Financial services: tool for economic development
In 2001, Mr. Manoogian sought a chance to apply his experience in a socially constructive manner. He became the CIO of the Cafesjian Family Foundation, a non-profit philanthropic organization dedicated to the social and economic development of Armenia, a former Soviet Republic. Of Armenian heritage, he lived in Armenia for a three and a half year period, 2002 to 2005, overseeing a joint effort between the Foundation, the US Agency for International Development (USAID), the World Bank, and the European Bank for Reconstruction and Development (EBRD) to revitalize public trust in the country's financial sector, improve financial inter-mediation in the bank and securities markets, and increase business and consumer access to credit as part of an overall economic assistance program.
At the time the country and surrounding region suffered from a lack of capital formation and credit availability brought on by chronic depositor distrust of banks and financial institutions. This was heightened by a series of high profile bank failures resulting from prior imprudent lending against overvalued assets. Lack of access to capital and credit was having a negative impact on employment, productivity, and the export efforts of a host of nascent manufacturing and agriculture product processing businesses still struggling to recover from the disintegration of the prior Soviet economic system.
Following a five month review of the country's financial system by he and his team, Mr. Manoogian devised and implemented a strategy to achieve these goals. The strategy consisted of directing the creation of a series of de noveau financial institutions in which the Foundation, USAID, EBRD and the World Bank were to be stakeholders. These entities became Cascade Capital Holdings, consisting of:
Cascade Credit: a non-banking lending institution focusing on creating business credit and export trade finance, funding its operation through the issuance of corporate debt securities guaranteed by the Foundation and the US Treasury in a ground-breaking use of a newly-devised program, the Development Credit Authority. This was meant to attract liquidity back into the financial system, overcome depositor mistrust, and provide liquidity to jump start business activity.
Cascade Investments: an investment bank and securities broker/dealer responsible for the creation, placement, and market making of Cascade Credit's debt securities as well as equity and debt securities issued by other banks to recapitalize other domestic financial institutions.
- Cascade Insurance & Re: a newly created insurance company extending risk mitigation by offering insurance to areas of the economy where it had never been available and providing the first domestic reinsurance capacity to foster risk and premium retention by other domestic insurers, increasing their capital reserves and the pool of funds available for domestic capital formation.
- Cascade Bank: Mr. Manoogian achieved the capstone of this effort by negotiating the acquisition of Emporiki Bank of Armenia and Emporiki Bank of Georgia from the parent bank, Emporiki Bank of Greece, a member of the Credit Agricole Group. Adding the bank component provided a deposit base, residential mortgage, and consumer lending product sets to Cascade Capital Holdings, completing the creation of a universal bank holding company.
This effort coincided with legislative and regulatory reform under the assistance of USAID to improve the providential regulation of the sector. Cascade Capital Holdings' ground-breaking lending programs have also resulted in job creation measured in the thousands among its wide variety of business customers.