WEBVTT - TPG Founding Partner & Chairman Jim Coulter Talks David Bonderman's Legacy

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>So, David Bondman, it's amazing to read about his impact

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<v Speaker 2>on the broader investment world. He is a one of

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<v Speaker 2>the best known names, one of the icons. You knew

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<v Speaker 2>him better than anybody in this business. What specifically did

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<v Speaker 2>he bring to this business that was unique to him?

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<v Speaker 1>David really is a legend in the industry. But he's

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<v Speaker 1>a legend for several reasons, and I think there's three

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<v Speaker 1>particular things. First of all, he pioneered a type of investing. Secondly,

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<v Speaker 1>he built a firm that had a distinctive place in

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<v Speaker 1>the industry. And thirty had a really interesting personal style

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<v Speaker 1>that I think helped evolve the style of this industry.

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<v Speaker 1>And So what did he do, how did that work

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<v Speaker 1>in practice?

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<v Speaker 2>What was he doing as a deal maker that really

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<v Speaker 2>set him apart?

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<v Speaker 1>David did deal making as problem solving. So if you

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<v Speaker 1>think about some of his signature deals, they were deals

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<v Speaker 1>that everyone saw but no one else was willing to

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<v Speaker 1>take on. And it wasn't that he was taking on

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<v Speaker 1>more risk, it was that he saw something different. Take

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<v Speaker 1>the Continental Airlines deal, a legendary deal in the industry,

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<v Speaker 1>the most hated company in America, the biggest bankruptcy in

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<v Speaker 1>US history had sat there for two years. Dave and

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<v Speaker 1>I put together a deal that carved out a new

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<v Speaker 1>continental and took it from worse to first in seven years.

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<v Speaker 1>It was Warren Buffett said that airlines were financial sinkholes.

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<v Speaker 1>David over and over made successful investments in airlines. When

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<v Speaker 1>others saw the SNL crisis, David saw the SNL opportunity.

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<v Speaker 1>We created the good bank bad bank structure for American

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<v Speaker 1>savings when working with Bess, and then we exported that

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<v Speaker 1>structure around the world to do bank rescues in China,

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<v Speaker 1>in Korea, again deals that no one else did, and

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<v Speaker 1>that a problem solving approach really appeared a moment that

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<v Speaker 1>the industry was mostly about changing capital structures, not companies.

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<v Speaker 2>All right, So you said something to me before we

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<v Speaker 2>came on air which I found fascinating, which is that

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<v Speaker 2>David was a polymath investor. The Blueberg audience is pretty smart,

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<v Speaker 2>but you need to break this down what that actually

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<v Speaker 2>means in practice.

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<v Speaker 1>Poly Math is from the Greek and it's basically a

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<v Speaker 1>person who has broad and diverse interests but uses that

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<v Speaker 1>knowledge and interest to solve problems and So David really

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<v Speaker 1>didn't come to investing until his forties. Yeah, think about that.

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<v Speaker 1>He had several careers before he was a litigator. He

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<v Speaker 1>was argued in front of the Supreme Court. He taught

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<v Speaker 1>law Tulane, he studied Islamic law on Tunis. This was

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<v Speaker 1>a person that never took a finance class, didn't know accounting,

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<v Speaker 1>and yet he brought that broad experience and problem solving

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<v Speaker 1>expertise to the problems of investing. And his ability to

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<v Speaker 1>use different experiences he had to solve problems I think

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<v Speaker 1>really created his style, and it's a polymass style. It

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<v Speaker 1>was not one thing. It was a unique ability to

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<v Speaker 1>see opportunity and frankly solve problems well.

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<v Speaker 2>And it translated into him being, I have to say,

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<v Speaker 2>one of those eclectic, maybe eccentric sort of figures in

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<v Speaker 2>an industry that didn't always certainly the broader Wall Street

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<v Speaker 2>doesn't always sort of embrace change.

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<v Speaker 1>So how was he received in this broader Wall Street world?

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<v Speaker 1>In your estimation, David was many things, but he was

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<v Speaker 1>never boring. We used to laugh that David often brought

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<v Speaker 1>like a rock and roll backbeat into rooms that were

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<v Speaker 1>used to classical music. It was a very different style.

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<v Speaker 1>He was known for his ridiculous socks. I mean they

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<v Speaker 1>were just ridiculous. When others were drinking fine wine, he

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<v Speaker 1>was drinking diet coke. He's flew one thousand hours a

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<v Speaker 1>year to meetings anywhere. It's a very personal thing for him.

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<v Speaker 1>And his style was informal, it was direct. He couldn't

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<v Speaker 1>stand obfuscation. And that style was sort of a different

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<v Speaker 1>a different wind in the industry at the time, and

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<v Speaker 1>it opened up the opportunity for different types of styles

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<v Speaker 1>to really flourish. It's an industry that had incredible talent

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<v Speaker 1>among its founding brethren, but David brought I think a

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<v Speaker 1>little bit of a different attitude and frankly, you know,

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<v Speaker 1>a lot of fun into a very serious business. And

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<v Speaker 1>so how do you be able to firm around that?

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<v Speaker 2>I mean that you can be sort of a you know,

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<v Speaker 2>sort of an iconoclast as a single person.

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<v Speaker 1>You know, maybe as a small firm.

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<v Speaker 2>You guys started out as three people in ninety two,

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<v Speaker 2>ninety three, but now thousands of employees, quarter trillion dollars

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<v Speaker 2>in assets. How does that sort of grow into something

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<v Speaker 2>this big.

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<v Speaker 1>I've been doing this long time. Culture and curiosity, so

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<v Speaker 1>in some ways, what we described you and I about

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<v Speaker 1>David became how you would describe PPG in some ways.

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<v Speaker 1>At a time that the industry was very much about finance,

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<v Speaker 1>was very much focused in New York. We came out

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<v Speaker 1>of a family off in Texas. We set up on

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<v Speaker 1>the West Coast. I used to say that when you

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<v Speaker 1>do sports a lot, Jason, that we were playing the

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<v Speaker 1>same game, but differently. We were the West Coast offense

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<v Speaker 1>of private equity. And to do that you have to

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<v Speaker 1>get a culture of curiosity and problem solving. And I

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<v Speaker 1>think at the first fundraise we did for TPG, our

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<v Speaker 1>tagline was contrarianism, complexity, and change. At a time the

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<v Speaker 1>industry was more focused on franchise businesses and finance. Contrarianism, complexity,

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<v Speaker 1>and change. And I think those lines of problem solving

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<v Speaker 1>and a different approach really were what David brought to

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<v Speaker 1>the business in the early days.

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<v Speaker 2>Not afraid to take big swings, I mean, was that

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<v Speaker 2>but part of his ethos do you think, like being

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<v Speaker 2>able to really go big on something.

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<v Speaker 1>It was never about ego or size. It was about

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<v Speaker 1>really interesting problems and sometimes we got it wrong. Yeah,

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<v Speaker 1>if you're doing this type of investing. You know, five

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<v Speaker 1>percent of the time you'll make mistakes, and probably you

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<v Speaker 1>should be making that sort of risk. But the key

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<v Speaker 1>is never make the same mistakes if you can help it,

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<v Speaker 1>and importantly learn from all of them. And David and

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<v Speaker 1>I think our firm has been a lifelong learner on those.

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<v Speaker 1>So I think somehow we've been able to grow with

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<v Speaker 1>the industry but still keep some of that essence of

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<v Speaker 1>doing it a little differently and looking at new deals.

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<v Speaker 1>I mean even today, as you know, Jason, we've taken

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<v Speaker 1>on impact investing, climate investing. These are new things, new problems,

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<v Speaker 1>done in a new way, and that ethos I think

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<v Speaker 1>was what we started with almost forty years ago, and

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<v Speaker 1>we've tried to very much guard today.

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<v Speaker 2>How did you build a partnership with him? You guys

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<v Speaker 2>are not the same You showed up in Texas? You know,

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<v Speaker 2>Dartmouth undergrad, Stanford Business School, He was a University of

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<v Speaker 2>Washington bankruptcy lawyer, save Grand Central. How does that marriage

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<v Speaker 2>of a sort happen?

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<v Speaker 1>I think there's two types of partnerships. One are people

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<v Speaker 1>who are very much the same, almost can complete each

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<v Speaker 1>other's senses. The other type of partnership are people who

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<v Speaker 1>are very different but share the same values. And I

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<v Speaker 1>think David and I brought different skill sets, different views

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<v Speaker 1>of the world, but values on fairness, the idea of

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<v Speaker 1>you can leave the last cent on the table to

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<v Speaker 1>create a win win, and we agreed on the type

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<v Speaker 1>of firm and culture we wanted to build, so complimented

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<v Speaker 1>each other, respected each other, but also brought some balance

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<v Speaker 1>to the equation.

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<v Speaker 2>How do you think he changed you as an investor

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<v Speaker 2>and as an executive.

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<v Speaker 1>I think David was, as well as being a great investor,

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<v Speaker 1>simply a great business person. You know, he served on

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<v Speaker 1>eighty different corporate boards. Who does that? Eighty different corporate boards,

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<v Speaker 1>from GM to Dakati, from Behringer to Burger King. Immensely diverse,

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<v Speaker 1>and that viewpoint, something that was often underestimated with David,

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<v Speaker 1>really helped me be a better businessman. It's about being straightforward,

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<v Speaker 1>about seeing different things. It's about patients from time to time,

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<v Speaker 1>and even when things go wrong, you don't step back,

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<v Speaker 1>you step in. So I think his polymath skills really

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<v Speaker 1>extended into the business world.

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<v Speaker 2>All right, I mentioned earlier this is a massive, massive

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<v Speaker 2>industry at this point that what we used to call

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<v Speaker 2>private equity, it's now alternative investing. These firms, including yours,

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<v Speaker 2>are doing lots of different things.

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<v Speaker 1>How do you take that Bonderman.

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<v Speaker 2>Ethos, you know, the sort of like you know he's

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<v Speaker 2>calling into an investment committee, meaning from Tim buck to

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<v Speaker 2>to you know, now a publicly traded company. How do

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<v Speaker 2>you maintain that essence? Because I know that culture is

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<v Speaker 2>something that's important to you, you study it, how do

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<v Speaker 2>you really institutionalize that culture fight conformity.

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<v Speaker 1>In all ways? I think if you were starting this

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<v Speaker 1>business today, sometimes I think the people who are looking

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<v Speaker 1>at it feel they have to learn finance in their

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<v Speaker 1>crip and have to go through internships. David came to this,

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<v Speaker 1>as I said before ines, he brought that wide set

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<v Speaker 1>of experiences, and I think the understanding that you can

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<v Speaker 1>ask different questions, approach problems in different ways is something

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<v Speaker 1>the industry needs to say true to today. So that spirit,

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<v Speaker 1>the spirit of problem solving, curiosity, a little bit of

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<v Speaker 1>courage put together with a broad view, is something the

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<v Speaker 1>industry still needs to say. And I think the industry

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<v Speaker 1>is delivering that immense talent in the industry. We have

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<v Speaker 1>to just make sure that it's not delivered in one Way.

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<v Speaker 2>And so as he sort of kind of moved on

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<v Speaker 2>from the firm, and we'll talk a little bit about

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<v Speaker 2>what he was doing in the latter years of his life.

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<v Speaker 2>You know, how did you know, how did you sort

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<v Speaker 2>of honor his legacy?

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<v Speaker 1>How did he stay involved? Well, David always had broad

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<v Speaker 1>interests and one of the interesting things about his career

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<v Speaker 1>is he's mentored and spawned many businesses and helped many businesses,

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<v Speaker 1>from Mark Lazari to Tom Barrick to Mark's Stad to

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<v Speaker 1>Way Jan Sean. There are disciples around the industry that

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<v Speaker 1>have picked up some of his investing style in ethos

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<v Speaker 1>and he continued to do that as he continued to

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<v Speaker 1>have a TPG as a cornerstone. But he went on,

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<v Speaker 1>as you know, to be active in sports. And yes

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<v Speaker 1>he had been an investor in the Celtics, but he

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<v Speaker 1>did a typical Bondo thing. By the way, just the

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<v Speaker 1>nickname Bondo was different in the industry. He did a

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<v Speaker 1>typical Bondo thing, which is he took on a problem

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<v Speaker 1>no one else would bringing back a team indoors in Seattle,

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<v Speaker 1>rebuilt an arena where he had worked as a security

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<v Speaker 1>guard when he was an undergrad at university of Washington,

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<v Speaker 1>and we were listening there to TPG founding partner James

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<v Speaker 1>Coulter reflecting on the life and legacy of his business

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<v Speaker 1>partner David Bonderman, a legend in the world of private equity,

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<v Speaker 1>who passed away yesterday at the age of eighty two.