1
00:00:02,720 --> 00:00:14,040
Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.

2
00:00:18,480 --> 00:00:22,280
Speaker 2: Hello and welcome to another episode of the Odd Lots podcast.

3
00:00:22,360 --> 00:00:25,000
Speaker 3: I'm Jill Wisenthal and I'm Tracy Alloway Chrasy.

4
00:00:25,239 --> 00:00:29,000
Speaker 2: I would say that within the broader realm of finance

5
00:00:29,080 --> 00:00:31,800
Speaker 2: and markets and Wall Street and stuff that we cover

6
00:00:32,200 --> 00:00:36,880
Speaker 2: like deals in deal making, kind of maybe we don't

7
00:00:36,880 --> 00:00:37,480
Speaker 2: cover it enough.

8
00:00:37,880 --> 00:00:40,320
Speaker 3: Yeah, it's kind of. I guess it's unfortunate because I

9
00:00:40,320 --> 00:00:42,400
Speaker 3: think when a lot of people think about Wall Street,

10
00:00:42,720 --> 00:00:45,440
Speaker 3: I mean, the guy doing big M and A deals,

11
00:00:45,560 --> 00:00:48,879
Speaker 3: the rainmaker is kind of one of the images that

12
00:00:48,920 --> 00:00:51,559
Speaker 3: people have in their minds. I guess, alongside you know,

13
00:00:51,640 --> 00:00:54,880
Speaker 3: traders taking oodles of risk. I think people are always

14
00:00:54,920 --> 00:00:57,520
Speaker 3: thinking about the guy on the phone. He's like, you know,

15
00:00:57,640 --> 00:01:00,200
Speaker 3: talking to his big client. He's going to strike this big,

16
00:01:00,280 --> 00:01:03,920
Speaker 3: multi billion dollar deal. So yeah, lots of interest.

17
00:01:04,080 --> 00:01:06,759
Speaker 2: Yeah, there's like two images, right, the guys staring at

18
00:01:06,760 --> 00:01:09,720
Speaker 2: his screen clicking either buy or sell as the line

19
00:01:09,760 --> 00:01:13,560
Speaker 2: moves really fast. And then someone you know, working over

20
00:01:13,640 --> 00:01:15,920
Speaker 2: lunch bulfing and having a nice lunch or stuff. But

21
00:01:16,000 --> 00:01:17,560
Speaker 2: I don't really know, I mean I don't know that

22
00:01:17,640 --> 00:01:19,399
Speaker 2: much about the first one. I really don't know that

23
00:01:19,520 --> 00:01:22,959
Speaker 2: much about the second one. Those seem like very good jobs.

24
00:01:23,040 --> 00:01:25,680
Speaker 2: I think I would be very terrible at that job.

25
00:01:26,160 --> 00:01:28,800
Speaker 2: But yeah, there's so much to learn on that. I

26
00:01:28,840 --> 00:01:32,320
Speaker 2: have so many questions about this area. And we should

27
00:01:32,319 --> 00:01:35,520
Speaker 2: probably talk about deals and the trajectory of deals and

28
00:01:35,560 --> 00:01:37,520
Speaker 2: the history of deals and the future of deals a

29
00:01:37,560 --> 00:01:38,160
Speaker 2: little bit more.

30
00:01:38,360 --> 00:01:39,000
Speaker 4: Let's do it.

31
00:01:39,080 --> 00:01:40,800
Speaker 3: So I have to say I used to cover the

32
00:01:40,840 --> 00:01:44,600
Speaker 3: investment banks for the ft, and within that there was

33
00:01:44,640 --> 00:01:46,840
Speaker 3: obviously quite a lot about the m and a business.

34
00:01:46,840 --> 00:01:48,600
Speaker 3: The one thing I know for sure is that the

35
00:01:48,640 --> 00:01:51,920
Speaker 3: Bulge Brackets, even though MNA is not the entirety of

36
00:01:51,960 --> 00:01:54,960
Speaker 3: their business, as you know, they care a lot about it.

37
00:01:55,360 --> 00:01:57,720
Speaker 3: They care a lot about the league tables and who's

38
00:01:57,760 --> 00:02:01,920
Speaker 3: doing better than whatever other firm. It's extremely competitive. So

39
00:02:02,320 --> 00:02:03,440
Speaker 3: let's dig into it.

40
00:02:03,400 --> 00:02:05,600
Speaker 2: You know, just to reveal my own ignorance a little

41
00:02:05,640 --> 00:02:08,040
Speaker 2: bit more. I don't even think I have a great

42
00:02:08,120 --> 00:02:12,280
Speaker 2: handle on the question of why within one firm, banking

43
00:02:12,480 --> 00:02:15,760
Speaker 2: and trading are often parts of the same company.

44
00:02:16,080 --> 00:02:18,679
Speaker 3: Oh, why they're the same company. Yeah, I thought you

45
00:02:18,720 --> 00:02:20,959
Speaker 3: were going to say you didn't understand why they were separated. No,

46
00:02:21,080 --> 00:02:22,200
Speaker 3: and that's why I was shocked.

47
00:02:22,240 --> 00:02:26,919
Speaker 2: No, Like, why within a large firm. These are natural

48
00:02:26,960 --> 00:02:29,080
Speaker 2: compliments to each other as part of the business. Even

49
00:02:29,120 --> 00:02:30,640
Speaker 2: that I don't have a great handle.

50
00:02:30,400 --> 00:02:33,160
Speaker 3: On, I have a feeling that our guests goes exactly

51
00:02:33,200 --> 00:02:34,400
Speaker 3: the answer to that question.

52
00:02:35,160 --> 00:02:38,239
Speaker 2: We do, indeed have the perfect guest. We are going

53
00:02:38,280 --> 00:02:41,160
Speaker 2: to be speaking with Scott Bock, the longtime former chairman

54
00:02:41,200 --> 00:02:44,560
Speaker 2: and CEO of the investment bank Greenhilen Company. He is

55
00:02:44,680 --> 00:02:48,560
Speaker 2: out with a new book called Surviving Wall Street. So Scott,

56
00:02:48,600 --> 00:02:50,760
Speaker 2: thank you so much for coming on odd Lots.

57
00:02:50,800 --> 00:02:52,160
Speaker 5: It's great to be here. Thank you.

58
00:02:52,200 --> 00:02:53,600
Speaker 2: There's so much I want to talk about it, and

59
00:02:53,639 --> 00:02:55,600
Speaker 2: it's so bad that we could probably spend an hour

60
00:02:55,840 --> 00:02:59,280
Speaker 2: with you just answering very rudimentary questions about the business

61
00:02:59,400 --> 00:03:01,320
Speaker 2: that seems like out of a waste of your time.

62
00:03:02,080 --> 00:03:05,160
Speaker 2: I have a random question when I've always wondered about

63
00:03:05,200 --> 00:03:07,720
Speaker 2: for so long. You can make a lot of money

64
00:03:08,000 --> 00:03:11,200
Speaker 2: in investment banking and deal making and making deals happen.

65
00:03:11,880 --> 00:03:15,320
Speaker 2: What is the investment banker bring to the table? You know,

66
00:03:15,360 --> 00:03:17,400
Speaker 2: I say a company wants to buy another company, Why

67
00:03:17,400 --> 00:03:18,960
Speaker 2: can't they just go find it in the house. What

68
00:03:19,000 --> 00:03:21,600
Speaker 2: does the investment banker bring to the table that's so

69
00:03:21,760 --> 00:03:25,040
Speaker 2: valuable that companies, at least in some cases, are willing

70
00:03:25,080 --> 00:03:26,519
Speaker 2: to make the bankers quite rich.

71
00:03:27,160 --> 00:03:29,160
Speaker 6: You know, I actually answer that question early in the

72
00:03:29,160 --> 00:03:31,120
Speaker 6: book because I think most people don't really understand they

73
00:03:31,160 --> 00:03:33,480
Speaker 6: pay these big fees. What do these people actually do?

74
00:03:33,680 --> 00:03:36,600
Speaker 6: And there's actually several things they do. Number one, they

75
00:03:36,600 --> 00:03:38,800
Speaker 6: may tell you it's the right time for an acquisition.

76
00:03:38,880 --> 00:03:41,240
Speaker 6: They might tell you what is the right value for

77
00:03:41,280 --> 00:03:44,160
Speaker 6: that acquisition. They might tell you how your stock price

78
00:03:44,240 --> 00:03:47,880
Speaker 6: might react to that acquisition. Importantly, they also give the

79
00:03:47,920 --> 00:03:51,040
Speaker 6: board of directors comfort that you know, management hasn't gone

80
00:03:51,080 --> 00:03:53,440
Speaker 6: off the reservation or the deal actually make sense, it's

81
00:03:53,440 --> 00:03:56,080
Speaker 6: going to get a reasonable response. And so it's a

82
00:03:56,160 --> 00:03:58,680
Speaker 6: kind of a very broad role. And you know, it's

83
00:03:58,920 --> 00:04:01,600
Speaker 6: one thing I like about it versus say training or

84
00:04:01,600 --> 00:04:04,400
Speaker 6: so many other aspects of Wall Street is you know,

85
00:04:04,440 --> 00:04:06,400
Speaker 6: this is never going to be outsourced to AI. There's

86
00:04:06,400 --> 00:04:07,960
Speaker 6: never going to be a button you push and an

87
00:04:08,040 --> 00:04:09,760
Speaker 6: M and a deal happens. You know, each one is

88
00:04:09,800 --> 00:04:12,280
Speaker 6: so different and so much just kind of the human

89
00:04:12,400 --> 00:04:14,760
Speaker 6: touch of trying to get people on both sides of

90
00:04:14,800 --> 00:04:16,480
Speaker 6: a transaction to come to agreement.

91
00:04:17,120 --> 00:04:20,479
Speaker 3: Kind of an expensive sanity check on corporate management, though,

92
00:04:20,560 --> 00:04:22,280
Speaker 3: if you get them to talk to bankers and make

93
00:04:22,320 --> 00:04:24,960
Speaker 3: sure that you know the deal is not completely crazy.

94
00:04:25,400 --> 00:04:28,200
Speaker 3: But to Joe's point about the bulge brackets and why

95
00:04:28,200 --> 00:04:30,960
Speaker 3: do they have M and A on top of trading

96
00:04:31,160 --> 00:04:33,880
Speaker 3: or debt issuance and that sort of thing, maybe we

97
00:04:33,880 --> 00:04:36,840
Speaker 3: should talk about the big trend of the early two thousands,

98
00:04:36,920 --> 00:04:40,360
Speaker 3: which was all the boutique M and A firms getting

99
00:04:40,400 --> 00:04:43,240
Speaker 3: started and then getting a lot of traction versus the

100
00:04:43,320 --> 00:04:47,080
Speaker 3: bulge bracket guys like a Goldman Sachs or a Morgan Stanley.

101
00:04:47,520 --> 00:04:49,599
Speaker 3: And as far as I remember, the big pitch for

102
00:04:49,640 --> 00:04:53,200
Speaker 3: the boutiques was that they don't have a conflict of

103
00:04:53,240 --> 00:04:57,640
Speaker 3: interest and you know they're entirely focused on getting the

104
00:04:57,680 --> 00:05:00,640
Speaker 3: best deal for their clients. Is that the pitch?

105
00:05:00,800 --> 00:05:03,200
Speaker 5: It was that simple, That indeed was the pitch.

106
00:05:03,240 --> 00:05:06,520
Speaker 6: But you know that pitch developed out of circumstances as

107
00:05:06,560 --> 00:05:09,479
Speaker 6: opposed to being the original strategy. Here, here's a short

108
00:05:09,520 --> 00:05:12,640
Speaker 6: history of my career, which is kind of laid out

109
00:05:12,480 --> 00:05:15,640
Speaker 6: in the book. Okay, when I started in the business

110
00:05:15,720 --> 00:05:18,280
Speaker 6: back in you know, graduating from college in nineteen eighty one.

111
00:05:18,320 --> 00:05:20,880
Speaker 6: It's a terrible time. Dow Jones is below a thousand,

112
00:05:20,920 --> 00:05:23,160
Speaker 6: which a first crossed more than ten years before that,

113
00:05:23,640 --> 00:05:26,560
Speaker 6: you know, M and a almost unheard of private equity,

114
00:05:26,560 --> 00:05:30,279
Speaker 6: hedge fund, activist investor. Those phrases didn't even exist, and

115
00:05:30,360 --> 00:05:33,640
Speaker 6: the business was very specialized. So if you wanted to

116
00:05:33,680 --> 00:05:36,240
Speaker 6: get a tech deal done, you didn't go to Morgan

117
00:05:36,320 --> 00:05:39,000
Speaker 6: Stanley or Golden Sachs. You went to Hamburton Quist or

118
00:05:39,080 --> 00:05:42,320
Speaker 6: Alex Brown or Montgomery Securities. If you wanted to do

119
00:05:42,600 --> 00:05:45,080
Speaker 6: a UK deal, you went to what was called a

120
00:05:45,080 --> 00:05:50,320
Speaker 6: British merchant bank Kleinberg, Benson, Warburg, sg Warburg Bearing Brothers,

121
00:05:50,360 --> 00:05:53,839
Speaker 6: et cetera. So everything was highly specialized as to what

122
00:05:53,960 --> 00:05:55,880
Speaker 6: you did, and what happened is sort of the next

123
00:05:55,920 --> 00:05:59,120
Speaker 6: ten to fifteen years was a massive wave of mergers.

124
00:05:59,440 --> 00:06:01,880
Speaker 6: At the end of that wave of mergers, you know,

125
00:06:02,200 --> 00:06:04,320
Speaker 6: the four what they call the four horsemen who did

126
00:06:04,360 --> 00:06:07,560
Speaker 6: technology were gone. All the British merchant banks were gone.

127
00:06:08,040 --> 00:06:11,280
Speaker 6: Many US firms, including like Donaldson, Lufkin and Jenrett had

128
00:06:11,320 --> 00:06:15,479
Speaker 6: been absorbed, and essentially, at the time Greenhill started, I

129
00:06:15,520 --> 00:06:18,279
Speaker 6: would say almost all the advisory fees in the world

130
00:06:18,279 --> 00:06:20,720
Speaker 6: were paid to one of nine firms. There were six

131
00:06:20,720 --> 00:06:23,480
Speaker 6: in America and three in Europe. So it got very,

132
00:06:23,600 --> 00:06:27,320
Speaker 6: very concentrated, and I would say Greenhill was formed, and

133
00:06:27,360 --> 00:06:29,599
Speaker 6: then a whole bunch of other firms sort of followed us,

134
00:06:29,760 --> 00:06:32,680
Speaker 6: particularly once we went public. Greenhill was formed as kind

135
00:06:32,680 --> 00:06:36,039
Speaker 6: of a reaction to that consolidation. It's like you'd go

136
00:06:36,120 --> 00:06:38,560
Speaker 6: to a client and say, there are sort of two

137
00:06:38,600 --> 00:06:41,479
Speaker 6: flavors here. There's nine guys selling one flavor, which is

138
00:06:41,520 --> 00:06:45,360
Speaker 6: one stop shopping all the different products, very sales oriented approach,

139
00:06:45,400 --> 00:06:47,920
Speaker 6: and then we're selling this other flavor, which is we're

140
00:06:47,920 --> 00:06:50,320
Speaker 6: totally aligned with you. All were focused on is M

141
00:06:50,320 --> 00:06:52,080
Speaker 6: and A. We don't have anything to cross sell you.

142
00:06:52,680 --> 00:06:54,279
Speaker 6: And one thing I talk about in the book, which

143
00:06:54,320 --> 00:06:57,280
Speaker 6: is kind of interesting, is what really drove that conflict

144
00:06:58,080 --> 00:07:01,080
Speaker 6: pitch to clients was not something that anything to do

145
00:07:01,160 --> 00:07:03,640
Speaker 6: with M and A. I think it's when Elliott Spitzer

146
00:07:03,800 --> 00:07:06,720
Speaker 6: went after Merrill Lynch and other firms and eventually had

147
00:07:06,720 --> 00:07:08,000
Speaker 6: a settlement with whole industry.

148
00:07:08,080 --> 00:07:12,400
Speaker 3: We just recorded with the Henry Blodgett follow Yeah.

149
00:07:12,320 --> 00:07:14,400
Speaker 6: That look and he sorry to say it got in

150
00:07:14,400 --> 00:07:17,640
Speaker 6: a little bit of trouble for that line on the episode.

151
00:07:17,800 --> 00:07:20,440
Speaker 6: You may recall that, but yes, he was focused on,

152
00:07:20,520 --> 00:07:23,400
Speaker 6: you know, research, analysts writing glowing reports for companies they

153
00:07:23,400 --> 00:07:25,800
Speaker 6: didn't believe in to try to get share sold in

154
00:07:25,840 --> 00:07:29,120
Speaker 6: an IPO. But you know, it woke up corporate America

155
00:07:29,200 --> 00:07:31,600
Speaker 6: to the fact that sometimes there are conflicts of interest

156
00:07:31,640 --> 00:07:34,320
Speaker 6: you're not aware of, and why not hire a firm

157
00:07:34,760 --> 00:07:36,840
Speaker 6: that doesn't have any of those. So we kind of

158
00:07:36,880 --> 00:07:40,120
Speaker 6: adopted that as our strategy as our calling card, and

159
00:07:40,120 --> 00:07:41,000
Speaker 6: it worked really well.

160
00:07:41,440 --> 00:07:45,280
Speaker 3: So conversely, the story I always heard from bulge brackets

161
00:07:45,400 --> 00:07:47,640
Speaker 3: was like, Okay, you can go with a smaller firm

162
00:07:47,680 --> 00:07:49,880
Speaker 3: that might not have a conflict of interest in all

163
00:07:49,880 --> 00:07:52,680
Speaker 3: these other businesses trying to get your attention and sell

164
00:07:52,720 --> 00:07:55,720
Speaker 3: you stuff. But if you go to a boutique bank,

165
00:07:55,720 --> 00:07:58,320
Speaker 3: there are some downsides. So obviously they don't have the

166
00:07:58,360 --> 00:08:02,240
Speaker 3: same financing and credit and capital market services that a

167
00:08:02,240 --> 00:08:06,080
Speaker 3: bulge bracket would have. And also they get paid only

168
00:08:06,120 --> 00:08:09,320
Speaker 3: when they complete the deal, and so you know they

169
00:08:09,400 --> 00:08:11,560
Speaker 3: want to complete the deal and they might not actually

170
00:08:11,600 --> 00:08:14,640
Speaker 3: be providing you advice on why you shouldn't do the deal.

171
00:08:14,960 --> 00:08:16,400
Speaker 3: What do you say to that pitch?

172
00:08:17,200 --> 00:08:20,280
Speaker 6: Look, that is the legitimate counterpoint, and then the counterpoint

173
00:08:20,280 --> 00:08:23,640
Speaker 6: to that is yes, but our business is built entirely

174
00:08:23,680 --> 00:08:26,360
Speaker 6: on reputations, and if we're out there telling companies to

175
00:08:26,400 --> 00:08:28,120
Speaker 6: do deals that don't really make sense, it's going to

176
00:08:28,160 --> 00:08:30,880
Speaker 6: hurt our reputation. We're in a long term business. We're

177
00:08:30,880 --> 00:08:33,079
Speaker 6: trying to build a brand, trying to build a client base,

178
00:08:33,160 --> 00:08:36,560
Speaker 6: and so but fundamentally there's room for both players, and

179
00:08:36,640 --> 00:08:39,120
Speaker 6: both players have certainly thrived in the year since then.

180
00:08:39,120 --> 00:08:40,839
Speaker 6: His M and A has really boomed in America and

181
00:08:40,880 --> 00:08:43,880
Speaker 6: around the world. But what we did and what really

182
00:08:43,920 --> 00:08:46,680
Speaker 6: differentiated us, we had a different strategy. It was a

183
00:08:46,679 --> 00:08:49,120
Speaker 6: different flavor for companies, and many of them were worried

184
00:08:49,120 --> 00:08:51,800
Speaker 6: about conflicts, or maybe they liked a real small firm approach,

185
00:08:51,920 --> 00:08:54,319
Speaker 6: or they liked the hands on sort of seenior guys

186
00:08:54,320 --> 00:08:56,160
Speaker 6: working on the day to day aspect of the deal.

187
00:08:56,160 --> 00:08:59,000
Speaker 6: And so it worked very well, you know, and really

188
00:08:59,040 --> 00:09:01,280
Speaker 6: a whole bunch of firm followed us into that once

189
00:09:01,320 --> 00:09:03,199
Speaker 6: we actually went public and had a lot of success

190
00:09:03,200 --> 00:09:03,400
Speaker 6: with that.

191
00:09:03,559 --> 00:09:05,320
Speaker 3: Yeah, we should talk about that, because you were kind

192
00:09:05,360 --> 00:09:07,840
Speaker 3: of a victim of your own success in some ways.

193
00:09:08,320 --> 00:09:10,440
Speaker 2: Just to set the context for the rest of the

194
00:09:10,440 --> 00:09:12,679
Speaker 2: conversation a little bit more, why don't you just sort

195
00:09:12,720 --> 00:09:15,840
Speaker 2: of fill out the short version of your career history

196
00:09:15,840 --> 00:09:20,440
Speaker 2: and Greenhill specifically. You talk in the book about the

197
00:09:20,480 --> 00:09:23,760
Speaker 2: founder Bob Greenhill, also at Morgan Stanley, but just sort

198
00:09:23,760 --> 00:09:25,760
Speaker 2: of give us like the sort of the rest of

199
00:09:25,800 --> 00:09:28,439
Speaker 2: the outline of sure your slash green Hill's history.

200
00:09:28,720 --> 00:09:31,800
Speaker 6: Sure, Sure, So I worked at Morgan Stanley for about

201
00:09:31,800 --> 00:09:33,719
Speaker 6: ten years after a brief time at the law firm,

202
00:09:33,760 --> 00:09:36,200
Speaker 6: walked out Lipton doing M and A. I was at

203
00:09:36,240 --> 00:09:38,600
Speaker 6: a vastly different level than Bob Greenhill. He is a

204
00:09:38,640 --> 00:09:41,199
Speaker 6: full generation, probably twenty five years older than I am.

205
00:09:41,440 --> 00:09:43,960
Speaker 6: So at the time I moved for some period to

206
00:09:44,040 --> 00:09:47,000
Speaker 6: London for Morgan Stanley, I was an associate, pretty lowly

207
00:09:47,080 --> 00:09:49,920
Speaker 6: job at the firm. Bob was president, pretty senior job

208
00:09:49,920 --> 00:09:52,200
Speaker 6: at the firm. By time I came back, he was gone.

209
00:09:52,280 --> 00:09:54,559
Speaker 6: What had happened and you guys alluded a few minutes

210
00:09:54,600 --> 00:09:57,400
Speaker 6: ago to know why are sort of bankers and traders

211
00:09:57,480 --> 00:09:59,719
Speaker 6: under the same roof, well back in those days is

212
00:09:59,720 --> 00:10:02,800
Speaker 6: one that was first happening, and that caused a bit

213
00:10:02,840 --> 00:10:05,600
Speaker 6: of a turf war really between a power struggle really

214
00:10:05,640 --> 00:10:08,240
Speaker 6: between Bob Greenhill and John Mack, who obviously went onto

215
00:10:08,240 --> 00:10:11,600
Speaker 6: an extraordinary career in a couple of different places and

216
00:10:11,640 --> 00:10:15,000
Speaker 6: as trading really grew in terms of scale and volume

217
00:10:15,040 --> 00:10:17,360
Speaker 6: and how much money you could make, how greatly you

218
00:10:17,360 --> 00:10:20,080
Speaker 6: could scale that business and put capital to work, you know,

219
00:10:20,160 --> 00:10:23,920
Speaker 6: the investment banking business became less important. I mentioned in

220
00:10:23,960 --> 00:10:26,439
Speaker 6: my book a great quote from a mentor of mine

221
00:10:26,480 --> 00:10:28,680
Speaker 6: at Morgan Stanley, who I don't mention his name, but

222
00:10:28,720 --> 00:10:31,160
Speaker 6: he used to say, investment banking is the hood ornament

223
00:10:31,160 --> 00:10:34,160
Speaker 6: on the Mercedes. The engine of the Mercedes is the

224
00:10:34,200 --> 00:10:37,480
Speaker 6: trading is the trade and trading operation. So Bob Greenhill

225
00:10:37,600 --> 00:10:40,240
Speaker 6: ended up going to work briefly for a client of

226
00:10:40,280 --> 00:10:43,160
Speaker 6: his name, Sandy Wild, another famous guy in our industry.

227
00:10:43,480 --> 00:10:46,400
Speaker 6: He was not really well suited. I think he would

228
00:10:46,440 --> 00:10:49,199
Speaker 6: even agree with this as kind of a pure administrator

229
00:10:49,200 --> 00:10:51,960
Speaker 6: a manager. He's a deal maker. And so he ended

230
00:10:52,040 --> 00:10:53,800
Speaker 6: up having a bit of a struggle there with another

231
00:10:53,840 --> 00:10:55,760
Speaker 6: guy you may have heard of, Jamie Diamond, who was

232
00:10:55,800 --> 00:10:58,760
Speaker 6: a very world at that level exactly, who was a

233
00:10:58,880 --> 00:11:01,000
Speaker 6: very young guy at the time. I'm working for Sandy

234
00:11:01,040 --> 00:11:03,199
Speaker 6: wil his mentor early in his career, and so they

235
00:11:03,200 --> 00:11:03,920
Speaker 6: had a falling out.

236
00:11:04,000 --> 00:11:04,600
Speaker 5: Bob left.

237
00:11:04,679 --> 00:11:06,760
Speaker 6: He hung out his own shingle, and I think he

238
00:11:06,880 --> 00:11:09,600
Speaker 6: did it not so much with any sort of grand strategy.

239
00:11:10,000 --> 00:11:12,240
Speaker 6: He did it with the sense of, you know what,

240
00:11:12,320 --> 00:11:15,240
Speaker 6: the big firms are really focusing on these capital businesses.

241
00:11:15,720 --> 00:11:18,000
Speaker 6: I like advising clients on deals. I'm going to hang

242
00:11:18,000 --> 00:11:20,760
Speaker 6: out my shingle to do that. And I joined him

243
00:11:20,920 --> 00:11:23,720
Speaker 6: in the pretty early days when the firm is tiny.

244
00:11:23,760 --> 00:11:26,959
Speaker 6: I think it had announced one transaction, and I went

245
00:11:27,040 --> 00:11:30,320
Speaker 6: really for the same reason. Actually I left between the

246
00:11:30,400 --> 00:11:33,360
Speaker 6: announcement and the closing of the Dean Witter merger with

247
00:11:33,400 --> 00:11:35,680
Speaker 6: Morgan Stanley. The firm is going to go from a

248
00:11:35,679 --> 00:11:39,160
Speaker 6: few thousand people to forty some thousand people. And to

249
00:11:39,200 --> 00:11:41,680
Speaker 6: be honest, I never saw myself working for a place

250
00:11:41,720 --> 00:11:44,360
Speaker 6: with forty thousand people, and so I was kind of

251
00:11:44,440 --> 00:11:46,680
Speaker 6: open to the idea of going to a small or

252
00:11:46,679 --> 00:11:49,440
Speaker 6: more focused place. So when Bob called, I took the

253
00:11:49,480 --> 00:11:50,840
Speaker 6: call and went there very quickly.

254
00:11:51,640 --> 00:11:54,000
Speaker 3: Can I ask a cultural question, because I mean, the

255
00:11:54,000 --> 00:11:56,600
Speaker 3: book is called Surviving Wall Street and you get into

256
00:11:56,800 --> 00:11:59,560
Speaker 3: I guess, the daily rhythm of life working in a

257
00:11:59,600 --> 00:12:02,880
Speaker 3: business like that. But whenever I talk to or when

258
00:12:02,920 --> 00:12:04,600
Speaker 3: I used to talk to a lot of the big

259
00:12:04,600 --> 00:12:07,280
Speaker 3: investment banks, all the management likes to talk about how

260
00:12:07,320 --> 00:12:10,720
Speaker 3: special their culture is. We do things differently to others.

261
00:12:10,960 --> 00:12:14,600
Speaker 3: So I guess my question is what's the cultural difference

262
00:12:14,640 --> 00:12:16,920
Speaker 3: I'm doing air quotes here on a podcast. I don't

263
00:12:16,920 --> 00:12:19,600
Speaker 3: know why, but what's the cultural difference between being a

264
00:12:19,640 --> 00:12:23,920
Speaker 3: trader versus someone in M and A who's presumably very

265
00:12:23,920 --> 00:12:26,800
Speaker 3: client focused? And then how would you describe the cultural

266
00:12:26,840 --> 00:12:31,600
Speaker 3: differences between different m and a firm slash banks themselves.

267
00:12:31,679 --> 00:12:33,040
Speaker 3: Is it really all that different?

268
00:12:33,960 --> 00:12:36,520
Speaker 6: I think it does differ quite a bit. So first

269
00:12:36,520 --> 00:12:39,160
Speaker 6: the question of sort of traders versus bankers. I mean,

270
00:12:39,280 --> 00:12:43,760
Speaker 6: trading is an analytical profession, it's a I think it's

271
00:12:43,800 --> 00:12:46,560
Speaker 6: more of an individualistic profession. You know, you're the guy

272
00:12:46,640 --> 00:12:48,840
Speaker 6: trading a particular kind of security.

273
00:12:48,559 --> 00:12:50,840
Speaker 3: Just you and your screen, Like like your screen.

274
00:12:50,880 --> 00:12:52,360
Speaker 6: Look, you spent a lot of time at the screen,

275
00:12:52,400 --> 00:12:53,920
Speaker 6: and you all sort of tied to the market.

276
00:12:53,960 --> 00:12:54,680
Speaker 5: I mean your day.

277
00:12:54,760 --> 00:12:56,839
Speaker 6: You get there really early in the morning because you

278
00:12:56,840 --> 00:12:59,120
Speaker 6: want to be ready for markets to open. You're there

279
00:12:59,160 --> 00:13:01,240
Speaker 6: for the full day, the closed, you go home pretty

280
00:13:01,240 --> 00:13:04,480
Speaker 6: soon after that. Investment banking is much more of a

281
00:13:04,760 --> 00:13:08,520
Speaker 6: team sport where literally, you know, in your junior years,

282
00:13:08,600 --> 00:13:11,720
Speaker 6: you're sitting there at nine o'clock having you know, pizza

283
00:13:11,840 --> 00:13:14,200
Speaker 6: or Chinese food. You just ordered in with your colleagues

284
00:13:14,200 --> 00:13:16,040
Speaker 6: because you've got two more hours or three more hours

285
00:13:16,040 --> 00:13:18,240
Speaker 6: of work to do that night. So it's a real

286
00:13:18,320 --> 00:13:22,080
Speaker 6: camaraderie that develops in investment banking and deal making in

287
00:13:22,120 --> 00:13:26,280
Speaker 6: part because people live together so much, they work long hours,

288
00:13:26,320 --> 00:13:29,440
Speaker 6: and they also travel together. So it really develops a

289
00:13:29,480 --> 00:13:33,719
Speaker 6: strong camaraderie, which is why culture actually is very important.

290
00:13:33,920 --> 00:13:36,400
Speaker 6: And yes, everyone says they've got a fabulous culture. I

291
00:13:36,400 --> 00:13:39,600
Speaker 6: will tell you I believe it. Greenhill really did, and

292
00:13:39,640 --> 00:13:42,400
Speaker 6: that won't surprise you at all. But you know, look,

293
00:13:42,440 --> 00:13:45,160
Speaker 6: you read these things about analysts who are being abused

294
00:13:45,200 --> 00:13:47,640
Speaker 6: for being overworked to the point where literally people are

295
00:13:47,640 --> 00:13:50,320
Speaker 6: getting sick, in some cases worse than that. And you

296
00:13:50,360 --> 00:13:53,240
Speaker 6: want to have a place where people feel like a human,

297
00:13:53,360 --> 00:13:55,439
Speaker 6: you know, where they're treated with respect by the more

298
00:13:55,480 --> 00:13:57,920
Speaker 6: senior people. Yes they work harder, yes they get paid

299
00:13:58,000 --> 00:14:00,640
Speaker 6: less money, but you've got to treat those people with respect.

300
00:14:00,640 --> 00:14:02,559
Speaker 6: And I think we did that, and I think many

301
00:14:02,600 --> 00:14:04,360
Speaker 6: of the best firms do that. I think there have

302
00:14:04,400 --> 00:14:06,800
Speaker 6: been some firms over the years that are kind of

303
00:14:06,800 --> 00:14:09,760
Speaker 6: too much of a sweatshop mentality, and that really doesn't

304
00:14:09,840 --> 00:14:11,360
Speaker 6: I think pay off in the long run.

305
00:14:11,400 --> 00:14:14,320
Speaker 3: Joe, you know what happens after eleven pm, after the

306
00:14:14,360 --> 00:14:17,000
Speaker 3: bankers are finished eating Chinese food and they've done the deal,

307
00:14:17,760 --> 00:14:19,720
Speaker 3: they send them to the lawyers.

308
00:14:19,760 --> 00:14:21,080
Speaker 6: And then the lawyers have.

309
00:14:21,120 --> 00:14:23,800
Speaker 3: To stay up from eleven pm to six am to

310
00:14:23,840 --> 00:14:26,640
Speaker 3: finish the docs. I know this from personal experience.

311
00:14:26,200 --> 00:14:28,680
Speaker 6: And now you have just explained why I left practicing

312
00:14:29,800 --> 00:14:30,280
Speaker 6: my husband.

313
00:14:46,840 --> 00:14:49,120
Speaker 2: You said something at the very beginning that I think

314
00:14:49,280 --> 00:14:52,800
Speaker 2: was very important, which is that when you started your

315
00:14:52,920 --> 00:14:57,600
Speaker 2: career in the early eighties, the scale of the deal

316
00:14:57,640 --> 00:15:00,960
Speaker 2: making industry set aside the deal making industry deals period,

317
00:15:01,440 --> 00:15:05,000
Speaker 2: we're just not as prevalent. It was just not what change.

318
00:15:05,720 --> 00:15:08,280
Speaker 6: I think this is going to segue into a really

319
00:15:08,280 --> 00:15:10,920
Speaker 6: interesting topic, but it did change right around that. I mean,

320
00:15:10,960 --> 00:15:14,000
Speaker 6: a grand innovation at Morgan Stanley in the years before

321
00:15:14,080 --> 00:15:17,800
Speaker 6: I got there was when somebody said to Bob Greenhill, hey,

322
00:15:17,960 --> 00:15:20,640
Speaker 6: why don't you form a group with three other people

323
00:15:20,680 --> 00:15:23,400
Speaker 6: and see if we can sell advice to companies who

324
00:15:23,440 --> 00:15:25,000
Speaker 6: want to do M and A deals. There were four

325
00:15:25,040 --> 00:15:26,880
Speaker 6: people in the group, right, So it was a tiny,

326
00:15:26,920 --> 00:15:29,240
Speaker 6: tiny business. And even when I started got to law

327
00:15:29,280 --> 00:15:31,400
Speaker 6: school in nineteen eighty four, it was a very small business.

328
00:15:32,080 --> 00:15:35,200
Speaker 6: I think looking back, what really drove a lot of

329
00:15:35,240 --> 00:15:38,280
Speaker 6: that was globalization. I think if you think back to,

330
00:15:38,560 --> 00:15:40,360
Speaker 6: you know, when I was a kid. I'm sure probably

331
00:15:40,400 --> 00:15:42,200
Speaker 6: you're younger, but when you were a kid, I mean,

332
00:15:42,240 --> 00:15:44,280
Speaker 6: every town had its own newspaper, every town had its

333
00:15:44,280 --> 00:15:46,960
Speaker 6: own bank, every region had its own soft drink brands,

334
00:15:47,000 --> 00:15:49,000
Speaker 6: its own ice cream brands, its own you.

335
00:15:48,920 --> 00:15:51,280
Speaker 5: Know, yeah, other you know, consumer brands.

336
00:15:51,280 --> 00:15:54,560
Speaker 6: And if you think about what happened in the ensuing years,

337
00:15:54,760 --> 00:15:57,400
Speaker 6: was you had trillions of dollars of m and A

338
00:15:57,720 --> 00:16:01,480
Speaker 6: that essentially rolled up companies into first and national and

339
00:16:01,480 --> 00:16:05,120
Speaker 6: then global sort of champions. And I looked back, for example,

340
00:16:05,360 --> 00:16:07,440
Speaker 6: because I thought this might be a topic given what's

341
00:16:07,440 --> 00:16:09,600
Speaker 6: going on in the world right now. And if you

342
00:16:09,680 --> 00:16:12,800
Speaker 6: look at cross border m and A and meaning buyer

343
00:16:12,920 --> 00:16:16,200
Speaker 6: one side, target and another from American companies. I mean,

344
00:16:16,240 --> 00:16:18,040
Speaker 6: I look back in the early nineteen eighties, there were

345
00:16:18,040 --> 00:16:20,960
Speaker 6: some years when there was roughly zero, and for the

346
00:16:21,040 --> 00:16:23,840
Speaker 6: last ten to fifteen years it's between five hundred billion

347
00:16:23,880 --> 00:16:27,120
Speaker 6: and a trillion dollars a year. So that's what really

348
00:16:27,240 --> 00:16:30,400
Speaker 6: drove it was you had a very fragmented industry in

349
00:16:30,480 --> 00:16:33,240
Speaker 6: every industry and still there's plenty of there's all more

350
00:16:33,280 --> 00:16:35,760
Speaker 6: deals to be done, but what really happened was forming

351
00:16:35,800 --> 00:16:38,200
Speaker 6: these national and global companies through M and A.

352
00:16:38,960 --> 00:16:41,160
Speaker 3: So one thing you describe in your book and you

353
00:16:41,320 --> 00:16:44,600
Speaker 3: sort of explain all these different events through your personal career.

354
00:16:44,640 --> 00:16:48,480
Speaker 3: But five crises that defined Wall Street. So the collapse

355
00:16:48,480 --> 00:16:51,600
Speaker 3: of LTCM, the bursting of the dot com bubble, the

356
00:16:51,600 --> 00:16:54,840
Speaker 3: two thousand and eight financial crisis, the COVID pandemic, and

357
00:16:54,880 --> 00:16:58,760
Speaker 3: then the sort of aftermath. Talk to us about the aftermath,

358
00:16:58,800 --> 00:17:00,240
Speaker 3: because I think a lot of people would. I think,

359
00:17:00,280 --> 00:17:03,640
Speaker 3: you know, twenty twenty two was a terrible year for markets,

360
00:17:03,640 --> 00:17:06,199
Speaker 3: and we saw a lot of deal volume collapse. But

361
00:17:06,520 --> 00:17:10,520
Speaker 3: what's the sort of existential crisis that's facing deal making

362
00:17:10,680 --> 00:17:12,160
Speaker 3: in the post pandemic period?

363
00:17:12,560 --> 00:17:12,879
Speaker 5: Sure?

364
00:17:13,000 --> 00:17:15,800
Speaker 6: Yeah, Much of the book is really about leadership and

365
00:17:15,840 --> 00:17:18,920
Speaker 6: sort of navigating those five crises. And the reason Surviving

366
00:17:19,000 --> 00:17:21,560
Speaker 6: is in the title is that a large majority of

367
00:17:21,560 --> 00:17:23,240
Speaker 6: the Wall Street firms that were in business when I

368
00:17:23,240 --> 00:17:26,040
Speaker 6: started are long gone. So it really is a game

369
00:17:26,119 --> 00:17:29,879
Speaker 6: of survival played on a grand scale. And I do

370
00:17:29,960 --> 00:17:32,040
Speaker 6: talk about those five crises. The fifth one is the

371
00:17:32,080 --> 00:17:34,240
Speaker 6: hardest one to name in a pithy way, but I

372
00:17:34,240 --> 00:17:36,720
Speaker 6: think in some ways it was the most complicated because

373
00:17:36,760 --> 00:17:38,520
Speaker 6: I would say, if you wanted to describe it, I

374
00:17:38,520 --> 00:17:41,520
Speaker 6: would say it was the combination of COVID recovery when

375
00:17:41,560 --> 00:17:43,639
Speaker 6: there was a ton of stimulus put into the economy,

376
00:17:43,960 --> 00:17:47,240
Speaker 6: and the Ukraine invasion. The combination of those things drove

377
00:17:47,320 --> 00:17:49,960
Speaker 6: up inflation, drove up interest rates, and I think it's

378
00:17:49,960 --> 00:17:52,199
Speaker 6: fair to say we are still kind of reeling from that.

379
00:17:52,280 --> 00:17:55,560
Speaker 6: I think they even had political implications in terms of how,

380
00:17:55,680 --> 00:17:58,160
Speaker 6: you know, what president got elected and for what reasons

381
00:17:58,200 --> 00:18:01,480
Speaker 6: and so on. So think it was a very sticky

382
00:18:01,520 --> 00:18:06,560
Speaker 6: crisis that also involved the way we work, not just markets,

383
00:18:06,560 --> 00:18:09,080
Speaker 6: not just all the interest rates are we're going to

384
00:18:09,080 --> 00:18:11,159
Speaker 6: bring them down to try to reflight the economy and

385
00:18:11,160 --> 00:18:13,879
Speaker 6: all that, but really literally the way people work, you know,

386
00:18:13,920 --> 00:18:16,080
Speaker 6: trying to work from home and you know, not having

387
00:18:16,160 --> 00:18:18,800
Speaker 6: the same sort of in office culture and training and

388
00:18:18,880 --> 00:18:21,399
Speaker 6: kind of team efforts to win and do business. And

389
00:18:21,440 --> 00:18:23,680
Speaker 6: so that's been a hard one, I think for American

390
00:18:23,720 --> 00:18:24,880
Speaker 6: business to work their way through.

391
00:18:25,160 --> 00:18:27,879
Speaker 2: I want to talk more about the actual reality of

392
00:18:27,960 --> 00:18:32,639
Speaker 2: globalization and what that means, because to this day, countries

393
00:18:32,680 --> 00:18:37,520
Speaker 2: feel prideful about their national champions even in Europe largely

394
00:18:37,560 --> 00:18:42,120
Speaker 2: integrated economies. Some of the issues with further integration has

395
00:18:42,200 --> 00:18:45,159
Speaker 2: to do with the fact that specific countries within the

396
00:18:45,200 --> 00:18:49,080
Speaker 2: EU don't want to see their national defense company whatever

397
00:18:49,119 --> 00:18:51,679
Speaker 2: it is, rolled up into something that is not stuck

398
00:18:51,720 --> 00:18:55,280
Speaker 2: to the nation. What happened in the early eighties such

399
00:18:55,400 --> 00:18:59,960
Speaker 2: that either countries or regions or companies that there was

400
00:19:00,080 --> 00:19:04,240
Speaker 2: this ability like discomfort with folding them all up or

401
00:19:04,280 --> 00:19:06,480
Speaker 2: who saw that vision like talk to us about like

402
00:19:06,520 --> 00:19:09,480
Speaker 2: this idea that look, there's a lot of publishing magazine

403
00:19:09,560 --> 00:19:11,600
Speaker 2: companies in every country. They don't all have to be

404
00:19:11,840 --> 00:19:14,680
Speaker 2: there are economies of scale to be had by integrating them.

405
00:19:14,720 --> 00:19:17,239
Speaker 2: Like where did that come from? Or who? How did

406
00:19:17,280 --> 00:19:18,000
Speaker 2: that get greenlit?

407
00:19:18,600 --> 00:19:20,720
Speaker 6: Well, I think, you know, the nineteen seventies was a

408
00:19:20,800 --> 00:19:23,480
Speaker 6: really stagnant period. I mean I was in high school

409
00:19:23,520 --> 00:19:25,159
Speaker 6: in early years of college in that period, but it

410
00:19:25,200 --> 00:19:27,160
Speaker 6: was a really stagnant right. The Dow Jones was lower

411
00:19:27,240 --> 00:19:28,520
Speaker 6: kind of at the end of that decade than it

412
00:19:28,560 --> 00:19:31,359
Speaker 6: was at the beginning. So that's a long, difficult period.

413
00:19:31,480 --> 00:19:33,600
Speaker 6: And I think what you know, with Ron Reagan, with

414
00:19:33,680 --> 00:19:35,520
Speaker 6: a view that we're going to be more kind of

415
00:19:35,520 --> 00:19:38,520
Speaker 6: more real capitalism, we're going to you know, let capital

416
00:19:38,560 --> 00:19:41,399
Speaker 6: flow freely. We're going to reduce regulation, reduce taxes, all

417
00:19:41,440 --> 00:19:43,160
Speaker 6: that kind of stuff and try to get things to grow.

418
00:19:43,240 --> 00:19:45,800
Speaker 6: That that was kind of that spread around the world

419
00:19:45,800 --> 00:19:48,240
Speaker 6: to a fair degree. And now that I look back

420
00:19:48,280 --> 00:19:49,960
Speaker 6: as a nation we think about whether we want to

421
00:19:50,000 --> 00:19:53,040
Speaker 6: reverse globalization, I think back, like, what were the key events?

422
00:19:53,280 --> 00:19:55,639
Speaker 6: I would say number one the European Union really coming

423
00:19:55,640 --> 00:19:57,080
Speaker 6: together in a more meaningful way.

424
00:19:57,160 --> 00:19:58,320
Speaker 5: Right, there's not a day they.

425
00:19:58,200 --> 00:19:59,880
Speaker 6: Just said, okay, we're going to have a European Union.

426
00:20:00,160 --> 00:20:03,480
Speaker 6: It came and fits and starts, It got more integrated.

427
00:20:03,520 --> 00:20:06,280
Speaker 6: That euro was sort of formed as its own currency.

428
00:20:06,760 --> 00:20:08,840
Speaker 6: You know, I remember it because it happened right before

429
00:20:08,880 --> 00:20:10,879
Speaker 6: I moved to London from Morgan Stanley, when the Berlin

430
00:20:10,960 --> 00:20:14,359
Speaker 6: Wall fell. That really changed the attitude in Europe a

431
00:20:14,400 --> 00:20:16,320
Speaker 6: lot that Europe was not going to be a bigger,

432
00:20:16,440 --> 00:20:20,320
Speaker 6: more integrated place. There was a lot of opportunity economically,

433
00:20:21,240 --> 00:20:24,000
Speaker 6: you know, clearly China joining the World Trade Organization was

434
00:20:24,040 --> 00:20:27,080
Speaker 6: another big event. But I also think what drove it,

435
00:20:27,160 --> 00:20:29,119
Speaker 6: and this is maybe a little bit circular, but I

436
00:20:29,160 --> 00:20:31,680
Speaker 6: think it's true. I think this trillions of dollars worth

437
00:20:31,720 --> 00:20:34,160
Speaker 6: of m and A transactions that the more you did.

438
00:20:34,400 --> 00:20:36,880
Speaker 6: You know, it's like deals, baget deals. Right, if you're

439
00:20:37,000 --> 00:20:38,800
Speaker 6: a in an industry and you see one of your

440
00:20:38,800 --> 00:20:42,200
Speaker 6: competitors buy something that gives them a leg up, and

441
00:20:42,280 --> 00:20:43,720
Speaker 6: what you're doing, You're going to go out and try

442
00:20:43,760 --> 00:20:45,880
Speaker 6: to find something over your own. And so it kind

443
00:20:45,880 --> 00:20:48,760
Speaker 6: of fed on itself and obviously in the end created

444
00:20:48,800 --> 00:20:52,040
Speaker 6: a massive industry that really is focused on doing transactions.

445
00:20:52,040 --> 00:20:53,880
Speaker 6: And I was I was a part of that industry.

446
00:20:54,119 --> 00:20:57,480
Speaker 3: Here's a very loaded question, but what percentage of M

447
00:20:57,520 --> 00:21:00,640
Speaker 3: and A transactions would you say are people based trying

448
00:21:00,640 --> 00:21:03,080
Speaker 3: to copycat their competitors and going, well, they did a

449
00:21:03,080 --> 00:21:04,680
Speaker 3: big M and A deal, I want to do it too,

450
00:21:05,080 --> 00:21:09,840
Speaker 3: versus how many are actually driven by rational strategic argument?

451
00:21:10,840 --> 00:21:13,040
Speaker 6: Well, I think it's a little bit of both, but

452
00:21:13,119 --> 00:21:15,879
Speaker 6: I do think they're mostly driven by rational strategy, and

453
00:21:15,920 --> 00:21:19,439
Speaker 6: it makes sense. I think those broad strategic themes. I

454
00:21:19,520 --> 00:21:23,200
Speaker 6: think cause one company that's a bit more of a leader,

455
00:21:23,280 --> 00:21:25,760
Speaker 6: a bit more kind of proactive, will do something and

456
00:21:25,800 --> 00:21:27,359
Speaker 6: then it kind of wakes up the other ones that

457
00:21:27,359 --> 00:21:29,440
Speaker 6: they need to do something too. And you know, particularly

458
00:21:29,440 --> 00:21:32,040
Speaker 6: if you think about how technology has changed so many industries,

459
00:21:32,080 --> 00:21:34,760
Speaker 6: I mean, you know, take your industry, Take the media industry. Yeah,

460
00:21:34,800 --> 00:21:36,639
Speaker 6: I mean it's so called legacy media. Boy, they have

461
00:21:36,720 --> 00:21:39,280
Speaker 6: had a rough generation, not a rough couple of years,

462
00:21:39,320 --> 00:21:42,560
Speaker 6: like a rough generation. You know, Newspapers sort of largely

463
00:21:42,640 --> 00:21:44,719
Speaker 6: died except for a few like the New York Times,

464
00:21:44,720 --> 00:21:48,080
Speaker 6: and you broadcast TVs kind of sort of died. Cable

465
00:21:48,119 --> 00:21:49,560
Speaker 6: TV struggling, but.

466
00:21:49,600 --> 00:21:51,439
Speaker 3: You know, you keep Podcasts are doing okay.

467
00:21:51,560 --> 00:21:54,639
Speaker 6: Podcasts are doing okay. Streaming is doing more than okay.

468
00:21:55,040 --> 00:21:57,320
Speaker 6: So it's not that the business went away, it's just

469
00:21:57,359 --> 00:21:59,320
Speaker 6: that it evolved, and if you didn't find a way

470
00:21:59,320 --> 00:22:01,240
Speaker 6: to evolve with that, your company was going to get

471
00:22:01,280 --> 00:22:01,800
Speaker 6: left behind.

472
00:22:02,440 --> 00:22:04,399
Speaker 2: I'm really interested in this idea of this sort of

473
00:22:04,440 --> 00:22:09,760
Speaker 2: like spread of Reaganism and this comfort with capitalism, and yeah,

474
00:22:09,800 --> 00:22:13,040
Speaker 2: the comfort with the realities of capitalism that your inefficient

475
00:22:13,160 --> 00:22:15,800
Speaker 2: company here might be better as part of something multinational

476
00:22:15,840 --> 00:22:18,600
Speaker 2: tied to. Was that something that like you could see

477
00:22:18,640 --> 00:22:21,960
Speaker 2: like you know, softening. You know, it's interesting one thing

478
00:22:22,000 --> 00:22:25,280
Speaker 2: that we should talk about. We're already seeing how a

479
00:22:25,320 --> 00:22:28,439
Speaker 2: sort of discomfort with globalization is killing deal activities. A

480
00:22:28,520 --> 00:22:31,480
Speaker 2: really good example is US Steel. The discomfort both the

481
00:22:31,520 --> 00:22:34,000
Speaker 2: Biden and the Trump administrations had with the idea of

482
00:22:34,000 --> 00:22:37,000
Speaker 2: selling that to Nippon Steel. But just talk about like,

483
00:22:37,080 --> 00:22:39,360
Speaker 2: was there a sort of like softening in the regulatory

484
00:22:39,560 --> 00:22:45,840
Speaker 2: environment everywhere is such that these agglomerations conglomerations were enabled

485
00:22:45,840 --> 00:22:46,240
Speaker 2: to happen.

486
00:22:46,760 --> 00:22:48,480
Speaker 6: You know, I'll tell you a story that really makes

487
00:22:48,520 --> 00:22:50,960
Speaker 6: it seem in some ways even more cultural than sort

488
00:22:50,960 --> 00:22:53,639
Speaker 6: of legalist in the regulatory When I remember when I

489
00:22:53,680 --> 00:22:56,120
Speaker 6: went to Morgan Stanley in nineteen ninety again right after

490
00:22:56,119 --> 00:22:58,679
Speaker 6: the Berlin Wall had fallen, and just to paint a

491
00:22:58,680 --> 00:23:01,520
Speaker 6: picture Morgan Stanley's office, and we're in a rabbit warrant

492
00:23:01,560 --> 00:23:05,199
Speaker 6: of small offices behind the John Lewis Department store on

493
00:23:05,200 --> 00:23:05,879
Speaker 6: Oxford Street.

494
00:23:06,160 --> 00:23:06,320
Speaker 5: Right.

495
00:23:06,359 --> 00:23:08,159
Speaker 6: It was not in the City of London, which is

496
00:23:08,160 --> 00:23:09,919
Speaker 6: their version of Wall Street. It was not in Canary

497
00:23:09,960 --> 00:23:12,560
Speaker 6: warfolthough later it would be when that got built. It

498
00:23:12,640 --> 00:23:15,440
Speaker 6: was a very very small business. Goldvin Sachs was very

499
00:23:15,440 --> 00:23:18,000
Speaker 6: small over there too. But we were I literally look

500
00:23:18,080 --> 00:23:19,360
Speaker 6: back on and think, you know, we were a little

501
00:23:19,359 --> 00:23:22,400
Speaker 6: bit like missionaries. We weren't selling a religion, but when

502
00:23:22,400 --> 00:23:25,159
Speaker 6: we traveled the places like France and Germany and the

503
00:23:25,200 --> 00:23:28,520
Speaker 6: Nordic region and so on, the religion we were spreading

504
00:23:28,680 --> 00:23:32,280
Speaker 6: is that you should focus on shareholder value. Shareholder value.

505
00:23:32,320 --> 00:23:34,760
Speaker 3: You heard the Good Book of Shareholders.

506
00:23:34,520 --> 00:23:37,480
Speaker 6: Exactly because you know this this thing that we totally

507
00:23:37,760 --> 00:23:41,399
Speaker 6: came to take for granted about like what our corporation's for,

508
00:23:42,119 --> 00:23:45,560
Speaker 6: what is their purpose is Americans would tell you, and

509
00:23:45,600 --> 00:23:47,000
Speaker 6: I think now around the world they would tell you

510
00:23:47,080 --> 00:23:49,520
Speaker 6: they're largely for shareholder value. You can talk about different

511
00:23:49,560 --> 00:23:51,640
Speaker 6: constituents and so on, but I can tell you when

512
00:23:51,680 --> 00:23:54,280
Speaker 6: we went to talk to German, French and other companies

513
00:23:54,320 --> 00:23:57,160
Speaker 6: back in the early nineties, that was a novel concept

514
00:23:57,200 --> 00:23:59,359
Speaker 6: for them. You know that it wasn't just about building

515
00:23:59,400 --> 00:24:02,639
Speaker 6: a bigger and or prize, or surviving difficult times and

516
00:24:02,720 --> 00:24:05,640
Speaker 6: just building great resilience. It was about, wow, you can

517
00:24:05,680 --> 00:24:09,320
Speaker 6: actually focus on the goal of creating shareholder value. And

518
00:24:09,359 --> 00:24:11,639
Speaker 6: that is what drove I think M and A and

519
00:24:11,640 --> 00:24:13,959
Speaker 6: that M and A just kind of a virtuous circle

520
00:24:14,040 --> 00:24:15,359
Speaker 6: drove more of that thinking.

521
00:24:15,840 --> 00:24:18,360
Speaker 2: Tracy, I have to say, you know, like I've been

522
00:24:18,480 --> 00:24:24,520
Speaker 2: so thoroughly enmeshed by the messianic message of shareholder value,

523
00:24:24,640 --> 00:24:28,040
Speaker 2: I almost have like a hard time imagining a world

524
00:24:28,640 --> 00:24:31,880
Speaker 2: in which companies don't perceive that, and governments and citizens

525
00:24:31,880 --> 00:24:34,160
Speaker 2: don't perceive that as the mission to make the stock

526
00:24:34,240 --> 00:24:34,560
Speaker 2: go up.

527
00:24:34,640 --> 00:24:37,600
Speaker 3: Really Okay, well, here's my next question, and this is

528
00:24:37,640 --> 00:24:39,919
Speaker 3: the reason why I kind of asked you about the

529
00:24:39,960 --> 00:24:43,600
Speaker 3: post pandemic crisis. But it does feel like we are

530
00:24:43,600 --> 00:24:46,600
Speaker 3: in a somewhat different world and we now have a

531
00:24:46,680 --> 00:24:50,400
Speaker 3: president who I think everyone initially thought he was very

532
00:24:50,440 --> 00:24:52,680
Speaker 3: pro business, and we saw stocks of a lot of

533
00:24:52,840 --> 00:24:56,000
Speaker 3: smaller M and A boutiques go up, and stocks of

534
00:24:56,040 --> 00:24:58,359
Speaker 3: a lot of larger banks go up after the election

535
00:24:58,560 --> 00:25:01,439
Speaker 3: or around the election. They've since come down because a

536
00:25:01,440 --> 00:25:03,440
Speaker 3: lot of the measures, a lot of the statements coming

537
00:25:03,480 --> 00:25:06,879
Speaker 3: out of the Trump administration don't actually seem that business friendly.

538
00:25:07,200 --> 00:25:10,320
Speaker 3: And we have reports, for instance, of Trump telling companies

539
00:25:10,359 --> 00:25:13,640
Speaker 3: don't raise your prices too much to offset the tariffs

540
00:25:13,680 --> 00:25:17,119
Speaker 3: because you know, it's a political liability for him. That

541
00:25:17,240 --> 00:25:20,000
Speaker 3: seems to fly in the face of the mission of

542
00:25:20,040 --> 00:25:23,200
Speaker 3: creating shareholder value. Is this a new regime?

543
00:25:23,800 --> 00:25:27,200
Speaker 6: It certainly feels like a new regime. I think company's

544
00:25:27,600 --> 00:25:29,800
Speaker 6: job is to try to figure out how can I

545
00:25:29,880 --> 00:25:33,680
Speaker 6: create or maximizes the word often used shareholder value given

546
00:25:33,720 --> 00:25:37,920
Speaker 6: whatever circumstances surround me, and those circumstances of both economic,

547
00:25:37,960 --> 00:25:40,040
Speaker 6: and they're also political, and they're also regulatory.

548
00:25:40,640 --> 00:25:41,840
Speaker 5: But I do think one.

549
00:25:41,680 --> 00:25:44,600
Speaker 6: Of the reasons that you see but just really a

550
00:25:44,640 --> 00:25:47,199
Speaker 6: remarkable amount of volatility right now. And you know, I

551
00:25:47,200 --> 00:25:49,000
Speaker 6: said I wouldn't use this word, but I'll use it

552
00:25:49,080 --> 00:25:50,920
Speaker 6: uncertainty that close, so.

553
00:25:50,880 --> 00:25:53,240
Speaker 3: You made it about twenty minutes, twenty five minutes.

554
00:25:54,080 --> 00:25:57,080
Speaker 6: It's clearly impacting markets. But you know, when I talk

555
00:25:57,160 --> 00:25:59,359
Speaker 6: about in my book, sort of the dowblow of a

556
00:25:59,440 --> 00:26:02,280
Speaker 6: thousand on I graduated college and it's forty thousand today,

557
00:26:02,280 --> 00:26:04,919
Speaker 6: I mean forty times gain. And I do feel like

558
00:26:05,119 --> 00:26:07,479
Speaker 6: a lot of that was driven by globalization. And I

559
00:26:07,520 --> 00:26:09,879
Speaker 6: think if that was going to be reverse, sort of

560
00:26:09,920 --> 00:26:14,240
Speaker 6: the untangling the strands of spaghetti that we've created in

561
00:26:14,320 --> 00:26:16,359
Speaker 6: sort of the corporate world, I think is going to

562
00:26:16,359 --> 00:26:19,000
Speaker 6: be very problematic. And that's why, you know, you hear

563
00:26:19,119 --> 00:26:21,040
Speaker 6: things like I think Secretary best and the other day

564
00:26:21,080 --> 00:26:23,399
Speaker 6: talked about how the current situation between the US and

565
00:26:23,480 --> 00:26:27,040
Speaker 6: China is unsustainable. I think a lot of business people

566
00:26:27,040 --> 00:26:30,879
Speaker 6: are thinking, yeah, it's unsustainable, and therefore they won't sustain it.

567
00:26:31,040 --> 00:26:33,600
Speaker 6: Yes they will, they will back off, but I'm not

568
00:26:33,960 --> 00:26:36,480
Speaker 6: sure that's going to happen. And nobody else is either.

569
00:26:37,000 --> 00:26:40,719
Speaker 2: The bankers of these missionaries extolling the shareholder value mantra

570
00:26:40,880 --> 00:26:44,520
Speaker 2: around the world. What was the previous belief system in

571
00:26:44,640 --> 00:26:47,359
Speaker 2: place before that? If you're in a Germany, what is

572
00:26:47,440 --> 00:26:51,879
Speaker 2: the role of a company that that your vision superseded?

573
00:26:52,760 --> 00:26:55,760
Speaker 6: I think that in many parts of the world, and

574
00:26:55,800 --> 00:26:58,560
Speaker 6: you know, even in America, really you had this sense

575
00:26:58,600 --> 00:27:02,360
Speaker 6: of just sort of the corporational an entity of itself

576
00:27:02,400 --> 00:27:04,400
Speaker 6: and had a life of its own, and its goal

577
00:27:04,520 --> 00:27:07,119
Speaker 6: was just to perpetuate itself. You know, there wasn't a

578
00:27:07,160 --> 00:27:08,359
Speaker 6: lot of M and A. I mean there was a

579
00:27:08,560 --> 00:27:10,440
Speaker 6: you know, of course I mentioned I started my career

580
00:27:10,440 --> 00:27:12,359
Speaker 6: at walk Taul Lipton, and you know, Marty Lipton, the

581
00:27:12,359 --> 00:27:15,320
Speaker 6: founder of that firm, was such a great spokesman for

582
00:27:15,359 --> 00:27:19,000
Speaker 6: this issue of the market for corporate control. That only

583
00:27:19,080 --> 00:27:23,600
Speaker 6: when you had the discipline of the market that said, essentially,

584
00:27:23,760 --> 00:27:26,520
Speaker 6: you're a CEO, you're a board, manage it however you want.

585
00:27:26,720 --> 00:27:29,080
Speaker 6: But if you don't manage it well, your stock price

586
00:27:29,119 --> 00:27:31,680
Speaker 6: will go down and we will buy you and then

587
00:27:31,720 --> 00:27:33,520
Speaker 6: you will be out of jobs and we will take

588
00:27:33,560 --> 00:27:35,119
Speaker 6: over and we will run it better than you do.

589
00:27:35,280 --> 00:27:38,879
Speaker 6: And that market for corporate control created a discipline on

590
00:27:39,040 --> 00:27:42,240
Speaker 6: companies that they had to try to maximize shareholder value

591
00:27:42,240 --> 00:27:45,080
Speaker 6: because if they didn't do that, they would get bought.

592
00:27:45,160 --> 00:28:01,760
Speaker 4: Yeah, green Hill got bought.

593
00:28:02,080 --> 00:28:04,439
Speaker 3: Can we talk about that deal a little bit, because

594
00:28:04,480 --> 00:28:06,440
Speaker 3: we've been meaning to do an episode on the sort

595
00:28:06,440 --> 00:28:10,720
Speaker 3: of rise slash return of Big Japan I guess, and

596
00:28:10,760 --> 00:28:14,320
Speaker 3: we've never quite gotten around to it. But obviously, you know,

597
00:28:14,640 --> 00:28:18,439
Speaker 3: Mizuho coming in buying a company like Green Hill for

598
00:28:18,600 --> 00:28:22,200
Speaker 3: I think it was five hundred and fifty five hundred

599
00:28:22,200 --> 00:28:24,640
Speaker 3: fifty million. A lot of people were saying at the time,

600
00:28:24,720 --> 00:28:27,560
Speaker 3: this is, you know, another big Japanese bank trying to

601
00:28:27,600 --> 00:28:31,119
Speaker 3: make a splash in overseas markets. Maybe it's about the

602
00:28:31,240 --> 00:28:34,960
Speaker 3: idea that given tensions between the US and China, there's

603
00:28:35,000 --> 00:28:39,040
Speaker 3: going to be more opportunity for deal making by Japanese companies.

604
00:28:39,320 --> 00:28:42,200
Speaker 3: There were all these sort of strategies attached to why

605
00:28:42,240 --> 00:28:46,479
Speaker 3: this deal was being done. You were directly involved with it,

606
00:28:46,520 --> 00:28:49,320
Speaker 3: I assume what was your interpretation of what was going on.

607
00:28:50,080 --> 00:28:53,120
Speaker 6: The book certainly tells the story of the evolution of

608
00:28:53,160 --> 00:28:56,000
Speaker 6: our industry. Again, going back, we were a pretty unique

609
00:28:56,080 --> 00:28:58,240
Speaker 6: business for a long period of time. There were lots

610
00:28:58,240 --> 00:28:59,680
Speaker 6: of the whole chapter, and there are about all the

611
00:28:59,720 --> 00:29:02,440
Speaker 6: many firms that followed us, particularly once our IPO not

612
00:29:02,480 --> 00:29:05,800
Speaker 6: only was the success, but quadrupled in't share price over

613
00:29:05,800 --> 00:29:08,160
Speaker 6: the first eighteen months, so we worth two billion dollars

614
00:29:08,160 --> 00:29:10,320
Speaker 6: and still not many more than one hundred people, including

615
00:29:10,360 --> 00:29:12,320
Speaker 6: you know, the receptionists and everybody else.

616
00:29:12,880 --> 00:29:14,000
Speaker 5: So the sector.

617
00:29:13,680 --> 00:29:16,280
Speaker 6: Got more crowded, right, there were more players, And I

618
00:29:16,320 --> 00:29:18,640
Speaker 6: thought what made our firm so successful at the beginning

619
00:29:18,760 --> 00:29:20,640
Speaker 6: was we had a different strategy. And so you always

620
00:29:20,680 --> 00:29:22,880
Speaker 6: have to think about what's the right strategy, not for

621
00:29:22,960 --> 00:29:24,560
Speaker 6: the last five or ten years, but for the next

622
00:29:24,560 --> 00:29:27,880
Speaker 6: five or ten years. And so having had many many

623
00:29:27,920 --> 00:29:31,160
Speaker 6: opportunities to sell the firm over the years and really

624
00:29:31,400 --> 00:29:32,880
Speaker 6: not showing any interest in any of them.

625
00:29:32,920 --> 00:29:33,680
Speaker 5: I talk about a lot of.

626
00:29:33,680 --> 00:29:34,880
Speaker 6: Them in the book. There are many of them that

627
00:29:34,880 --> 00:29:37,520
Speaker 6: are spelled out there. But I never had any interests

628
00:29:37,520 --> 00:29:40,080
Speaker 6: at all, really didn't even have much of a serious

629
00:29:40,080 --> 00:29:42,560
Speaker 6: meeting with anybody. But you know, the Mizuho people, through

630
00:29:42,600 --> 00:29:46,640
Speaker 6: an intermediary, approached me, and again I had no interest,

631
00:29:46,880 --> 00:29:49,680
Speaker 6: took my typical stance, and I just started to rethink things,

632
00:29:49,720 --> 00:29:53,440
Speaker 6: you know, coming out of kind of the latest pandemic crisis,

633
00:29:53,680 --> 00:29:57,400
Speaker 6: you know, seeing the industry go through another difficult time. Also, frankly,

634
00:29:57,560 --> 00:30:00,600
Speaker 6: you know my own personal situation. I mean, I thought

635
00:30:00,600 --> 00:30:02,800
Speaker 6: about subtitles for the book that would be something like

636
00:30:02,880 --> 00:30:05,200
Speaker 6: life cycles of Wall Street firms and the people who

637
00:30:05,320 --> 00:30:07,960
Speaker 6: run them, because you know, we don't go forever either,

638
00:30:08,080 --> 00:30:10,280
Speaker 6: And I thought, you know, for the next chapter of Greenhill,

639
00:30:10,320 --> 00:30:13,960
Speaker 6: I think being part of a strong global international bank

640
00:30:14,040 --> 00:30:17,320
Speaker 6: like Mazuha would be good. So six months after they

641
00:30:17,400 --> 00:30:19,840
Speaker 6: said would you have a cup of coffee? I sent

642
00:30:20,000 --> 00:30:22,560
Speaker 6: Mac a message through that intermediary saying yes, I would

643
00:30:22,600 --> 00:30:23,560
Speaker 6: have a cup of coffee.

644
00:30:24,240 --> 00:30:29,040
Speaker 2: If the purpose of a corporation is to create shareholder value.

645
00:30:29,720 --> 00:30:33,480
Speaker 2: For a boot Seek investment bank, why do shareholders get

646
00:30:33,480 --> 00:30:37,080
Speaker 2: to split the value? If you why even bring shareholders in?

647
00:30:37,200 --> 00:30:41,400
Speaker 2: It's not a capital intensive business the people creating the margin.

648
00:30:42,080 --> 00:30:45,360
Speaker 2: Why isn't it just run for the bankers? And actually

649
00:30:45,400 --> 00:30:48,360
Speaker 2: this is a criticism in fact of like investing in

650
00:30:48,360 --> 00:30:51,200
Speaker 2: investment banks. It's like, no, the bankers capture all the margin.

651
00:30:51,520 --> 00:30:53,040
Speaker 2: Why even have shareholders?

652
00:30:53,560 --> 00:30:56,760
Speaker 6: Well, here is sort of the dirty little secret of

653
00:30:57,000 --> 00:31:01,640
Speaker 6: the IPO market, which is if you want to crystallize

654
00:31:01,920 --> 00:31:04,080
Speaker 6: and collect shareholder value.

655
00:31:04,200 --> 00:31:05,440
Speaker 5: A very good way.

656
00:31:05,280 --> 00:31:07,320
Speaker 6: Of doing it is to take your company public. We

657
00:31:07,360 --> 00:31:09,680
Speaker 6: were the first of our kind to do that. So

658
00:31:09,840 --> 00:31:11,680
Speaker 6: ideas sort of came to me one summer when I

659
00:31:11,720 --> 00:31:14,200
Speaker 6: was doing work for a client in an unrelated industry

660
00:31:14,200 --> 00:31:16,000
Speaker 6: and I thought, I wonder if we could go public.

661
00:31:16,440 --> 00:31:18,640
Speaker 6: We decided, if we had one more good year, we're

662
00:31:18,680 --> 00:31:20,800
Speaker 6: going to do that. So on January second, two thousand

663
00:31:20,840 --> 00:31:22,800
Speaker 6: and four, I called up Golden Sachs and others and said, hey,

664
00:31:22,800 --> 00:31:25,480
Speaker 6: would you consider taking us public? And that's a great

665
00:31:25,520 --> 00:31:27,760
Speaker 6: way to crystallize value, realize all I worked out great

666
00:31:27,800 --> 00:31:31,480
Speaker 6: for our early founders. For sure, being a public company

667
00:31:31,800 --> 00:31:35,000
Speaker 6: is not nearly as much fun as going public, you know,

668
00:31:35,040 --> 00:31:36,680
Speaker 6: And in fact, I mentioned in the book part of

669
00:31:36,760 --> 00:31:39,000
Speaker 6: my thought process when I ultimately decided that we would

670
00:31:39,040 --> 00:31:41,440
Speaker 6: sell become part of Mizuho. You know, the number of

671
00:31:41,480 --> 00:31:44,800
Speaker 6: publicly traded companies in America in the lifetime of our

672
00:31:44,840 --> 00:31:48,400
Speaker 6: firm fell in half. And part of that is investment

673
00:31:48,480 --> 00:31:50,920
Speaker 6: funds want to invest in bigger, more liquid stocks, and

674
00:31:50,960 --> 00:31:53,239
Speaker 6: part of that is there's more regulatory hurdles to being

675
00:31:53,240 --> 00:31:55,800
Speaker 6: a public company, and so it declined a lot. So

676
00:31:55,880 --> 00:31:58,680
Speaker 6: sometimes people say to me, that really is difficult being

677
00:31:58,680 --> 00:32:00,840
Speaker 6: a public company. Do you regret that? I'm like, no,

678
00:32:00,960 --> 00:32:03,520
Speaker 6: I don't regret that because we all made a lot

679
00:32:03,560 --> 00:32:05,840
Speaker 6: of money by going public, and by the way, I

680
00:32:05,880 --> 00:32:07,200
Speaker 6: had a lot of fun as well, so that was

681
00:32:07,240 --> 00:32:09,880
Speaker 6: all good. But I think for many companies, and the

682
00:32:09,920 --> 00:32:13,800
Speaker 6: reason you often see companies go public, be public for

683
00:32:13,880 --> 00:32:16,240
Speaker 6: some number of years, maybe get taken private by a

684
00:32:16,240 --> 00:32:18,479
Speaker 6: private equity fund, and then what happens three to five

685
00:32:18,560 --> 00:32:20,840
Speaker 6: years later, they take it public again, maybe in a

686
00:32:20,880 --> 00:32:23,840
Speaker 6: slightly different form. So that's the kind of ying and

687
00:32:23,960 --> 00:32:27,160
Speaker 6: yang of the IPO market, which is that it's not forever.

688
00:32:27,280 --> 00:32:28,480
Speaker 6: You tend to do it for a period.

689
00:32:28,680 --> 00:32:31,240
Speaker 3: Wasn't the argument. Also, if you're a partner at a

690
00:32:31,280 --> 00:32:35,400
Speaker 3: boutique M and A for you have sort of equity

691
00:32:35,880 --> 00:32:38,959
Speaker 3: in the business, some sort of partnership stake. But if

692
00:32:39,040 --> 00:32:41,960
Speaker 3: you IPO, then you basically trade that illiquid equity for

693
00:32:42,040 --> 00:32:45,160
Speaker 3: something that's public and quite liquid that you can monetize well.

694
00:32:45,200 --> 00:32:47,520
Speaker 6: And even more so that's all true, but even more

695
00:32:47,600 --> 00:32:50,000
Speaker 6: so if you were a partner of Gold and Sachs

696
00:32:50,080 --> 00:32:52,600
Speaker 6: before it went public about five years before we did,

697
00:32:53,000 --> 00:32:56,120
Speaker 6: when you retired or sold your effectively sold your shares

698
00:32:56,160 --> 00:32:58,320
Speaker 6: back to the firm. You got paid out of book value.

699
00:32:58,520 --> 00:33:00,280
Speaker 6: You know, the day at went public, I think think

700
00:33:00,480 --> 00:33:02,920
Speaker 6: in public a like three times book or something like that.

701
00:33:03,000 --> 00:33:06,080
Speaker 6: So suddenly overnight the value what you had tripled. You

702
00:33:06,080 --> 00:33:07,960
Speaker 6: can read historyes of Gold and Sachs kind of like

703
00:33:08,560 --> 00:33:10,160
Speaker 6: my book is a bit of a history of the

704
00:33:10,200 --> 00:33:13,080
Speaker 6: industry and see some of the tension over the years,

705
00:33:13,120 --> 00:33:16,240
Speaker 6: because you had generation after generation of partners who would

706
00:33:16,280 --> 00:33:19,040
Speaker 6: reach retirement and get cashed out of book. And then

707
00:33:19,040 --> 00:33:22,080
Speaker 6: along came one generation that decided, We're not going to

708
00:33:22,080 --> 00:33:24,200
Speaker 6: get cashed out of book. We're going to do something different.

709
00:33:24,520 --> 00:33:26,680
Speaker 6: And that's kind of the calculus we made as well

710
00:33:26,720 --> 00:33:28,840
Speaker 6: at Greenhill. I mean, there was a long history even

711
00:33:28,880 --> 00:33:32,560
Speaker 6: before our firm, of smaller boutiques that eventually got sold.

712
00:33:32,680 --> 00:33:35,160
Speaker 6: They would sell out to a bigger bank, and I

713
00:33:35,360 --> 00:33:38,160
Speaker 6: wanted to keep us independent. I thought we could go

714
00:33:38,240 --> 00:33:40,040
Speaker 6: a long way and build a big global firm and

715
00:33:40,080 --> 00:33:42,760
Speaker 6: all that sort of thing. And so I thought, really,

716
00:33:42,800 --> 00:33:45,360
Speaker 6: one summer, I just thought, I wonder if instead of

717
00:33:45,640 --> 00:33:48,040
Speaker 6: crystallizing value by selling the firm, I wonder if we

718
00:33:48,080 --> 00:33:48,760
Speaker 6: could go public.

719
00:33:49,480 --> 00:33:52,520
Speaker 2: Let's talk a little bit more about the contemporary environment

720
00:33:52,800 --> 00:33:58,320
Speaker 2: and the prospect of deglobalization. The initial COVID supply shock

721
00:33:58,480 --> 00:34:01,240
Speaker 2: obviously woke up a lot of countries at least in

722
00:34:01,280 --> 00:34:05,320
Speaker 2: key strategic sectors or whatever, to have their own capacity.

723
00:34:05,840 --> 00:34:09,280
Speaker 2: Then the war in Ukraine further dividing the world among

724
00:34:09,440 --> 00:34:13,560
Speaker 2: multiple lines. Now the tensions with China specifically, but also

725
00:34:13,560 --> 00:34:17,439
Speaker 2: maybe with every other trading partner, including Japan, And talk

726
00:34:17,480 --> 00:34:21,759
Speaker 2: to us about like, what's emerging potentially from your perspective

727
00:34:21,880 --> 00:34:25,120
Speaker 2: in the place of the ideology that you preached throughout

728
00:34:25,120 --> 00:34:25,880
Speaker 2: most of your career.

729
00:34:26,480 --> 00:34:29,160
Speaker 6: Yes, it is different change from just the kind of

730
00:34:29,160 --> 00:34:31,960
Speaker 6: the pure shareholder value. We don't care where our plants are,

731
00:34:32,080 --> 00:34:33,839
Speaker 6: we don't care where our customers are. We just want

732
00:34:33,880 --> 00:34:36,880
Speaker 6: to have the right configuration to maximize shareholder value. If

733
00:34:36,960 --> 00:34:40,719
Speaker 6: you or your government has to start thinking about, hey,

734
00:34:40,840 --> 00:34:44,080
Speaker 6: maybe we want to have some of our own capability

735
00:34:44,160 --> 00:34:47,279
Speaker 6: in that field, it really changes everything. I mean, here's

736
00:34:47,280 --> 00:34:50,320
Speaker 6: a really simple example. If you are running a country

737
00:34:50,360 --> 00:34:52,840
Speaker 6: that's in a climate that's not you know, the greatest

738
00:34:52,840 --> 00:34:55,279
Speaker 6: place to grow food, you probably want to grow some

739
00:34:55,320 --> 00:34:58,440
Speaker 6: of your own food. Nonetheless, you know, maybe more expensive,

740
00:34:58,520 --> 00:35:00,880
Speaker 6: maybe more difficult, but you probably want to have some

741
00:35:00,920 --> 00:35:03,719
Speaker 6: of your own supply. What's now being talked about is

742
00:35:03,760 --> 00:35:05,479
Speaker 6: maybe that's true in a whole bunch of things. Maybe

743
00:35:05,520 --> 00:35:08,000
Speaker 6: that's true of you know, pharmaceuticals. Maybe that's true of

744
00:35:08,000 --> 00:35:10,879
Speaker 6: our defense products. Maybe that's true of all the electronics

745
00:35:10,880 --> 00:35:12,959
Speaker 6: that were we all, you know, live with every single

746
00:35:13,000 --> 00:35:16,000
Speaker 6: day of our lives. And if you start thinking that way,

747
00:35:16,200 --> 00:35:19,960
Speaker 6: I think it will quickly lead to countries saying I'm

748
00:35:20,000 --> 00:35:22,600
Speaker 6: not sure we want to allow this foreign company to

749
00:35:22,680 --> 00:35:26,239
Speaker 6: buy our you know, wonderful company here, because if we

750
00:35:26,280 --> 00:35:29,319
Speaker 6: will lose control of that production. And I think if

751
00:35:29,320 --> 00:35:32,719
Speaker 6: you start to think broadly as a government, you could

752
00:35:32,800 --> 00:35:35,440
Speaker 6: convince yourself that in almost every industry you'd like to

753
00:35:35,480 --> 00:35:36,759
Speaker 6: have some of your own capability.

754
00:35:37,440 --> 00:35:40,279
Speaker 2: I just you know, this came up on a recent podcast,

755
00:35:40,400 --> 00:35:44,120
Speaker 2: But the administration recently talked about how much we import

756
00:35:44,160 --> 00:35:47,799
Speaker 2: in textiles and clothing, and it's just like, this is

757
00:35:47,920 --> 00:35:51,760
Speaker 2: not a strategic sector. Particularly, this is not a sector

758
00:35:51,840 --> 00:35:55,440
Speaker 2: associated with high margins or high value jobs. So to

759
00:35:55,600 --> 00:35:59,960
Speaker 2: Scott's point, Tracy, yes, countries could suddenly start to convince

760
00:36:00,080 --> 00:36:03,200
Speaker 2: themselves that every sector of the economy needs to have

761
00:36:03,280 --> 00:36:04,279
Speaker 2: domestic capacity.

762
00:36:04,719 --> 00:36:08,440
Speaker 3: Why is the US not growing its own silkworm supply

763
00:36:08,600 --> 00:36:12,560
Speaker 3: for bananas or bananas or mangoes or avocados. These are

764
00:36:12,560 --> 00:36:13,200
Speaker 3: the big questions.

765
00:36:13,200 --> 00:36:14,600
Speaker 5: We love guacamole in this country.

766
00:36:14,680 --> 00:36:17,719
Speaker 3: Were avocados we do indeed? Okay, So if we're in

767
00:36:17,800 --> 00:36:23,200
Speaker 3: a period of heightened protectionism slash deglobalization, what exactly should

768
00:36:23,480 --> 00:36:26,440
Speaker 3: M and A advisories actually do the deal makers? Do

769
00:36:26,520 --> 00:36:30,560
Speaker 3: you start focusing on restructurings instead. I know Greenhill did

770
00:36:30,600 --> 00:36:32,759
Speaker 3: a lot of restructurings post two thousand and eight.

771
00:36:33,200 --> 00:36:35,400
Speaker 6: Yes, a lot, almost really all the M and A

772
00:36:35,400 --> 00:36:38,960
Speaker 6: advisory bootooks really added restructuring capability because you figured it

773
00:36:38,960 --> 00:36:41,920
Speaker 6: out pretty early that when MNA is really slow, there's

774
00:36:41,960 --> 00:36:44,560
Speaker 6: a lot of restructure going to be done this cycle.

775
00:36:44,600 --> 00:36:45,239
Speaker 5: Though I'm not.

776
00:36:45,239 --> 00:36:47,840
Speaker 6: Sure that it necessarily shifts into a lot of restructuring

777
00:36:47,840 --> 00:36:49,560
Speaker 6: because it's not like the economy is that bad. And

778
00:36:49,600 --> 00:36:52,360
Speaker 6: maybe it gets there, of course, but I think you know,

779
00:36:52,600 --> 00:36:55,280
Speaker 6: what you're seeing in the statistics year to date certainly

780
00:36:55,400 --> 00:36:57,480
Speaker 6: is that there has been considerably less M and A.

781
00:36:57,520 --> 00:36:59,479
Speaker 6: I mean, somebody told me the last month some data

782
00:36:59,520 --> 00:37:02,160
Speaker 6: was showing that it's like the slowest month and you

783
00:37:02,200 --> 00:37:04,560
Speaker 6: know in many, many years, And so I think we're

784
00:37:04,600 --> 00:37:07,880
Speaker 6: not yet in a period. I don't think of deglobalization,

785
00:37:08,040 --> 00:37:10,440
Speaker 6: but we certainly are on the brink of one. And

786
00:37:10,520 --> 00:37:14,440
Speaker 6: if the tariffs you know, really got solidified at significant levels,

787
00:37:14,960 --> 00:37:17,480
Speaker 6: I think that would perhaps create some.

788
00:37:17,680 --> 00:37:18,640
Speaker 5: M and A opportunities.

789
00:37:18,680 --> 00:37:21,160
Speaker 6: I don't think as many as the under the old

790
00:37:21,239 --> 00:37:23,759
Speaker 6: religion of free trade and shareholder value, but I think

791
00:37:23,800 --> 00:37:26,440
Speaker 6: it'll create some. I mean you'll need you know, European

792
00:37:26,480 --> 00:37:28,640
Speaker 6: companies that sell in the US might think, okay, we

793
00:37:28,719 --> 00:37:32,120
Speaker 6: need to have manufacturing capability in the US to service that,

794
00:37:32,640 --> 00:37:35,480
Speaker 6: and like vice versa, US into Europe and US and

795
00:37:35,520 --> 00:37:38,000
Speaker 6: to other parts of the world as well. So there's

796
00:37:38,000 --> 00:37:40,239
Speaker 6: always this n M and A banker. Again, whatever the

797
00:37:40,320 --> 00:37:43,200
Speaker 6: rules are, you can find deals that make sense. The

798
00:37:43,360 --> 00:37:45,719
Speaker 6: thing is, right now people don't know what the rules are,

799
00:37:45,760 --> 00:37:46,759
Speaker 6: so they can't quite do that.

800
00:37:47,280 --> 00:37:50,880
Speaker 2: How much is it simply rolodex knowing the person to

801
00:37:50,920 --> 00:37:53,400
Speaker 2: call it, knowing the person to get the communication with

802
00:37:53,480 --> 00:37:58,560
Speaker 2: someone else, And how much does that value compound over

803
00:37:58,680 --> 00:38:03,280
Speaker 2: time such that of veteran deal maker has a sustainable

804
00:38:03,680 --> 00:38:07,000
Speaker 2: edge over a junior deal maker simply by dent to volume.

805
00:38:08,000 --> 00:38:10,839
Speaker 6: Certainly the role of decks or the electronic equivalent there

806
00:38:10,840 --> 00:38:13,359
Speaker 6: always is very very important. I mean, if you think back,

807
00:38:13,400 --> 00:38:15,800
Speaker 6: you know, it's interesting again about the evolution of the industry,

808
00:38:15,800 --> 00:38:17,920
Speaker 6: which is so fascinating that was so small and became

809
00:38:17,960 --> 00:38:21,239
Speaker 6: so big. You know, initially very few people were in

810
00:38:21,280 --> 00:38:23,680
Speaker 6: the business, and a person like say Bob Greenhill found

811
00:38:23,680 --> 00:38:25,720
Speaker 6: at our firm. I mean, he had a huge market

812
00:38:25,719 --> 00:38:28,320
Speaker 6: share by himself. You know, I'm not talking Morgan Stanley's

813
00:38:28,320 --> 00:38:30,160
Speaker 6: market share, like his market share, and there are a

814
00:38:30,200 --> 00:38:31,879
Speaker 6: few other guys that had had sort of the same

815
00:38:31,920 --> 00:38:34,120
Speaker 6: thing and they did everything. You know, today, we're doing

816
00:38:34,120 --> 00:38:36,560
Speaker 6: a paper deal. Tomorrow, we're doing a computer deal. Day

817
00:38:36,600 --> 00:38:38,560
Speaker 6: after that, we're going to do an energy deal. You know,

818
00:38:38,600 --> 00:38:41,680
Speaker 6: what happened as the industry grew is that firms realize

819
00:38:41,680 --> 00:38:45,160
Speaker 6: that to create a competitive edge and trying to win business,

820
00:38:45,200 --> 00:38:48,080
Speaker 6: you should be a specialist. And at first they thought, okay,

821
00:38:48,080 --> 00:38:50,680
Speaker 6: you're going to be a healthcare specialist, and then later

822
00:38:50,760 --> 00:38:52,839
Speaker 6: that got broken down to well, that's not narrow enough.

823
00:38:52,880 --> 00:38:55,000
Speaker 6: You've got to be either a biotech or a pharma

824
00:38:55,120 --> 00:38:59,400
Speaker 6: or a healthcare devices or a hospital management expert. And

825
00:38:59,440 --> 00:39:03,399
Speaker 6: so you create all these like subspecialties where people may

826
00:39:03,440 --> 00:39:06,359
Speaker 6: not be a household name, they may not ever, you know,

827
00:39:06,400 --> 00:39:08,400
Speaker 6: get their name in the Wall Street Journal or something,

828
00:39:08,600 --> 00:39:11,120
Speaker 6: but they may be the leading m and a expert

829
00:39:11,200 --> 00:39:14,839
Speaker 6: on a niche within healthcare, within technology, within industrials that

830
00:39:14,880 --> 00:39:16,840
Speaker 6: builds a great business for them. So it's kind of

831
00:39:17,200 --> 00:39:19,959
Speaker 6: a narrow but deep roll index people try to build.

832
00:39:20,000 --> 00:39:23,240
Speaker 3: Now, speaking of household names and the Wall Street Journal,

833
00:39:23,280 --> 00:39:25,560
Speaker 3: this is actually something that I wanted to ask you about.

834
00:39:25,600 --> 00:39:27,560
Speaker 3: So when I first got your book, I immediately went

835
00:39:27,560 --> 00:39:30,600
Speaker 3: to the index and I looked up every media organization

836
00:39:30,760 --> 00:39:33,960
Speaker 3: name and then read what you said about Bloomberg coverage,

837
00:39:34,200 --> 00:39:37,759
Speaker 3: Financial Times coverage, Reuter's coverage, and one line that I

838
00:39:37,800 --> 00:39:40,680
Speaker 3: thought was interesting is you had a criticism of one

839
00:39:40,680 --> 00:39:43,239
Speaker 3: of the news stories where you said that you know,

840
00:39:43,560 --> 00:39:46,640
Speaker 3: it was a news publication that was making out that

841
00:39:46,800 --> 00:39:50,040
Speaker 3: the departures of some of your bankers wore a bigger

842
00:39:50,040 --> 00:39:53,240
Speaker 3: deal than they actually were. And you make the point

843
00:39:53,280 --> 00:39:56,800
Speaker 3: that while outsiders can't really tell the difference between whether

844
00:39:56,920 --> 00:39:59,800
Speaker 3: or not you know someone who's leaving is a huge

845
00:39:59,840 --> 00:40:04,000
Speaker 3: deal in their industry or not, what advice do you

846
00:40:04,080 --> 00:40:06,799
Speaker 3: have for financial journalists who are trying to figure out

847
00:40:06,840 --> 00:40:09,799
Speaker 3: whether or not this particular guy is a big deal.

848
00:40:09,920 --> 00:40:12,520
Speaker 3: Slash rain Maker in his particular.

849
00:40:12,080 --> 00:40:14,600
Speaker 6: Niche Well, first of all, I was hoping you wouldn't

850
00:40:14,600 --> 00:40:18,040
Speaker 6: go to the indexing work for your company. By the way,

851
00:40:18,120 --> 00:40:20,440
Speaker 6: huge fan of Bloomberg, Thank you. You know the point

852
00:40:20,480 --> 00:40:23,400
Speaker 6: I made. And a whole chapter is titled from a

853
00:40:23,440 --> 00:40:25,960
Speaker 6: comment that was somebody made on Bloomberg once. But I

854
00:40:26,000 --> 00:40:28,000
Speaker 6: think what I've talked about a lot in the book

855
00:40:28,200 --> 00:40:31,280
Speaker 6: is is my relations and the firm's relations with the media.

856
00:40:31,360 --> 00:40:33,440
Speaker 6: And you know, and on the way up, boy did

857
00:40:33,440 --> 00:40:35,839
Speaker 6: they help us. I mean it was incredible the way

858
00:40:35,840 --> 00:40:38,799
Speaker 6: they fed this sort of brand building and to kind

859
00:40:38,800 --> 00:40:41,239
Speaker 6: of each story added to the luster and helped you

860
00:40:41,320 --> 00:40:42,960
Speaker 6: in the next piece of business, and that piece of

861
00:40:42,960 --> 00:40:45,000
Speaker 6: business got you another good story, and then it just

862
00:40:45,320 --> 00:40:48,759
Speaker 6: was a beautiful, virtuous circle. But the media relationship gets

863
00:40:48,800 --> 00:40:52,080
Speaker 6: more complicated as time goes on. You know, the media,

864
00:40:52,160 --> 00:40:54,799
Speaker 6: I think sometimes has a tendency to both want to

865
00:40:54,840 --> 00:40:58,359
Speaker 6: build entities or people up a lot, and then it's

866
00:40:58,440 --> 00:41:00,319
Speaker 6: kind of really interesting if you can sort of tear

867
00:41:00,360 --> 00:41:02,640
Speaker 6: them down as well. So, you know, I had my

868
00:41:02,800 --> 00:41:06,560
Speaker 6: complicated relationships with the media, and I think it's hard

869
00:41:06,600 --> 00:41:08,319
Speaker 6: for them to know from the outside. I mean, there's

870
00:41:08,360 --> 00:41:10,560
Speaker 6: a whole as you well know, there is a whole

871
00:41:10,560 --> 00:41:15,000
Speaker 6: industry of advisors out there who are trying to help companies,

872
00:41:15,160 --> 00:41:18,120
Speaker 6: you know, to some degree, fool you right, to some degree,

873
00:41:18,440 --> 00:41:20,600
Speaker 6: put the you know, the lipstick on the pig, to

874
00:41:20,640 --> 00:41:23,399
Speaker 6: put the right spin on whatever happened yesterday, to make

875
00:41:23,440 --> 00:41:26,600
Speaker 6: the quarter sound better than it probably was. So I

876
00:41:26,640 --> 00:41:27,799
Speaker 6: think you've got a hard job.

877
00:41:27,840 --> 00:41:28,359
Speaker 5: I mean, I think.

878
00:41:28,400 --> 00:41:30,160
Speaker 6: Look, I think Bloomberg does it well, and so do

879
00:41:30,239 --> 00:41:33,319
Speaker 6: some others FT. Wall Street Journal, et cetera. Do a

880
00:41:33,440 --> 00:41:35,919
Speaker 6: nice job, but it's not easy to ferret through what's

881
00:41:35,960 --> 00:41:38,239
Speaker 6: the real story on a quarter or an M and

882
00:41:38,239 --> 00:41:39,759
Speaker 6: a deal or whatever news there is.

883
00:41:40,080 --> 00:41:41,719
Speaker 3: Thank you, I appreciate that empathy.

884
00:41:42,360 --> 00:41:45,360
Speaker 2: What do deals leak? What is the most common reason

885
00:41:45,480 --> 00:41:47,759
Speaker 2: that a deal might leak to the media? Early, I

886
00:41:47,760 --> 00:41:50,400
Speaker 2: don't understand why anyone talks to reporters. I'm very glad

887
00:41:50,440 --> 00:41:52,319
Speaker 2: that some people seem to be willing to talk to

888
00:41:52,360 --> 00:41:54,680
Speaker 2: the media, but I never really get it. I would

889
00:41:54,719 --> 00:41:57,160
Speaker 2: never Why do deals leak and what is the most

890
00:41:57,200 --> 00:41:58,919
Speaker 2: common source of leaks.

891
00:41:59,560 --> 00:42:01,520
Speaker 6: That I'm happy to say is a mystery to me.

892
00:42:01,760 --> 00:42:06,200
Speaker 6: Certainly they never leaked for me. Part of the argument

893
00:42:06,320 --> 00:42:09,400
Speaker 6: going back to why the so called boutique investment banks

894
00:42:09,400 --> 00:42:11,040
Speaker 6: did quite well for a long time. I mean, part

895
00:42:11,080 --> 00:42:14,320
Speaker 6: of the pitch we made was if you care about confidentiality,

896
00:42:14,360 --> 00:42:16,840
Speaker 6: wish every company does when they're kind of secretly hatching

897
00:42:16,840 --> 00:42:19,200
Speaker 6: some deal is that if you have a small team,

898
00:42:19,280 --> 00:42:21,680
Speaker 6: small firm involved, you're less like a have a leak

899
00:42:21,719 --> 00:42:23,879
Speaker 6: and they have a big team, big firm involved. Sense

900
00:42:23,920 --> 00:42:25,520
Speaker 6: And you know, we used to point out that, you know,

901
00:42:25,560 --> 00:42:28,439
Speaker 6: if you imagine you know, the biggest, the Golden Sacks,

902
00:42:28,480 --> 00:42:31,719
Speaker 6: the JP Morgan, Like, just how many compliance people would

903
00:42:31,760 --> 00:42:34,000
Speaker 6: even have to hear about a specific deal before they

904
00:42:34,000 --> 00:42:36,440
Speaker 6: got approval to lend the money, to give the advice

905
00:42:36,480 --> 00:42:38,759
Speaker 6: and things like that, And so it's just a it's

906
00:42:38,800 --> 00:42:41,600
Speaker 6: a numbers game in some way. But look, it's illegal

907
00:42:41,719 --> 00:42:45,400
Speaker 6: to leak information on public deals, and it's surprising that

908
00:42:45,480 --> 00:42:48,400
Speaker 6: somehow it happens. And of course there have been insider

909
00:42:48,440 --> 00:42:50,920
Speaker 6: trading case as well, which is another form of abusing

910
00:42:51,040 --> 00:42:53,640
Speaker 6: client information that you have proud to say, Greenhill, we

911
00:42:53,680 --> 00:42:56,120
Speaker 6: never had an insider trading case, So I'm very pleased

912
00:42:56,120 --> 00:42:56,399
Speaker 6: with that.

913
00:42:57,000 --> 00:42:58,520
Speaker 3: Can I ask you a personal question?

914
00:42:58,840 --> 00:42:59,120
Speaker 5: Sure?

915
00:42:59,400 --> 00:43:01,919
Speaker 3: So there's a moment in the book where you talk

916
00:43:01,960 --> 00:43:04,880
Speaker 3: about how you're fifty one years old and about to

917
00:43:04,920 --> 00:43:09,920
Speaker 3: go on your first ever two week vacation, which is

918
00:43:10,080 --> 00:43:13,960
Speaker 3: kind of shocking. What's work life balance like? Are you

919
00:43:14,239 --> 00:43:16,600
Speaker 3: happy with the choices you made in your career? Would

920
00:43:16,640 --> 00:43:21,600
Speaker 3: you advise young students to consider going into investment banking now?

921
00:43:21,680 --> 00:43:24,040
Speaker 3: Is it better in terms of work life balance?

922
00:43:24,960 --> 00:43:27,200
Speaker 5: I'm not sure it's better. I mean I feel that.

923
00:43:27,239 --> 00:43:29,920
Speaker 6: Look, that story is true because I always felt like,

924
00:43:30,040 --> 00:43:32,520
Speaker 6: especially in the firm's early years, I played a pretty

925
00:43:32,560 --> 00:43:34,879
Speaker 6: central orl even before I was the CEO, because Bob

926
00:43:34,920 --> 00:43:36,480
Speaker 6: Greenhill was the guy. I loved to do deals and

927
00:43:36,520 --> 00:43:39,160
Speaker 6: didn't really like to manage. So I didn't feel like

928
00:43:39,200 --> 00:43:41,040
Speaker 6: I could be away very long, and so I would

929
00:43:41,080 --> 00:43:44,200
Speaker 6: take one week vacations. But now, I mean, personally, I

930
00:43:44,239 --> 00:43:46,960
Speaker 6: feel like I've got good work life balance. But everybody

931
00:43:46,960 --> 00:43:48,799
Speaker 6: has to work it out in their own way. I mean,

932
00:43:48,880 --> 00:43:50,680
Speaker 6: you know, I'm married to the same woman for forty

933
00:43:50,719 --> 00:43:52,799
Speaker 6: three years. That's got to say something. You know, I

934
00:43:52,800 --> 00:43:54,480
Speaker 6: think I didn't miss any of my kids, you know,

935
00:43:54,560 --> 00:43:58,279
Speaker 6: sports or other theater activities and so on, and you know,

936
00:43:58,360 --> 00:44:00,839
Speaker 6: and probably at the peak, my wife and I saw

937
00:44:00,920 --> 00:44:02,640
Speaker 6: maybe fifty Broadway shows a year.

938
00:44:02,880 --> 00:44:05,480
Speaker 5: You'll know, that you see. You'll see many references to

939
00:44:05,560 --> 00:44:06,280
Speaker 5: Broadway shows.

940
00:44:06,360 --> 00:44:08,839
Speaker 2: There was there a client who came along or.

941
00:44:09,680 --> 00:44:12,160
Speaker 6: In some cases but mostly but mostly us. You know,

942
00:44:12,360 --> 00:44:14,160
Speaker 6: you just say, you know, so I found my work

943
00:44:14,239 --> 00:44:16,920
Speaker 6: life balance. But the one balance I didn't have was

944
00:44:16,960 --> 00:44:19,279
Speaker 6: like long vacations, because I just didn't feel like I

945
00:44:19,320 --> 00:44:20,239
Speaker 6: could be away that long.

946
00:44:20,320 --> 00:44:22,839
Speaker 3: Well, it's funny because even in that anecdote, you end

947
00:44:22,920 --> 00:44:24,920
Speaker 3: up on a call. I think you went on safari to.

948
00:44:24,960 --> 00:44:28,080
Speaker 5: Africa, on the coast of East coast Africa. There's no

949
00:44:28,239 --> 00:44:28,719
Speaker 5: such thing.

950
00:44:28,640 --> 00:44:30,560
Speaker 2: As a vacation when you're an adult and you have

951
00:44:30,600 --> 00:44:32,279
Speaker 2: a job. I mean, I've taken no, no, no.

952
00:44:32,520 --> 00:44:36,440
Speaker 3: The real vacation is when you take gardening leaf between jobs.

953
00:44:36,480 --> 00:44:38,319
Speaker 3: If you're lucky enough to get that, that's when you

954
00:44:38,320 --> 00:44:39,280
Speaker 3: can actually relax.

955
00:44:39,360 --> 00:44:41,719
Speaker 2: This is the best time to change jobs. And iwa say

956
00:44:41,760 --> 00:44:44,319
Speaker 2: this once. There's no such thing as vacation. If you

957
00:44:44,320 --> 00:44:46,360
Speaker 2: have a serious job in a place you could maybe

958
00:44:46,400 --> 00:44:48,480
Speaker 2: not look at your email for a few hours.

959
00:44:48,560 --> 00:44:50,239
Speaker 6: Yes, can I just say one thing more about that?

960
00:44:50,560 --> 00:44:53,359
Speaker 6: It's just another little anecdote, And boy is that true.

961
00:44:53,400 --> 00:44:55,040
Speaker 6: I mean, and this is one of the things that

962
00:44:55,239 --> 00:44:57,200
Speaker 6: ultimately gets you to think you know, maybe there's a

963
00:44:57,239 --> 00:44:59,360
Speaker 6: life after this, and I should think that it is

964
00:44:59,400 --> 00:45:01,280
Speaker 6: time to sort of respond to one of these increases

965
00:45:01,280 --> 00:45:02,680
Speaker 6: to buy the firm. But you know, I also talk

966
00:45:02,760 --> 00:45:05,040
Speaker 6: in there about you know what deal that we worked

967
00:45:05,040 --> 00:45:07,880
Speaker 6: really hard on, fabulous deal, wonderful about to be announced.

968
00:45:07,920 --> 00:45:09,960
Speaker 6: And you know, and I meant, like at the at

969
00:45:09,960 --> 00:45:13,880
Speaker 6: the intermission of a play with my kids in the country,

970
00:45:13,920 --> 00:45:17,080
Speaker 6: sort of rural Berkshire, you know, summer theater thing, and

971
00:45:17,080 --> 00:45:19,239
Speaker 6: and you get this call that the thing died, I mean,

972
00:45:19,480 --> 00:45:21,439
Speaker 6: and you have to by saying the book that you

973
00:45:21,440 --> 00:45:23,319
Speaker 6: you know, your job then is like we don't ruin

974
00:45:23,360 --> 00:45:25,840
Speaker 6: your family's day, you know, keep your game face on

975
00:45:25,920 --> 00:45:28,200
Speaker 6: and just keep moving. But you know, you're right, the

976
00:45:28,280 --> 00:45:30,359
Speaker 6: bad news can come at any minute. It can come

977
00:45:30,360 --> 00:45:32,000
Speaker 6: at five in the morning when you just woke up.

978
00:45:32,040 --> 00:45:33,520
Speaker 6: It can come and you're at the you know, the

979
00:45:33,520 --> 00:45:35,719
Speaker 6: intermission of a of a show. It can come in

980
00:45:35,719 --> 00:45:37,800
Speaker 6: the middle of vacation. And that's a bit the price

981
00:45:37,840 --> 00:45:39,000
Speaker 6: you pay to be in this industry.

982
00:45:39,480 --> 00:45:43,600
Speaker 2: In recruiting these days, for bankers, is it as important

983
00:45:44,000 --> 00:45:46,319
Speaker 2: to say go to one of the best schools. You know,

984
00:45:46,360 --> 00:45:48,000
Speaker 2: people think about where their kids are going to go

985
00:45:48,080 --> 00:45:50,800
Speaker 2: and or like, you know, is it fine if someone

986
00:45:50,880 --> 00:45:54,680
Speaker 2: goes to University of Indiana or University of Mississippi or

987
00:45:54,719 --> 00:45:58,040
Speaker 2: something like that, Like how important is that pipeline? When

988
00:45:58,040 --> 00:46:02,279
Speaker 2: you think about the industry today recruiting of young bankers, I.

989
00:46:02,239 --> 00:46:04,960
Speaker 6: Think a good thing is that it has become much

990
00:46:05,120 --> 00:46:08,400
Speaker 6: more democratic in terms of this opportunity from almost everywhere.

991
00:46:08,400 --> 00:46:10,759
Speaker 6: I mean, you mentioned Indiana University actually haven't have a

992
00:46:10,800 --> 00:46:16,080
Speaker 6: great undergraduate business school, and they've sent a lot of recruiteduation. No,

993
00:46:16,160 --> 00:46:18,319
Speaker 6: but it used to be when I started out. I mean,

994
00:46:18,520 --> 00:46:20,960
Speaker 6: I think at Morgan Stanley we recruited at very few

995
00:46:21,000 --> 00:46:24,040
Speaker 6: schools under read or even fewer NBA schools, and and

996
00:46:24,080 --> 00:46:26,279
Speaker 6: at green Hill was kind of the same way. But

997
00:46:26,320 --> 00:46:28,960
Speaker 6: over time, and partly because the industry needed so much talent,

998
00:46:29,320 --> 00:46:30,719
Speaker 6: you know, then you sort of started going to the

999
00:46:30,760 --> 00:46:32,720
Speaker 6: big ten, and then you start going to the smaller

1000
00:46:32,760 --> 00:46:35,200
Speaker 6: liberal arts schools, and you start going to the Southeast schools,

1001
00:46:35,200 --> 00:46:38,359
Speaker 6: and and now I think young people who you know,

1002
00:46:38,400 --> 00:46:40,960
Speaker 6: who work hard, who take enough of the stems stuff

1003
00:46:40,960 --> 00:46:42,920
Speaker 6: to be able to do the math, to be a banker,

1004
00:46:43,160 --> 00:46:45,680
Speaker 6: they can come from almost anywhere and build a great career.

1005
00:46:46,200 --> 00:46:49,040
Speaker 3: So I think you told one of our fellow journalists,

1006
00:46:49,040 --> 00:46:52,040
Speaker 3: Sujit Endapp, who has actually been on this podcast as well,

1007
00:46:52,160 --> 00:46:55,359
Speaker 3: but you described your role on Wall Street as kind

1008
00:46:55,400 --> 00:46:59,680
Speaker 3: of like being Forrest Gump, so not necessarily the most

1009
00:46:59,800 --> 00:47:03,040
Speaker 3: important guy in the room, but someone who had a

1010
00:47:03,080 --> 00:47:06,239
Speaker 3: front row seat to all these really big moments in

1011
00:47:06,360 --> 00:47:09,960
Speaker 3: financial history. When I think of Forrest Gump, I think

1012
00:47:09,960 --> 00:47:12,359
Speaker 3: of how surreal a lot of those scenes are, and

1013
00:47:12,400 --> 00:47:14,960
Speaker 3: you know, Forrest Gump in the White House and things

1014
00:47:15,000 --> 00:47:15,359
Speaker 3: like that.

1015
00:47:15,400 --> 00:47:18,319
Speaker 5: With MLK and the Washington That's right, What.

1016
00:47:18,160 --> 00:47:21,719
Speaker 3: Was the most surreal moment for you looking back on

1017
00:47:21,760 --> 00:47:22,040
Speaker 3: it all?

1018
00:47:23,040 --> 00:47:28,320
Speaker 6: Wow, it's really hard to pick out one, I would say.

1019
00:47:28,400 --> 00:47:30,360
Speaker 6: I mean, it's funny I flippantly came up with a

1020
00:47:30,400 --> 00:47:32,560
Speaker 6: Forrest Gump line because, you know, because I think I'll

1021
00:47:32,560 --> 00:47:32,759
Speaker 6: tell you.

1022
00:47:32,760 --> 00:47:33,160
Speaker 5: I'll tell you.

1023
00:47:33,200 --> 00:47:35,640
Speaker 6: One thing I think got my career ahead is I

1024
00:47:35,640 --> 00:47:37,560
Speaker 6: didn't feel like I always needed to be the most

1025
00:47:37,560 --> 00:47:39,280
Speaker 6: important guy in the room, and so I was happy

1026
00:47:39,280 --> 00:47:41,800
Speaker 6: to let you know, Bob Greenhill's a generation old to

1027
00:47:41,880 --> 00:47:43,840
Speaker 6: me be a more senior, more important guy. And by

1028
00:47:43,880 --> 00:47:46,560
Speaker 6: the way, if you stay in the advisory business, I mean,

1029
00:47:46,640 --> 00:47:49,000
Speaker 6: your client should always be more important than you, so

1030
00:47:49,080 --> 00:47:51,400
Speaker 6: you have to kind of subordinate yourself to the CEO,

1031
00:47:51,480 --> 00:47:53,320
Speaker 6: the chairman of the board. I mean, you're whispering in

1032
00:47:53,360 --> 00:47:55,839
Speaker 6: the ear, You're giving them great advice. Often you're giving

1033
00:47:55,840 --> 00:47:57,799
Speaker 6: that advice to the whole board. But it's not all

1034
00:47:57,800 --> 00:48:00,720
Speaker 6: about you. You know, it's supposed to be about the client,

1035
00:48:00,800 --> 00:48:03,600
Speaker 6: subjective and so on. So, you know, lucky for me

1036
00:48:03,760 --> 00:48:06,680
Speaker 6: being at the firm i was at, I did end up,

1037
00:48:06,840 --> 00:48:10,520
Speaker 6: almost like Forrest Gump, being in an interesting spot for

1038
00:48:10,560 --> 00:48:13,440
Speaker 6: the dot com crash, the financial crisis, nine to eleven,

1039
00:48:13,560 --> 00:48:15,799
Speaker 6: the COVID. I mean, I sort of saw all those,

1040
00:48:15,880 --> 00:48:18,239
Speaker 6: and you know, I'm not sure what I would pick

1041
00:48:18,320 --> 00:48:20,719
Speaker 6: with the most surreal, But that's a that's a really

1042
00:48:20,719 --> 00:48:22,640
Speaker 6: good question, because there were a lot of them where,

1043
00:48:22,760 --> 00:48:24,799
Speaker 6: you know, where you just kind of can't believe you're

1044
00:48:25,040 --> 00:48:28,160
Speaker 6: you're there at kind of this critical, kind of pivotal

1045
00:48:28,200 --> 00:48:29,640
Speaker 6: moment during one of these crises.

1046
00:48:29,920 --> 00:48:33,960
Speaker 2: There is this backlash to globalization happening. There is people,

1047
00:48:34,160 --> 00:48:38,439
Speaker 2: there's on many levels, there's the security concerns. People feel

1048
00:48:38,480 --> 00:48:41,080
Speaker 2: a certain sense of sadness that like, you know, the

1049
00:48:41,120 --> 00:48:44,479
Speaker 2: local potato chip maker got bought and is now part

1050
00:48:44,520 --> 00:48:46,799
Speaker 2: of Free Too Lay or whatever, and that brand that

1051
00:48:46,840 --> 00:48:49,480
Speaker 2: they loved as a child, and like I get you know,

1052
00:48:49,719 --> 00:48:52,720
Speaker 2: these things that you describe which were sort of pivotal

1053
00:48:52,760 --> 00:48:55,640
Speaker 2: to this expansion of the global economy and so forth.

1054
00:48:56,160 --> 00:48:58,799
Speaker 2: Do you have any regrets or change of perspective on

1055
00:48:58,840 --> 00:49:01,440
Speaker 2: some of these questions over time about the sort of

1056
00:49:01,719 --> 00:49:05,080
Speaker 2: the zeal with which many people were spreading the shareholder

1057
00:49:05,200 --> 00:49:10,080
Speaker 2: value mission and the sort of perhaps understandable loss of

1058
00:49:10,160 --> 00:49:13,880
Speaker 2: like their local environment, what made their area distinct, et cetera,

1059
00:49:14,280 --> 00:49:16,640
Speaker 2: when you look back over it, what is your perspective

1060
00:49:16,680 --> 00:49:16,920
Speaker 2: on that?

1061
00:49:17,360 --> 00:49:17,560
Speaker 5: Look?

1062
00:49:17,600 --> 00:49:20,719
Speaker 6: I think an interesting book for somebody other than me

1063
00:49:20,840 --> 00:49:24,520
Speaker 6: to write would be where do we go next? In

1064
00:49:24,560 --> 00:49:27,759
Speaker 6: what I would call the whole transaction ecosystem? Because I

1065
00:49:27,800 --> 00:49:30,080
Speaker 6: know when I started out, I mean I talked about

1066
00:49:30,080 --> 00:49:32,040
Speaker 6: how the nineteen seventies, again I was a very very

1067
00:49:32,040 --> 00:49:35,000
Speaker 6: young person then was kind of a stagnant decade, really

1068
00:49:35,160 --> 00:49:37,680
Speaker 6: very little economic growth, very in the you know, stock

1069
00:49:37,719 --> 00:49:41,400
Speaker 6: market growth, et cetera. I think the country needed a

1070
00:49:41,480 --> 00:49:45,120
Speaker 6: real jolt of energy and activity and kind of a

1071
00:49:45,320 --> 00:49:48,239
Speaker 6: market for new shareholders to take over companies and run

1072
00:49:48,239 --> 00:49:50,640
Speaker 6: them differently. You know, at some point there's got to

1073
00:49:50,640 --> 00:49:53,440
Speaker 6: be diminishing returns on that and we now have this

1074
00:49:53,560 --> 00:49:55,840
Speaker 6: huge industry of lawyers and bankers to sort of do

1075
00:49:55,960 --> 00:49:58,040
Speaker 6: that kind of thing, and you know, I think it's

1076
00:49:58,040 --> 00:50:01,000
Speaker 6: a legitimate question should there be some constraints on that.

1077
00:50:01,239 --> 00:50:03,960
Speaker 6: So that's a question to be answered for the future.

1078
00:50:04,000 --> 00:50:07,360
Speaker 2: I think Scott Boch the book is Surviving Wall Street,

1079
00:50:07,400 --> 00:50:10,120
Speaker 2: a tale of triumph, tragedy and timing. Thank you so

1080
00:50:10,239 --> 00:50:12,960
Speaker 2: much for coming on Odd Life. That was fantastic, Thank you.

1081
00:50:13,160 --> 00:50:27,640
Speaker 5: I really enjoyed it. Thank you, Tracy.

1082
00:50:27,680 --> 00:50:30,439
Speaker 2: I really liked talking to Scott, and there's a lot

1083
00:50:30,520 --> 00:50:33,000
Speaker 2: in there, but just this idea of bankers as the

1084
00:50:33,080 --> 00:50:38,480
Speaker 2: missionary of a sort of shareholder value thinking about corporations

1085
00:50:38,480 --> 00:50:40,719
Speaker 2: and capitalism, super interesting thing to.

1086
00:50:40,760 --> 00:50:44,640
Speaker 3: Think about, absolutely, and coming with their talking points about synergy.

1087
00:50:44,920 --> 00:50:45,840
Speaker 2: Oh yeah, totally.

1088
00:50:45,880 --> 00:50:47,120
Speaker 3: The other thing I was thinking of.

1089
00:50:47,360 --> 00:50:49,600
Speaker 2: So economies of scale, that's right.

1090
00:50:50,239 --> 00:50:51,400
Speaker 3: One thing I hadn't considered.

1091
00:50:51,480 --> 00:50:51,640
Speaker 1: You know.

1092
00:50:51,680 --> 00:50:55,799
Speaker 3: He talked about how low share prices can be like

1093
00:50:55,800 --> 00:50:59,279
Speaker 3: a form of discipline on corporate management, because if you

1094
00:50:59,360 --> 00:51:01,560
Speaker 3: have a low share price, than someone's going to start

1095
00:51:01,560 --> 00:51:04,600
Speaker 3: eyeing you and going, well, we could just buy that thing,

1096
00:51:04,719 --> 00:51:07,920
Speaker 3: and then you're probably going to be ousted as management.

1097
00:51:07,960 --> 00:51:10,280
Speaker 3: I hadn't really considered that. But it is true.

1098
00:51:10,520 --> 00:51:13,719
Speaker 2: Yeah, no, it's totally true. And it's a hard constraint

1099
00:51:14,000 --> 00:51:18,480
Speaker 2: on the ability of any management team to prioritize anything

1100
00:51:18,640 --> 00:51:20,360
Speaker 2: of the shareholder value. So it's like, I'm sure you

1101
00:51:20,400 --> 00:51:23,320
Speaker 2: know they'ah like, well, we want to keep people employed

1102
00:51:23,320 --> 00:51:26,359
Speaker 2: in this country because we've always had a history in

1103
00:51:26,400 --> 00:51:30,239
Speaker 2: this country. Well, if that's not profitable, productive employment, it's

1104
00:51:30,280 --> 00:51:32,200
Speaker 2: going to be a drag on your stock price. And

1105
00:51:32,239 --> 00:51:35,160
Speaker 2: you create the opportunity for one of your competitors to

1106
00:51:35,440 --> 00:51:37,960
Speaker 2: buy you, and then they're gonna they who have no

1107
00:51:38,000 --> 00:51:41,120
Speaker 2: emotional resonance with this place, they'll do the hard job

1108
00:51:41,600 --> 00:51:46,200
Speaker 2: of laying off the workers. And I get why. You know, frankly,

1109
00:51:46,320 --> 00:51:50,360
Speaker 2: it's not surprising to me why there are individuals and

1110
00:51:50,400 --> 00:51:53,319
Speaker 2: businesses and politicians who want to curb that.

1111
00:51:54,160 --> 00:51:57,120
Speaker 3: It all comes down to incentives, doesn't it. That's really

1112
00:51:57,120 --> 00:51:59,200
Speaker 3: what drives everything. All right, shall we leave it there,

1113
00:51:59,280 --> 00:52:01,400
Speaker 3: Let's leave it there. This has been another episode of

1114
00:52:01,400 --> 00:52:04,279
Speaker 3: the Odd Lots podcast. I'm Tracyalloway. You can follow me

1115
00:52:04,440 --> 00:52:05,920
Speaker 3: at Tracy Aalloway.

1116
00:52:05,600 --> 00:52:08,400
Speaker 2: And I'm Jill Wisenthal. You can follow me at The Stalwart.

1117
00:52:08,840 --> 00:52:12,000
Speaker 2: Check out Scott's book Surviving Wall Street, A tale of triumph,

1118
00:52:12,120 --> 00:52:15,640
Speaker 2: tragedy and timing that's now out. Follow our producers Carmen

1119
00:52:15,719 --> 00:52:18,759
Speaker 2: Rodriguez at Carman armand dash Ol Bennett at Dashbot and

1120
00:52:18,840 --> 00:52:21,759
Speaker 2: Kilbrooks at Kilbrooks. For more Odd Loots content, go to

1121
00:52:21,800 --> 00:52:24,000
Speaker 2: Bloomberg dot com slash odd Lots, where we have a

1122
00:52:24,080 --> 00:52:26,880
Speaker 2: daily newsletter and all of our episodes, and you can

1123
00:52:26,960 --> 00:52:29,479
Speaker 2: chet about all of these topics with fellow listeners twenty

1124
00:52:29,520 --> 00:52:33,360
Speaker 2: four seven in our discord Discord dot gg slash odlog.

1125
00:52:33,719 --> 00:52:36,080
Speaker 3: And if you enjoy Odd Lots, if you like it

1126
00:52:36,120 --> 00:52:37,920
Speaker 3: when we talk about the life of an m and

1127
00:52:37,960 --> 00:52:40,360
Speaker 3: a banker, then please leave us a positive review on

1128
00:52:40,440 --> 00:52:43,440
Speaker 3: your favorite podcast platform. And remember, if you are a

1129
00:52:43,480 --> 00:52:46,879
Speaker 3: Bloomberg subscriber, you can listen to all of our episodes

1130
00:52:47,000 --> 00:52:49,480
Speaker 3: absolutely ad free. All you need to do is find

1131
00:52:49,520 --> 00:52:53,040
Speaker 3: the Bloomberg channel on Apple Podcasts and follow the instructions there.

1132
00:52:53,360 --> 00:53:02,160
Speaker 3: Thanks for listening

1133
00:53:10,960 --> 00:53:11,000
Speaker 4: In