markets cratered on October 19th 1987 (what we now call Black Monday). A combination of put options and futures selling saw BT breeze through the '87 crash while others crumbled. From that moment, BT was the main game in town. Billions flowed into the coffers and it was the number one money manager in Australia. Rahn remained a key force until BT Australia was sold to the principal group for $2.1 billion in 1999.

In this episode of Success and More Interesting Stuff, Rahn discusses the growth of BT Financial in Australia, the key figures that were instrumental in building the firm, and how he, and his colleagues, navigated the 1987 crash. Rahn also shares his views on markets in 2024 and why he is happy to have some cash at hand.

Time stamps

  • 0:00 - Introduction
  • 3:10 - Early life and leaving Estonia
  • 8:15 - Developing an interest in economics
  • 9:49 - An opportunity with Ord Minett and the XYZ method of research
  • 15:13 - A move to London on the back of booming markets
  • 20:03 - A call with Chris Corrigan and bringing active management to Australia
  • 25:05 - Good performance leads to rapid growth Keating
  • 30:41 - Kerr Neilson and Jillian Broadbent join BT as it becomes a powerhouse
  • 34:15 - 1987 and the era of corporate excess
  • 38:54 - The strategies Olev Rahn used to protect BT from the crash of 1987
  • 42:00 - The signs of exuberance prior to the 1987 crash
  • 47:39 - A golden era for Bankers Trust
  • 50:00 - Olev Rahn’s views on markets in 2024

More episodes

Funds
How 'The Speculator's Diary' got Ben Griffiths hooked on small caps
View
Equities
Graham ‘Skroo’ Turner shares the highs and lows of Flight Centre and his 50 years in travel
View
Education
The CEO who kicked the incumbents to the curb (and delivered investors a +4000% return in the process)
View
........
Livewire gives readers access to information and educational content provided by financial services professionals and companies ("Livewire Contributors"). Livewire does not operate under an Australian financial services licence and relies on the exemption available under section 911A(2)(eb) of the Corporations Act 2001 (Cth) in respect of any advice given. Any advice on this site is general in nature and does not take into consideration your objectives, financial situation or needs. Before making a decision please consider these and any relevant Product Disclosure Statement. Livewire has commercial relationships with some Livewire Contributors.
Matthew Kidman
Matthew Kidman
Principal and Portfolio Manager
Centennial Asset Management

Matthew is the Principal and Portfolio Manager at Centennial Asset Management. Prior to this, Matthew was the CIO at Wilson Asset Management between 1998 and 2011, achieving 18% p.a. over the period.

Expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment

most popular

Equities

Decade of excellence: 10 years of outstanding performance for L1 Capital’s Long Short Fund

Livewire Markets

Equities

The 7 zombie companies lurking on the ASX 300

Livewire Markets

Equities

Buy Hold Sell: The best and worst investment ideas from 5 ASX sectors

Livewire Markets

Equities

18 stocks backed by a fund that returned 42% in 12 months

Livewire Markets

view all