grubstakers

Episode 225: Lex Greensill

Added 2021-03-25 16:43:24 +0000 UTC

Lex Greensill grew up in a family of farmers from the countryside of Queensland, Australia. Upon graduating high school, Lex recognized the family business was experiencing challenging times and decided to attend night school for university while working on the farm during the day. Living through a trying financial experience helped him realize the working capital difficulties of the farming industry. Farmers invest a lot of time and resources to produce their products and then need to wait an additional few months after delivery to get paid.

Lex eventually left the family farm and joined a Supply Chain Finance startup in Australia, where they would help businesses get paid early by charging a small fee. Although the business eventually failed and went bankrupt, he saw a lot of value in the product and decided he was going to try to build a better version of the company elsewhere. This place ended up being Morgan Stanley, which he joined after moving to the UK to pursue his MBA. A successful sting at MS eventually led him to Citigroup, where Mr. Greensill continued focusing on Working Capital financing and helped build Citi’s Trade Finance EMEA franchise. During his time at Citi, he also realized the floor was shifting underneath their feet and new technologies were driving innovation and large banks like Citi were not able to adapt at an appropriate pace. So, he figured he would try to build a better product by himself and left Citi to launch Greensill Capital in 2011.

To launch the company, Lex decided to go back to his roots to focus on helping Australian farmers secure financing. The initial goal of the firm was to serve those businesses considered too small for large banks like Citi and Morgan Stanley and he never imagined Greensill Capital would eventually be competing with big banks and serving all types of clients.

Anyway in early 2021 Greensill collapsed due to shady trading practices and Lex Greensill is currently facing legal scrutiny and a wave of lawsuits.