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Marcus Shaw on Diversity in Wall Street and Finance · Masters in Business

0:02
Speaker 1: This is Mesters in Business with Very Results on Bloomberg Radio.
0:09
Speaker 1: This week on the podcast, I have another special guest.
0:11
Speaker 1: His name is Marcus Shaw. He has really a fascinating
0:16
Speaker 1: UM career and a focus these days. He really began
0:20
Speaker 1: as a traditional engineer slash finance person, working at IBM
0:27
Speaker 1: as a network engineer before he got his m b
0:30
Speaker 1: a at Duke and from there did the usual research
0:35
Speaker 1: and investment banking gigs throughout a lot of Wall Street
0:39
Speaker 1: before the opportunity came to help entrepreneurs develop and grow
0:44
Speaker 1: their businesses in places like Alabama and Tennessee, which ultimately
0:50
Speaker 1: led him uh to participate in the founding of of
0:54
Speaker 1: a new firm called Old Finance, which was created by
0:59
Speaker 1: really a group of um for lack of a better word,
1:03
Speaker 1: of finance royalty. It's Howard Marks of oak Tree Capital.
1:08
Speaker 1: It's Tony Wrestler of Aries, Mark Rowan of Apollo Global.
1:13
Speaker 1: These three gentlemen said, we're lacking the ability to tap
1:17
Speaker 1: into a very rich, diverse talent pool, including historically black
1:22
Speaker 1: colleges and universities, venture capital, private equity. Just we're not
1:26
Speaker 1: recruiting from those spaces, and so they stood up a
1:29
Speaker 1: firm called Old Finance, whose main purpose was to help
1:33
Speaker 1: alternative asset managers tap into that rich pool of potential
1:39
Speaker 1: hires UH. Marcus shaw works with them, and he's the
1:42
Speaker 1: CEO of Ald Finance. I found this to be really
1:46
Speaker 1: a fascinating conversation about how to access the most skilled
1:53
Speaker 1: UH partners and and employees, what can be done to
1:57
Speaker 1: shake up a relatively stayed industry that has lagged behind
2:02
Speaker 1: its peers in terms of recruiting and other things, and
2:07
Speaker 1: and really how to help have a major impact UH
2:12
Speaker 1: in the world's of finance. And I found this conversation
2:14
Speaker 1: to be fascinating and I think you will also, so,
2:17
Speaker 1: with no further ado, my interview with Marcus shaw Berry.
2:22
Speaker 1: Thank you so much for inviting me. I'm excited to
2:24
Speaker 1: chat with you. So let's talk a little bit about
2:28
Speaker 1: Wall Street and diversity. Wall Street has been pretty bad
2:32
Speaker 1: at recruiting black talent. It's been a stated objective for decades.
2:38
Speaker 1: Why is finance so bad at this? Barry? I think
2:42
Speaker 1: there it's a complex question, UM that requires actually a
2:46
Speaker 1: complex solution and a multifacet solution. I would say the
2:51
Speaker 1: most general issue here is that folks don't have the
2:57
Speaker 1: networks and the access to careers in finance from across
3:01
Speaker 1: the country. Right, So, if you grow up in New York, yeah,
3:05
Speaker 1: you'll probably know some people that worked in the industry,
3:08
Speaker 1: and you may have some relationships, you may go to
3:11
Speaker 1: school with somebody, your parent may work there. And that's
3:13
Speaker 1: whether you're white or black, all right. Um. But if
3:16
Speaker 1: you don't, if you grow up in a market where
3:19
Speaker 1: there's not an investment bank, there's nothing other than a
3:22
Speaker 1: branch bank for one of the multidimensional financials, then you're
3:26
Speaker 1: not really going to have an understanding of what that
3:30
Speaker 1: career looks like at a young age. And so as
3:33
Speaker 1: you get ready to go to college and you start
3:35
Speaker 1: thinking about what your career good look like, it's gonna
3:38
Speaker 1: be primarily academic for you. Um. And so I think
3:42
Speaker 1: that's always a challenge that they're not a ton of people.
3:45
Speaker 1: They're in the seats they're getting access to, in this case,
3:49
Speaker 1: black students from across the country. They're giving them a
3:53
Speaker 1: look at this is what a career could look like
3:55
Speaker 1: for you, This is what an opportunity could look like
3:57
Speaker 1: for you. Here's what the real with possibilities is. And
4:01
Speaker 1: this primarily is how you get there. Here's a path
4:05
Speaker 1: to get there. Um, that's the biggest challenge. So, so
4:08
Speaker 1: tell us about all Finance, what is its mission and
4:12
Speaker 1: why is this a better masse trap than the way
4:14
Speaker 1: things have been done before. So All Finance is focused
4:18
Speaker 1: on building diversity in the alternative investment industry. Alternatives being
4:22
Speaker 1: venture capital, private equity, anything else, private credit, real estate investing,
4:28
Speaker 1: hedge funds, um everything kind of outside of traditional stock
4:32
Speaker 1: and bond investment. Right the things that are more private
4:35
Speaker 1: market driven often and so our goal is increased diversity
4:41
Speaker 1: in that space by working with partnerships at historically black
4:45
Speaker 1: colleges and universities, by providing students from HBCUs opportunities to
4:51
Speaker 1: have co curricular programming understanding you know exactly what you
4:55
Speaker 1: need to know to be successful in that role. Also
4:59
Speaker 1: to provide mentors ship for students so that they're not
5:01
Speaker 1: operating in a vacuum, so that when they have questions
5:04
Speaker 1: there are people in the business, people that have experienced
5:06
Speaker 1: in the business that they can talk to. And also
5:09
Speaker 1: by working and partnering with schools to provide um financial
5:14
Speaker 1: support to help increase capacity not only for students, but
5:17
Speaker 1: also for the institutions themselves. So let's talk a little
5:19
Speaker 1: bit about how old Finance was initially funded and created.
5:25
Speaker 1: You have Howard Marks of oak Tree Capital, Um, Mark
5:30
Speaker 1: Rowan of Apollo, Tony Wrestler of of Aries. These are
5:35
Speaker 1: like three heavy hitters at giant legendary firms. That's a
5:40
Speaker 1: heavy group to to work with. What led them to say,
5:45
Speaker 1: we need help accessing black talent and we're not getting
5:48
Speaker 1: it from anywhere else, we have to do it ourselves.
5:52
Speaker 1: What I think all three gentlemen, and you know Howard,
5:55
Speaker 1: Mark and Tony all recognized is that relationships help drive value,
5:59
Speaker 1: and so you've got to have relationships with the schools
6:02
Speaker 1: and the places where there is a lot of black talent.
6:05
Speaker 1: And I think they saw HBC used as an opportunity
6:08
Speaker 1: for that. I think what's important, though, and what's key,
6:12
Speaker 1: is that we found ourselves at a very interesting point
6:15
Speaker 1: in time in the wake of George Floyd, in the
6:19
Speaker 1: middle of COVID, and so I think everybody around the world,
6:23
Speaker 1: business leaders from across multiple industries, we're trying to think
6:27
Speaker 1: about how can we make the world a better place,
6:30
Speaker 1: How can we address um racial equity in a way
6:34
Speaker 1: that's specific to the businesses that we operate in and
6:38
Speaker 1: I think that's the key, right. This was not just
6:40
Speaker 1: about you know, going out and being philanthropic, right and
6:44
Speaker 1: making one time gifts. This was about how can you
6:47
Speaker 1: be UM strategic in building partnerships over the long term
6:53
Speaker 1: they're going to have a systemic impact in the industry
6:56
Speaker 1: in which you operate. And that's where I really think
6:59
Speaker 1: that that the three firms led by again Howard Tonian
7:02
Speaker 1: Mark really found something that was special and something that was,
7:06
Speaker 1: you know, a better solution to a question that Wall
7:09
Speaker 1: Street has been dealing with for years. So so is
7:11
Speaker 1: it safe to say that Wall Street in general, but
7:16
Speaker 1: alternatives like private equity and venture capital, we're not recruiting
7:20
Speaker 1: at historically black colleges and universities. Was that void out
7:25
Speaker 1: there forever? I think that it was not systemic, right,
7:29
Speaker 1: There was no systemic recruiting UM at HBCUs in a
7:33
Speaker 1: way that was going to be sustainable, right, And I
7:37
Speaker 1: think that a lot of that was driven by needing
7:41
Speaker 1: to take some time and figure out how do we
7:43
Speaker 1: engage with these universities. We know we've got talent there,
7:46
Speaker 1: We've got density of talent, which is the important thing UM,
7:49
Speaker 1: And so I think giving us time to reflect on
7:53
Speaker 1: what had happened over the past few years. Was a
7:55
Speaker 1: really strong case for let's go let's be direct and intentional.
7:59
Speaker 1: Let's work with presidents at these universities, Let's work with
8:02
Speaker 1: the deans, Let's work with the students to develop a
8:06
Speaker 1: strategy together that's going to rise the tide for everybody.
8:11
Speaker 1: So I want to get into the details of what
8:13
Speaker 1: you guys actually do with students. But before I get there,
8:18
Speaker 1: you mentioned Tony, Howard and Mark what led them to say, Hey,
8:22
Speaker 1: let's stand up some entity so we can set up
8:26
Speaker 1: an institution to correct, uh, just a recruiting shortfall we've
8:31
Speaker 1: had for years and years Like that's an unusual group
8:34
Speaker 1: of guys to get together and say, let's see if
8:36
Speaker 1: we can dent the universe a little bit. Yeah. Um, So,
8:39
Speaker 1: I think there are two factors, number one, and I
8:42
Speaker 1: think they both reflect strong leadership at the Firm's Number one,
8:46
Speaker 1: you had, you know, somewhat of a ground swell from
8:49
Speaker 1: within the firm, certainly a leadership that said we need
8:52
Speaker 1: to figure out a way to do something. And I think,
8:55
Speaker 1: as great leaders do, I think Howard and Tony and
8:59
Speaker 1: Mark were receptive to that and Also it was perfect
9:03
Speaker 1: timing because they were thinking, how can we drive impact?
9:06
Speaker 1: How can we uh impact and effect change in our
9:10
Speaker 1: own way. And so it starts off with senior leaders
9:14
Speaker 1: at the firm, and you know, these heads of industry
9:18
Speaker 1: working together to figure out what can we do. Then
9:21
Speaker 1: you bring the relationships together. So Howard and Marcantoni have
9:25
Speaker 1: known each other, but also many of their senior leaders
9:27
Speaker 1: have known each other as well. And so the main
9:31
Speaker 1: thing that you have to do is say, we want
9:32
Speaker 1: to take down any competitive barriers in which we operate
9:35
Speaker 1: during our standard business, and we recognize that what we're
9:39
Speaker 1: trying to solve for is bigger than our individual company.
9:42
Speaker 1: It's really about the industry. And if you can get
9:45
Speaker 1: to that point, which they did very quickly, I mind you,
9:48
Speaker 1: then you can instantly start to put together something as
9:51
Speaker 1: powerful as all Finance. And that happened, um, And it
9:55
Speaker 1: happened fairly quickly, but I think it took a lot
9:57
Speaker 1: of time and a lot of vulnerability and a lot
10:00
Speaker 1: of transparency UM. And I think that's really symbolic of
10:04
Speaker 1: of what all Finance represents. So now let's drill down
10:07
Speaker 1: a little bit and talk about what you exactly do
10:10
Speaker 1: with students. Do you guys provide coaching or mentorship? What
10:14
Speaker 1: do you do to help kids who probably aren't all
10:17
Speaker 1: that familiar with what private credit is and put them
10:22
Speaker 1: on a career path into alternative investments. So there's a
10:26
Speaker 1: framework that I use. I use it with entrepreneurs, I
10:29
Speaker 1: use it with with talent anywhere I see it. First,
10:32
Speaker 1: you identify really good talent, right, kids that have an
10:36
Speaker 1: interest in investing, although they may not know the nuance
10:40
Speaker 1: of what investing asset class that they're most interested in,
10:44
Speaker 1: or you know, they're young. They may not have the
10:46
Speaker 1: experience of understanding multicycles in the market, but they haven't
10:51
Speaker 1: interest in investing. They have academic strength, right, some some
10:55
Speaker 1: real intellectual rigor and horsepower. And so you look at
10:58
Speaker 1: kids that perform well no matter what they do. I'm
11:01
Speaker 1: you know, the kid could be a philosophy major, that
11:03
Speaker 1: could be a finance major, but are they doing well
11:06
Speaker 1: in the pursuit that they're following um And then we
11:08
Speaker 1: look for for students that are coachable, right, Coachable. Coachable
11:13
Speaker 1: is key. It's an apprentice model business. You know, there's
11:18
Speaker 1: nobody that comes into this business and comes in right
11:22
Speaker 1: out of college. As a partner. Even if they've got
11:25
Speaker 1: all the resources in the world, nobody's going to come
11:28
Speaker 1: in as a partner. By and large, most people start
11:31
Speaker 1: this business as an analyst and they work with associates,
11:35
Speaker 1: and those associates work with vps and principles and managing
11:38
Speaker 1: directors and so forth. So you need people that are
11:41
Speaker 1: gonna be willing to work through the apprenticeship model, that
11:44
Speaker 1: are willing to come in, you know, well compensated, a
11:48
Speaker 1: great network of people that they're going to be around,
11:50
Speaker 1: but they're still gonna have to listen and be coached
11:53
Speaker 1: up um in order to benefit the team and the company.
11:56
Speaker 1: And so we look for those things. People that have
11:59
Speaker 1: an interest in vesting, people that have intellectual horsepower, and
12:02
Speaker 1: people that are coachable. That's that's really intriguing. So it's
12:07
Speaker 1: not so much specific qualifications that are needed as qualities
12:13
Speaker 1: that will allow the students you select to succeed going forward. Yeah,
12:17
Speaker 1: I think, by and large, I mean I would say
12:19
Speaker 1: that those qualities, you know, we recognize them through qualifications, right,
12:23
Speaker 1: So I look for people who have strong g p
12:25
Speaker 1: a s and people they're taking some rigorous coursework, even
12:28
Speaker 1: if that courseworks not in finance. I look for people
12:31
Speaker 1: that have done extracurricular work or you know, manage their
12:34
Speaker 1: own little portfolio, or have stock ideas or business ideas
12:38
Speaker 1: that they want to pitch. And then I look for
12:40
Speaker 1: people who also have references that say, you know what,
12:44
Speaker 1: this young man, this young woman has been really coachable
12:47
Speaker 1: in the time that I've had them in school. So,
12:49
Speaker 1: generally speaking, alternative assets, that's a tough gig to get into,
12:54
Speaker 1: regardless of where you go to school. Private equity, venture capital,
12:58
Speaker 1: hedge funds, real estate, down the whole list, not not easy.
13:03
Speaker 1: How much harder is it to get into that space
13:05
Speaker 1: if you're coming from an HBCU. I think it can
13:08
Speaker 1: be difficult um and and not because of anything that's
13:12
Speaker 1: attributed to the student themselves. I think it can be
13:15
Speaker 1: difficult because no matter where you're coming from, you need
13:18
Speaker 1: to know somebody to get into this business. And so
13:20
Speaker 1: the first key is how can you create networks that
13:25
Speaker 1: allow HBCU students to have mentors, to have advocates that
13:30
Speaker 1: are in the industry that learn and know them well,
13:33
Speaker 1: know their strengths, know their weaknesses, no you know their
13:36
Speaker 1: ambition and their aspirations, and can speak to that and
13:39
Speaker 1: help guide them to certain careers inside of alternatives where
13:43
Speaker 1: they can be successful. Really intriguing. Let's talk a little
13:47
Speaker 1: bit about some of the work you've done. UH start
13:50
Speaker 1: with CEO of the Company Lab. What what was COLLABS
13:54
Speaker 1: mission and why Tennessee. My wife and I decided to
13:58
Speaker 1: move to Tennessee back in two thousand and sixteen. She
14:02
Speaker 1: joined a practice down there, and we had family in Tennessee,
14:05
Speaker 1: and it was really a unique opportunity to to move around.
14:08
Speaker 1: We've moved around a bunch and and have enjoyed all
14:11
Speaker 1: the different places that we lived in the country. Chattanooga
14:14
Speaker 1: is a fascinating city UM really steeped in some rich history,
14:19
Speaker 1: but also a city that faces some challenges as they
14:22
Speaker 1: grow UM from a very small city to a more
14:25
Speaker 1: significant city in the U. S economy. UM I. When
14:29
Speaker 1: I moved down there, I was still working with MLT
14:32
Speaker 1: and then an opportunity came up to take a pretty
14:35
Speaker 1: significant role within the community UM as the CEO of
14:38
Speaker 1: the Company Lab. The Company Lab was the entrepreneurship and
14:42
Speaker 1: Economic Development Center UM before Chattanooga and the surrounding areas
14:46
Speaker 1: which include North Georgia, North Alabama, and Southeast Tennessee. It
14:51
Speaker 1: was incredible to really focus on local opportunities for entrepreneurs,
14:58
Speaker 1: for investors, for economic development, and really see how the
15:02
Speaker 1: fabric of a city, UH with you know about a
15:05
Speaker 1: couple of hundred thousand people can develop when you have
15:09
Speaker 1: people that are really dedicated to fostering that growth. It
15:11
Speaker 1: was just like a private public partnership. Tell us a
15:14
Speaker 1: little bit about the structure of that. It was a
15:16
Speaker 1: private public partnership UM. It was set up as a
15:18
Speaker 1: nonprofit that had funding coming some funding coming from the States,
15:22
Speaker 1: some funding coming from foundations UM, and then some funding
15:25
Speaker 1: coming from corporate entities that also found economic development in
15:29
Speaker 1: the region very important. What what some of the economic
15:33
Speaker 1: UM sectors within within that area? What is Chattanooga known for? So,
15:38
Speaker 1: Chattanooga is known for a couple of things, right, key brands.
15:42
Speaker 1: Number one, Coca Cola Bottling is the the UM company
15:46
Speaker 1: that really helped to jump start the city. And so
15:49
Speaker 1: Jack Lupton was kind of the patriarch of of that
15:52
Speaker 1: company UM and sold that company back to Coca Cola
15:55
Speaker 1: in the mid nineties. They were two separate companies at
15:58
Speaker 1: the So the yes, there were a number of bottling
16:02
Speaker 1: UM companies that would bottle Coca Cola product and distributed
16:07
Speaker 1: it throughout the country or throughout the region, and UM
16:10
Speaker 1: the one in Chattanooga, Coca Cola Bottling was one of
16:13
Speaker 1: the larger ones UM in the mid century. Again, it
16:16
Speaker 1: was sold back to Coca Cola as they consolidated those
16:19
Speaker 1: businesses UM and left a pretty strong economic footprint in Chattanooga. UM.
16:25
Speaker 1: Chattanooga was also the home of Moonpie and Little Devi right,
16:28
Speaker 1: and a number of consumer products that are very familiar
16:33
Speaker 1: brands that we know about but did not know that
16:35
Speaker 1: they were from Chattanooga UM. And so what I saw
16:39
Speaker 1: in Chattanooga was a rich history around entrepreneurship that necessarily
16:44
Speaker 1: hadn't found its way into the modern day. Right. We
16:46
Speaker 1: didn't see a lot of great companies coming out of
16:49
Speaker 1: Chattanooga in the late nineties during the tech bubble and
16:52
Speaker 1: and and so forth. So what did you accomplish when
16:55
Speaker 1: you were there? Do you feel like you move the
16:57
Speaker 1: needle little, Well, we moved the needle tremendously. UM. You know,
17:00
Speaker 1: there were some companies that were there when I took
17:02
Speaker 1: the seat, companies like Bellhop that's a tremendous company UM
17:07
Speaker 1: and kind of operates in the uber of moving right,
17:10
Speaker 1: so you a fantastic moving company and a fantastic culture.
17:15
Speaker 1: UM there was a company, Freight Waves that has done
17:17
Speaker 1: fantastic work. People kind of equated to the Bloomberg of trucking. UM.
17:22
Speaker 1: And so they've got a freight way Freight Waves, freight
17:25
Speaker 1: Waves Freight with W. A. V. E. S Um and
17:29
Speaker 1: Craig Fuller, who's the founder and CEO. Down there's a
17:32
Speaker 1: good friend but also a really strong business person who's
17:36
Speaker 1: done some great work. We brought Steve Case and Rise
17:39
Speaker 1: to the rest of Chattanooga and UM Freight Waves was
17:42
Speaker 1: actually the investment that they made in Chattanooga and has
17:45
Speaker 1: done great work. The company has grown, They've employed hundreds
17:48
Speaker 1: of people at meaningful salaries. And that's what it takes
17:52
Speaker 1: to move the needle in a place like Chattanooga. And
17:54
Speaker 1: there are hundreds of cities like that around the child.
17:56
Speaker 1: So how do you go from Tennessee to Alabama and
17:58
Speaker 1: Montgomery Tech last, So, as I was leaving Collab in Tennessee,
18:04
Speaker 1: I saw what was going on in Montgomery, and I
18:07
Speaker 1: saw that Montgomery had great leadership. The mayor down there,
18:10
Speaker 1: Stephen Reid, has done a fantastic job in Montgomery. I
18:13
Speaker 1: also saw that they had some really unique assets. They've
18:16
Speaker 1: got UM, a fantastic Air Force installation down there, They've
18:20
Speaker 1: got the state capital there in Montgomery, that got a
18:23
Speaker 1: really diverse population. And so what I really did was
18:27
Speaker 1: take the thesis that we were working with in Chattanooga
18:30
Speaker 1: and adjusted so that it applied to Montgomery. UM. And
18:34
Speaker 1: so in a couple of years down there, we've been
18:36
Speaker 1: able to bring some really incredible companies to Montgomery to
18:39
Speaker 1: see the type of value that they have there. But
18:42
Speaker 1: we've also, in this most recent cohort UM and the
18:45
Speaker 1: team down there's an incredible job helped grow companies that
18:48
Speaker 1: are there in Montgomery, focusing on tech solutions and tech
18:52
Speaker 1: services to help them expand and recognize assets even outside
18:56
Speaker 1: of the region. So you mentioned tech. I tend to
18:58
Speaker 1: think of the West Coast as the you know, the
19:01
Speaker 1: center of tech in the US. The northeast is the
19:05
Speaker 1: center of finance. The southeast. How should we think about
19:09
Speaker 1: that in terms of the business sectors that they should
19:13
Speaker 1: be known for. So I think there are a couple
19:15
Speaker 1: of things. UM Number one, manufacturing has been strong in
19:20
Speaker 1: the Southeast for a number of years, a lot of
19:22
Speaker 1: car companies read a lot of car companies UM. There's
19:25
Speaker 1: a lot of pro business environment UM for companies with
19:29
Speaker 1: with big labor forces in the Southeast, you're able to
19:33
Speaker 1: operate UM at a more efficient standard of living in
19:37
Speaker 1: terms of cost, and so you see a lot of
19:40
Speaker 1: car manufacturers operating down there. Also transportation and logistics, Chattanooga
19:46
Speaker 1: UM was probably one of the biggest hubs for transportation
19:50
Speaker 1: logistics in the country. Anything that's coming through the Southeast
19:54
Speaker 1: via truck is coming through either one or seventy five
19:58
Speaker 1: or twenty four. All of that comes through Chattanooga, and
20:01
Speaker 1: so that was something that we saw. You've got companies
20:04
Speaker 1: like US Express and Covenant that operate in chatted and
20:07
Speaker 1: FedEx or UPS have a big logistics center. So FedEx
20:11
Speaker 1: is out in Memphis, in Memphis, CNSE so on the
20:13
Speaker 1: other side of the state. But those trucks, again will
20:16
Speaker 1: all come through through Chattanooga. And so when you think
20:19
Speaker 1: about you know the South, thing you think about industries
20:22
Speaker 1: that are moving UM, it continues to be manufacturing and logistics. Also,
20:27
Speaker 1: healthcare is really popping up. Nashville in Atlanta are two
20:31
Speaker 1: very large health care hubs. UM. Some of that is
20:34
Speaker 1: due unfortunately to demand right where you have health outcomes
20:38
Speaker 1: that are probably a little more severe UM and some
20:41
Speaker 1: of the southeastern states in the United States, and so
20:44
Speaker 1: you need strong healthcare to meet the needs of the population.
20:47
Speaker 1: It's interesting we're talking about different parts of the country. UM.
20:52
Speaker 1: A lot of the bigger firms want to see the
20:54
Speaker 1: end of remote work or hybrid work. But I would
20:57
Speaker 1: imagine that that creates opportunity ease for parts of the
21:01
Speaker 1: country like Chattanooga and Nashville and Montgomery, where there are
21:06
Speaker 1: a lot of big companies that may not be located there,
21:08
Speaker 1: but they want to tap the pool of talent that's there.
21:11
Speaker 1: So we've seen that, and in talking with leaders in
21:14
Speaker 1: in a number of cities UM throughout the South and
21:17
Speaker 1: and even throughout other areas in the middle of the
21:19
Speaker 1: country UM that have not tremendous not traditionally had the
21:24
Speaker 1: type of talent there or the draw to those cities. UM.
21:29
Speaker 1: You definitely saw a surge of people, I would say
21:31
Speaker 1: during the COVID period that we're moving to cities where
21:35
Speaker 1: there was a lower cost of living but a strong
21:38
Speaker 1: quality of living and they could work remote. And so
21:42
Speaker 1: I think there's been a benefit to those cities UM,
21:45
Speaker 1: and that you're getting people that are moving. You know,
21:47
Speaker 1: Nashville had a ton of people that were moving to Nashville,
21:50
Speaker 1: primarily from California, UM, and that really strengthened the work
21:54
Speaker 1: or the labor force in Nashville. What you do see
21:58
Speaker 1: on the other side of the coin, though, is that
22:00
Speaker 1: for companies that are there locally, it can be a
22:04
Speaker 1: detriment because you have people that are there in the
22:07
Speaker 1: city and may take jobs outside of the region instead
22:10
Speaker 1: of taking jobs there in the region. And so there's
22:13
Speaker 1: a delicate balance right to the impact UM, particularly for
22:16
Speaker 1: small to mid size markets where you have a labor
22:20
Speaker 1: force that's needed in the market that's finding opportunities outside
22:24
Speaker 1: of the market, even if they continue to live. Let's
22:26
Speaker 1: spend a little time going over some of your history.
22:29
Speaker 1: Your your families from Mississippi. But you grew up a
22:32
Speaker 1: little bit of a military Brad tell us tell us
22:34
Speaker 1: about those experiences. Yes, so, my my dad's actually from Mississippi.
22:38
Speaker 1: My mom was from North Carolina. My dad was a
22:41
Speaker 1: naval officer who retired shortly before I was born. So
22:44
Speaker 1: I spent most of my time growing up in Maryland,
22:46
Speaker 1: right outside of d C. So you didn't do the
22:48
Speaker 1: whole army. Brad didn't do that. But I did hang
22:51
Speaker 1: out on military basis a lot. So all my friends
22:55
Speaker 1: would change every three years when the PCs. Right, So
22:58
Speaker 1: I had kind of the ob sit side of the travel,
23:01
Speaker 1: which is being the friend that was always left behind. Right.
23:04
Speaker 1: That's that's really Uh, that's really intriguing. What what did
23:07
Speaker 1: your dad, dad retire from doing? What was his So
23:10
Speaker 1: my dad, my dad had two careers in his life.
23:12
Speaker 1: He grew up in Mississippi, his picking cotton believe it
23:15
Speaker 1: or not when he was seven years Oldways born in
23:17
Speaker 1: nine seven years old. Right, we talked about skipping generations. Um.
23:23
Speaker 1: He went into the Navy in nineteen and spent twenty
23:27
Speaker 1: seven years in the Navy. He retired and went to
23:30
Speaker 1: work at the Library of Congress and Personnel. Was able
23:32
Speaker 1: to get his undergrad master's PhD all through the g
23:35
Speaker 1: I bill while he was in the navy. Um. But
23:37
Speaker 1: I always say my father is a real hero of
23:39
Speaker 1: mine because he truly did skip three generations in one lifetime. Um,
23:44
Speaker 1: that's really impressive. Was was mom working? Was she mother?
23:49
Speaker 1: My mother was a fifty year school teacher and uh,
23:52
Speaker 1: public school in d C for fifty years, um, and
23:56
Speaker 1: really was an inspiration for the way I think about
23:59
Speaker 1: learn eLearning and understanding the value of education. So let's
24:03
Speaker 1: talk a little bit about education. You went to Sidwell
24:08
Speaker 1: Friends School. That that's some rarefied company, isn't it. It's
24:11
Speaker 1: some good people that have gone there. Yeah, who did
24:14
Speaker 1: you go to school with? Any famous names? Well, Marcus
24:17
Speaker 1: Shaw's one, um, But no I had. I had great
24:20
Speaker 1: great folks in my class. Bear Tune Day Thurston who
24:23
Speaker 1: may have heard of, author um and producer that spent
24:26
Speaker 1: time with the Daily Show, John bern Ball who's a
24:29
Speaker 1: great actor, Tommy Kale who was the director of Hamilton's
24:33
Speaker 1: and and some other big plays. But you know, everybody
24:36
Speaker 1: in our class was was phenomenal. Um. Also folks like
24:39
Speaker 1: Chelsea Clinton and later the Obama girls went to said well,
24:43
Speaker 1: so some rarefied air indeed, But um, a great group
24:46
Speaker 1: of students and a great group of friends. So so
24:48
Speaker 1: you go from there to get a mathematics degree from
24:51
Speaker 1: Morehouse College, then onto Georgia Tech for an electrical engineering
24:56
Speaker 1: degree with little football mixed in. Tell us a little
24:59
Speaker 1: bit about your act ademic career in college. So when
25:02
Speaker 1: I went to more House. I was excited. I went
25:04
Speaker 1: down there with a few friends. It was a great
25:06
Speaker 1: mix to be able to go to a school like
25:08
Speaker 1: said well and then go to an hvc U. UM
25:11
Speaker 1: as esteemed as more House was. Was really a great
25:14
Speaker 1: opportunity for me to have a bunch of different experiences. UM.
25:19
Speaker 1: My story around playing football is probably my great interview story.
25:23
Speaker 1: I UH was playing cards with a bunch of guys
25:26
Speaker 1: right at the beginning of the school year, and UH
25:29
Speaker 1: made a bet that I could kick a fifty yard
25:31
Speaker 1: field goal. So we go out on the field. We
25:33
Speaker 1: jumped the fence, I line up, take about twenty steps
25:36
Speaker 1: back kick a field goal from fifty yards. One of
25:39
Speaker 1: the coaches comes out and yells at us to get
25:41
Speaker 1: off the field with trespassing. UM. As we're leaving, he
25:44
Speaker 1: tells me to come out to the walk on tryouts
25:46
Speaker 1: at the end of the week. How close did you
25:48
Speaker 1: come to a fifty yard field goal? Oh? I knocked
25:50
Speaker 1: it down. He made it, man. He he didn't want
25:53
Speaker 1: me to come out because I missed it. He wanted
25:54
Speaker 1: to come out because I made it. And UM, you know,
25:57
Speaker 1: I went on to play four years and more House
26:00
Speaker 1: and had some some strong accolades there, But really even
26:03
Speaker 1: that experience was about building great friends, um, that I
26:06
Speaker 1: played football with, and many of those gentlemen have going
26:09
Speaker 1: on to do incredible things as well. What why is
26:12
Speaker 1: it not surprising that a math nerd is also a
26:15
Speaker 1: place kicker. It seems to be like, um, the field
26:18
Speaker 1: goal seems to be one of the most mathematical parts
26:21
Speaker 1: of football. Well, it's pure geometry, right, So one point
26:25
Speaker 1: three seconds from the snapper to putting the ball down
26:29
Speaker 1: and getting the ball off the ground, the angle that
26:31
Speaker 1: has got to come up, you know, is is pretty
26:33
Speaker 1: significant in terms of your probability of making it. Um.
26:36
Speaker 1: So I already I looked at it as an exercise
26:38
Speaker 1: in physics, geometry, Um, you know a little bit of
26:41
Speaker 1: chemistry depending on on the texture of the football. So
26:45
Speaker 1: I thought I was a natural. That's really intriguing. And
26:48
Speaker 1: then you go on get your masters at Duke School
26:51
Speaker 1: of Business. Uh, what led you in that direction? Given
26:54
Speaker 1: the mathematics and electrical engineering undergraduate? So I went to
26:59
Speaker 1: IBM after my completing my undergrad degree at Georgia Tech
27:03
Speaker 1: and Electrical Engineering and had a great time there, learned
27:06
Speaker 1: a lot, but really wanted to understand the way that
27:10
Speaker 1: we were selling business right, understanding more about the business
27:13
Speaker 1: of IBM and how we thought about the products and
27:15
Speaker 1: services that I was delivering as an engineer. UM not
27:19
Speaker 1: to mention one of my you know, very good friends
27:21
Speaker 1: that played football with me, A more House, was a
27:23
Speaker 1: year ahead of me in business school. He said, you're
27:25
Speaker 1: pretty smart. You should check out business school. And uh,
27:28
Speaker 1: fortunately enough, I had a great school in Duke that
27:30
Speaker 1: was right there in Durham. My wife was in med
27:33
Speaker 1: school at U n C. And Uh, I didn't have
27:35
Speaker 1: to move to go to a great business school, which
27:37
Speaker 1: was really refreshing and it was a great experience and
27:40
Speaker 1: I learned a lot about business there and kicked off
27:42
Speaker 1: a new career from there. You end up going into
27:45
Speaker 1: a decade of equity research and investment banking at shops
27:49
Speaker 1: like Bank of America, Piedmont others. What led to that
27:53
Speaker 1: aspect of finance. So I always tell folks this is
27:57
Speaker 1: one of the great turning points in my life. When
28:00
Speaker 1: I went to business school, I was pretty confident that
28:03
Speaker 1: I was going to come out of business school and
28:05
Speaker 1: go back to IBM. I was gonna stay an engineer.
28:07
Speaker 1: I wanted to learn more about marketing and you know,
28:09
Speaker 1: some operations around technology. There was a point right before
28:14
Speaker 1: the start of my first year in business school, so
28:17
Speaker 1: this is two thousand three, I had an opportunity to
28:20
Speaker 1: go to a camp, two day camp at Goldman that
28:24
Speaker 1: was focused on providing insights in investment careers for people
28:29
Speaker 1: that did not have an investment background. And they, you know,
28:31
Speaker 1: they fly you up your smart kid, put you up
28:34
Speaker 1: in a nice hotel. And I met a woman who
28:37
Speaker 1: covered enterprise software at Goldman, and she gave me really
28:41
Speaker 1: great insight into how I could leverage the industry knowledge
28:45
Speaker 1: that I had developed at IBM. And so really it
28:49
Speaker 1: was one person on an off conversation, you know, down
28:53
Speaker 1: on Broad Street twenty plus years ago that led to
28:57
Speaker 1: my career. She said, Equity research is a great ace
29:00
Speaker 1: where if you know a lot about the business and
29:02
Speaker 1: you learn a lot about finance, you can be impactful,
29:05
Speaker 1: You can earn a good living, you can really understand
29:07
Speaker 1: the markets and meet great people. As opposed to the opposite,
29:10
Speaker 1: which is learning knowing a lot about finance and then
29:14
Speaker 1: having to learn a whole industry from the outside. It's
29:17
Speaker 1: a very different perspective than starting with the industry knowledge
29:21
Speaker 1: from the inside and and that perspective is something that
29:26
Speaker 1: I think we've got to learn to embrace more because
29:29
Speaker 1: you know, finances challenging, but it's not difficult, right. It
29:34
Speaker 1: requires putting in work and getting reps um in order
29:37
Speaker 1: to start to understand patterns and be able to anticipate
29:41
Speaker 1: things that you will see in the market or things
29:43
Speaker 1: that you'll see at a company. But really understanding that
29:46
Speaker 1: the core of industry is what makes a master of business, right.
29:50
Speaker 1: I mean, that's how you really start to hone the
29:53
Speaker 1: skills that you need in order to make a true
29:55
Speaker 1: alpha out there in the market as an investor. So
29:58
Speaker 1: tell us what you did at ups like Bank of America.
30:01
Speaker 1: What was your focus? So I covered telecom services at
30:03
Speaker 1: Bank of America UM. During my time at IBM, I
30:06
Speaker 1: had worked UM on several telecom networking projects and really
30:10
Speaker 1: understood the industry, things like spectrum and things like wireless
30:14
Speaker 1: that were coming of age at that time. I understood
30:17
Speaker 1: pretty deeply. And you know, through my understanding of finance,
30:20
Speaker 1: I was able to say, these are businesses that I
30:22
Speaker 1: think will do well, These are businesses that are positioned
30:25
Speaker 1: to do well, and once the market understands that the
30:28
Speaker 1: socks will perform. Um. I had a great mentors at
30:31
Speaker 1: at a Bank of America, a great team that I
30:33
Speaker 1: worked with and really set me up for a great
30:36
Speaker 1: start in in finance. So you have a little bit
30:38
Speaker 1: of a health scare when you're relatively young, and it
30:41
Speaker 1: changes your career trajectory. Tell us what led you to
30:45
Speaker 1: stepping off of the merry go round? Yeah, um, it's
30:49
Speaker 1: an incredible story and um one that I think also
30:53
Speaker 1: defines a lot of where my life has led. Um.
30:58
Speaker 1: So this is you know, I was at a firm
31:02
Speaker 1: in d C and UH covering tech, media, telecom, a
31:07
Speaker 1: bunch of regulated industries as well, and was having some
31:11
Speaker 1: chest pain and a bunch of traders had you know,
31:15
Speaker 1: what we call walking pneumonia. But it takes everything to
31:17
Speaker 1: get a trader off the desk, right, I mean, they'll
31:19
Speaker 1: the whole desk will get pneumonia before they leave. And um,
31:23
Speaker 1: I was pretty sure that's what I had And was
31:25
Speaker 1: coughing for a few days and had some pain in
31:27
Speaker 1: my chest. Go to the hospital, they take an x ray,
31:31
Speaker 1: They see that I've got some swelling and a little
31:34
Speaker 1: bit of cloudiness there in my lungs, and they give
31:36
Speaker 1: me a Z pack and antibiotic. They think that I
31:38
Speaker 1: might have had pneumonia. My wife, who's a physicious, as
31:41
Speaker 1: I shared with you before you know, comes to the
31:44
Speaker 1: hospital to the emergency room. She asked me what they said.
31:47
Speaker 1: I said, you know, as an equity research guy, I
31:49
Speaker 1: think I know it all. I've got pneumonia. You know,
31:52
Speaker 1: they saw it on the X ray. What I did.
31:55
Speaker 1: Let me see those those She's like, let me see
31:57
Speaker 1: what's going on exactly. She didn't buy it. Well, she
32:01
Speaker 1: didn't buy it because she's a doctor and she's very
32:03
Speaker 1: good at her job. Like I say all the time,
32:05
Speaker 1: I've got a great wife. But I've got the best
32:06
Speaker 1: doctor that anybody could have in their house. I had
32:09
Speaker 1: some leg pain earlier in the week, left side, left side,
32:13
Speaker 1: So we know what we know where this is going
32:15
Speaker 1: right there? You out thought it was a Charlie horse.
32:20
Speaker 1: I played a little basketball with buddies. This was right
32:23
Speaker 1: at the end of a Thanksgiving holiday and I got
32:26
Speaker 1: a group of buddies, lifelong friends. We always played basketball together,
32:29
Speaker 1: and I thought it was a Charlie horse pain and
32:33
Speaker 1: the leg went away. A couple of days later, I'm
32:35
Speaker 1: having this pain in my chest, and I take myself
32:37
Speaker 1: to the hospital. She goes, did you tell them about
32:40
Speaker 1: your leg? And I said no. She goes into the
32:44
Speaker 1: head of the emergency room's office. The guy comes back
32:47
Speaker 1: out and he says, how come you didn't tell me
32:49
Speaker 1: about your leg. I said, well, my leg doesn't hurt anymore.
32:51
Speaker 1: It's my chest. I got pneumonia. That's what that's raised.
32:53
Speaker 1: This is where equity research guys talk themselves into a hole.
32:56
Speaker 1: They think they know more than they do. I know
32:58
Speaker 1: a lot about telecom, I know no thing about healthcare,
33:01
Speaker 1: all right. Um, So the guy comes out and he says, well,
33:04
Speaker 1: we gotta do give you what we call a d dimer. Right,
33:06
Speaker 1: there's a test for blood clots essentially. Um, they do
33:11
Speaker 1: the tests. I am at this point the second sickest person,
33:16
Speaker 1: highest priority in the emergency. They rolled me in, They
33:19
Speaker 1: give me an m R I. They see the blood
33:22
Speaker 1: clots in my lungs, they see some remnants in my leg.
33:25
Speaker 1: I'm immediately, um, you know, brought into the hospital and
33:29
Speaker 1: and I'm there for several days. They give me blood thinner.
33:33
Speaker 1: They want to make sure that these clots don't pass
33:36
Speaker 1: or anything crazy like no, no, no, no, no, so
33:39
Speaker 1: what I had was was a blood clot, right, so
33:41
Speaker 1: I did not have a heart attack. Um, I'm in
33:43
Speaker 1: the Strokes Center there, the hospital in d C. And
33:46
Speaker 1: for me, it was really a point where you start
33:50
Speaker 1: thinking about your life in a different way. It had
33:52
Speaker 1: to be terrifying when your wife comes in and the
33:55
Speaker 1: head of the R e R says, stat, let's let's
33:58
Speaker 1: let's get this guy taking care of immediately. It is,
34:03
Speaker 1: but not as scary until you realize what's really happening,
34:07
Speaker 1: and that you know, there's things that they called widow makers,
34:09
Speaker 1: which are these bilateral blood clots that you get across
34:12
Speaker 1: the aortic valve. And I mean you just go away,
34:16
Speaker 1: you're done right. As somebody that's kind of steeped in mathematics, probabilities, investment,
34:21
Speaker 1: you always have you thinking about the future, and um,
34:25
Speaker 1: you know my great story from that is that I
34:26
Speaker 1: actually upgraded a stock Pandora media from the I see
34:30
Speaker 1: you in the hospital. Um, yeah, to which my wife responded,
34:36
Speaker 1: you know, if you die writing a research report, I'll
34:38
Speaker 1: kill you, right. Um. So this is where you start
34:42
Speaker 1: putting it together. You put a little bit of life together,
34:45
Speaker 1: and you start thinking like an investor. And you start
34:48
Speaker 1: investing in yourself and thinking about you know, how are
34:51
Speaker 1: you going to measure the return in your life? And
34:53
Speaker 1: for me, I've done well UM as an analyst. You know,
34:57
Speaker 1: we we we did well. And I said, I really
35:00
Speaker 1: want to find ways that I can impact and help
35:02
Speaker 1: others with with the years that I have left, because
35:05
Speaker 1: it could have gone away right then and there. So
35:07
Speaker 1: is that what led to Management Leadership for Tomorrow? And
35:11
Speaker 1: then old finance tell us about what took place when
35:14
Speaker 1: you get out of the hospital. Yeah, so I got
35:17
Speaker 1: out of the hospital. UM stuck around for a few
35:20
Speaker 1: more months at at the firm that I was working UM,
35:23
Speaker 1: and then decided to do some other things and and
35:25
Speaker 1: that included UM doing some work with small and medium
35:29
Speaker 1: sized businesses providing some outsourced CFO type of service UM
35:34
Speaker 1: to really understand how some of these small businesses worked.
35:36
Speaker 1: An organization that I looked at doing some work with
35:40
Speaker 1: with Management Leadership for Tomorrow and John Rice and the
35:43
Speaker 1: team and MLT do a great job. UM. They have
35:46
Speaker 1: absolutely moved the needle and changed the trajectory for thousands
35:50
Speaker 1: of UM, Black, Latino and Native American students. Over twenty
35:53
Speaker 1: plus years, uh knew John a little bit and knew
35:56
Speaker 1: about the work that he had done. I had written
35:58
Speaker 1: recommendations for or mintyes of mine into that program UM,
36:02
Speaker 1: and John asked me to come out and you know,
36:04
Speaker 1: can you help raise some money right running business development?
36:07
Speaker 1: And for me that was a step away from the
36:10
Speaker 1: industry UM. And what I recognized is I got tremendous
36:15
Speaker 1: fulfillment out of seeing young people that were, you know,
36:19
Speaker 1: ten twenty years younger than myself, but helping them get
36:22
Speaker 1: to the next level, helping give them the opportunities that
36:25
Speaker 1: that woman gave me from Goldman when she said here's
36:28
Speaker 1: the path you should think about taking. Quite quite interesting.
36:31
Speaker 1: I'm Barry Ritults. You're listening to Masters in Business on
36:34
Speaker 1: Bloomberg Radio. We're talking to Marcus Shaw. He is the
36:38
Speaker 1: CEO of alt Finance, a firm which seeks to increase
36:42
Speaker 1: diversity across alternative asset management firms. So we've been talking
36:48
Speaker 1: earlier about UM, the lack of recruiting and the lack
36:53
Speaker 1: of diversity historically on Wall Street, but let's talk about
36:57
Speaker 1: the other side. You you often speak to gups of
37:00
Speaker 1: smart college kids and you asked them, Hey, what do
37:04
Speaker 1: you guys know about private equity or credit or venture capital?
37:08
Speaker 1: What what sort of answer do you get when you
37:10
Speaker 1: ask those college students those questions. So, the most interesting
37:14
Speaker 1: thing that I've seen in assessing college students and talking
37:17
Speaker 1: to them is that students generally have very little knowledge
37:23
Speaker 1: of the companies that are operating in the private equity,
37:26
Speaker 1: private credit markets, real estate. They're knowing they know some
37:29
Speaker 1: of the venture capital firms, because I think venture capital
37:32
Speaker 1: has done a great job of pr over the past
37:35
Speaker 1: ten years or so. I mean, everybody wants to be
37:37
Speaker 1: a venture capitalist and an entrepreneur. Um. I always attribute
37:41
Speaker 1: that to a low interest rate environment where oh no,
37:44
Speaker 1: go back to the nineties and venture capitalists were rock stars.
37:48
Speaker 1: That's right, that's right, right. Well, also, though you know
37:50
Speaker 1: a period there where you had the FED being a
37:52
Speaker 1: little accommodative, right. I think that by nature and by design,
37:57
Speaker 1: many of the firms that operate in in the private
38:00
Speaker 1: equity and private credit space don't want to be known.
38:03
Speaker 1: But our students know many of the holding companies, right,
38:06
Speaker 1: And that's what's really interesting. That they know the publicly
38:10
Speaker 1: traded companies, they know the private companies, but they don't
38:13
Speaker 1: know the holding companies for the private companies. You use
38:17
Speaker 1: the example and I think it's fascinating. Rihanna partnered with
38:21
Speaker 1: a private equity firm for her fashion line. The students
38:24
Speaker 1: know who Rihanna is and they know how wildly successful
38:28
Speaker 1: she's become, but they don't know who the financers are.
38:31
Speaker 1: That's right, and and how do you get them to
38:36
Speaker 1: look behind the curtain and or under the hood and
38:40
Speaker 1: see that that capital is what's driving the business. I
38:44
Speaker 1: think the key to that and we we we check
38:46
Speaker 1: for this when we're interviewing students for our program is
38:50
Speaker 1: intellectual curiosity, Right, That's the key to being an investor.
38:54
Speaker 1: Are you always thinking about peeling back another layer to
38:57
Speaker 1: the onion? You go in a store, you see a
38:59
Speaker 1: great product? Mm hmm. Where's that product made? Who's the
39:05
Speaker 1: company that owns that? If there's several different pieces to
39:09
Speaker 1: the product, how many where are they getting the components from?
39:11
Speaker 1: Where they sourcing them from? Who owns that company? Who
39:14
Speaker 1: finances those companies? That's the way we're teaching students to
39:18
Speaker 1: think because that brings about the type of intellectual curiosity
39:23
Speaker 1: that you need to have when ultimately you want to
39:25
Speaker 1: put some capital behind a company that you really like.
39:29
Speaker 1: So So let's go back to first principles. Why are
39:32
Speaker 1: companies interested in in diversity? What's in it for them?
39:36
Speaker 1: So I think they're There are a number of reasons
39:38
Speaker 1: why companies are and should be interested in diversity. UM.
39:43
Speaker 1: We have hundred million students out here UM coming through
39:48
Speaker 1: you know, K through twelve and university system that are
39:51
Speaker 1: operating at a higher level than we were twenty years ago.
39:55
Speaker 1: Students are very smart, independent of their color, their background,
39:58
Speaker 1: their religion, their central owner Asian right. What we know
40:01
Speaker 1: is is that students are being educated at tremendous levels today.
40:06
Speaker 1: There have so much more access that their intellectual curiosity
40:10
Speaker 1: is going to be UM really fueled by a lot
40:14
Speaker 1: more information that's delivered in a more equitable way. If
40:18
Speaker 1: I'm hiring for talent, I want access to all of that.
40:22
Speaker 1: I want to know the brightest kid from every corner
40:25
Speaker 1: of the country, boy, girl, gay, straight, black, white, it
40:30
Speaker 1: doesn't matter. I want to know that student because that
40:33
Speaker 1: student can help me. That student can help me build
40:36
Speaker 1: and invest in find opportunities and generate alpha and bring
40:40
Speaker 1: more clients into my business. And so if I'm a
40:43
Speaker 1: senior leader at a company, I think that's the business operative, right,
40:47
Speaker 1: I've got to have the brightest talent. The talent that's
40:50
Speaker 1: most differentiated and intelligent is also helpful. I think the
40:54
Speaker 1: social part of this is that you know, a lot
40:58
Speaker 1: of these dollars are public dollars that that companies are managing.
41:02
Speaker 1: My mother again, a fifty year school teacher who put
41:06
Speaker 1: money into her retirement for fifty years. It would benefit
41:11
Speaker 1: her and it would benefit the other teachers and firefighters
41:14
Speaker 1: and police officers. To represent diverse communities, to have people
41:18
Speaker 1: who are investing their money look like them as well,
41:21
Speaker 1: really interesting. So this is more than just a checkbox
41:25
Speaker 1: on any list. Companies are actually looking to expand their
41:29
Speaker 1: diversity and inclusion practices because they see a genuine benefit
41:34
Speaker 1: to both their decision making process and their businesses. I
41:38
Speaker 1: think that's the obvious answer, um, and that's why with
41:42
Speaker 1: all finance, you know, this is a long term plan.
41:44
Speaker 1: We've got a tenure commitment from our three uh initial
41:47
Speaker 1: partner firms, and so this is not about checking the box.
41:51
Speaker 1: This is about changing the paradigm um for recruiting talent
41:55
Speaker 1: in this industry. So this industry has been notorously laggered
42:02
Speaker 1: when it comes to diversity, but there are lots of
42:04
Speaker 1: other industries. Technology has been accused of having a diversity issue,
42:10
Speaker 1: medicine law, pretty much wherever you look. The United States
42:14
Speaker 1: has its own history with some of its dark pockets.
42:19
Speaker 1: What other sectors could benefit from an organization like ALD Finance,
42:24
Speaker 1: ALD DOT. What else can we focus on? Yeah, I
42:28
Speaker 1: think there are a number of sectors that could benefit
42:31
Speaker 1: from this strategy, even sectors like tech that have already
42:35
Speaker 1: developed some strategies. I think again, we're focused around education, exposure,
42:40
Speaker 1: and experience, the three elements that are going into preparing
42:43
Speaker 1: students for careers. This is not just about scholarships. Right.
42:47
Speaker 1: You give us in the scholarship, but then you don't
42:50
Speaker 1: really give them access to the people at your firm
42:52
Speaker 1: that are going to help that student not only get
42:55
Speaker 1: a job at that firm, but feel a sense of belonging,
42:58
Speaker 1: right once they get to that firm, so that they
43:00
Speaker 1: maximize their individual output. That's what you're trying to go for. Right.
43:04
Speaker 1: I'll tell you a story about a student. So we
43:07
Speaker 1: have a student in our program, and when you talk
43:09
Speaker 1: about counseling and coaching, it was a phenomenal story. A student,
43:14
Speaker 1: very bright student who had the ability to graduate in
43:16
Speaker 1: three years and worked last summer at at a fairly
43:20
Speaker 1: reputable consulting company. And I asked a student, I said,
43:24
Speaker 1: why are you in a hurry to graduate? You've got
43:26
Speaker 1: a students, got a pretty good scholarship package. Student comes
43:30
Speaker 1: from a background where you know, he's having to support
43:33
Speaker 1: families still at home. I mean, you know, a tough situation,
43:37
Speaker 1: and he wanted to get out in the workplace where
43:39
Speaker 1: he can earn I said, trust me, if you stay
43:43
Speaker 1: for your full four years, you'll have the opportunity through
43:46
Speaker 1: this program to get access to a career in alternatives.
43:52
Speaker 1: You have a great opportunity. Last summer you'll come out.
43:55
Speaker 1: You could make two x, even three X if you
43:58
Speaker 1: stay and pursue this opportun any alternatives. So the young
44:01
Speaker 1: man stayed, had multiple opportunities selected one. But here's here's
44:06
Speaker 1: the real power of the network. As he's making his
44:10
Speaker 1: decision to which role he's going to take, and you know,
44:12
Speaker 1: at one of three mega funds, he calls up his mentor,
44:18
Speaker 1: who is not at one of the firms that he
44:19
Speaker 1: has an offer from, and he says, well, what do
44:22
Speaker 1: you think I should do. In the course of that conversation,
44:25
Speaker 1: not only does he get guides from the mentor. The
44:27
Speaker 1: mentor connects him with another gentleman who used to work
44:30
Speaker 1: at one of the firms in the same group that
44:33
Speaker 1: he was going to. Now he has a decision that
44:37
Speaker 1: he's made that's been informed by two people that he
44:40
Speaker 1: did not know a year ago dinner table, and we
44:44
Speaker 1: will we will take those conversations for granted. If, especially
44:49
Speaker 1: someone grown up in a New York area where you
44:52
Speaker 1: know people who work in finance or people's parents were
44:55
Speaker 1: in finance, that network just doesn't develop elsewhere without focus
45:00
Speaker 1: exposure to it. That's right, that's really intriguing. So you
45:03
Speaker 1: were a Bank of America a decade ago, you let
45:06
Speaker 1: it uh, you had some important teams you worked with,
45:08
Speaker 1: and you led some groups. How do you see Wall
45:11
Speaker 1: Street having changed over the past ten or twenty years?
45:16
Speaker 1: Were the signs on the on the road that things
45:19
Speaker 1: were getting better? Were they ripe for moving the right direction?
45:24
Speaker 1: Or is Wall Street just calcified and needed to really
45:27
Speaker 1: be shaken up? Well, Barry, I think that question really
45:31
Speaker 1: highlights something that's that's amazing to me. Number One, that
45:34
Speaker 1: I've been in this business, you know, a long time
45:38
Speaker 1: goes by very fast, And Number two. How much things change,
45:44
Speaker 1: you know, in a fairly short amount of time. You know,
45:47
Speaker 1: when I started my career in finance, I was the
45:51
Speaker 1: only black person in in my group, in my division. Okay, Um,
45:56
Speaker 1: another young woman came shortly after. We had a great relationship.
45:59
Speaker 1: In fact, she's been a lifelong friend and I, you know,
46:02
Speaker 1: was a mentor to her. And um, was that something
46:05
Speaker 1: that was very consistent. You were the only black guy
46:07
Speaker 1: working at the other shops you worked at, or at
46:10
Speaker 1: least the only person in the department. Well, um, for
46:14
Speaker 1: a couple for a couple of firms that I also
46:16
Speaker 1: did work at a minority own firm UM down in
46:18
Speaker 1: North Carolina, And and that was it was refreshing. I mean,
46:22
Speaker 1: I actually, you know, some of the brightest people that
46:25
Speaker 1: I ever worked with, and much of my investment philosophy
46:27
Speaker 1: and the thesis the way I think about investing was
46:30
Speaker 1: developed there amongst an incredibly diverse group of investors who had,
46:36
Speaker 1: you know, tremendous experience and success. Really intriguing. So given
46:41
Speaker 1: that you were at some big firms early tens, you know,
46:46
Speaker 1: what what did you see? What was what was it
46:49
Speaker 1: that led Wall Street to finally being ripe to accept changes.
46:54
Speaker 1: I think there is an inevitable pressure from society that
46:59
Speaker 1: helps drive change. And I think Wall Street, while we
47:03
Speaker 1: talk about it in this compartmentalized concept of it's Wall Street,
47:08
Speaker 1: it's in New York, it's you know, the bull down
47:12
Speaker 1: on Wall Street, right, and it's it's the movies that
47:14
Speaker 1: we see in reality, the funds that Wall Street is managing,
47:20
Speaker 1: the capital that it's managing, it's coming from all over
47:23
Speaker 1: the country. It's coming from people that look like me,
47:26
Speaker 1: It's coming from people that look like you. It's coming
47:28
Speaker 1: from people that look like our parents and our children.
47:30
Speaker 1: So at the end of the day, and I think
47:33
Speaker 1: we saw this in two thousand and eight, I think
47:35
Speaker 1: we saw it again during COVID that the end of
47:38
Speaker 1: the day, these companies are accountable to the people, right
47:42
Speaker 1: and to the people that are their investors, their LPs
47:45
Speaker 1: and and entities that their LPs represent um in their clients.
47:48
Speaker 1: And so I think that what we've evolved into is
47:53
Speaker 1: a more human Wall Street that is more inclusive by nature.
47:58
Speaker 1: And I do believe that what we're seeing now right,
48:01
Speaker 1: we will continue to see because we'll have people that
48:04
Speaker 1: come throughout finance, but also people more senior that are
48:07
Speaker 1: at the table and helping make decisions on where and
48:10
Speaker 1: how we invest in people, and where are we how
48:12
Speaker 1: and where and how we invest in companies. So so
48:15
Speaker 1: that leads me to um a pretty straightforward question, which is, first,
48:20
Speaker 1: how do you measure your own success with all finance?
48:24
Speaker 1: And second, how do people like oak Tree, Apollo and aries.
48:30
Speaker 1: How did they ask you to track uh, your your progress?
48:34
Speaker 1: What metrics do they look at to say, hey, we're
48:37
Speaker 1: getting our our money's worth for standing up this company
48:41
Speaker 1: and giving them a decade long horizon. So I'll address
48:45
Speaker 1: the ladder first, right. Number one, we had our first
48:50
Speaker 1: CYC in September. We started our first cohort of our
48:54
Speaker 1: fellowship in January. We now have the second coort. I've
48:57
Speaker 1: got seventy five students from eight hbs you use. There
49:01
Speaker 1: are now building relationships, getting education, getting exposure and ultimately
49:05
Speaker 1: getting experience to the alternative investment industry. That is fascinating.
49:10
Speaker 1: We've got students in our program that have their first
49:13
Speaker 1: full time offer with alternative investment firms that will graduate
49:17
Speaker 1: in two thousand three and May. So we're already in
49:21
Speaker 1: a few months really hitting the cover off the ball. UM.
49:24
Speaker 1: That's the quantitative element. Right, those are the KPI s
49:27
Speaker 1: up on the dashboard that are saying, you know, how
49:29
Speaker 1: many students are are you getting to exposure to these jobs?
49:33
Speaker 1: How many students are getting these jobs? What I also measure,
49:36
Speaker 1: and this is who the conversation with students? How many
49:39
Speaker 1: students are building confidence, skills and relationships that will help
49:45
Speaker 1: improve their wealth and economic mobility as they grow. How
49:48
Speaker 1: many students are having a conversation around the learning session
49:52
Speaker 1: that we do on interest rates and they're calling mom
49:55
Speaker 1: or dad at home and saying, you know, what is
49:58
Speaker 1: your credit card? You know what sort of interest rate
50:00
Speaker 1: on your credit card? Did you refile your house? How
50:03
Speaker 1: should I think about my student loans? Right? That are
50:06
Speaker 1: really taking an active position and the way that they
50:10
Speaker 1: think about their personal finance, but also the way they
50:13
Speaker 1: think about investing. And I hear those conversations and have
50:16
Speaker 1: those conversations with students almost on a daily basis, and
50:20
Speaker 1: that's what fulfills me and lets me know we're moving
50:22
Speaker 1: in the right direction. When I look down the road
50:25
Speaker 1: in ten years, I believe that I will have hundreds
50:28
Speaker 1: of students that are actively working in alternative investments. But
50:32
Speaker 1: I'll have thousands that are knowledgeable and have relationships with
50:36
Speaker 1: people in this business and are better off for it.
50:39
Speaker 1: So we've been talking a lot about alt investments. Are
50:43
Speaker 1: there parallel entities to old finance for traditional asset management, investing, banking, stocks, bonds,
50:52
Speaker 1: I p o s, etcetera. It seems like there should
50:55
Speaker 1: be something similar to what you're doing for that space
50:59
Speaker 1: as well, which arguably is even bigger than alter finance.
51:02
Speaker 1: So I think there are some some organizations that have, um,
51:06
Speaker 1: you know, been active and in providing similar opportunities for
51:10
Speaker 1: students for traditional banking. Right. I mean when you think
51:13
Speaker 1: about what Reginald Lewis did you know almost thirty years
51:17
Speaker 1: ago um and and breaking grounds for for blacks and
51:21
Speaker 1: investment banking. Um, I think that we're doing some of
51:26
Speaker 1: that today in the alternative space. Remember when I have
51:30
Speaker 1: we had our first group of fellows. We had thirty
51:33
Speaker 1: three fellows in our first cohort. So this is January two,
51:38
Speaker 1: This is just you know a few months ago, right,
51:41
Speaker 1: And I asked the students, all right, how many of
51:44
Speaker 1: you know Morning Stanley Goldman City Group. Everybody raises their hand.
51:47
Speaker 1: They all know what they see, the commercials, they get
51:50
Speaker 1: the commercials on on the internet. I asked, how many
51:54
Speaker 1: of you know areas of Pollo oak Tree one student,
51:59
Speaker 1: so roughly three were sent. These students are brilliant, all
52:03
Speaker 1: high performers, all strong academic performers. I mean they will
52:07
Speaker 1: not fail to get a job. They could get a
52:09
Speaker 1: job doing anything. But they did not have the awareness
52:12
Speaker 1: of how the pathway to enter one of the most
52:16
Speaker 1: rewarding careers in investing. And that's that That's a key.
52:21
Speaker 1: And so when I look at other industries and what
52:23
Speaker 1: other organizations are doing, we are squarely focused on helping
52:27
Speaker 1: move the needle and the alternative investment space, places where
52:32
Speaker 1: people can help do deals, be long term owners. It's
52:35
Speaker 1: not about you know, the transactional element of investment banking,
52:39
Speaker 1: right be an owner, a direct owner of a brand
52:42
Speaker 1: that you know, but you never knew who the holding
52:44
Speaker 1: company was. I have seventy five students now that can
52:48
Speaker 1: answer that question of what's the pathway? How much larger
52:52
Speaker 1: can you expand this to be? So Barry, we will
52:56
Speaker 1: expand the fellowship program ultimately to be a round a
53:00
Speaker 1: hundred or a hundred and twenty students in you know,
53:03
Speaker 1: each year about fourty or so in each class. We
53:06
Speaker 1: are also partnering with the Warden School of University of
53:09
Speaker 1: Pennsylvania to develop an institute, the Warden Alt Finance Institute,
53:14
Speaker 1: which will be an online community and platform providing AGAIN
53:18
Speaker 1: curriculum and content and community as well as resources to
53:22
Speaker 1: help students at any HBCU gain access to AGAIN education,
53:27
Speaker 1: exposure and opportunities for experience in the space. And so
53:31
Speaker 1: through the institute will be able to scale some of
53:33
Speaker 1: the best parts of our fellowship, which is a real
53:36
Speaker 1: high touch part of our programming, but we'll be able
53:39
Speaker 1: to scale that to the students that are at HBC
53:42
Speaker 1: is that we don't partner with directly. Really really quite fascinating.
53:46
Speaker 1: I know I only have you for a couple of minutes.
53:49
Speaker 1: More So before I let you go, I want to
53:51
Speaker 1: ask uh the standard questions that I ask all of
53:54
Speaker 1: my guests, starting with what have you been streaming these days?
53:58
Speaker 1: What's been keeping you entertained a post lockdown? Yeah, so Barry,
54:02
Speaker 1: I would say, I tend to read a lot and
54:05
Speaker 1: follow a lot obviously in news channels, UM on finance,
54:09
Speaker 1: on podcasts. I mean, I love Howard marks the memo
54:12
Speaker 1: and I read his his memos that he puts out.
54:14
Speaker 1: But I love what he's doing in the podcast format
54:17
Speaker 1: that he's developed. But I listened to a lot of sports.
54:19
Speaker 1: I'm a huge Jalen and Jacoby fan. Um. I love
54:23
Speaker 1: what those guys are doing in terms of sports and
54:25
Speaker 1: entertainment and so, uh, you know, probably not as heady
54:28
Speaker 1: as some of the other answers you get, UM, but
54:31
Speaker 1: I I love sports talk radio. That's interesting. Tell us
54:35
Speaker 1: about some of your early mentors who helped shape your career.
54:40
Speaker 1: So you know a couple of the mentors that I had, Um,
54:45
Speaker 1: there was a woman named Stacy Gorn who hired me
54:47
Speaker 1: actually too IBM, And it's amazing to think this is
54:51
Speaker 1: over twenty years ago. Um. Stacy was a long term
54:57
Speaker 1: executive at IBM and has now moved to an resulting firm.
55:01
Speaker 1: But what she really helped me focus on early in
55:05
Speaker 1: my career was continuous improvement. Right. You think about it
55:09
Speaker 1: as an engineer a lot, right, kind of the causing
55:11
Speaker 1: principle right that Toyota used, but personal improvement of yourself? Right,
55:17
Speaker 1: how do you continue to develop as a person? If
55:19
Speaker 1: you're strong technically, how do you develop into a person
55:23
Speaker 1: that people feel comfortable managing? Others and feel comfortable being
55:27
Speaker 1: managed by um. And so as I developed into an
55:29
Speaker 1: executive and the CEO, I always reflect on those lessons
55:33
Speaker 1: that she gave me early on about being vulnerable and
55:36
Speaker 1: being coachable, even being coached up right. So having somebody
55:39
Speaker 1: that reports to you have the ability to coach you
55:42
Speaker 1: up on things where you can be more helpful for
55:45
Speaker 1: your organization. Uh. You mentioned books and you like to
55:49
Speaker 1: do a lot of reading. Tell us what some of
55:51
Speaker 1: your favorites are and what are you're reading now? Yeah? So, Um,
55:56
Speaker 1: you know a book that I go too often and
55:59
Speaker 1: I you know you read this, you know, probably once
56:02
Speaker 1: every couple of years, is uh Peter Burnsteins against the Gods?
56:06
Speaker 1: Um kind of. It's just it's it's fascinating to think
56:10
Speaker 1: about this concept of risk and how it's affected us
56:15
Speaker 1: since the very beginning of time, right, and then really
56:19
Speaker 1: how we have taken risk from something that was deified
56:24
Speaker 1: right kind of this religious concept and turned it into
56:28
Speaker 1: an economic tool that we can arbitrage for for personal gain. Unbelievable. Um,
56:34
Speaker 1: well written. I love the historical context and bringing it
56:37
Speaker 1: into the future. And so that's one um that I
56:40
Speaker 1: that I go too often I'll tell you a book
56:43
Speaker 1: that that I want to pick up and um, the
56:47
Speaker 1: title here, it's John Max's new book. And I thought
56:51
Speaker 1: it's interesting because you know, John is somebody, um that
56:54
Speaker 1: I don't know personally, but I've always respected kind of
56:57
Speaker 1: the way that he organized and ran businesses. And you know,
57:02
Speaker 1: it's a note that um, he's dealing. You know, I
57:07
Speaker 1: think has talked publicly about the aging process that he
57:10
Speaker 1: is going through himself. And uh, I found that particularly
57:14
Speaker 1: endearing because it's something that that I've dealt with in
57:16
Speaker 1: my family and to recognize that, you know, in this business,
57:21
Speaker 1: we're still human and we're not excluded from the human process.
57:26
Speaker 1: And so that's a book. John max new book is
57:28
Speaker 1: one that I certainly want to pick up up close
57:31
Speaker 1: and all. In life Lessons from a Wall Street Warrior
57:34
Speaker 1: is that is? That's a hell of a title. Hell
57:37
Speaker 1: of a guy. Um, what sort of advice would you
57:41
Speaker 1: give to a recent college grad? This is kind of
57:44
Speaker 1: a funny question because I asked this to everybody, but
57:47
Speaker 1: essentially I'm asking you a question, which is what old
57:51
Speaker 1: finance does. But I'll ask it anyway. What advice do
57:55
Speaker 1: you give to a recent college grad who was interested
57:58
Speaker 1: in a career in either investments or alternative finance. So
58:03
Speaker 1: there are two things that I tell all of our students. UM.
58:07
Speaker 1: Number one is a bigger picture and probably pretty simple.
58:11
Speaker 1: You've got to have intellectual curiosity. You can never run
58:15
Speaker 1: out of questions. I mean you you run incredible podcasts.
58:18
Speaker 1: You can never run out of questions. You've always got
58:21
Speaker 1: to have something that you're thinking about in terms of
58:24
Speaker 1: what's the next layer. How can I think about it
58:27
Speaker 1: in a different perspective, How can I put myself in
58:29
Speaker 1: somebody else's shoes and think about it? And how does
58:32
Speaker 1: that change the value of what I'm looking at right?
58:36
Speaker 1: I think it's that's critical to being successful as an investor.
58:40
Speaker 1: Number two is something that somebody shared with me and
58:44
Speaker 1: essentually John Rice, who runs m LT and is a
58:46
Speaker 1: partner and a great friend and and really one of
58:48
Speaker 1: the great leaders in the D and I space. Um,
58:53
Speaker 1: when you're young and you're bright, you've got to take
58:57
Speaker 1: risk early in your career, and in fact act not
59:01
Speaker 1: taking risk is actually the riskiest thing you can do.
59:04
Speaker 1: It's a little bit of a parable, right, but when
59:08
Speaker 1: you're young, you can recover from failure. You don't have
59:11
Speaker 1: that same luxury when you're older. It's so hard to
59:14
Speaker 1: appreciate that when you're you know, twenty or twenty one,
59:18
Speaker 1: when you're you're afraid of failure, When you're afraid of failure,
59:21
Speaker 1: when you should actually be seeking failure. Right. You should
59:26
Speaker 1: not be doing anything when you're twenty two or twenty
59:28
Speaker 1: or twenty one that you can't fail it right. Playing
59:31
Speaker 1: it safe is risky. It is risky. That's really interesting.
59:36
Speaker 1: And our final question, what do you know about the
59:39
Speaker 1: world of investing and old finance today? You wish you
59:42
Speaker 1: knew twenty or so years ago when you were really
59:45
Speaker 1: exploring the field in its early days. So the biggest
59:50
Speaker 1: thing I would say procedurally that that that I see
59:54
Speaker 1: in the investment hiring cycle is that you got be
1:00:00
Speaker 1: ready for the gig before you get it, which means
1:00:04
Speaker 1: that the recruiting process for alternative investments may start. Even
1:00:09
Speaker 1: if you're going to investment banking as an analyst, it
1:00:12
Speaker 1: may start before you actually start that job. There may
1:00:16
Speaker 1: be people that are reaching out to you trying to
1:00:18
Speaker 1: assess your interests in what you're gonna do after banking,
1:00:22
Speaker 1: and that was you know, I say one of the
1:00:25
Speaker 1: secrets of the industry that you know. I was well
1:00:27
Speaker 1: into my career before I knew that's how people were
1:00:30
Speaker 1: getting recruited into the industry. And so you gotta have
1:00:33
Speaker 1: your ear to the ground right. You got to know
1:00:35
Speaker 1: who's who, where the players are, who you should be
1:00:38
Speaker 1: expecting emails and calls from, and when you get those
1:00:40
Speaker 1: emails and calls, you gotta be ready for it. Really
1:00:44
Speaker 1: really interesting answer. We have been speaking to Marcus Shaw,
1:00:48
Speaker 1: CEO of ult Finance. If you enjoy this conversation, well,
1:00:53
Speaker 1: be sure and check out any of the previous four
1:00:55
Speaker 1: hundreds or so we've done over the past eight and
1:00:57
Speaker 1: a half years. You can find those at iTunes, Spotify, YouTube,
1:01:02
Speaker 1: wherever you get your podcast from. We love your comments,
1:01:06
Speaker 1: feedback and suggestions right to us at m IB podcast
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Speaker 1: I would be remiss if I did not thank the
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Speaker 1: crack team that helps put this conversation together each week.
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Speaker 1: Justin Milner is my audio engineer. Attica val Bron is
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Speaker 1: our project manager. Paris Wold is my producer. Sean Russo
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Speaker 1: is my researcher. I'm Barry Rihults. You've been listening to
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Speaker 1: Masters and Business on Bloomberg radioa