It did happen once.
Ladislaus von Hoffman joined IFC as a young investment officer in 1960. By 1974, he was running the place…
In 1960 Ladislaus von Hoffman was working for a chemical company in his native Germany. A friend told him about a new outfit in Washington, DC called the International Finance Corporation. It sounded like it might make “an interesting and respectable job for a couple of years,” he later recalled.
But when he went for an interview, von Hoffman found that the IFC of that era was far from perfect. It was a small organization then, with only 20 people and far fewer resources than it needed to succeed in its ambitious global mission. The financial products IFC used at the time were also highly cumbersome, not always suited to meet client needs.
Still, something struck von Hoffman — something that defined IFC from the outset, and still does today. The “spirit of pioneering, of proving that risk investments in private business could be done successfully in the developing world,” is how he described it.
He got the offer, took the job, and began a new career in earnest. He was not shy about approaching his boss, IFC’s founding president Robert L. Garner, about opportunities for advancement.
“For a few years I had to slap his ears back because of his frequent requests for increased responsibility and salary. I told him to get back to work and if he did the job as well as I thought he was capable of, his promotion would come naturally,” Garner wrote in his 1972 autobiography.
As was so often the case, Garner’s vision proved correct.
Von Hoffman soon began to rise through the ranks. By 1970 he had been promoted to vice president, the number two job under William Gaud, a former head of the U.S. Agency for International Development whom World Bank President Robert McNamara had brought in as Executive Vice President (EVP). Four years later Gaud retired, leaving a vacancy at the top of IFC.
McNamara agreed to consider internal candidates, eventually choosing von Hoffman for the post.
Although IFC chief economist Moeen Qureshi would eventually succeed him as EVP, to this day von Hoffman remains the only IO to make it to the top.
In the end von Hoffman only headed IFC for three years, leaving in 1977 to become CEO of an international metals and minerals company, the Hochschild Group. But it was on his watch that IFC received its first capital increase, obtaining an additional $500 million from shareholding governments.
No one had been brazen enough to ask for a capital increase until then. But then it was the “spirit of pioneering” that had attracted von Hoffman to IFC in the first place, and the very trait that he wanted to pursue so vigorously here. Although it may have seemed a small step at the time, this first capital increase was a landmark event in IFC’s gradual evolution from the non-factor that von Hoffman found in 1960 to the global player it is today.
“When I became executive vice president,” von Hoffman recalls. “I went to McNamara and said ‘IFC needs more resources. Do you mind if I try for a capital increase?’ And he said ‘Go ahead. You’ll have to justify it of course, but go ahead and talk to the member governments and see what they say.’
“The U.S. was very supportive, so were the Japanese and most of the Europeans and the Arabs,” he remembers. “But some countries weren’t supportive of private investment, so with them it was a tough sell. And it was really Moeen Qureshi, who was then vice president, who convinced the reluctant countries to go along. Of course we had a majority vote, but we wanted it to be unanimous. When Moeen took over from me, he carried it on and took it to the Governors and it was approved.”
If you have an idea for a “postcard from the past,” please email Celeste Diaz Ferraro at cdiazferraro@ifc.org.
