Latest / Masters in Business / Jonathan S. Lavine on Private Equity Investing (Podcast)

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Jonathan S. Lavine on Private Equity Investing (Podcast) · Masters in Business

• 0:00
  Speaker 1: M HM. This is mesters in Business with Very Results
• 0:05
  Speaker 1: on Bluebird Radio here this weekend. On the podcast, Jonathan
• 0:11
  Speaker 1: Levine of Bain Capital really a fascinating career, just absolutely intriguing.
• 0:18
  Speaker 1: How he was able to convert his experiences doing M
• 0:22
  Speaker 1: and A at Drexel and then being a consultant of
• 0:25
  Speaker 1: Mackenzie uh to not just joining a private equity firm,
• 0:29
  Speaker 1: but really founding and creating the entire capital credit at Bain.
• 0:37
  Speaker 1: Really an interesting um history. He is extremely knowledgeable about
• 0:42
  Speaker 1: all sorts of different aspects of private equity and aware,
• 0:47
  Speaker 1: very aware of how there is a spill over from
• 0:50
  Speaker 1: the equity markets as well as the impact of alternatives
• 0:55
  Speaker 1: like bonds and and how that's given rise to different
• 0:58
  Speaker 1: types of private equity. We we talked about everything from
• 1:02
  Speaker 1: operating on during the pandemic to what is going to
• 1:05
  Speaker 1: happen as rates rise, what that might mean for private
• 1:08
  Speaker 1: equity and for credit spreads. I found this conversation to
• 1:12
  Speaker 1: be absolutely fascinating and I think you will also with
• 1:15
  Speaker 1: no further ado. My interview with Jonathan Levine, co managing
• 1:20
  Speaker 1: partner at Bain Capital. This is Masters in Business with
• 1:27
  Speaker 1: Very Results on Bluebird Radio. My extra special guest this
• 1:33
  Speaker 1: week is Jonathan Levine. He is the managing partner at
• 1:37
  Speaker 1: Bain Capital, which manages about a hundred and fifty five
• 1:41
  Speaker 1: billion dollars. He is also the chief investment officer at
• 1:45
  Speaker 1: Bain Capital, credit about fifty eight billion dollars in assets.
• 1:49
  Speaker 1: He is the co chair of the board of Trustees
• 1:52
  Speaker 1: of Columbia University, where he got his undergraduate degree before
• 1:56
  Speaker 1: going on to earn an m b A. At Harvard.
• 2:00
  Speaker 1: Jonathan Levine, Welcome to Bloomberg. Thank you very much. I'm
• 2:04
  Speaker 1: glad to be here. So so, given your background, you
• 2:08
  Speaker 1: study economics undergrad, you get an m b A. How
• 2:11
  Speaker 1: did you find your way to Wall Street? What what
• 2:14
  Speaker 1: did you do? Uh between your undergraduate and your m
• 2:18
  Speaker 1: b A. Interestingly enough, I actually didn't study economics as
• 2:23
  Speaker 1: an undergrad. I studied political science and English literature, and
• 2:28
  Speaker 1: I took one economics course. I think that that's why
• 2:32
  Speaker 1: I'm so good at always reducing things to basic supply
• 2:36
  Speaker 1: and demand, because that's how far I got. And I
• 2:39
  Speaker 1: was into Columbia Law School and I was planning on attending,
• 2:43
  Speaker 1: and a friend of mine said, Uh, you know, these
• 2:47
  Speaker 1: investment banks now have analyst programs and they claim they're
• 2:50
  Speaker 1: just looking for smart people and you don't need to
• 2:52
  Speaker 1: know anything. And I thought I was smart, and I
• 2:56
  Speaker 1: still wasn't sure. I said, well, I'm going to law
• 2:58
  Speaker 1: school and I'll never forget. You said to me, well,
• 3:00
  Speaker 1: there's free food, and I said, well, free food, I'll
• 3:03
  Speaker 1: definitely show up. And I literally showed up, interviewed with
• 3:08
  Speaker 1: a few places, was fortunate enough to get some offers,
• 3:11
  Speaker 1: and I decided to go to Drexel Burnham and I
• 3:14
  Speaker 1: worked at Drexel Burnham for the UH just short of
• 3:18
  Speaker 1: two years between business business School and college because obviously
• 3:24
  Speaker 1: Drexel didn't make it the full two years. But it
• 3:26
  Speaker 1: was an amazing experience before I went to business school,
• 3:30
  Speaker 1: really really intriguing. I never knew that uh NBA programs
• 3:35
  Speaker 1: came with free food. Otherwise I might not have gone
• 3:38
  Speaker 1: to law school had I known that. That's a that's
• 3:40
  Speaker 1: really interesting. So so you go from Drexel UH, which
• 3:45
  Speaker 1: you're primarily known as an M and A shop, to
• 3:49
  Speaker 1: Mackenzie the big consultancy. What was that transition, like, how
• 3:53
  Speaker 1: did you find yourself operating when you were no longer
• 3:56
  Speaker 1: you know what was essentially was one of the hottest
• 3:59
  Speaker 1: and in a shops on the street. So when I
• 4:02
  Speaker 1: went to business school, a couple of things happened. One is,
• 4:06
  Speaker 1: because I didn't have you know, traditional undergraduate economics or
• 4:11
  Speaker 1: finance or accounting, I really only knew about finance because
• 4:15
  Speaker 1: that's where I wound up, and so I learned so
• 4:18
  Speaker 1: much more about the strategic aspects of business. Second of all,
• 4:22
  Speaker 1: I met my wife the third day of business school
• 4:26
  Speaker 1: and we discussed where we wanted to be, and we
• 4:29
  Speaker 1: wanted to be in Boston, and at the time, there
• 4:32
  Speaker 1: weren't a lot of finance jobs in Boston, and I
• 4:35
  Speaker 1: had the good fortune of meeting the people from the
• 4:38
  Speaker 1: mckensey Boston office, which was quite small at the time.
• 4:42
  Speaker 1: I was able to go there at the summer. Really
• 4:44
  Speaker 1: found the work interesting, and probably even more so, the
• 4:48
  Speaker 1: people were truly extraordinary people, great teachers, really you know,
• 4:54
  Speaker 1: intellectually curious. And the second year of business school, because
• 4:59
  Speaker 1: my clients were local, I was able to actually work
• 5:02
  Speaker 1: part time in that office. The second year of business
• 5:04
  Speaker 1: school and I had accepted the offer, I went back there.
• 5:09
  Speaker 1: My wife actually was working at a different consulting firm.
• 5:12
  Speaker 1: She was at BCG, but there was part of me
• 5:15
  Speaker 1: that always thought I would get back to some form
• 5:18
  Speaker 1: of finance or investing and uh staying capital in early
• 5:26
  Speaker 1: was raising its first institutional fund historically. We were less
• 5:32
  Speaker 1: than ten years old and historically had basically had high
• 5:35
  Speaker 1: net worth UM funds, and we were jumping from a
• 5:40
  Speaker 1: hundred and twenty million dollars UH fund to a three
• 5:43
  Speaker 1: hundred million dollar fund, which at the time seemed enormous.
• 5:47
  Speaker 1: And I got a call from somebody I knew here
• 5:50
  Speaker 1: and she said, we're trying to quote beef up a
• 5:54
  Speaker 1: little bit. I think the firm had fewer than twenty investors,
• 5:57
  Speaker 1: and we want somebody with consulting and banking experience. Are
• 6:00
  Speaker 1: you interested in talking to it? And I literally came
• 6:04
  Speaker 1: over on a Friday met virtually everybody came back the
• 6:08
  Speaker 1: following Monday. Mitt Romney interviewed me and made me an offer,
• 6:12
  Speaker 1: and I tell people I accepted it because it felt right. Huh,
• 6:16
  Speaker 1: really really interesting. So So let's talk a little bit
• 6:20
  Speaker 1: about UM about that experience. Well, is it just that simple?
• 6:29
  Speaker 1: There wasn't anything else that that made you say, yes,
• 6:32
  Speaker 1: I want to move to away from consultancy and towards
• 6:35
  Speaker 1: private equity. It just was a gut Hey, this feels right.
• 6:39
  Speaker 1: I think it did in my heart. I think there
• 6:43
  Speaker 1: were two things. I think it played better to my skill,
• 6:47
  Speaker 1: a certain entrepreneurial bent, uh the ability to combine what
• 6:51
  Speaker 1: I had learned at Wreckvil and as a consultant, and
• 6:55
  Speaker 1: that is the heritage of the firm. Obviously, the the
• 6:59
  Speaker 1: firm started as a spinoff from the consulting firm Bain
• 7:02
  Speaker 1: and Company. It's so the approach to investing made sense
• 7:06
  Speaker 1: to me. It made sense to me on a fundamental
• 7:10
  Speaker 1: basis how you think about looking at companies. And it
• 7:13
  Speaker 1: was also differentiated because at the time nobody was approaching
• 7:17
  Speaker 1: investing that way. And while the firm was quite small,
• 7:22
  Speaker 1: there was an energy and aspiration and the hunger that
• 7:26
  Speaker 1: really really appealed to me. And I said, I think
• 7:29
  Speaker 1: this group is going to go somewhere and I can
• 7:32
  Speaker 1: help make that happen. And one thing that I'm really
• 7:36
  Speaker 1: really proud of is that even today, with a hundred
• 7:41
  Speaker 1: and fifty billion dollars under management and a hundred and
• 7:46
  Speaker 1: fifty partners in twenty one offices throughout the globe, I'm
• 7:50
  Speaker 1: still proud we have that hunger and we have that
• 7:53
  Speaker 1: int intellectual curiosity in the aspiration to do more and
• 7:58
  Speaker 1: do better. So five years later you found Sancity Advisors,
• 8:05
  Speaker 1: which eventually morphed into being Capital Credit. Tell us about
• 8:10
  Speaker 1: what you were thinking, UH, creating a new credit division,
• 8:15
  Speaker 1: and especially in light of you know, late nineties, the
• 8:18
  Speaker 1: equity markets were they were on fire. Why start a
• 8:21
  Speaker 1: credit focused investment farm? And the firm believed that what
• 8:27
  Speaker 1: we did, our approach to investing was applicable to multiple
• 8:31
  Speaker 1: asset classes, and we made the strategic decision in the
• 8:35
  Speaker 1: mid nineties to expand both across asset classes and geographies,
• 8:41
  Speaker 1: not all at once. So in the mid nineties we
• 8:44
  Speaker 1: founded a public equity business and I founded the credit business.
• 8:49
  Speaker 1: And the general belief was that we had been successful
• 8:53
  Speaker 1: in investing in the equity of leverage companies, and therefore
• 8:57
  Speaker 1: you would think that we would be able to apply
• 8:59
  Speaker 1: to skill to the depth of LeVert companies. My experience
• 9:04
  Speaker 1: from Drectful and the fact that I had worked on
• 9:07
  Speaker 1: a bunch of our financings UH previously at ben Capital
• 9:12
  Speaker 1: made me a logical choice to to start that business.
• 9:16
  Speaker 1: At the time, there were really no other A few
• 9:20
  Speaker 1: of our peers or competitors were doing the same thing.
• 9:23
  Speaker 1: But we were one of the first to do this,
• 9:27
  Speaker 1: and although the equity markets were hot at the time,
• 9:32
  Speaker 1: we invest for very long periods of time and therefore
• 9:36
  Speaker 1: it wasn't like we saw a two year window or
• 9:40
  Speaker 1: at any time one asset was better than the other.
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  Speaker 1: We thought that we had a sustainable advantage in this space.
• 9:48
  Speaker 1: The market was changing profoundly at the time. The concept
• 9:52
  Speaker 1: of a syndicated bank loan was very very new. Clos
• 9:57
  Speaker 1: weren't even around yet. We did one of the first
• 9:59
  Speaker 1: clos and and uh we decided that institutionally it was
• 10:06
  Speaker 1: worth doing that. Said, it was so unusual for a
• 10:11
  Speaker 1: private equity firm to have, particularly a debt firm, and
• 10:15
  Speaker 1: we didn't want people to misread when we were buying
• 10:18
  Speaker 1: the debt of of l b O s sponsored by
• 10:21
  Speaker 1: other sponsors. We put a different name on it. It's
• 10:24
  Speaker 1: always been part of bing capital um, but Thankity is
• 10:28
  Speaker 1: a lighthouse in Massachusetts, and we thought stability it was
• 10:33
  Speaker 1: a good a good, a good symbol, and we kept
• 10:37
  Speaker 1: that name for a while because we weren't sure how
• 10:41
  Speaker 1: people would think about buying their debt. Ultimately, obviously, firms
• 10:46
  Speaker 1: like ours having debt affiliates became quite mainstream, and UH
• 10:51
  Speaker 1: in about seven years ago, we changed the name UH
• 10:56
  Speaker 1: to ban Capital Credit. Our public equity business had the
• 10:59
  Speaker 1: name Brooks. We changed the name of that to Bank
• 11:01
  Speaker 1: Capital Public Equity. And you know, I joked that that
• 11:06
  Speaker 1: is the official story, the unofficial story for why they
• 11:11
  Speaker 1: picked me, as I think Mitt thought that I was
• 11:13
  Speaker 1: senior enough to be credible and young enough to be
• 11:16
  Speaker 1: expendable if it didn't work. But fortunately we never had
• 11:19
  Speaker 1: to test that hypothesis. That's very funny, So so let's
• 11:24
  Speaker 1: let's stay with that. Given what subsequently happens a few
• 11:29
  Speaker 1: years later with the dot com implosion in the market crash,
• 11:32
  Speaker 1: how did that spill over to the credit markets. It's interesting.
• 11:37
  Speaker 1: So I still remember the first bond trade I did.
• 11:41
  Speaker 1: I bought Riverwood bonds at about cents on the dollar
• 11:46
  Speaker 1: and they went up to about a hundred and five,
• 11:49
  Speaker 1: and I said, Wow, this is going to be an
• 11:52
  Speaker 1: easy business. There were several things I did not realize
• 11:56
  Speaker 1: at the time. One, I knew nothing about trader trading.
• 11:59
  Speaker 1: And the first thing we did in our first year
• 12:02
  Speaker 1: is higher a great trader, a guy named Jamie Kellogg,
• 12:05
  Speaker 1: who was with us for twenty years and two. People
• 12:08
  Speaker 1: forget that. In August Russia defaulted and that put a
• 12:13
  Speaker 1: shock wave through the bond markets. So we were already
• 12:17
  Speaker 1: dealing with turbulence when the dot com bubble hit um
• 12:21
  Speaker 1: and then shortly after the dot com bubble, obviously we
• 12:25
  Speaker 1: had nine eleven. And what we learned learned through that
• 12:28
  Speaker 1: period of time is actually one of the important things
• 12:33
  Speaker 1: in credit is you get paid back at the end
• 12:36
  Speaker 1: if you made good selections. Nobody likes price volatility, but
• 12:40
  Speaker 1: I highlight that all those things I just described had
• 12:44
  Speaker 1: no impact on how much pizza people were buying. And
• 12:47
  Speaker 1: therefore we lent money to a pizza company and those
• 12:51
  Speaker 1: bombs and loans went up and down, But at the
• 12:53
  Speaker 1: end of the day, that company went public and we
• 12:56
  Speaker 1: got paid back. And realizing too to filter out the
• 13:02
  Speaker 1: signal versus the noise, or filter out the noise versus
• 13:05
  Speaker 1: the signal is a really really important part of credit investing.
• 13:10
  Speaker 1: When we do distress investing, that's more of a hybrid
• 13:14
  Speaker 1: and you think more about enterprise value and what does
• 13:17
  Speaker 1: it take to get paid back. But in the part
• 13:20
  Speaker 1: of our business that's a lending business, and back then
• 13:23
  Speaker 1: we had mostly just the lending business. It was all
• 13:26
  Speaker 1: about did we picked good credits, were they paying their interests?
• 13:30
  Speaker 1: And would they ultimately be capable of paying back when
• 13:33
  Speaker 1: they were supposed to. So, so let's talk a little
• 13:36
  Speaker 1: bit about your role at bin UH and what you do,
• 13:40
  Speaker 1: starting with what what does the co managing partner do?
• 13:46
  Speaker 1: Is that like a CEO or a CEO role? How
• 13:49
  Speaker 1: do you how do you define that? The co managing
• 13:52
  Speaker 1: partner role is the equivalent of being the co CEO.
• 13:58
  Speaker 1: But our firm is partnership and we chose not to
• 14:03
  Speaker 1: put the title CEO on the leaders of the firm
• 14:07
  Speaker 1: because it is a partnership. We are lead partners. We
• 14:12
  Speaker 1: do not run the firm top down. We are an
• 14:15
  Speaker 1: old fashioned partnership where the voices of all the partners matter.
• 14:19
  Speaker 1: Everybody is a leader and everybody needs to contribute. That said,
• 14:24
  Speaker 1: it falls on myself and my co managing partner, John Connaughton,
• 14:29
  Speaker 1: to help drive strategy at the firm, to help make
• 14:32
  Speaker 1: sure that our expansion is being done in a in
• 14:36
  Speaker 1: a thoughtful way. There's um standards across the firm and
• 14:41
  Speaker 1: as a real organizing force among our partners as we
• 14:45
  Speaker 1: deliver great results for our investors and drive the business forward.
• 14:50
  Speaker 1: So it's really a reflection. Sorry, it's good. It's really
• 14:54
  Speaker 1: a reflection of our culture. So let's talk a little
• 14:58
  Speaker 1: bit about how that culture manifests itself in your investment strategy.
• 15:05
  Speaker 1: And this is a loose quote from you. Your investment
• 15:09
  Speaker 1: strategy is described as thoughtful, not aggressive, not cautious. Explain
• 15:14
  Speaker 1: that a little bit, and and how does that reflect
• 15:18
  Speaker 1: the culture of the farm. I use a driving analogy
• 15:22
  Speaker 1: a lot to try to explain what we mean about this.
• 15:27
  Speaker 1: You can cause as many accidents going fifteen miles an
• 15:31
  Speaker 1: hour in the right lane on a highway as you
• 15:33
  Speaker 1: can driving a hundred and twenty five in the left lane.
• 15:38
  Speaker 1: You have to know when to put on the gas,
• 15:41
  Speaker 1: when to slow down, and you drive differently on different
• 15:45
  Speaker 1: stretches of highways at different times during the day, and
• 15:49
  Speaker 1: that applies to investing. You have to know that sometimes
• 15:54
  Speaker 1: you have a view of the market that may be
• 15:57
  Speaker 1: different than others. You have confidence to that view is
• 16:00
  Speaker 1: well considered and analyzed, and therefore you might choose to
• 16:06
  Speaker 1: put on a little more risk. You may choose to
• 16:09
  Speaker 1: lean in um when everybody else is running away. There
• 16:13
  Speaker 1: are also other times when we may decide, you know
• 16:17
  Speaker 1: what we need time diversity or industry diversity, or we're
• 16:22
  Speaker 1: not entirely certain what uh what the vision ahead is,
• 16:27
  Speaker 1: and we will slow down a little bit. And I
• 16:30
  Speaker 1: think what we do really well philosophically is we understand
• 16:35
  Speaker 1: the difference between pricing risk and understanding uncertainty. There's a
• 16:40
  Speaker 1: famous economists, um Then Knight, who who wrote back in
• 16:45
  Speaker 1: the twenties and thirties about understanding that trying to quantify
• 16:50
  Speaker 1: the difference between risk and uncertainty. And you can price
• 16:53
  Speaker 1: and quantify risk, you have to learn to live and
• 16:57
  Speaker 1: mitigate uncertainty, and you need to understand that difference between
• 17:00
  Speaker 1: the two. Really really interesting, let's let's stick with that.
• 17:04
  Speaker 1: Given how fast the recession was in equity markets plunged
• 17:09
  Speaker 1: and then came back very strongly, Um, did you see
• 17:12
  Speaker 1: something similar in the credit markets? How did they behave
• 17:15
  Speaker 1: over that time? So the credit markets were as volatiled
• 17:19
  Speaker 1: for a while as the equity markets, although I only
• 17:24
  Speaker 1: remind people volatility implies going up and down, and they
• 17:27
  Speaker 1: were going straight now, um. And it's at that time
• 17:32
  Speaker 1: that as a leader of firm and the managing directors
• 17:35
  Speaker 1: who had seen different cycles before had to make sure
• 17:39
  Speaker 1: that the team focused on first principles, what would happen
• 17:44
  Speaker 1: over the long run, would these companies be able to
• 17:47
  Speaker 1: pay us back? How much cash could they burn? How
• 17:50
  Speaker 1: long could this last? And we were able to find
• 17:55
  Speaker 1: opportunities and had near record deployment during that period of time.
• 18:00
  Speaker 1: Because the recovery was industry specific, so not everything came
• 18:05
  Speaker 1: back at the same time. As you know, indussease, stock market, induscries,
• 18:10
  Speaker 1: credit indusseries lie because their averages um. Secondly, there were
• 18:15
  Speaker 1: different needs by geography and those those needs continue today.
• 18:19
  Speaker 1: Where in Europe in particular, banks still had to shed
• 18:23
  Speaker 1: lots and lots of bad assets and it became increasingly
• 18:27
  Speaker 1: important to clean up their balance sheets. UH In the
• 18:30
  Speaker 1: US there were a lot of industries, airlines, restaurants that
• 18:35
  Speaker 1: did not recover the same way. We obviously made a
• 18:39
  Speaker 1: very high profile airline investment with Virgin Australia UH in Australia,
• 18:45
  Speaker 1: which we bought in partnership with our private equity team
• 18:48
  Speaker 1: out of out of bankruptcy. And while there was a recovery,
• 18:53
  Speaker 1: there was some sense that people did not fully believe
• 18:55
  Speaker 1: it was over and therefore there was a reticence to
• 18:59
  Speaker 1: deploy a new capital. We saw periods of time where
• 19:03
  Speaker 1: the safer assets were way over priced at the expense
• 19:08
  Speaker 1: of riskier assets. And if you got the default picture correct,
• 19:13
  Speaker 1: which fortunately we did, and the team did a great
• 19:16
  Speaker 1: job thinking about how much money companies would need and
• 19:20
  Speaker 1: how they would access cash if they needed it, and
• 19:25
  Speaker 1: we UM we said we could take a little more risk.
• 19:29
  Speaker 1: We are not going to just buy double bees and
• 19:31
  Speaker 1: ride the interest rate decline waves, and that was was
• 19:35
  Speaker 1: the right decision. And then lastly, events like oh a like,
• 19:41
  Speaker 1: like the dot com boom, they leave some scars, and
• 19:45
  Speaker 1: we saw a lot of companies that had just gotten
• 19:48
  Speaker 1: through that wanted to shore up their capital structures and said,
• 19:51
  Speaker 1: you know what, having too much senior bank at with
• 19:55
  Speaker 1: covenants or not enough equity, or perhaps they wanted preferred
• 19:59
  Speaker 1: to doc But we spent a lot of time working
• 20:02
  Speaker 1: with companies all over the globe on very structured sources
• 20:05
  Speaker 1: of debton capital to help them make sure that they
• 20:09
  Speaker 1: could ride through a second wave a third wave. Really
• 20:13
  Speaker 1: really intriguing. UM, did you see as much distressed debt
• 20:18
  Speaker 1: opportunities that you thought initially when when the pandemic really
• 20:24
  Speaker 1: took root and we started to see all sorts of
• 20:26
  Speaker 1: economic dislocations or was that recovery just shockingly quick? So
• 20:32
  Speaker 1: we clearly didn't see as much distressed as we thought
• 20:36
  Speaker 1: we were going to see because we thought everything was
• 20:39
  Speaker 1: going to be distressed. I mean, when you put yourself
• 20:41
  Speaker 1: back in you know, March of nobody had any idea
• 20:47
  Speaker 1: what was going on. I remember being on debate where
• 20:52
  Speaker 1: we were wondering whether we would have our offices closed
• 20:56
  Speaker 1: until Memorial Day or Labor Day, and we were right,
• 21:00
  Speaker 1: we just had the wrong years. Uh. And but that said,
• 21:04
  Speaker 1: there was a lot of uh. There was a lot
• 21:08
  Speaker 1: of distressed opportunities and rescue opportunities that available that we
• 21:13
  Speaker 1: could do. The footprint that we operate with the twenty
• 21:18
  Speaker 1: one offices throughout the globe also made a big difference
• 21:21
  Speaker 1: because being proximate to so many different geographies and being
• 21:27
  Speaker 1: able to participate in um so many different ways. We
• 21:32
  Speaker 1: were able to do business locally as different geographies were
• 21:37
  Speaker 1: opening and closing, and we could visit real estate sites
• 21:42
  Speaker 1: some places in in Ireland or in Greece, or in
• 21:46
  Speaker 1: uh In in Spain because we had a presence there.
• 21:51
  Speaker 1: When we were looking at Virgin Australia. We have two
• 21:54
  Speaker 1: offices in Australia, so we were able to UM do
• 21:59
  Speaker 1: analysis US and have a view that others weren't able
• 22:03
  Speaker 1: to have because you couldn't get to Australia. So we
• 22:06
  Speaker 1: really felt the value of our platform during that period
• 22:09
  Speaker 1: of time. And and let's stick with the idea of value.
• 22:13
  Speaker 1: A lot of people of the equity markets as let's
• 22:17
  Speaker 1: call them fully valued and or or more. Uh, does
• 22:22
  Speaker 1: any of that spill over to the credit markets? What
• 22:25
  Speaker 1: do you see in terms of private credit investments? Are
• 22:30
  Speaker 1: are things available at the same sorts of valuations that
• 22:34
  Speaker 1: you like to see? I would say that what we're
• 22:37
  Speaker 1: seeing is once again more bespoke opportunities. On the one hand,
• 22:42
  Speaker 1: in our special situations business that you know, there's no
• 22:48
  Speaker 1: cookie cutter solutions out there, and access to capital um
• 22:53
  Speaker 1: is still in some segments still pretty tight. I think
• 22:57
  Speaker 1: that there are some people who own a lot against
• 23:01
  Speaker 1: enterprise value, and we will do that a little, but
• 23:04
  Speaker 1: we're not comfortable relying on getting paid back. We're okay
• 23:08
  Speaker 1: taking returns from the equity markets, but we need to
• 23:13
  Speaker 1: believe we're going to get paid back on debt instruments.
• 23:16
  Speaker 1: In traditional debt ways UH preferred stock and structured equity
• 23:21
  Speaker 1: and things like that are are a different story. And
• 23:23
  Speaker 1: that's obviously where equity valuations make a difference. On the
• 23:27
  Speaker 1: lending side of our business. In our private credit business
• 23:31
  Speaker 1: and our cello business and our bank loan and bond business,
• 23:34
  Speaker 1: default rates are incredibly low, and the economic outlook vise
• 23:39
  Speaker 1: are the default vise are. The company's ability to access
• 23:43
  Speaker 1: traditional capital markets is pretty good. And when you make
• 23:48
  Speaker 1: a credit investment, when you make a loan, you look
• 23:52
  Speaker 1: at the spread you're getting and then you always net
• 23:54
  Speaker 1: out what you presume you're gonna lose um in default
• 23:58
  Speaker 1: over a period of of the next two or three years.
• 24:02
  Speaker 1: And I think not enough people look at loss adjusted
• 24:05
  Speaker 1: spread that in bad markets, people probably underestimate what the
• 24:10
  Speaker 1: losses would be, and in good markets they probably overestimate
• 24:14
  Speaker 1: what they're going to lose because of defaults. And just
• 24:18
  Speaker 1: like during we correctly thought that the whole world wasn't
• 24:22
  Speaker 1: done a default and at a three percent four percent
• 24:24
  Speaker 1: default rate, wasn't the end of the world. The default
• 24:28
  Speaker 1: rate year to date is less than one percent, so
• 24:32
  Speaker 1: it is well below average. And when default rates are
• 24:36
  Speaker 1: below average, you would expect the spreads that people are
• 24:39
  Speaker 1: lending money at to be below average, which is what
• 24:43
  Speaker 1: we're seeing. So so let me flip that question over
• 24:46
  Speaker 1: a little bit. A lot of what has made private
• 24:50
  Speaker 1: credits so attractive, at least for the past decade anyway,
• 24:54
  Speaker 1: has been that interest rates have really been so low
• 24:57
  Speaker 1: and the yields from fixed income has in less attractive.
• 25:02
  Speaker 1: What does that mean in terms of rising rates these days?
• 25:05
  Speaker 1: If we continue to see um Man yields tick up,
• 25:09
  Speaker 1: if the FED is early in their rate hiking cycle,
• 25:13
  Speaker 1: and we could see you know, four or five six
• 25:16
  Speaker 1: rate increases over the next two years, what does that
• 25:19
  Speaker 1: do to your expectations for the private credit sector. Our
• 25:23
  Speaker 1: expectations actually go up in that scenario for two reasons.
• 25:28
  Speaker 1: One is, most of the way we loan in private
• 25:31
  Speaker 1: credit is through floating rate instruments, and therefore, as rates
• 25:38
  Speaker 1: go up UH, the amount of interest we received goes up.
• 25:44
  Speaker 1: There's very little fixed rate in UH in the private
• 25:47
  Speaker 1: credit space. Now. Secondly, you have to step back and
• 25:52
  Speaker 1: ask yourself why are rates going up? And they're going up, yes,
• 25:57
  Speaker 1: because there's some inflation, but also because the economy is
• 26:01
  Speaker 1: growing and the economy is doing well. And the FAD
• 26:04
  Speaker 1: needs to tap the brakes a little bit, and that
• 26:07
  Speaker 1: would suggest that there will be fewer defaults, so it
• 26:10
  Speaker 1: would be a good market to lend private credit. Let's
• 26:14
  Speaker 1: talk a little bit about Baine because they really are
• 26:18
  Speaker 1: kind of an interesting um private equity shop. Uh, they
• 26:23
  Speaker 1: have employees across the US and around the world. How
• 26:27
  Speaker 1: did they manage this during the lockdown? Were you able
• 26:31
  Speaker 1: to deal with this or did you go into the
• 26:34
  Speaker 1: pandemic semi virtual anyway? So, because we have such a
• 26:40
  Speaker 1: big global footprint and such a diversity of businesses from
• 26:45
  Speaker 1: life sciences to obviously private equity and credit and check
• 26:51
  Speaker 1: ropes and venture capital and uh, you know many others,
• 26:58
  Speaker 1: we were used to working across our platform and how
• 27:02
  Speaker 1: do we activate our platform when we're looking at various situations. Now,
• 27:07
  Speaker 1: we obviously had never encountered anything like we saw in March,
• 27:13
  Speaker 1: but we had the technology and play in huge credit
• 27:16
  Speaker 1: to our technology team that everything worked. We decided early
• 27:20
  Speaker 1: on that we were going to make sure everybody from
• 27:24
  Speaker 1: the most junior analysts to the most senior people in
• 27:26
  Speaker 1: the firm had any technology they needed at their homes,
• 27:30
  Speaker 1: if they needed routers, if they needed their internets be
• 27:33
  Speaker 1: sped up, new laptops, screens. A lot of firms spent
• 27:38
  Speaker 1: a lot of time figuring out what they were going
• 27:41
  Speaker 1: to do, and we made the concerted effort to enable
• 27:45
  Speaker 1: people as fast as possible. In Boston, we even had
• 27:50
  Speaker 1: a group going around with literally a pickup truck and
• 27:54
  Speaker 1: they moved our trade stations, our trader stations and reset
• 27:58
  Speaker 1: them up in their homes. Within the first week of
• 28:01
  Speaker 1: the pandemic. We never missed in an hour. But when
• 28:06
  Speaker 1: I stepped back and I reflect on that period of
• 28:08
  Speaker 1: time and what we've learned over the last two years,
• 28:13
  Speaker 1: it really has brought out the entrepreneurial spirit that defines us,
• 28:18
  Speaker 1: and it has brought us closer together. People hop on
• 28:21
  Speaker 1: a zoom with colleagues in Mumbai with more ease and
• 28:27
  Speaker 1: more comfort today than they used to, you know, go
• 28:31
  Speaker 1: from the thirty seventh floor to the thirty eight floor
• 28:33
  Speaker 1: to ask somebody a question. It's just been amazing to
• 28:37
  Speaker 1: see the resourcefulness that individual people have brought to to
• 28:43
  Speaker 1: to this situation, and the aggregation of that and the
• 28:47
  Speaker 1: sharing of learnings has made a huge difference in our
• 28:50
  Speaker 1: ability to be effective. We've hired hundreds of people during
• 28:54
  Speaker 1: the pandemic, We've continued to increase our assets under management.
• 29:00
  Speaker 1: We have found great investment opportunities across all of our
• 29:04
  Speaker 1: business units. And you know, while I never would like
• 29:08
  Speaker 1: to do it again, I am just incredibly proud of
• 29:11
  Speaker 1: what the team has accomplished and to be part of it.
• 29:14
  Speaker 1: And I know that may sound corny, but it truly
• 29:17
  Speaker 1: has been the finest hour for our people, and the
• 29:21
  Speaker 1: compassion and resourcefulness people have shown has been amazing. Sure,
• 29:26
  Speaker 1: it's a baptism of fire. It's similar to what UM
• 29:30
  Speaker 1: people when the Armed services go through, where everybody has
• 29:33
  Speaker 1: to pull together and and rise to the challenge of
• 29:37
  Speaker 1: a of a common enemy. I could certainly understand that.
• 29:41
  Speaker 1: Let's talk a little bit about your overseas business. You
• 29:45
  Speaker 1: you guys have fairly substantial investments both in Europe and
• 29:49
  Speaker 1: and UH Asia and the Pacific. Tell us a little
• 29:53
  Speaker 1: bit about what the challenges are of UH private investments
• 29:58
  Speaker 1: outside of the US and does your thought process differ
• 30:02
  Speaker 1: when you're considering those sorts of opportunities. So we view
• 30:07
  Speaker 1: ourselves as a global firm. One of the things culturally
• 30:11
  Speaker 1: is we don't view London or Hong Kong or Melbourne
• 30:15
  Speaker 1: as overseas because to them at home, and in fact,
• 30:19
  Speaker 1: about half our partners are outside the United States now.
• 30:24
  Speaker 1: And so we have learned a lot from our global
• 30:28
  Speaker 1: expansion over the last twenty two years, and one is
• 30:32
  Speaker 1: that each market there are some core principles of what
• 30:36
  Speaker 1: makes a good company what makes a bad company. That
• 30:39
  Speaker 1: does translate. Our investment style does translate. But there are
• 30:44
  Speaker 1: different norms, different ways people do business. There are different laws.
• 30:49
  Speaker 1: Lending is different from uh from geography to geography, and
• 30:54
  Speaker 1: you want to be sensitive to that, which is why
• 30:57
  Speaker 1: all of our offices are predomina at Lee people who
• 31:01
  Speaker 1: are from the local market. We didn't send a bunch
• 31:05
  Speaker 1: of people over to London and say Hi, I'm from
• 31:08
  Speaker 1: Boston and New York, You're happy to meet me. We
• 31:12
  Speaker 1: actually built a local team that um does business. It
• 31:17
  Speaker 1: has participated in the market, but early on worked very
• 31:21
  Speaker 1: closely with people who had moved over from Boston or
• 31:25
  Speaker 1: they spent time in Boston, so that the culture of
• 31:28
  Speaker 1: the firm could grow um as it um as as
• 31:32
  Speaker 1: we moved across the globe. And I think that's really
• 31:35
  Speaker 1: really important. Is the biggest challenge you have in these
• 31:40
  Speaker 1: types of situations when you are growing globally. You've been
• 31:44
  Speaker 1: very successful in its single geography is just trying to
• 31:48
  Speaker 1: replicate it without being sensitive to local norms and local networks.
• 31:54
  Speaker 1: And what you need to do is find a way
• 31:57
  Speaker 1: to maintain the core firm culture and the platform advantage
• 32:01
  Speaker 1: that you bring your your reason for being, but make
• 32:04
  Speaker 1: sure that you find ways to incorporate people with different
• 32:07
  Speaker 1: experiences and people who know different markets better than we do. Uh.
• 32:14
  Speaker 1: Let's talk about diversity a little bit. Finance has been
• 32:18
  Speaker 1: criticized for for lacking in diversity. We we tend to
• 32:22
  Speaker 1: be a bit of a white male industry. There are
• 32:25
  Speaker 1: signs that's improving, but finance still lags a lot of
• 32:30
  Speaker 1: other industries. UH, tell us a little bit about what
• 32:33
  Speaker 1: pain is doing to address that issue. This is a
• 32:37
  Speaker 1: huge issue in finance, in in a lot of industries
• 32:41
  Speaker 1: across the US, and we recognize that we have to
• 32:45
  Speaker 1: apply the esteem creativity we do to our investments in
• 32:51
  Speaker 1: to our portfolio companies too, um to bringing a more
• 32:57
  Speaker 1: diverse group of people in to the industry, obviously underrepresented groups,
• 33:05
  Speaker 1: but also diversity of thought, diversity of geography, diversity of
• 33:09
  Speaker 1: socioeconomic backgrounds. And we also recognize that we can't solve
• 33:15
  Speaker 1: it ourselves, and we have made sure to consult with
• 33:19
  Speaker 1: expertise and partner with organizations like m LT and s CEO,
• 33:24
  Speaker 1: and we have found that technology has really helped us
• 33:30
  Speaker 1: reach a broader group of people. When you don't hire
• 33:33
  Speaker 1: a lot of people in any given year, we have
• 33:36
  Speaker 1: fifteen hundred people UM, and you know, we may hire
• 33:41
  Speaker 1: twenty associates and analysts, maybe forty associates and analysts in
• 33:46
  Speaker 1: the United States a year. That's not a huge amount,
• 33:49
  Speaker 1: and therefore it was really easy to just lapse into
• 33:53
  Speaker 1: keep going to the same schools you're going to, and
• 33:56
  Speaker 1: we recognize that that wasn't going to solve the problem.
• 33:59
  Speaker 1: So we are you zoom to host informational forum UH two,
• 34:05
  Speaker 1: teach people about what investing is, who we are UM,
• 34:08
  Speaker 1: to coach people on the interview process, whether the interview
• 34:12
  Speaker 1: with us or somebody else, and really start engaging with
• 34:15
  Speaker 1: larger groups UM across the country. And we think it's
• 34:20
  Speaker 1: it's incumbent upon everybody in our industry to make the
• 34:24
  Speaker 1: industry more accessible and not just think about what I
• 34:28
  Speaker 1: want ten more recruits. And just the other day we
• 34:32
  Speaker 1: did a a informational session on Zoom and had two
• 34:37
  Speaker 1: hundred or three hundred students from colleges across the United
• 34:40
  Speaker 1: States learning about what we do, learning about the case
• 34:45
  Speaker 1: method of interviewing, and we're going to see how that works.
• 34:48
  Speaker 1: And you just have to keep experimenting, leaning in, and
• 34:53
  Speaker 1: you know, be willing to take some risk, because doing
• 34:56
  Speaker 1: the same thing over and over again and expecting a
• 34:58
  Speaker 1: different outcome is definition of insanity. Really really interesting. I
• 35:04
  Speaker 1: saw a really wonderful quote of yours before the pandemic began.
• 35:09
  Speaker 1: It was it was around February four. Quote. I really
• 35:13
  Speaker 1: think nobody could possibly understand the impact. And until we
• 35:16
  Speaker 1: see how it plays out, how the quarantine works out,
• 35:19
  Speaker 1: and whether or not we can find some sort of
• 35:21
  Speaker 1: a vaccine, We're going to study this very closely and
• 35:24
  Speaker 1: look at it very carefully. Unquote that that was a
• 35:28
  Speaker 1: solid month and change before the lockdowns began, And it
• 35:32
  Speaker 1: very much tells as to your approach, uh, not too aggressive,
• 35:37
  Speaker 1: not too cautious, but really looking at things closely. Uh,
• 35:42
  Speaker 1: tell us a bill a little bit about what you
• 35:45
  Speaker 1: were thinking about a month before things really got bad
• 35:48
  Speaker 1: here in the States. Investing is not the prediction business.
• 35:54
  Speaker 1: It's really about adapting. And I use a framework a
• 35:58
  Speaker 1: lot with the team, all the Udha loop, which actually
• 36:03
  Speaker 1: comes from the military, and how they would teach fighter
• 36:06
  Speaker 1: pilots to orient themselves in a dog fight at time
• 36:10
  Speaker 1: of high uncertainty, and it tells you that you need
• 36:14
  Speaker 1: to orient yourself to where you are, you need to
• 36:17
  Speaker 1: observe what's going on, then you need to decide, and
• 36:20
  Speaker 1: then you need to act. And it's a loop because
• 36:23
  Speaker 1: you do it over and over and over again. And
• 36:27
  Speaker 1: at that time, it was clear that we were in
• 36:30
  Speaker 1: a situation where we were not being asked to price risk.
• 36:34
  Speaker 1: We were being asked to price uncertainty. And we were
• 36:38
  Speaker 1: humble enough to see that nobody had exactly gotten this
• 36:43
  Speaker 1: right yet, and sensitive enough to recognize that there was
• 36:48
  Speaker 1: a human tole that this was taking both in human life,
• 36:53
  Speaker 1: and people were starting to die as well as fear.
• 36:56
  Speaker 1: And I thought at the time, and in my partner
• 37:00
  Speaker 1: Um and I talked about it that boy, we don't
• 37:03
  Speaker 1: really know what's going on. And sometimes people think you
• 37:07
  Speaker 1: should zig or you should dad, but really what you
• 37:10
  Speaker 1: should do when you don't know what's going on to
• 37:11
  Speaker 1: stand still and watch. And that's what we did. We
• 37:15
  Speaker 1: didn't panic, We didn't try to guess one way or
• 37:18
  Speaker 1: the other. We set out a framework for how we
• 37:20
  Speaker 1: were going to look at this, how we were going
• 37:22
  Speaker 1: to think about the safety of our team as well
• 37:26
  Speaker 1: as the um security of our portfolio companies. And we're
• 37:32
  Speaker 1: very fortunate at Bank Capital because we have a life
• 37:35
  Speaker 1: sciences group with real doctors and people with pH d
• 37:39
  Speaker 1: s who played a huge role at that time in
• 37:42
  Speaker 1: trying to help us understand how this could play out
• 37:47
  Speaker 1: and also what it took to develop a vaccine. And
• 37:51
  Speaker 1: I had never put much thought into how developing vaccines
• 37:55
  Speaker 1: work and how they worked and who would take them
• 37:58
  Speaker 1: um and that was incredibly helpful. And uh, that part
• 38:02
  Speaker 1: of the firm continues to be incredibly helpful today to
• 38:05
  Speaker 1: this point, to this day. So let's talk a little
• 38:07
  Speaker 1: bit about some of the philanthropic work you do. You
• 38:10
  Speaker 1: were a major supporter of of City Year, Lift, you Aspire,
• 38:15
  Speaker 1: and you were one of the earliest donors to Brian
• 38:17
  Speaker 1: Stevenson's Equal Justice Initiative. Tell us a little bit about
• 38:22
  Speaker 1: what the connection is between all of these different clauses.
• 38:27
  Speaker 1: My wife and I both went to public high schools
• 38:30
  Speaker 1: and had the ability to obtain incredible education, both undergrad
• 38:36
  Speaker 1: and graduate, And at no point in my life when
• 38:40
  Speaker 1: I was walking through the halls of my public high
• 38:43
  Speaker 1: school in downtown Providence, did I ever question that there
• 38:47
  Speaker 1: might be a ceiling on what I could do and
• 38:49
  Speaker 1: what I could accomplish. And that's just not the case today.
• 38:53
  Speaker 1: And we recognize that we have been incredibly, incredibly lucky.
• 39:01
  Speaker 1: There's a lot of people with the same skills I
• 39:04
  Speaker 1: have that just never had the opportunities that I have had,
• 39:08
  Speaker 1: and we focus a lot of our philanthropy on what
• 39:12
  Speaker 1: we call leveling the playing field. So City Year was
• 39:16
  Speaker 1: the UM, the organization that was used as the models
• 39:21
  Speaker 1: for AmeriCorps, which is the National service organization UM. City
• 39:26
  Speaker 1: Year when we started volunteering with City Year, they had
• 39:30
  Speaker 1: come to my Business school section. A friend of mine
• 39:33
  Speaker 1: had helped them with their business plan, and they had
• 39:36
  Speaker 1: a vision of putting near peer mentors and public schools
• 39:39
  Speaker 1: across the United States and UM and using them to
• 39:44
  Speaker 1: help UH students see their potential and help prevent the
• 39:51
  Speaker 1: help prevent students from dropping out. We didn't have much
• 39:55
  Speaker 1: money back then, but we gave them eighteen dollars, which
• 40:00
  Speaker 1: was which is high in the Jewish faith, which stands
• 40:03
  Speaker 1: for lock in life, and for some weird reason, I
• 40:07
  Speaker 1: kept the check. I still have that check and have
• 40:10
  Speaker 1: been involved with City Or for more than thirty years.
• 40:13
  Speaker 1: I chaired the board, I was on the I was
• 40:18
  Speaker 1: on the board for fifteen years, and I've watched that
• 40:21
  Speaker 1: organization grow to three thousand young core members volunteering in
• 40:27
  Speaker 1: schools in thirty cities in the United States, London, UM,
• 40:34
  Speaker 1: Northern England and South Africa, and Johannesburg. And I've seen
• 40:38
  Speaker 1: the power of UH commitment and idealism to help solve
• 40:44
  Speaker 1: problems that the problems we have of opportunity aren't intractable
• 40:49
  Speaker 1: UM And along that theme, we were introduced to smaller
• 40:55
  Speaker 1: organizations at the time. You Aspire helps students find financial aid.
• 41:01
  Speaker 1: The financial aid process in the United States is unbelievably complicated,
• 41:06
  Speaker 1: and it started by helping Boston Public school kids just
• 41:10
  Speaker 1: learn how to apply for financial aid. It's one of
• 41:13
  Speaker 1: the number one reasons that students don't apply to college
• 41:18
  Speaker 1: is they just assume it's not accessible to them. People
• 41:21
  Speaker 1: don't realize that even understanding financial aid is super complicated.
• 41:26
  Speaker 1: One of the things the CEO did when I first
• 41:30
  Speaker 1: met him. Is gave me three financial aid letters and
• 41:34
  Speaker 1: asked me to read them and tell him what I
• 41:36
  Speaker 1: thought the best package was. And it was really hard,
• 41:39
  Speaker 1: and he said, now, imagine your kid in South Boston
• 41:44
  Speaker 1: whose parents didn't go to college and this arrives in
• 41:46
  Speaker 1: the mail. How do we help explain that to them?
• 41:49
  Speaker 1: And they now work UM once again using technology, with
• 41:53
  Speaker 1: hundreds of thousands of kids across the country. UH and
• 41:57
  Speaker 1: LIFT Communities. UH was founded by a woman named Kirsten Lodel,
• 42:03
  Speaker 1: who I met through an organization called New Profit here
• 42:07
  Speaker 1: in Boston which does venture philanthropy, and Kirsten started LIFT
• 42:13
  Speaker 1: for junior year at Yale and with the belief that
• 42:17
  Speaker 1: people need a helping hand to it's not always people
• 42:21
  Speaker 1: need money and money will will solve a problem. And effectively,
• 42:25
  Speaker 1: what LIFT does is their life coaches. They help people budget,
• 42:29
  Speaker 1: they help with financial literacy, they help people learn how
• 42:32
  Speaker 1: to take care of their health. And it's almost like
• 42:36
  Speaker 1: life coaches for people who otherwise don't have it, how
• 42:39
  Speaker 1: to do a resume, and it it follows the great line.
• 42:44
  Speaker 1: You know, give a person a fish, you feed them
• 42:47
  Speaker 1: for a day, teach them how to fish, and you
• 42:49
  Speaker 1: feed them for a lifetime and LIFT has done just
• 42:53
  Speaker 1: amazing work. They very much focus on underrepresented communities. It's
• 42:58
  Speaker 1: generally mother and UM, they have had just amazing, amazing results. UM.
• 43:06
  Speaker 1: It's now run by a woman named Michelle Roan Collins.
• 43:09
  Speaker 1: And then lastly, the several years ago, just when Just
• 43:14
  Speaker 1: Mercy came out, the founder or co founder of City Or,
• 43:18
  Speaker 1: Michael Brown, gave me Brian's book for Hanaka. He always
• 43:23
  Speaker 1: sends me a book every year, and he had gone
• 43:25
  Speaker 1: to law school with Brian. I had met Brian once
• 43:28
  Speaker 1: briefly at a City Year event. And I don't know
• 43:31
  Speaker 1: if you've read Just Mercy, but you're reading it, and
• 43:34
  Speaker 1: it's about how Brian Uh. One of his first major
• 43:38
  Speaker 1: cases he got somebody off of death Row who was
• 43:41
  Speaker 1: basically framed and it was completely and totally um racially
• 43:47
  Speaker 1: motivated and uh discriminatory, and he did a There's a
• 43:53
  Speaker 1: section in there about children who have been sentenced to
• 43:57
  Speaker 1: life in jail and the horrible trauma that they've go through.
• 44:01
  Speaker 1: And I read this and I, you know, UM humble
• 44:05
  Speaker 1: enough to tell you I was shocked. I thought I
• 44:08
  Speaker 1: was pretty aware of what was going on. And this
• 44:12
  Speaker 1: is years and years and years before uh, George Floyd,
• 44:16
  Speaker 1: and I was like, how can this be happening in America?
• 44:19
  Speaker 1: And I actually called Michael and said, can you introduce
• 44:22
  Speaker 1: me to Brian Jennie and I would love to meet him?
• 44:25
  Speaker 1: And um, we got to meet him. We've gotten to
• 44:28
  Speaker 1: be friendly with him. UM. We gave him one of
• 44:31
  Speaker 1: his largest early gifts. He had been around for a while,
• 44:34
  Speaker 1: but we gave him a substantial gift. And you know,
• 44:37
  Speaker 1: I thought it was so important that people understand the
• 44:41
  Speaker 1: top both the type of work that he is doing,
• 44:44
  Speaker 1: but the need to do that type of work, which
• 44:47
  Speaker 1: is just incredible that that's still necessary in this country. Um.
• 44:52
  Speaker 1: He and I actually did a joint to parents on
• 44:55
  Speaker 1: ntr UM six years ago to talk about it, um
• 44:59
  Speaker 1: and talk about how somebody like me had come across
• 45:03
  Speaker 1: the work he's doing down in Alabama and how I
• 45:06
  Speaker 1: just thought it was so important as an American to
• 45:10
  Speaker 1: do whatever I could to help not just rectify these
• 45:15
  Speaker 1: types of injustices, but actually make sure they stop happening.
• 45:19
  Speaker 1: And that his book Just Mercy eventually became a film
• 45:24
  Speaker 1: with Michael Jordan and Jamie Fox. So so let's let's
• 45:28
  Speaker 1: stick with that concept of social and economic mobility. Why
• 45:33
  Speaker 1: do you think that there is a ceiling today in
• 45:36
  Speaker 1: the United States that didn't exist decades ago? And what
• 45:41
  Speaker 1: can we do about improving economic mobility? You know, if
• 45:46
  Speaker 1: I had all the answers, uh, I hope it would
• 45:50
  Speaker 1: be solved, because other people smarter than I am would
• 45:53
  Speaker 1: have figured it out. But I do think it starts
• 45:55
  Speaker 1: with the educational system and making sure that public school
• 46:00
  Speaker 1: was in the United States aren't just good, they're great. Um.
• 46:04
  Speaker 1: The number of folks I went to public school with
• 46:07
  Speaker 1: who now send their children to private school is staggering
• 46:10
  Speaker 1: to me. And UM, So it starts with making sure
• 46:14
  Speaker 1: that education in the United States works. Um. Secondly, I
• 46:19
  Speaker 1: think we've all got to recognize the problem. We've got
• 46:21
  Speaker 1: to recognize, um uh, that people with different lived experiences
• 46:27
  Speaker 1: do not have the same access to starting businesses, the
• 46:30
  Speaker 1: same access to UM capital, the same access to all
• 46:35
  Speaker 1: the resources that you might see you know more obviously
• 46:40
  Speaker 1: in a traditional sense in Silicon Valley as an institution,
• 46:44
  Speaker 1: we have committed ourselves to try to help improve that,
• 46:47
  Speaker 1: um UH in in business equity in the City of Boston,
• 46:52
  Speaker 1: UM and many of us support other organizations across the country,
• 46:58
  Speaker 1: which are all trying to to level the playing field,
• 47:01
  Speaker 1: as I discussed, But the first thing is we've got
• 47:04
  Speaker 1: to be aware of the disparity. You can't fix it
• 47:08
  Speaker 1: until you name it and you own it, and then
• 47:12
  Speaker 1: people have got to recognize that there's work to do.
• 47:16
  Speaker 1: Quite quite interesting, you end up in a similar place
• 47:19
  Speaker 1: to Joel Greenblatt, who also points to the education system
• 47:24
  Speaker 1: as the key to improving UH economic mobility. I think
• 47:28
  Speaker 1: the book is something common sense, the guide, Investor's Guide
• 47:32
  Speaker 1: to a quality opportunity in growth. You guys are very similar.
• 47:36
  Speaker 1: Let me ask you about a different project that you
• 47:40
  Speaker 1: were involved in. You helped to fund the teen uh
• 47:44
  Speaker 1: ten part documentary series by Ken Burns and Lynn Novak
• 47:48
  Speaker 1: The Vietnam War. Tell us how we're going to find
• 47:53
  Speaker 1: the next great filmmaker like Ken Burns. So while Ken's
• 47:59
  Speaker 1: film came out in seventeen, I had met him about
• 48:02
  Speaker 1: seven years earlier. One thing as I've become friendly with
• 48:07
  Speaker 1: Ken over the years, and my my wife and I've
• 48:10
  Speaker 1: become really good friends with him, is he starts thinking
• 48:13
  Speaker 1: about his projects a decade out. He literally can tell
• 48:18
  Speaker 1: you what he's going to do in and um when
• 48:22
  Speaker 1: he approached me on the Vietnam War. It was very
• 48:26
  Speaker 1: important to him that this have funding from people who
• 48:31
  Speaker 1: would be associated with being Democrats and Republicans to immediately
• 48:36
  Speaker 1: take away any possibility people would think that this had
• 48:39
  Speaker 1: a political agenda. He also, very purposely in the film
• 48:44
  Speaker 1: does not interview John McCain or John Kerry because a
• 48:48
  Speaker 1: lot of people reduce the um, you know, some of
• 48:53
  Speaker 1: the Vietnam stories to two very famous people, both of
• 48:56
  Speaker 1: whom are heroes, UM who served in What he wanted
• 49:00
  Speaker 1: to do is tell the story of you know, a
• 49:03
  Speaker 1: whole mix of Americans and what that story was. And
• 49:07
  Speaker 1: that is the beauty of Ken's work and Um, as
• 49:11
  Speaker 1: we've gotten to know each other, we helped fund a film.
• 49:16
  Speaker 1: He did a short film on the Holocaust um and
• 49:19
  Speaker 1: he's actually got a multi part series on the Holocaust
• 49:23
  Speaker 1: coming coming out um UH. Later this year, we um
• 49:29
  Speaker 1: talked about the importance of who is the next Ken Burns?
• 49:32
  Speaker 1: Burns and he came up with this idea and asked
• 49:36
  Speaker 1: my wife Jeanie and I if we would join him
• 49:39
  Speaker 1: in funding a prize given by the Library of Congress
• 49:43
  Speaker 1: to emerging filmmakers. Because he remembered that when he started.
• 49:48
  Speaker 1: The toughest thing he had was getting what's called the
• 49:51
  Speaker 1: completion grant. He could do all the raw filming, but
• 49:55
  Speaker 1: really pulling it together in something that was production worthy.
• 49:59
  Speaker 1: But so we agreed to sponsor and we do to
• 50:02
  Speaker 1: this day a prize through the Library of Congress which
• 50:06
  Speaker 1: provides completion grants not just to the winner of the
• 50:09
  Speaker 1: of of the Content of the of the Award, but
• 50:13
  Speaker 1: also to a couple of other runner ups. They are
• 50:16
  Speaker 1: different size grants so that the next can Burns can
• 50:20
  Speaker 1: can have an opportunity. UM over the last couple of
• 50:24
  Speaker 1: years can recognize that UM their diversity and documentary filmmakers,
• 50:31
  Speaker 1: just like we talked about incindance, UM wasn't what it
• 50:35
  Speaker 1: should be. And we came together with him and also
• 50:39
  Speaker 1: fund a fellowship and mentorship program that he started to
• 50:44
  Speaker 1: help UM UM mentor up and coming filmmakers from underrepresented groups.
• 50:52
  Speaker 1: And UM he's just an amazing person. Uh when you
• 50:56
  Speaker 1: look at polls of people still trust his films and
• 51:01
  Speaker 1: trust his storytelling and know that it's up the middle
• 51:05
  Speaker 1: and in this time when people do not trust media
• 51:09
  Speaker 1: for whatever reasons and people polarized to their networks, to
• 51:14
  Speaker 1: know that there's people like Ken, and hopefully a generation
• 51:17
  Speaker 1: behind Ken, who are presenting history in a really approachable
• 51:22
  Speaker 1: and important way. I think is incredibly important to strengthening
• 51:28
  Speaker 1: some of the social fabric we've talked about. And one
• 51:31
  Speaker 1: of the amazing things about the Vietnam War, where you
• 51:34
  Speaker 1: would have thought everything that had been done and written
• 51:37
  Speaker 1: in all that, is that was the first film I
• 51:39
  Speaker 1: had ever seen that actually interviewed North Vietnamese soldiers and
• 51:44
  Speaker 1: interviewed North Vietnamese citizens, and we forget that there were
• 51:49
  Speaker 1: two sides in that war, both of which suffered incredible
• 51:53
  Speaker 1: human loss, and learning the lessons of Vietnam applies to
• 51:59
  Speaker 1: so many things we're looking at today. Um and UM.
• 52:03
  Speaker 1: I think that's true of almost alocains film. You mentioned
• 52:07
  Speaker 1: he's working on a Holocaust film. Towards the end of
• 52:11
  Speaker 1: his presidency, UH Barack Obama appointed you a member of
• 52:15
  Speaker 1: the US Holocaust Memorial Museum Council. Tell us a little
• 52:20
  Speaker 1: bit about that experience. It was an absolute honor to serve.
• 52:25
  Speaker 1: It's a cause that really important to me and my wife.
• 52:31
  Speaker 1: The Holocaust is not just a moment in history. It's
• 52:35
  Speaker 1: not just uh A, you know, a a time of
• 52:39
  Speaker 1: a group was anti Semitic. It shows you that when
• 52:43
  Speaker 1: you forget the lessons of history, those atrocities can be
• 52:47
  Speaker 1: repeated again and again and again. But there's also a
• 52:51
  Speaker 1: lesson of the Holocaust, which Ken is gonna focus on
• 52:55
  Speaker 1: in his film about what people didn't do and Um
• 53:00
  Speaker 1: there's a whole section that was UM was opened while
• 53:05
  Speaker 1: I was on the UM the Memorial Board, which is
• 53:09
  Speaker 1: about America in the Holocaust and what we did or
• 53:13
  Speaker 1: more appropriately, didn't do during the thirties and how easy
• 53:17
  Speaker 1: it was to look away, say it was far away,
• 53:21
  Speaker 1: and there are a lot of lessons to be learned
• 53:24
  Speaker 1: to see what happens when people, UM are bystanders and
• 53:29
  Speaker 1: I think it's not their problem. And when you look
• 53:33
  Speaker 1: at Charlotte's Felle, you know, I'm not sure people understood
• 53:37
  Speaker 1: the symbolism of people with tiki torches chanting people Jews
• 53:41
  Speaker 1: will not replace us, and that that comes from Nazi Germany.
• 53:45
  Speaker 1: And UM. You know, there's an old adage that you know,
• 53:50
  Speaker 1: when you forget the history, you're doomed to repeat it.
• 53:53
  Speaker 1: And there's just so many lessons to be learned, and
• 53:57
  Speaker 1: the work, the educational work is more than a museum.
• 54:00
  Speaker 1: The educational work that UM the Holocaust UM Memorial Museum
• 54:07
  Speaker 1: Council does in the in the county, in the museum
• 54:09
  Speaker 1: does UM not just on Holocaust, on the Holocaust, but
• 54:13
  Speaker 1: on genocide more broadly. I think it's really really important,
• 54:18
  Speaker 1: and I am incredibly proud to have served UM and
• 54:23
  Speaker 1: UH continue to support support them because it's so important
• 54:28
  Speaker 1: that we learned the lessons and that we do not
• 54:31
  Speaker 1: repeat them. Really really fascinating stuff. Let me throw you
• 54:35
  Speaker 1: a little bit of a curveball here and talk about
• 54:39
  Speaker 1: the Boston Celtics. You've been a member of that ownership
• 54:42
  Speaker 1: group for a while. Tell us a little bit about
• 54:45
  Speaker 1: that experience, how that came about, and what's it like
• 54:49
  Speaker 1: being a Celtics owner. So with somebody who grew up
• 54:53
  Speaker 1: in the Boston area, I grew up in Providence, Rhode Island,
• 54:56
  Speaker 1: UH and went to games with my dad since I
• 55:00
  Speaker 1: was little. UM. The opportunity to be part of the
• 55:04
  Speaker 1: investor group was, you know, so exciting. UM. The Steve Paluco,
• 55:11
  Speaker 1: one of my partners, was friendly with Wick Rossback and
• 55:14
  Speaker 1: UH Bob Epstein, and the three of them put together
• 55:17
  Speaker 1: the group that that bought it a little more than
• 55:19
  Speaker 1: fifteen years ago. Um, they had a vision of local
• 55:23
  Speaker 1: business leaders, people who cared about philanthropy. UM, I cared
• 55:27
  Speaker 1: about you know what the team meant to the city
• 55:30
  Speaker 1: of Boston, and UM, you know it's been great. Uh
• 55:34
  Speaker 1: we you know. I was on the board for the
• 55:36
  Speaker 1: worst season we ever had and on the board for
• 55:40
  Speaker 1: a championship. So it's been UM, it's been amazing. They
• 55:45
  Speaker 1: started out this season looking pretty strong. They have a
• 55:48
  Speaker 1: better than record. What what do you think they have
• 55:50
  Speaker 1: a shot at winning the East this year? I always
• 55:54
  Speaker 1: believe that we not only have a shot, but will
• 55:58
  Speaker 1: win until um, events or otherwise proved me wrong. I'm
• 56:03
  Speaker 1: a true believer and I think that the talent we
• 56:05
  Speaker 1: have on this team is capable of winning any any
• 56:08
  Speaker 1: day and if they get it all working, the beauty
• 56:11
  Speaker 1: of basketball is the playoffs are like a second season. Um.
• 56:15
  Speaker 1: And uh, as long as we make it into the playoffs,
• 56:18
  Speaker 1: I think we can do anything. So I know I
• 56:20
  Speaker 1: only have you for a limited amount of time. Let
• 56:23
  Speaker 1: me jump to my favorite questions that I ask all
• 56:26
  Speaker 1: of my guests, starting with tell us what you're streaming
• 56:30
  Speaker 1: these days? Give us your favorite Netflix or Amazon Prime.
• 56:33
  Speaker 1: What's been keeping you entertained over the past two pandemic years.
• 56:39
  Speaker 1: So besides ted Lasso, the morning show Shifts Creek, which
• 56:44
  Speaker 1: I think everyone UM loves and and and people have
• 56:48
  Speaker 1: really really taken to. I I think ted Lasso may
• 56:52
  Speaker 1: go Down is one of the great philosophers of our time.
• 56:55
  Speaker 1: My wife and I actually, particularly with you know, all
• 57:01
  Speaker 1: the difficult events that have been going on in the world,
• 57:05
  Speaker 1: and you can focus so much on what's going wrong.
• 57:08
  Speaker 1: We actually enjoy periodically just streaming comedy concerts, and Netflix
• 57:13
  Speaker 1: and HBO have great a great array of comedy concerts
• 57:17
  Speaker 1: where you can just laugh, because I do think we
• 57:20
  Speaker 1: need to all laugh a little bit. Um. I Also,
• 57:24
  Speaker 1: as we've talked about, I very much enjoyed documentaries, and
• 57:29
  Speaker 1: not just uh Ken Burns stuff, but some more offbeat
• 57:34
  Speaker 1: stuff I really enjoyed on UM HBO. UH they had
• 57:39
  Speaker 1: a documentary called mcmillions which was riveting, I believe it
• 57:44
  Speaker 1: or not, which basically examined how the McDonald's Monopoly game
• 57:49
  Speaker 1: UH in the mid nineties and late nineties was rigged
• 57:52
  Speaker 1: and nobody realized it for a while, and that somebody
• 57:55
  Speaker 1: had rigged the game, even Monopoly, I mean even McDonald's
• 57:58
  Speaker 1: didn't know, and I'm not doing it justice, but it's
• 58:02
  Speaker 1: fascinating and UM and I UH also very much enjoyed
• 58:08
  Speaker 1: on Netflix the the documentary about the uh theest of
• 58:14
  Speaker 1: art from the Isabella Stewart Gardner Museum here in Boston. UM.
• 58:19
  Speaker 1: It was the largest art heist in history and remains
• 58:23
  Speaker 1: unsolved decades later, and it's called I think it's called
• 58:27
  Speaker 1: this is a heist or this is a robbery. My
• 58:30
  Speaker 1: wife and I saw that that was really quite fascinating,
• 58:33
  Speaker 1: and I mean, the Isabel Stewart Gardner Museum is walking
• 58:36
  Speaker 1: distance from our office, and it was just fascinating to
• 58:39
  Speaker 1: watch and so much UM, I didn't I didn't know.
• 58:44
  Speaker 1: And then I'm a huge sports fan and I think
• 58:46
  Speaker 1: the ESPN thirty for thirties are just absolutely fantastic and
• 58:52
  Speaker 1: you can find all sorts of stuff that that that
• 58:57
  Speaker 1: can keep your interest. UH. I even watched to the
• 59:00
  Speaker 1: hour long documentary on the Tuck Rule, which was that
• 59:05
  Speaker 1: first UH that playoff game that made Tom Brady's career
• 59:09
  Speaker 1: where there was a debate whether or not he fumbled
• 59:12
  Speaker 1: the ball in the snow and UH and UH there
• 59:16
  Speaker 1: was a little known rule in the NFL which they
• 59:18
  Speaker 1: took away the next year called the tuck rule, and
• 59:21
  Speaker 1: he had not tucked the ball back in and uh
• 59:24
  Speaker 1: and he um, so it was ruled an incomplete pass.
• 59:28
  Speaker 1: And because of that, the Patriots beat the Raiders and
• 59:30
  Speaker 1: went on to win their first Super Bowl. And I
• 59:34
  Speaker 1: know that sounds crazy, but I watched it for an
• 59:36
  Speaker 1: hour and I just thought it was fascinating to listen
• 59:39
  Speaker 1: to Tom Brady and Charles Woodson, who had been a
• 59:42
  Speaker 1: college teammate, who was the guy on the Raiders who
• 59:44
  Speaker 1: knocked the ball out, relived that twenty years later. So
• 59:48
  Speaker 1: I think that you can find lots of interesting things
• 59:51
  Speaker 1: to do and things to watch, and UM, I don't
• 59:55
  Speaker 1: think it always needs to be business material. I listened
• 59:58
  Speaker 1: to a lot of podcasts on politics, on um on
• 1:00:03
  Speaker 1: um history, and UM, I think that we're so lucky
• 1:00:08
  Speaker 1: to live in an age where we can where we
• 1:00:10
  Speaker 1: can stream all that stuff. And of course, uh, I
• 1:00:14
  Speaker 1: always make sure to listen to this business podcast. Well
• 1:00:16
  Speaker 1: appreciate you say that. Lets let me skip over that
• 1:00:20
  Speaker 1: and and just ask you two uh more streaming questions. Um.
• 1:00:24
  Speaker 1: The first is I assume you saw the Last Dance,
• 1:00:29
  Speaker 1: the series about Jordan and the Bulls, believe it or not,
• 1:00:33
  Speaker 1: I have not watched the whole thing because I couldn't
• 1:00:37
  Speaker 1: get my wife to watch the whole thing. So um
• 1:00:40
  Speaker 1: as travel is picking up that's on the stream it alone. Camp.
• 1:00:46
  Speaker 1: I was a giant Knicks fan, and I have vivid
• 1:00:49
  Speaker 1: recollections of that era in in the late eighties and nineties,
• 1:00:54
  Speaker 1: just thwarted every time the Knicks ran into that buzz.
• 1:00:58
  Speaker 1: So you mentioned in stand up comedy on Netflix, UM,
• 1:01:03
  Speaker 1: I'm curious any any couple in particular stand out? What
• 1:01:07
  Speaker 1: what have you really enjoyed in terms of stand up Sure,
• 1:01:11
  Speaker 1: there's this guy, Nate BARGOTSI. Um, he has the Tennessee
• 1:01:16
  Speaker 1: Kid in the All American Average Guy or something like that.
• 1:01:21
  Speaker 1: I mean, it's something funny like that, and you know,
• 1:01:25
  Speaker 1: he's hilarious and his it's self deprecating humor. It's it's clean,
• 1:01:31
  Speaker 1: it's not political, it's he's really really good. And the
• 1:01:36
  Speaker 1: beauty of Netflix is you find one you like and
• 1:01:39
  Speaker 1: then you can watch two or three others because they
• 1:01:41
  Speaker 1: probably have have UM have a whole library. And then
• 1:01:45
  Speaker 1: UM Mike Rabiglia UM has some really really interesting, thought
• 1:01:50
  Speaker 1: provoking UM thought provoking UM comedy specials there too that
• 1:01:56
  Speaker 1: we really like. And then UM Aliza Slessinger who won
• 1:02:01
  Speaker 1: Last Comics Standing on NBC. UM had gone to college
• 1:02:06
  Speaker 1: here in the Boston area. UM is hilarious and has
• 1:02:11
  Speaker 1: a number of a number of interests of fun concerts
• 1:02:15
  Speaker 1: on on on Netflix. The one of hers I remember
• 1:02:19
  Speaker 1: was Elder Millennial and it it is hilarious. I'm gonna
• 1:02:23
  Speaker 1: recommend to to you because I have a flavor of
• 1:02:26
  Speaker 1: what you like. UM, I'm gonna go out on a
• 1:02:31
  Speaker 1: on a llege with inside inside with Bo Burnham. It's
• 1:02:35
  Speaker 1: a ethlectic and here's a guy just locked in an
• 1:02:39
  Speaker 1: apartment making comedy all by himself in the early days
• 1:02:42
  Speaker 1: of the Lockdown. But the one that I'm I'm so
• 1:02:46
  Speaker 1: that people either love or or completely perplexed by it.
• 1:02:50
  Speaker 1: But the one that's a slam dunk is going to
• 1:02:52
  Speaker 1: be the Tom Pappus comedy. He talks about his wife,
• 1:02:56
  Speaker 1: his kids, and it's just your your You and I
• 1:03:00
  Speaker 1: are about the same age, and that is right talking
• 1:03:04
  Speaker 1: right to our generation. And it's also pretty hilarious. Awesome.
• 1:03:09
  Speaker 1: I will definitely, I will definitely do that, all right,
• 1:03:11
  Speaker 1: So let me keep working my win and my questions.
• 1:03:14
  Speaker 1: UM tell us about your early mentors who helped to
• 1:03:17
  Speaker 1: shape your career. I'm really lucky that I showed up
• 1:03:21
  Speaker 1: at a firm that really believes in partnership and mentorship.
• 1:03:26
  Speaker 1: And we use the word sponsorship. It's more than just mentoring.
• 1:03:28
  Speaker 1: It's it's we're responsible for each other's success. When we
• 1:03:33
  Speaker 1: were quite small and early on, I worked with two
• 1:03:37
  Speaker 1: partners really closely, guy named Mark Nunley and the guy
• 1:03:41
  Speaker 1: named Bob white Um. And Mark was from Kentucky, Bob
• 1:03:46
  Speaker 1: was from Woburn, Massachusetts, had been a hockey goalie in college.
• 1:03:50
  Speaker 1: And it's so reflective of who we are as a firm.
• 1:03:54
  Speaker 1: Mark went to Center College and HBS. Bob went to
• 1:03:58
  Speaker 1: Bowden Um played hot there and also went to HBS,
• 1:04:02
  Speaker 1: so very very different background. They had very very different
• 1:04:07
  Speaker 1: approaches to investing, and I learned with working with them
• 1:04:12
  Speaker 1: that one people really matter. People on your team and
• 1:04:16
  Speaker 1: how you treat people at the various companies you're investing in,
• 1:04:19
  Speaker 1: that makes a big difference. All money is green and
• 1:04:22
  Speaker 1: people want to want to do business with you, and
• 1:04:25
  Speaker 1: you've got to leave your values every day. Secondly, there's
• 1:04:29
  Speaker 1: not only one way of doing it. Um. Mark was
• 1:04:32
  Speaker 1: always a little bit more of an engineer and Bob
• 1:04:34
  Speaker 1: was always a little bit more of an artist and
• 1:04:36
  Speaker 1: they recognize that in each other. And for me to
• 1:04:39
  Speaker 1: become the third musketeer of that group early in my
• 1:04:42
  Speaker 1: career really, uh really was was helpful. And um they've
• 1:04:47
  Speaker 1: both since retired from the firm, but you know, I
• 1:04:51
  Speaker 1: spoke to Bob last Sunday. Um he's teaching at HBS
• 1:04:54
  Speaker 1: and Marx got an office right around the corner. And
• 1:04:59
  Speaker 1: that's I think part of the beauty of the firm
• 1:05:01
  Speaker 1: and how we grew up together. And also, honestly, being
• 1:05:04
  Speaker 1: in Boston, it's just a little bit smaller. And then
• 1:05:08
  Speaker 1: my father in law has uh really helped helped me
• 1:05:13
  Speaker 1: in my business career. He was a senior banker. He
• 1:05:15
  Speaker 1: ran investment banking UM at Drexel Burnham. UM. I actually
• 1:05:19
  Speaker 1: met my wife after I worked for him. UM so
• 1:05:24
  Speaker 1: that was a little odd, but um so he understood, um,
• 1:05:29
  Speaker 1: the choices that you make and um and um how
• 1:05:34
  Speaker 1: to think through things from review processes too. You know,
• 1:05:38
  Speaker 1: how to compensate people fairly, how you've got your own
• 1:05:41
  Speaker 1: career and um he always um made sure that you
• 1:05:47
  Speaker 1: don't forget that you are measured not only by what
• 1:05:50
  Speaker 1: you do, but what you choose not to do. UM.
• 1:05:53
  Speaker 1: And I've always thought that that's incredibly good. UM, good advice.
• 1:05:58
  Speaker 1: Let's talk about every buddy's favorite question books. Tell us
• 1:06:02
  Speaker 1: some of your favorites and what you're reading now. So
• 1:06:05
  Speaker 1: we uh talked about Brian Stevenson's book and what an incredible, uh,
• 1:06:11
  Speaker 1: incredible impact it had on me. Another interesting book. A
• 1:06:18
  Speaker 1: woman who I become friendly with through the Holocaust Memorial
• 1:06:21
  Speaker 1: named Sarah herwit Um was Michelle Obama's lead speech writer.
• 1:06:25
  Speaker 1: But when she left government, she didn't write a book
• 1:06:29
  Speaker 1: on politics. She actually had rediscovered her Jewish roots. She
• 1:06:34
  Speaker 1: had been fairly non observant, and um reimagined religion and
• 1:06:40
  Speaker 1: seeing it as an adult. Um. You know, and somebody
• 1:06:44
  Speaker 1: who who focuses on language reimagines or just or investigates
• 1:06:50
  Speaker 1: her Jewish roots and the Jewish faith through the use
• 1:06:53
  Speaker 1: of language, through the difference between what the values of
• 1:06:56
  Speaker 1: the religion are versus the observances that you know, our
• 1:07:01
  Speaker 1: traditions that came along well afterwards. And while clearly it's
• 1:07:06
  Speaker 1: about Judaism, you could apply this to any religion and
• 1:07:09
  Speaker 1: just think about um, you know, the philosophical under pinnings
• 1:07:14
  Speaker 1: of religion and when people move away from their faith,
• 1:07:18
  Speaker 1: do they do so because of belief because it's unapproachable.
• 1:07:22
  Speaker 1: It's just brilliantly written. I I there's a chapter in
• 1:07:26
  Speaker 1: there about imagining God, and she's like, you actually don't
• 1:07:30
  Speaker 1: have to believe in God UM in any sort of
• 1:07:33
  Speaker 1: traditional sense to UM to be a person of faith.
• 1:07:38
  Speaker 1: And uh, She's like, I can't tell you what God is.
• 1:07:41
  Speaker 1: I can tell you it's not an old man with
• 1:07:43
  Speaker 1: a beard sitting on a chair. And it could be
• 1:07:45
  Speaker 1: anything from the energy between us all as people to
• 1:07:49
  Speaker 1: some concept of the force from Star Wars. And it's
• 1:07:52
  Speaker 1: just a fascinating book. And I also just finished Bob
• 1:07:56
  Speaker 1: Iger's memoir The Right of a Lifetime, and I thought
• 1:07:59
  Speaker 1: it's just a both a fascinating personal story as well
• 1:08:03
  Speaker 1: as UM interesting thoughts on management. And I always try
• 1:08:09
  Speaker 1: to read UM fiction and nonfiction. I have one going
• 1:08:13
  Speaker 1: of each at the same time. And UM. I discovered
• 1:08:16
  Speaker 1: during the pandemic an author named Frederick Bachman who's a
• 1:08:19
  Speaker 1: Swedish author UM and he wrote a book called UM
• 1:08:23
  Speaker 1: A Man named Uva, which is ov so until I
• 1:08:27
  Speaker 1: heard an interview with him I thought it was pronounced
• 1:08:29
  Speaker 1: ov um and uh. And he also wrote a book
• 1:08:34
  Speaker 1: called Anxious People in bear Town, and there he tells
• 1:08:37
  Speaker 1: incredibly interesting stories. They're all very different. Um. They all
• 1:08:43
  Speaker 1: sort of have twists. Um. And they explore some some
• 1:08:48
  Speaker 1: some really important and sometimes heavy topics, but with a
• 1:08:52
  Speaker 1: humor and in approachability that is fascinating. And I just
• 1:08:57
  Speaker 1: think his books are so incredibly well written and so
• 1:09:01
  Speaker 1: readable that during the course of the pandemic I read
• 1:09:04
  Speaker 1: three of them. Huh. Really interesting. And what was the
• 1:09:06
  Speaker 1: full title of the first first book about faith? It
• 1:09:11
  Speaker 1: went by too quick? A Sarah's. Sarah's book is called
• 1:09:15
  Speaker 1: here all Along, Here all Along. What she's saying is
• 1:09:19
  Speaker 1: is that the religion in the belief existed all along.
• 1:09:25
  Speaker 1: She just had to find it. It's been whether her.
• 1:09:27
  Speaker 1: It's been here all along. Got it? Finding meaning, spirituality
• 1:09:31
  Speaker 1: and a deeper connection to life. Got it. Um. We're
• 1:09:34
  Speaker 1: down to our final two questions. What sort of advice
• 1:09:38
  Speaker 1: would you give to a recent college grad who was
• 1:09:40
  Speaker 1: interested in a career in investment management or finance or
• 1:09:44
  Speaker 1: private equity. You know why you want to do it.
• 1:09:47
  Speaker 1: If you do it just for the money, at some
• 1:09:50
  Speaker 1: point that won't be enough. And if you're only doing
• 1:09:53
  Speaker 1: it for the money and not because you're interested in it,
• 1:09:56
  Speaker 1: then the money won't be there UM. And I think
• 1:10:00
  Speaker 1: with any any um, any career you choose, it's got
• 1:10:05
  Speaker 1: to you've got to pique your interest. You've got to
• 1:10:08
  Speaker 1: be good at it um and you want to make
• 1:10:11
  Speaker 1: sure you know why you're doing it. Good good advice,
• 1:10:15
  Speaker 1: And our final question, what do you know about the
• 1:10:17
  Speaker 1: world of investing and private equity today that you wish
• 1:10:21
  Speaker 1: you knew thirty or so years ago when you were
• 1:10:24
  Speaker 1: first starting out. I have an expression I use a
• 1:10:27
  Speaker 1: lot with the team, which is it's never as good
• 1:10:32
  Speaker 1: as it looks or as bad as it feels, and
• 1:10:34
  Speaker 1: that when the markets are doing great, avoid the temptation
• 1:10:39
  Speaker 1: of enjoying it too much. And when the markets are bad,
• 1:10:43
  Speaker 1: remember that markets operating cycles and there is another side.
• 1:10:49
  Speaker 1: And for our twentieth anniversary a few years back, I
• 1:10:53
  Speaker 1: wrote um a letter to investors, and I had three
• 1:10:58
  Speaker 1: pictures that summed up of the things I had learned.
• 1:11:01
  Speaker 1: One was a picture of clothing tag that said one
• 1:11:04
  Speaker 1: size fits all, the other one was a picture of
• 1:11:07
  Speaker 1: Roger Federer, and the last one was a picture of
• 1:11:09
  Speaker 1: the moon landing. And the point I was making was
• 1:11:11
  Speaker 1: one we know that you never walk into a store
• 1:11:15
  Speaker 1: and say I want a sweater? Do you have one
• 1:11:17
  Speaker 1: that's one size fits all? That you can't be all
• 1:11:21
  Speaker 1: things to all people. So um, no, what know what
• 1:11:24
  Speaker 1: it is that you're doing and and and do that?
• 1:11:28
  Speaker 1: Um too. I'm a huge tennis fan and um, and
• 1:11:32
  Speaker 1: I should mention Christopher Clary's book on Roger Federer that
• 1:11:36
  Speaker 1: just came out was was phenomenal. Um. But Roger Federer
• 1:11:41
  Speaker 1: over the years, early on people thought I wasn't going
• 1:11:44
  Speaker 1: to make it. He insisted on playing with you know,
• 1:11:48
  Speaker 1: a low technology, under sized racket when people were really
• 1:11:52
  Speaker 1: turning to power games to just crank up their serves. Um.
• 1:11:56
  Speaker 1: He continued to to to to focus on the techniques
• 1:12:01
  Speaker 1: or that he has and he has a one handed backhand,
• 1:12:04
  Speaker 1: and as everyone was trying to tell him to change
• 1:12:07
  Speaker 1: his game and it was unsustainable. Um, he actually knew
• 1:12:11
  Speaker 1: who he was and he knew what his game was,
• 1:12:14
  Speaker 1: and over time he's made tweaks. He did finally get
• 1:12:17
  Speaker 1: a slightly bigger racket, but still not one of the
• 1:12:20
  Speaker 1: huge ones, and he's added some things to his game.
• 1:12:23
  Speaker 1: But at his core, he knows who he is, he
• 1:12:27
  Speaker 1: knows what he's good at, and that is what has
• 1:12:30
  Speaker 1: been the key to his success. He has focused on
• 1:12:32
  Speaker 1: making that better rather than chasing the newest tennis fat.
• 1:12:36
  Speaker 1: And then lastly, the picture of the moon landing is
• 1:12:39
  Speaker 1: to remind people and this is really important and investing
• 1:12:43
  Speaker 1: in everything in life. Just because you've never seen it
• 1:12:46
  Speaker 1: before doesn't mean it can't happen, and that, Um, you
• 1:12:50
  Speaker 1: need imagination and you need to be able to adapt
• 1:12:53
  Speaker 1: to new realities all the time. Huh, really really fascinating stuff.
• 1:12:57
  Speaker 1: Do you remember, I don't know, maybe it was like
• 1:13:01
  Speaker 1: fifteen twenty years ago there was a David Foster Wallace
• 1:13:06
  Speaker 1: article on Roger Federer. Um, I'm sure I can find
• 1:13:11
  Speaker 1: it in in Google. But it was essentially Federer as
• 1:13:15
  Speaker 1: like a near religious experience experience and how there has
• 1:13:19
  Speaker 1: never been anybody like him. If I'm going to dig
• 1:13:22
  Speaker 1: that up, because if you're I'm a tennis fan, I'm
• 1:13:25
  Speaker 1: I'm late to the game. I started playing only over
• 1:13:27
  Speaker 1: the past decade um, and have always been impressed just
• 1:13:31
  Speaker 1: as a spectator of Federer. But if you read this
• 1:13:35
  Speaker 1: um one piece, it's just a beautiful combination of writing
• 1:13:39
  Speaker 1: and subject. Um, I think you'll find it, you know,
• 1:13:43
  Speaker 1: absolutely intriguing. I will I will look that up. I
• 1:13:46
  Speaker 1: think it was in the New York Times, and um,
• 1:13:49
  Speaker 1: I will definitely look that up. I do think, you know,
• 1:13:53
  Speaker 1: there's so many metaphors that can translate from sports to life.
• 1:13:57
  Speaker 1: UM and UM. I who think that his discipline and
• 1:14:04
  Speaker 1: the class and grace of his game teach us a
• 1:14:07
  Speaker 1: lot about how we can conduct our lives. But also
• 1:14:11
  Speaker 1: when you look at Nadal, there's lessons from how, um,
• 1:14:15
  Speaker 1: how he conducts himselves and he has a particular humility.
• 1:14:19
  Speaker 1: And UM, I just think that, as we said, the
• 1:14:23
  Speaker 1: metaphor does translate really really interesting stuff. Well, well, thank
• 1:14:27
  Speaker 1: you Jonathan for being so generous with your time. I
• 1:14:30
  Speaker 1: really enjoyed this. We have been speaking with Jonathan Levine.
• 1:14:34
  Speaker 1: He is the co managing partner of Being Capital. If
• 1:14:38
  Speaker 1: you enjoy this conversation, be shure and check out any
• 1:14:42
  Speaker 1: of our previous four hundred interviews. You can find those
• 1:14:46
  Speaker 1: at your favorite podcast sources iTunes, Google, Bloomberg, Spotify, ETCETERA.
• 1:14:52
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• 1:14:55
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• 1:14:59
  Speaker 1: if I did not thank the crack team that helps
• 1:15:01
  Speaker 1: put these conversations together each week. My researcher is Sean Russo.
• 1:15:07
  Speaker 1: Mohammed Ramaui is my audio engineer. Paris Wald is my
• 1:15:11
  Speaker 1: producer ATKO val Bron is our project manager. I'm Barry Ritolts.
• 1:15:16
  Speaker 1: You're listening to Masters in Business on Bloomberg Radio.