Money Games: The Inside Story of How American Dealmakers Saved Korea's Most Iconic Bank

"Weijian Shan is a great investor and writer. This is someone who’s actively challenging their priors and evaluating their norms. In my opinion, this book is a must-read for anyone who wants to understand private equity. It recounts how Newbridge Capital acquired what was formerly Korea’s largest bank during the IMF crisis in the 1990s. It tells a crazy story about people who do not fully understand each other’s culture, do not have control of their situation, and despite all of that, persevere to understand and try to make the best decision possible, at every moment in time. There are three things I want to call out. First, during the 1997 Asian financial crisis, no one knew what was happening. In retrospect, it’s easy for us in 2023, seeing the economic powerhouse South Korea has become, to observe, ‘Oh, of course you should buy a bank in Korea.’ No one knew at the time that Korea would become an economic superpower. I’m Korean-American, and I grew up not knowing about the powerhouse nature of Korea because it wasn’t a powerhouse at the time. It became one at around the time I became a teenager. Now people around the world know about BTS and Blackpink; in the 1990s Korea certainly didn’t have that cultural cachet. The norms and assumptions of Korean culture were different from those of American culture at the time. It’s super cool to read about an American-trained Chinese economist, based out of Hong Kong, working with an American private equity firm, heading to South Korea to navigate those differences. Support Five Books Five Books interviews are expensive to produce. If you're enjoying this interview, please support us by donating a small amount . Second, the regulatory climate was constantly changing. If you were basing your entire investment decision on what you knew at the beginning of the IMF crisis versus when they got the deal done, you would be lost. They had to challenge their priors, and they had to work with imperfect information, some of which was completely out of their control and included circumstances completely hidden from their view (such as the inner workings of the government, interpersonal politics, etc.). The noise of the situation was such that they would be working with someone who understood what they were trying to achieve, the situation would change, and then they would be working with someone else. It wasn’t their fault. Sometimes things just happen that way. The third interesting topic is the art of improving. Within this is embedded the art of learning. This is a guy who’s learning how to do private equity deals, learning how to improve those deals, and making deals in real time. Becoming an expert requires you to recognize the amount of luck involved. I spend a lot of time thinking about time horizons, about how I might be wrong and which competitive advantages I have. When I discuss this book with my investor friends, I ask them, “At which point would you have quit?” There are lots of points in this book when I don’t know how this guy keeps going. He’s vacationing in Jeju Island with his family when the deal blows up for the umpteenth time. He takes a deep breath and gets in the call and starts working on the deal. That’s a really great example. Specifically, I love the ability to reflect upon whether the deal succeeded. Can the deal be considered successful ten years later? It’s an important point to consider. Mostly, I do venture-style investing at pre-seed, seed, and series A — early-stage companies. It’s hard to obtain feedback. At times, I will not know for a decade if the bets I’ve made are going to turn out to be right. It is sometimes the case that they are right for reasons that are different from my reasons for investing in them. It is important to reflect on that constantly. David Hornik, a GP at August Capital and Lobby Capital, told me that it took him about ten years to figure out if he was lucky, and another ten years to figure out if he was good. He is now about twenty years in, so I think he can say that he’s good. For the rest of us, it’s a question of how we can improve in an environment where we don’t know what we’re doing."