WEBVTT - Marcus Shaw on Diversity in Wall Street and Finance 0:00:02.000 --> 0:00:07.160 This is Mesters in Business with Very Results on Bloomberg Radio. 0:00:09.039 --> 0:00:11.840 This week on the podcast, I have another special guest. 0:00:11.920 --> 0:00:15.440 His name is Marcus Shaw. He has really a fascinating 0:00:16.040 --> 0:00:20.360 UM career and a focus these days. He really began 0:00:20.600 --> 0:00:27.680 as a traditional engineer slash finance person, working at IBM 0:00:27.720 --> 0:00:30.120 as a network engineer before he got his m b 0:00:30.280 --> 0:00:35.559 a at Duke and from there did the usual research 0:00:35.640 --> 0:00:39.160 and investment banking gigs throughout a lot of Wall Street 0:00:39.760 --> 0:00:44.560 before the opportunity came to help entrepreneurs develop and grow 0:00:44.640 --> 0:00:50.160 their businesses in places like Alabama and Tennessee, which ultimately 0:00:50.280 --> 0:00:54.240 led him uh to participate in the founding of of 0:00:54.320 --> 0:00:58.840 a new firm called Old Finance, which was created by 0:00:59.440 --> 0:01:03.120 really a group of um for lack of a better word, 0:01:03.520 --> 0:01:07.600 of finance royalty. It's Howard Marks of oak Tree Capital. 0:01:08.080 --> 0:01:13.280 It's Tony Wrestler of Aries, Mark Rowan of Apollo Global. 0:01:13.840 --> 0:01:16.960 These three gentlemen said, we're lacking the ability to tap 0:01:17.040 --> 0:01:22.240 into a very rich, diverse talent pool, including historically black 0:01:22.319 --> 0:01:26.240 colleges and universities, venture capital, private equity. Just we're not 0:01:26.319 --> 0:01:29.360 recruiting from those spaces, and so they stood up a 0:01:29.400 --> 0:01:33.759 firm called Old Finance, whose main purpose was to help 0:01:33.920 --> 0:01:39.080 alternative asset managers tap into that rich pool of potential 0:01:39.160 --> 0:01:42.880 hires UH. Marcus shaw works with them, and he's the 0:01:42.920 --> 0:01:46.160 CEO of Ald Finance. I found this to be really 0:01:46.640 --> 0:01:52.520 a fascinating conversation about how to access the most skilled 0:01:53.040 --> 0:01:57.080 UH partners and and employees, what can be done to 0:01:57.400 --> 0:02:02.640 shake up a relatively stayed industry that has lagged behind 0:02:02.720 --> 0:02:07.680 its peers in terms of recruiting and other things, and 0:02:07.680 --> 0:02:12.160 and really how to help have a major impact UH 0:02:12.200 --> 0:02:14.760 in the world's of finance. And I found this conversation 0:02:14.760 --> 0:02:17.600 to be fascinating and I think you will also, so, 0:02:17.680 --> 0:02:21.919 with no further ado, my interview with Marcus shaw Berry. 0:02:22.160 --> 0:02:24.320 Thank you so much for inviting me. I'm excited to 0:02:24.760 --> 0:02:27.880 chat with you. So let's talk a little bit about 0:02:28.520 --> 0:02:32.600 Wall Street and diversity. Wall Street has been pretty bad 0:02:32.639 --> 0:02:37.680 at recruiting black talent. It's been a stated objective for decades. 0:02:38.080 --> 0:02:42.919 Why is finance so bad at this? Barry? I think 0:02:42.960 --> 0:02:46.520 there it's a complex question, UM that requires actually a 0:02:46.520 --> 0:02:51.919 complex solution and a multifacet solution. I would say the 0:02:51.960 --> 0:02:57.040 most general issue here is that folks don't have the 0:02:57.120 --> 0:03:01.920 networks and the access to careers in finance from across 0:03:01.960 --> 0:03:05.440 the country. Right, So, if you grow up in New York, yeah, 0:03:05.480 --> 0:03:08.600 you'll probably know some people that worked in the industry, 0:03:08.760 --> 0:03:11.120 and you may have some relationships, you may go to 0:03:11.160 --> 0:03:13.400 school with somebody, your parent may work there. And that's 0:03:13.400 --> 0:03:16.560 whether you're white or black, all right. Um. But if 0:03:16.600 --> 0:03:19.560 you don't, if you grow up in a market where 0:03:19.560 --> 0:03:21.960 there's not an investment bank, there's nothing other than a 0:03:22.000 --> 0:03:26.800 branch bank for one of the multidimensional financials, then you're 0:03:26.960 --> 0:03:30.400 not really going to have an understanding of what that 0:03:30.480 --> 0:03:33.160 career looks like at a young age. And so as 0:03:33.200 --> 0:03:35.120 you get ready to go to college and you start 0:03:35.160 --> 0:03:38.280 thinking about what your career good look like, it's gonna 0:03:38.360 --> 0:03:41.960 be primarily academic for you. Um. And so I think 0:03:42.000 --> 0:03:44.760 that's always a challenge that they're not a ton of people. 0:03:45.200 --> 0:03:49.640 They're in the seats they're getting access to, in this case, 0:03:49.920 --> 0:03:53.480 black students from across the country. They're giving them a 0:03:53.520 --> 0:03:55.600 look at this is what a career could look like 0:03:55.680 --> 0:03:57.800 for you, This is what an opportunity could look like 0:03:57.880 --> 0:04:01.800 for you. Here's what the real with possibilities is. And 0:04:01.880 --> 0:04:04.640 this primarily is how you get there. Here's a path 0:04:05.040 --> 0:04:08.320 to get there. Um, that's the biggest challenge. So, so 0:04:08.400 --> 0:04:11.880 tell us about all Finance, what is its mission and 0:04:12.200 --> 0:04:14.360 why is this a better masse trap than the way 0:04:14.680 --> 0:04:18.599 things have been done before. So All Finance is focused 0:04:18.640 --> 0:04:22.720 on building diversity in the alternative investment industry. Alternatives being 0:04:22.880 --> 0:04:27.919 venture capital, private equity, anything else, private credit, real estate investing, 0:04:28.040 --> 0:04:31.919 hedge funds, um everything kind of outside of traditional stock 0:04:32.040 --> 0:04:35.600 and bond investment. Right the things that are more private 0:04:35.720 --> 0:04:41.160 market driven often and so our goal is increased diversity 0:04:41.200 --> 0:04:45.240 in that space by working with partnerships at historically black 0:04:45.240 --> 0:04:51.479 colleges and universities, by providing students from HBCUs opportunities to 0:04:51.600 --> 0:04:55.760 have co curricular programming understanding you know exactly what you 0:04:55.839 --> 0:04:59.040 need to know to be successful in that role. Also 0:04:59.080 --> 0:05:01.600 to provide mentors ship for students so that they're not 0:05:01.640 --> 0:05:04.000 operating in a vacuum, so that when they have questions 0:05:04.320 --> 0:05:06.839 there are people in the business, people that have experienced 0:05:06.880 --> 0:05:09.599 in the business that they can talk to. And also 0:05:09.720 --> 0:05:14.040 by working and partnering with schools to provide um financial 0:05:14.040 --> 0:05:16.919 support to help increase capacity not only for students, but 0:05:17.000 --> 0:05:19.560 also for the institutions themselves. So let's talk a little 0:05:19.600 --> 0:05:24.599 bit about how old Finance was initially funded and created. 0:05:25.120 --> 0:05:29.839 You have Howard Marks of oak Tree Capital, Um, Mark 0:05:30.000 --> 0:05:34.960 Rowan of Apollo, Tony Wrestler of of Aries. These are 0:05:35.040 --> 0:05:40.760 like three heavy hitters at giant legendary firms. That's a 0:05:40.760 --> 0:05:44.800 heavy group to to work with. What led them to say, 0:05:45.200 --> 0:05:48.520 we need help accessing black talent and we're not getting 0:05:48.520 --> 0:05:51.320 it from anywhere else, we have to do it ourselves. 0:05:52.160 --> 0:05:55.160 What I think all three gentlemen, and you know Howard, 0:05:55.200 --> 0:05:58.800 Mark and Tony all recognized is that relationships help drive value, 0:05:59.120 --> 0:06:02.440 and so you've got to have relationships with the schools 0:06:02.480 --> 0:06:05.400 and the places where there is a lot of black talent. 0:06:05.600 --> 0:06:08.279 And I think they saw HBC used as an opportunity 0:06:08.320 --> 0:06:11.960 for that. I think what's important, though, and what's key, 0:06:12.240 --> 0:06:15.960 is that we found ourselves at a very interesting point 0:06:15.960 --> 0:06:19.320 in time in the wake of George Floyd, in the 0:06:19.320 --> 0:06:23.760 middle of COVID, and so I think everybody around the world, 0:06:23.839 --> 0:06:27.680 business leaders from across multiple industries, we're trying to think 0:06:27.720 --> 0:06:30.919 about how can we make the world a better place, 0:06:30.960 --> 0:06:34.760 How can we address um racial equity in a way 0:06:34.800 --> 0:06:38.080 that's specific to the businesses that we operate in and 0:06:38.120 --> 0:06:40.440 I think that's the key, right. This was not just 0:06:40.600 --> 0:06:44.159 about you know, going out and being philanthropic, right and 0:06:44.200 --> 0:06:47.520 making one time gifts. This was about how can you 0:06:47.640 --> 0:06:53.320 be UM strategic in building partnerships over the long term 0:06:53.640 --> 0:06:56.480 they're going to have a systemic impact in the industry 0:06:56.480 --> 0:06:59.400 in which you operate. And that's where I really think 0:06:59.440 --> 0:07:02.760 that that the three firms led by again Howard Tonian 0:07:02.839 --> 0:07:06.600 Mark really found something that was special and something that was, 0:07:06.720 --> 0:07:09.400 you know, a better solution to a question that Wall 0:07:09.400 --> 0:07:11.480 Street has been dealing with for years. So so is 0:07:11.520 --> 0:07:15.880 it safe to say that Wall Street in general, but 0:07:16.120 --> 0:07:20.680 alternatives like private equity and venture capital, we're not recruiting 0:07:20.680 --> 0:07:25.640 at historically black colleges and universities. Was that void out 0:07:25.680 --> 0:07:29.160 there forever? I think that it was not systemic, right, 0:07:29.160 --> 0:07:33.720 There was no systemic recruiting UM at HBCUs in a 0:07:33.840 --> 0:07:37.640 way that was going to be sustainable, right, And I 0:07:37.680 --> 0:07:41.120 think that a lot of that was driven by needing 0:07:41.160 --> 0:07:43.320 to take some time and figure out how do we 0:07:43.360 --> 0:07:46.240 engage with these universities. We know we've got talent there, 0:07:46.440 --> 0:07:49.800 We've got density of talent, which is the important thing UM, 0:07:49.960 --> 0:07:53.000 And so I think giving us time to reflect on 0:07:53.120 --> 0:07:55.520 what had happened over the past few years. Was a 0:07:55.600 --> 0:07:59.520 really strong case for let's go let's be direct and intentional. 0:07:59.600 --> 0:08:02.680 Let's work with presidents at these universities, Let's work with 0:08:02.720 --> 0:08:06.360 the deans, Let's work with the students to develop a 0:08:06.440 --> 0:08:11.120 strategy together that's going to rise the tide for everybody. 0:08:11.320 --> 0:08:13.320 So I want to get into the details of what 0:08:13.360 --> 0:08:17.160 you guys actually do with students. But before I get there, 0:08:18.000 --> 0:08:22.440 you mentioned Tony, Howard and Mark what led them to say, Hey, 0:08:22.520 --> 0:08:26.720 let's stand up some entity so we can set up 0:08:26.720 --> 0:08:30.960 an institution to correct, uh, just a recruiting shortfall we've 0:08:31.000 --> 0:08:34.079 had for years and years Like that's an unusual group 0:08:34.080 --> 0:08:36.800 of guys to get together and say, let's see if 0:08:36.880 --> 0:08:39.800 we can dent the universe a little bit. Yeah. Um, So, 0:08:39.880 --> 0:08:42.000 I think there are two factors, number one, and I 0:08:42.000 --> 0:08:45.960 think they both reflect strong leadership at the Firm's Number one, 0:08:46.200 --> 0:08:49.640 you had, you know, somewhat of a ground swell from 0:08:49.640 --> 0:08:52.640 within the firm, certainly a leadership that said we need 0:08:52.679 --> 0:08:55.760 to figure out a way to do something. And I think, 0:08:55.760 --> 0:08:59.079 as great leaders do, I think Howard and Tony and 0:08:59.480 --> 0:09:03.520 Mark were receptive to that and Also it was perfect 0:09:03.600 --> 0:09:06.880 timing because they were thinking, how can we drive impact? 0:09:06.960 --> 0:09:10.040 How can we uh impact and effect change in our 0:09:10.080 --> 0:09:14.040 own way. And so it starts off with senior leaders 0:09:14.040 --> 0:09:17.760 at the firm, and you know, these heads of industry 0:09:18.200 --> 0:09:21.719 working together to figure out what can we do. Then 0:09:21.800 --> 0:09:24.960 you bring the relationships together. So Howard and Marcantoni have 0:09:25.080 --> 0:09:27.720 known each other, but also many of their senior leaders 0:09:27.720 --> 0:09:31.080 have known each other as well. And so the main 0:09:31.120 --> 0:09:32.559 thing that you have to do is say, we want 0:09:32.600 --> 0:09:35.720 to take down any competitive barriers in which we operate 0:09:35.800 --> 0:09:39.240 during our standard business, and we recognize that what we're 0:09:39.240 --> 0:09:41.880 trying to solve for is bigger than our individual company. 0:09:42.160 --> 0:09:45.240 It's really about the industry. And if you can get 0:09:45.280 --> 0:09:47.960 to that point, which they did very quickly, I mind you, 0:09:48.720 --> 0:09:51.520 then you can instantly start to put together something as 0:09:51.520 --> 0:09:55.040 powerful as all Finance. And that happened, um, And it 0:09:55.080 --> 0:09:57.440 happened fairly quickly, but I think it took a lot 0:09:57.520 --> 0:10:00.320 of time and a lot of vulnerability and a lot 0:10:00.360 --> 0:10:04.760 of transparency UM. And I think that's really symbolic of 0:10:04.760 --> 0:10:07.839 of what all Finance represents. So now let's drill down 0:10:07.880 --> 0:10:10.200 a little bit and talk about what you exactly do 0:10:10.280 --> 0:10:14.320 with students. Do you guys provide coaching or mentorship? What 0:10:14.360 --> 0:10:17.800 do you do to help kids who probably aren't all 0:10:17.840 --> 0:10:22.000 that familiar with what private credit is and put them 0:10:22.040 --> 0:10:26.400 on a career path into alternative investments. So there's a 0:10:26.440 --> 0:10:29.280 framework that I use. I use it with entrepreneurs, I 0:10:29.360 --> 0:10:32.720 use it with with talent anywhere I see it. First, 0:10:32.760 --> 0:10:36.679 you identify really good talent, right, kids that have an 0:10:36.760 --> 0:10:40.320 interest in investing, although they may not know the nuance 0:10:40.400 --> 0:10:44.160 of what investing asset class that they're most interested in, 0:10:44.320 --> 0:10:46.520 or you know, they're young. They may not have the 0:10:46.559 --> 0:10:51.240 experience of understanding multicycles in the market, but they haven't 0:10:51.320 --> 0:10:55.520 interest in investing. They have academic strength, right, some some 0:10:55.600 --> 0:10:58.720 real intellectual rigor and horsepower. And so you look at 0:10:58.760 --> 0:11:01.160 kids that perform well no matter what they do. I'm 0:11:01.200 --> 0:11:03.240 you know, the kid could be a philosophy major, that 0:11:03.320 --> 0:11:05.600 could be a finance major, but are they doing well 0:11:06.040 --> 0:11:08.800 in the pursuit that they're following um And then we 0:11:08.840 --> 0:11:13.640 look for for students that are coachable, right, Coachable. Coachable 0:11:13.760 --> 0:11:18.760 is key. It's an apprentice model business. You know, there's 0:11:18.800 --> 0:11:22.360 nobody that comes into this business and comes in right 0:11:22.360 --> 0:11:25.000 out of college. As a partner. Even if they've got 0:11:25.040 --> 0:11:28.280 all the resources in the world, nobody's going to come 0:11:28.280 --> 0:11:31.679 in as a partner. By and large, most people start 0:11:31.720 --> 0:11:35.400 this business as an analyst and they work with associates, 0:11:35.400 --> 0:11:38.200 and those associates work with vps and principles and managing 0:11:38.480 --> 0:11:41.720 directors and so forth. So you need people that are 0:11:41.720 --> 0:11:44.679 gonna be willing to work through the apprenticeship model, that 0:11:44.720 --> 0:11:48.480 are willing to come in, you know, well compensated, a 0:11:48.600 --> 0:11:50.640 great network of people that they're going to be around, 0:11:50.640 --> 0:11:53.520 but they're still gonna have to listen and be coached 0:11:53.600 --> 0:11:56.520 up um in order to benefit the team and the company. 0:11:56.760 --> 0:11:59.240 And so we look for those things. People that have 0:11:59.320 --> 0:12:02.840 an interest in vesting, people that have intellectual horsepower, and 0:12:02.880 --> 0:12:07.000 people that are coachable. That's that's really intriguing. So it's 0:12:07.040 --> 0:12:12.960 not so much specific qualifications that are needed as qualities 0:12:13.000 --> 0:12:17.840 that will allow the students you select to succeed going forward. Yeah, 0:12:17.880 --> 0:12:19.760 I think, by and large, I mean I would say 0:12:19.800 --> 0:12:23.920 that those qualities, you know, we recognize them through qualifications, right, 0:12:23.960 --> 0:12:25.719 So I look for people who have strong g p 0:12:25.840 --> 0:12:28.840 a s and people they're taking some rigorous coursework, even 0:12:28.840 --> 0:12:31.160 if that courseworks not in finance. I look for people 0:12:31.440 --> 0:12:34.560 that have done extracurricular work or you know, manage their 0:12:34.600 --> 0:12:38.559 own little portfolio, or have stock ideas or business ideas 0:12:38.600 --> 0:12:40.440 that they want to pitch. And then I look for 0:12:40.480 --> 0:12:43.600 people who also have references that say, you know what, 0:12:44.320 --> 0:12:46.880 this young man, this young woman has been really coachable 0:12:47.480 --> 0:12:49.480 in the time that I've had them in school. So, 0:12:49.640 --> 0:12:53.920 generally speaking, alternative assets, that's a tough gig to get into, 0:12:54.280 --> 0:12:58.320 regardless of where you go to school. Private equity, venture capital, 0:12:58.360 --> 0:13:03.000 hedge funds, real estate, down the whole list, not not easy. 0:13:03.200 --> 0:13:05.559 How much harder is it to get into that space 0:13:05.920 --> 0:13:08.800 if you're coming from an HBCU. I think it can 0:13:08.840 --> 0:13:12.520 be difficult um and and not because of anything that's 0:13:12.520 --> 0:13:15.160 attributed to the student themselves. I think it can be 0:13:15.160 --> 0:13:18.079 difficult because no matter where you're coming from, you need 0:13:18.120 --> 0:13:20.800 to know somebody to get into this business. And so 0:13:20.880 --> 0:13:25.200 the first key is how can you create networks that 0:13:25.320 --> 0:13:30.280 allow HBCU students to have mentors, to have advocates that 0:13:30.360 --> 0:13:33.040 are in the industry that learn and know them well, 0:13:33.160 --> 0:13:36.680 know their strengths, know their weaknesses, no you know their 0:13:36.720 --> 0:13:39.880 ambition and their aspirations, and can speak to that and 0:13:39.920 --> 0:13:43.200 help guide them to certain careers inside of alternatives where 0:13:43.240 --> 0:13:47.079 they can be successful. Really intriguing. Let's talk a little 0:13:47.080 --> 0:13:50.679 bit about some of the work you've done. UH start 0:13:50.720 --> 0:13:54.000 with CEO of the Company Lab. What what was COLLABS 0:13:54.360 --> 0:13:58.720 mission and why Tennessee. My wife and I decided to 0:13:58.760 --> 0:14:02.440 move to Tennessee back in two thousand and sixteen. She 0:14:02.559 --> 0:14:05.400 joined a practice down there, and we had family in Tennessee, 0:14:05.400 --> 0:14:08.960 and it was really a unique opportunity to to move around. 0:14:08.960 --> 0:14:11.839 We've moved around a bunch and and have enjoyed all 0:14:11.840 --> 0:14:14.800 the different places that we lived in the country. Chattanooga 0:14:14.800 --> 0:14:18.560 is a fascinating city UM really steeped in some rich history, 0:14:19.120 --> 0:14:22.160 but also a city that faces some challenges as they 0:14:22.200 --> 0:14:25.600 grow UM from a very small city to a more 0:14:25.640 --> 0:14:29.600 significant city in the U. S economy. UM I. When 0:14:29.600 --> 0:14:31.840 I moved down there, I was still working with MLT 0:14:32.240 --> 0:14:35.280 and then an opportunity came up to take a pretty 0:14:35.280 --> 0:14:38.320 significant role within the community UM as the CEO of 0:14:38.360 --> 0:14:42.280 the Company Lab. The Company Lab was the entrepreneurship and 0:14:42.320 --> 0:14:46.720 Economic Development Center UM before Chattanooga and the surrounding areas 0:14:46.720 --> 0:14:51.400 which include North Georgia, North Alabama, and Southeast Tennessee. It 0:14:51.480 --> 0:14:58.560 was incredible to really focus on local opportunities for entrepreneurs, 0:14:58.960 --> 0:15:02.840 for investors, for economic development, and really see how the 0:15:02.880 --> 0:15:05.680 fabric of a city, UH with you know about a 0:15:05.680 --> 0:15:08.920 couple of hundred thousand people can develop when you have 0:15:09.000 --> 0:15:11.600 people that are really dedicated to fostering that growth. It 0:15:11.800 --> 0:15:14.120 was just like a private public partnership. Tell us a 0:15:14.160 --> 0:15:16.280 little bit about the structure of that. It was a 0:15:16.280 --> 0:15:18.440 private public partnership UM. It was set up as a 0:15:18.480 --> 0:15:22.360 nonprofit that had funding coming some funding coming from the States, 0:15:22.360 --> 0:15:25.720 some funding coming from foundations UM, and then some funding 0:15:25.760 --> 0:15:29.800 coming from corporate entities that also found economic development in 0:15:29.840 --> 0:15:32.840 the region very important. What what some of the economic 0:15:33.080 --> 0:15:38.640 UM sectors within within that area? What is Chattanooga known for? So, 0:15:38.720 --> 0:15:41.760 Chattanooga is known for a couple of things, right, key brands. 0:15:42.040 --> 0:15:46.359 Number one, Coca Cola Bottling is the the UM company 0:15:46.400 --> 0:15:49.600 that really helped to jump start the city. And so 0:15:49.800 --> 0:15:52.360 Jack Lupton was kind of the patriarch of of that 0:15:52.440 --> 0:15:55.480 company UM and sold that company back to Coca Cola 0:15:55.600 --> 0:15:58.320 in the mid nineties. They were two separate companies at 0:15:58.320 --> 0:16:02.200 the So the yes, there were a number of bottling 0:16:02.480 --> 0:16:07.680 UM companies that would bottle Coca Cola product and distributed 0:16:07.680 --> 0:16:10.680 it throughout the country or throughout the region, and UM 0:16:10.720 --> 0:16:13.440 the one in Chattanooga, Coca Cola Bottling was one of 0:16:13.440 --> 0:16:16.520 the larger ones UM in the mid century. Again, it 0:16:16.600 --> 0:16:19.160 was sold back to Coca Cola as they consolidated those 0:16:19.200 --> 0:16:25.800 businesses UM and left a pretty strong economic footprint in Chattanooga. UM. 0:16:25.960 --> 0:16:28.760 Chattanooga was also the home of Moonpie and Little Devi right, 0:16:28.880 --> 0:16:33.240 and a number of consumer products that are very familiar 0:16:33.280 --> 0:16:35.840 brands that we know about but did not know that 0:16:35.880 --> 0:16:39.400 they were from Chattanooga UM. And so what I saw 0:16:39.560 --> 0:16:44.160 in Chattanooga was a rich history around entrepreneurship that necessarily 0:16:44.200 --> 0:16:46.920 hadn't found its way into the modern day. Right. We 0:16:46.960 --> 0:16:49.360 didn't see a lot of great companies coming out of 0:16:49.440 --> 0:16:52.720 Chattanooga in the late nineties during the tech bubble and 0:16:52.720 --> 0:16:55.120 and and so forth. So what did you accomplish when 0:16:55.160 --> 0:16:57.160 you were there? Do you feel like you move the 0:16:57.200 --> 0:17:00.640 needle little, Well, we moved the needle tremendously. UM. You know, 0:17:00.680 --> 0:17:02.720 there were some companies that were there when I took 0:17:02.760 --> 0:17:07.200 the seat, companies like Bellhop that's a tremendous company UM 0:17:07.280 --> 0:17:10.880 and kind of operates in the uber of moving right, 0:17:10.960 --> 0:17:14.719 so you a fantastic moving company and a fantastic culture. 0:17:15.119 --> 0:17:17.640 UM there was a company, Freight Waves that has done 0:17:17.680 --> 0:17:22.840 fantastic work. People kind of equated to the Bloomberg of trucking. UM. 0:17:22.920 --> 0:17:25.919 And so they've got a freight way Freight Waves, freight 0:17:25.920 --> 0:17:29.840 Waves Freight with W. A. V. E. S Um and 0:17:29.920 --> 0:17:32.280 Craig Fuller, who's the founder and CEO. Down there's a 0:17:32.800 --> 0:17:35.960 good friend but also a really strong business person who's 0:17:36.000 --> 0:17:39.040 done some great work. We brought Steve Case and Rise 0:17:39.119 --> 0:17:42.159 to the rest of Chattanooga and UM Freight Waves was 0:17:42.200 --> 0:17:45.680 actually the investment that they made in Chattanooga and has 0:17:45.760 --> 0:17:48.800 done great work. The company has grown, They've employed hundreds 0:17:48.840 --> 0:17:51.920 of people at meaningful salaries. And that's what it takes 0:17:52.000 --> 0:17:54.520 to move the needle in a place like Chattanooga. And 0:17:54.520 --> 0:17:56.120 there are hundreds of cities like that around the child. 0:17:56.160 --> 0:17:58.600 So how do you go from Tennessee to Alabama and 0:17:58.920 --> 0:18:04.080 Montgomery Tech last, So, as I was leaving Collab in Tennessee, 0:18:04.560 --> 0:18:07.159 I saw what was going on in Montgomery, and I 0:18:07.240 --> 0:18:10.400 saw that Montgomery had great leadership. The mayor down there, 0:18:10.440 --> 0:18:13.639 Stephen Reid, has done a fantastic job in Montgomery. I 0:18:13.720 --> 0:18:16.560 also saw that they had some really unique assets. They've 0:18:16.600 --> 0:18:20.800 got UM, a fantastic Air Force installation down there, They've 0:18:20.800 --> 0:18:23.480 got the state capital there in Montgomery, that got a 0:18:23.520 --> 0:18:27.119 really diverse population. And so what I really did was 0:18:27.160 --> 0:18:30.520 take the thesis that we were working with in Chattanooga 0:18:30.880 --> 0:18:34.080 and adjusted so that it applied to Montgomery. UM. And 0:18:34.119 --> 0:18:36.000 so in a couple of years down there, we've been 0:18:36.040 --> 0:18:39.760 able to bring some really incredible companies to Montgomery to 0:18:39.920 --> 0:18:42.719 see the type of value that they have there. But 0:18:42.760 --> 0:18:45.639 we've also, in this most recent cohort UM and the 0:18:45.680 --> 0:18:48.720 team down there's an incredible job helped grow companies that 0:18:48.760 --> 0:18:52.280 are there in Montgomery, focusing on tech solutions and tech 0:18:52.359 --> 0:18:56.320 services to help them expand and recognize assets even outside 0:18:56.320 --> 0:18:58.399 of the region. So you mentioned tech. I tend to 0:18:58.440 --> 0:19:01.320 think of the West Coast as the you know, the 0:19:01.359 --> 0:19:05.280 center of tech in the US. The northeast is the 0:19:05.320 --> 0:19:09.280 center of finance. The southeast. How should we think about 0:19:09.320 --> 0:19:13.440 that in terms of the business sectors that they should 0:19:13.440 --> 0:19:15.200 be known for. So I think there are a couple 0:19:15.280 --> 0:19:20.040 of things. UM Number one, manufacturing has been strong in 0:19:20.080 --> 0:19:22.000 the Southeast for a number of years, a lot of 0:19:22.000 --> 0:19:25.639 car companies read a lot of car companies UM. There's 0:19:25.680 --> 0:19:29.439 a lot of pro business environment UM for companies with 0:19:29.440 --> 0:19:33.120 with big labor forces in the Southeast, you're able to 0:19:33.600 --> 0:19:37.760 operate UM at a more efficient standard of living in 0:19:37.840 --> 0:19:40.119 terms of cost, and so you see a lot of 0:19:40.160 --> 0:19:46.000 car manufacturers operating down there. Also transportation and logistics, Chattanooga 0:19:46.440 --> 0:19:50.840 UM was probably one of the biggest hubs for transportation 0:19:50.960 --> 0:19:54.640 logistics in the country. Anything that's coming through the Southeast 0:19:54.760 --> 0:19:58.200 via truck is coming through either one or seventy five 0:19:58.280 --> 0:20:01.280 or twenty four. All of that comes through Chattanooga, and 0:20:01.320 --> 0:20:04.000 so that was something that we saw. You've got companies 0:20:04.040 --> 0:20:07.000 like US Express and Covenant that operate in chatted and 0:20:07.240 --> 0:20:11.160 FedEx or UPS have a big logistics center. So FedEx 0:20:11.320 --> 0:20:13.639 is out in Memphis, in Memphis, CNSE so on the 0:20:13.680 --> 0:20:16.360 other side of the state. But those trucks, again will 0:20:16.359 --> 0:20:19.680 all come through through Chattanooga. And so when you think 0:20:19.720 --> 0:20:22.600 about you know the South, thing you think about industries 0:20:22.640 --> 0:20:26.959 that are moving UM, it continues to be manufacturing and logistics. Also, 0:20:27.400 --> 0:20:31.240 healthcare is really popping up. Nashville in Atlanta are two 0:20:31.400 --> 0:20:34.159 very large health care hubs. UM. Some of that is 0:20:34.280 --> 0:20:38.360 due unfortunately to demand right where you have health outcomes 0:20:38.400 --> 0:20:41.639 that are probably a little more severe UM and some 0:20:41.680 --> 0:20:44.120 of the southeastern states in the United States, and so 0:20:44.480 --> 0:20:47.159 you need strong healthcare to meet the needs of the population. 0:20:47.920 --> 0:20:52.160 It's interesting we're talking about different parts of the country. UM. 0:20:52.200 --> 0:20:54.399 A lot of the bigger firms want to see the 0:20:54.560 --> 0:20:57.760 end of remote work or hybrid work. But I would 0:20:57.800 --> 0:21:01.280 imagine that that creates opportunity ease for parts of the 0:21:01.320 --> 0:21:05.960 country like Chattanooga and Nashville and Montgomery, where there are 0:21:06.000 --> 0:21:08.359 a lot of big companies that may not be located there, 0:21:08.400 --> 0:21:11.200 but they want to tap the pool of talent that's there. 0:21:11.359 --> 0:21:14.480 So we've seen that, and in talking with leaders in 0:21:14.480 --> 0:21:17.560 in a number of cities UM throughout the South and 0:21:17.560 --> 0:21:19.879 and even throughout other areas in the middle of the 0:21:19.920 --> 0:21:24.399 country UM that have not tremendous not traditionally had the 0:21:24.520 --> 0:21:29.280 type of talent there or the draw to those cities. UM. 0:21:29.320 --> 0:21:31.520 You definitely saw a surge of people, I would say 0:21:31.600 --> 0:21:35.080 during the COVID period that we're moving to cities where 0:21:35.080 --> 0:21:38.000 there was a lower cost of living but a strong 0:21:38.119 --> 0:21:41.760 quality of living and they could work remote. And so 0:21:42.200 --> 0:21:45.200 I think there's been a benefit to those cities UM, 0:21:45.280 --> 0:21:47.679 and that you're getting people that are moving. You know, 0:21:47.760 --> 0:21:50.480 Nashville had a ton of people that were moving to Nashville, 0:21:50.480 --> 0:21:54.399 primarily from California, UM, and that really strengthened the work 0:21:54.680 --> 0:21:58.560 or the labor force in Nashville. What you do see 0:21:58.560 --> 0:22:00.800 on the other side of the coin, though, is that 0:22:00.880 --> 0:22:04.239 for companies that are there locally, it can be a 0:22:04.280 --> 0:22:07.480 detriment because you have people that are there in the 0:22:07.520 --> 0:22:10.600 city and may take jobs outside of the region instead 0:22:10.600 --> 0:22:13.200 of taking jobs there in the region. And so there's 0:22:13.200 --> 0:22:16.760 a delicate balance right to the impact UM, particularly for 0:22:16.920 --> 0:22:20.320 small to mid size markets where you have a labor 0:22:20.359 --> 0:22:24.159 force that's needed in the market that's finding opportunities outside 0:22:24.160 --> 0:22:26.560 of the market, even if they continue to live. Let's 0:22:26.600 --> 0:22:29.919 spend a little time going over some of your history. 0:22:29.960 --> 0:22:32.480 Your your families from Mississippi. But you grew up a 0:22:32.520 --> 0:22:34.760 little bit of a military Brad tell us tell us 0:22:34.760 --> 0:22:38.320 about those experiences. Yes, so, my my dad's actually from Mississippi. 0:22:38.359 --> 0:22:41.000 My mom was from North Carolina. My dad was a 0:22:41.119 --> 0:22:44.080 naval officer who retired shortly before I was born. So 0:22:44.160 --> 0:22:46.640 I spent most of my time growing up in Maryland, 0:22:46.720 --> 0:22:48.560 right outside of d C. So you didn't do the 0:22:48.560 --> 0:22:51.560 whole army. Brad didn't do that. But I did hang 0:22:51.560 --> 0:22:54.640 out on military basis a lot. So all my friends 0:22:55.040 --> 0:22:58.359 would change every three years when the PCs. Right, So 0:22:58.400 --> 0:23:01.320 I had kind of the ob sit side of the travel, 0:23:01.359 --> 0:23:04.080 which is being the friend that was always left behind. Right. 0:23:04.600 --> 0:23:07.520 That's that's really Uh, that's really intriguing. What what did 0:23:07.520 --> 0:23:10.359 your dad, dad retire from doing? What was his So 0:23:10.560 --> 0:23:12.920 my dad, my dad had two careers in his life. 0:23:12.960 --> 0:23:15.680 He grew up in Mississippi, his picking cotton believe it 0:23:15.800 --> 0:23:17.480 or not when he was seven years Oldways born in 0:23:17.520 --> 0:23:23.240 nine seven years old. Right, we talked about skipping generations. Um. 0:23:23.520 --> 0:23:27.080 He went into the Navy in nineteen and spent twenty 0:23:27.080 --> 0:23:29.920 seven years in the Navy. He retired and went to 0:23:30.000 --> 0:23:32.720 work at the Library of Congress and Personnel. Was able 0:23:32.760 --> 0:23:35.399 to get his undergrad master's PhD all through the g 0:23:35.520 --> 0:23:37.760 I bill while he was in the navy. Um. But 0:23:37.800 --> 0:23:39.840 I always say my father is a real hero of 0:23:39.880 --> 0:23:44.679 mine because he truly did skip three generations in one lifetime. Um, 0:23:44.680 --> 0:23:48.359 that's really impressive. Was was mom working? Was she mother? 0:23:49.320 --> 0:23:52.120 My mother was a fifty year school teacher and uh, 0:23:52.480 --> 0:23:56.240 public school in d C for fifty years, um, and 0:23:56.280 --> 0:23:59.680 really was an inspiration for the way I think about 0:23:59.800 --> 0:24:03.680 learn eLearning and understanding the value of education. So let's 0:24:03.720 --> 0:24:07.840 talk a little bit about education. You went to Sidwell 0:24:08.280 --> 0:24:11.600 Friends School. That that's some rarefied company, isn't it. It's 0:24:11.640 --> 0:24:14.240 some good people that have gone there. Yeah, who did 0:24:14.240 --> 0:24:17.080 you go to school with? Any famous names? Well, Marcus 0:24:17.119 --> 0:24:20.040 Shaw's one, um, But no I had. I had great 0:24:20.119 --> 0:24:23.119 great folks in my class. Bear Tune Day Thurston who 0:24:23.440 --> 0:24:26.680 may have heard of, author um and producer that spent 0:24:26.720 --> 0:24:29.159 time with the Daily Show, John bern Ball who's a 0:24:29.240 --> 0:24:33.040 great actor, Tommy Kale who was the director of Hamilton's 0:24:33.200 --> 0:24:36.040 and and some other big plays. But you know, everybody 0:24:36.040 --> 0:24:39.480 in our class was was phenomenal. Um. Also folks like 0:24:39.560 --> 0:24:43.200 Chelsea Clinton and later the Obama girls went to said well, 0:24:43.320 --> 0:24:46.840 so some rarefied air indeed, But um, a great group 0:24:46.840 --> 0:24:48.679 of students and a great group of friends. So so 0:24:48.760 --> 0:24:51.320 you go from there to get a mathematics degree from 0:24:51.320 --> 0:24:56.119 Morehouse College, then onto Georgia Tech for an electrical engineering 0:24:56.160 --> 0:24:59.320 degree with little football mixed in. Tell us a little 0:24:59.320 --> 0:25:02.120 bit about your act ademic career in college. So when 0:25:02.119 --> 0:25:04.320 I went to more House. I was excited. I went 0:25:04.359 --> 0:25:06.320 down there with a few friends. It was a great 0:25:06.720 --> 0:25:08.280 mix to be able to go to a school like 0:25:08.359 --> 0:25:11.240 said well and then go to an hvc U. UM 0:25:11.280 --> 0:25:14.200 as esteemed as more House was. Was really a great 0:25:14.240 --> 0:25:19.760 opportunity for me to have a bunch of different experiences. UM. 0:25:19.800 --> 0:25:23.480 My story around playing football is probably my great interview story. 0:25:23.520 --> 0:25:26.439 I UH was playing cards with a bunch of guys 0:25:26.920 --> 0:25:29.480 right at the beginning of the school year, and UH 0:25:29.640 --> 0:25:31.480 made a bet that I could kick a fifty yard 0:25:31.520 --> 0:25:33.240 field goal. So we go out on the field. We 0:25:33.320 --> 0:25:36.760 jumped the fence, I line up, take about twenty steps 0:25:36.760 --> 0:25:39.520 back kick a field goal from fifty yards. One of 0:25:39.560 --> 0:25:41.600 the coaches comes out and yells at us to get 0:25:41.640 --> 0:25:44.639 off the field with trespassing. UM. As we're leaving, he 0:25:44.680 --> 0:25:46.960 tells me to come out to the walk on tryouts 0:25:46.960 --> 0:25:48.919 at the end of the week. How close did you 0:25:48.960 --> 0:25:50.960 come to a fifty yard field goal? Oh? I knocked 0:25:50.960 --> 0:25:53.080 it down. He made it, man. He he didn't want 0:25:53.080 --> 0:25:54.800 me to come out because I missed it. He wanted 0:25:54.840 --> 0:25:57.639 to come out because I made it. And UM, you know, 0:25:57.760 --> 0:25:59.920 I went on to play four years and more House 0:26:00.040 --> 0:26:03.800 and had some some strong accolades there, But really even 0:26:03.840 --> 0:26:06.800 that experience was about building great friends, um, that I 0:26:06.840 --> 0:26:09.520 played football with, and many of those gentlemen have going 0:26:09.600 --> 0:26:12.000 on to do incredible things as well. What why is 0:26:12.040 --> 0:26:15.399 it not surprising that a math nerd is also a 0:26:15.400 --> 0:26:18.720 place kicker. It seems to be like, um, the field 0:26:18.720 --> 0:26:21.800 goal seems to be one of the most mathematical parts 0:26:21.960 --> 0:26:25.800 of football. Well, it's pure geometry, right, So one point 0:26:25.880 --> 0:26:29.040 three seconds from the snapper to putting the ball down 0:26:29.040 --> 0:26:31.240 and getting the ball off the ground, the angle that 0:26:31.240 --> 0:26:33.560 has got to come up, you know, is is pretty 0:26:33.720 --> 0:26:36.760 significant in terms of your probability of making it. Um. 0:26:36.760 --> 0:26:38.760 So I already I looked at it as an exercise 0:26:38.760 --> 0:26:41.679 in physics, geometry, Um, you know a little bit of 0:26:41.760 --> 0:26:44.760 chemistry depending on on the texture of the football. So 0:26:45.080 --> 0:26:48.199 I thought I was a natural. That's really intriguing. And 0:26:48.240 --> 0:26:51.280 then you go on get your masters at Duke School 0:26:51.280 --> 0:26:54.560 of Business. Uh, what led you in that direction? Given 0:26:54.960 --> 0:26:59.080 the mathematics and electrical engineering undergraduate? So I went to 0:26:59.119 --> 0:27:03.200 IBM after my completing my undergrad degree at Georgia Tech 0:27:03.280 --> 0:27:06.320 and Electrical Engineering and had a great time there, learned 0:27:06.359 --> 0:27:10.080 a lot, but really wanted to understand the way that 0:27:10.160 --> 0:27:13.320 we were selling business right, understanding more about the business 0:27:13.400 --> 0:27:15.879 of IBM and how we thought about the products and 0:27:15.880 --> 0:27:19.119 services that I was delivering as an engineer. UM not 0:27:19.200 --> 0:27:21.520 to mention one of my you know, very good friends 0:27:21.520 --> 0:27:23.680 that played football with me, A more House, was a 0:27:23.760 --> 0:27:25.800 year ahead of me in business school. He said, you're 0:27:25.800 --> 0:27:28.679 pretty smart. You should check out business school. And uh, 0:27:28.760 --> 0:27:30.879 fortunately enough, I had a great school in Duke that 0:27:30.960 --> 0:27:33.200 was right there in Durham. My wife was in med 0:27:33.240 --> 0:27:35.359 school at U n C. And Uh, I didn't have 0:27:35.400 --> 0:27:37.760 to move to go to a great business school, which 0:27:37.800 --> 0:27:40.840 was really refreshing and it was a great experience and 0:27:40.880 --> 0:27:42.840 I learned a lot about business there and kicked off 0:27:42.840 --> 0:27:45.320 a new career from there. You end up going into 0:27:45.359 --> 0:27:49.120 a decade of equity research and investment banking at shops 0:27:49.160 --> 0:27:53.320 like Bank of America, Piedmont others. What led to that 0:27:53.400 --> 0:27:57.560 aspect of finance. So I always tell folks this is 0:27:57.600 --> 0:28:00.280 one of the great turning points in my life. When 0:28:00.280 --> 0:28:03.399 I went to business school, I was pretty confident that 0:28:03.400 --> 0:28:05.000 I was going to come out of business school and 0:28:05.040 --> 0:28:07.200 go back to IBM. I was gonna stay an engineer. 0:28:07.440 --> 0:28:09.560 I wanted to learn more about marketing and you know, 0:28:09.600 --> 0:28:14.240 some operations around technology. There was a point right before 0:28:14.280 --> 0:28:16.960 the start of my first year in business school, so 0:28:17.000 --> 0:28:20.280 this is two thousand three, I had an opportunity to 0:28:20.320 --> 0:28:24.439 go to a camp, two day camp at Goldman that 0:28:24.640 --> 0:28:29.560 was focused on providing insights in investment careers for people 0:28:29.600 --> 0:28:31.840 that did not have an investment background. And they, you know, 0:28:31.880 --> 0:28:34.719 they fly you up your smart kid, put you up 0:28:34.720 --> 0:28:37.440 in a nice hotel. And I met a woman who 0:28:37.440 --> 0:28:41.840 covered enterprise software at Goldman, and she gave me really 0:28:41.880 --> 0:28:45.840 great insight into how I could leverage the industry knowledge 0:28:45.880 --> 0:28:49.280 that I had developed at IBM. And so really it 0:28:49.400 --> 0:28:53.760 was one person on an off conversation, you know, down 0:28:53.760 --> 0:28:57.160 on Broad Street twenty plus years ago that led to 0:28:57.240 --> 0:29:00.200 my career. She said, Equity research is a great ace 0:29:00.240 --> 0:29:02.400 where if you know a lot about the business and 0:29:02.440 --> 0:29:05.200 you learn a lot about finance, you can be impactful, 0:29:05.280 --> 0:29:07.600 You can earn a good living, you can really understand 0:29:07.600 --> 0:29:10.600 the markets and meet great people. As opposed to the opposite, 0:29:10.840 --> 0:29:14.320 which is learning knowing a lot about finance and then 0:29:14.360 --> 0:29:17.240 having to learn a whole industry from the outside. It's 0:29:17.240 --> 0:29:21.160 a very different perspective than starting with the industry knowledge 0:29:21.160 --> 0:29:26.040 from the inside and and that perspective is something that 0:29:26.120 --> 0:29:28.880 I think we've got to learn to embrace more because 0:29:29.320 --> 0:29:34.160 you know, finances challenging, but it's not difficult, right. It 0:29:34.240 --> 0:29:37.760 requires putting in work and getting reps um in order 0:29:37.840 --> 0:29:41.360 to start to understand patterns and be able to anticipate 0:29:41.400 --> 0:29:43.400 things that you will see in the market or things 0:29:43.440 --> 0:29:46.200 that you'll see at a company. But really understanding that 0:29:46.400 --> 0:29:50.640 the core of industry is what makes a master of business, right. 0:29:50.680 --> 0:29:53.760 I mean, that's how you really start to hone the 0:29:53.840 --> 0:29:55.760 skills that you need in order to make a true 0:29:55.760 --> 0:29:58.160 alpha out there in the market as an investor. So 0:29:58.320 --> 0:30:01.120 tell us what you did at ups like Bank of America. 0:30:01.160 --> 0:30:03.840 What was your focus? So I covered telecom services at 0:30:03.840 --> 0:30:06.600 Bank of America UM. During my time at IBM, I 0:30:06.640 --> 0:30:10.880 had worked UM on several telecom networking projects and really 0:30:10.960 --> 0:30:14.840 understood the industry, things like spectrum and things like wireless 0:30:14.880 --> 0:30:17.400 that were coming of age at that time. I understood 0:30:17.440 --> 0:30:20.200 pretty deeply. And you know, through my understanding of finance, 0:30:20.200 --> 0:30:22.880 I was able to say, these are businesses that I 0:30:22.920 --> 0:30:25.640 think will do well, These are businesses that are positioned 0:30:25.680 --> 0:30:28.240 to do well, and once the market understands that the 0:30:28.280 --> 0:30:31.960 socks will perform. Um. I had a great mentors at 0:30:31.760 --> 0:30:33.920 at a Bank of America, a great team that I 0:30:33.960 --> 0:30:36.280 worked with and really set me up for a great 0:30:36.320 --> 0:30:38.960 start in in finance. So you have a little bit 0:30:38.960 --> 0:30:41.160 of a health scare when you're relatively young, and it 0:30:41.280 --> 0:30:45.080 changes your career trajectory. Tell us what led you to 0:30:45.600 --> 0:30:49.400 stepping off of the merry go round? Yeah, um, it's 0:30:49.440 --> 0:30:53.200 an incredible story and um one that I think also 0:30:53.280 --> 0:30:57.840 defines a lot of where my life has led. Um. 0:30:58.000 --> 0:31:02.680 So this is you know, I was at a firm 0:31:02.760 --> 0:31:07.760 in d C and UH covering tech, media, telecom, a 0:31:07.760 --> 0:31:11.760 bunch of regulated industries as well, and was having some 0:31:11.840 --> 0:31:15.160 chest pain and a bunch of traders had you know, 0:31:15.200 --> 0:31:17.400 what we call walking pneumonia. But it takes everything to 0:31:17.400 --> 0:31:19.280 get a trader off the desk, right, I mean, they'll 0:31:19.560 --> 0:31:23.120 the whole desk will get pneumonia before they leave. And um, 0:31:23.160 --> 0:31:25.240 I was pretty sure that's what I had And was 0:31:25.320 --> 0:31:27.800 coughing for a few days and had some pain in 0:31:27.840 --> 0:31:31.120 my chest. Go to the hospital, they take an x ray, 0:31:31.200 --> 0:31:34.480 They see that I've got some swelling and a little 0:31:34.480 --> 0:31:36.440 bit of cloudiness there in my lungs, and they give 0:31:36.520 --> 0:31:38.800 me a Z pack and antibiotic. They think that I 0:31:38.880 --> 0:31:41.920 might have had pneumonia. My wife, who's a physicious, as 0:31:41.960 --> 0:31:44.200 I shared with you before you know, comes to the 0:31:44.240 --> 0:31:47.880 hospital to the emergency room. She asked me what they said. 0:31:47.880 --> 0:31:49.960 I said, you know, as an equity research guy, I 0:31:49.960 --> 0:31:52.440 think I know it all. I've got pneumonia. You know, 0:31:52.480 --> 0:31:55.400 they saw it on the X ray. What I did. 0:31:55.680 --> 0:31:57.840 Let me see those those She's like, let me see 0:31:57.880 --> 0:32:01.000 what's going on exactly. She didn't buy it. Well, she 0:32:01.080 --> 0:32:03.160 didn't buy it because she's a doctor and she's very 0:32:03.160 --> 0:32:05.120 good at her job. Like I say all the time, 0:32:05.120 --> 0:32:06.880 I've got a great wife. But I've got the best 0:32:06.880 --> 0:32:09.440 doctor that anybody could have in their house. I had 0:32:09.520 --> 0:32:13.400 some leg pain earlier in the week, left side, left side, 0:32:13.920 --> 0:32:15.520 So we know what we know where this is going 0:32:15.720 --> 0:32:19.640 right there? You out thought it was a Charlie horse. 0:32:20.680 --> 0:32:23.640 I played a little basketball with buddies. This was right 0:32:23.680 --> 0:32:26.680 at the end of a Thanksgiving holiday and I got 0:32:26.720 --> 0:32:29.440 a group of buddies, lifelong friends. We always played basketball together, 0:32:29.920 --> 0:32:33.320 and I thought it was a Charlie horse pain and 0:32:33.360 --> 0:32:35.280 the leg went away. A couple of days later, I'm 0:32:35.320 --> 0:32:37.920 having this pain in my chest, and I take myself 0:32:37.960 --> 0:32:40.520 to the hospital. She goes, did you tell them about 0:32:40.560 --> 0:32:44.480 your leg? And I said no. She goes into the 0:32:44.480 --> 0:32:47.120 head of the emergency room's office. The guy comes back 0:32:47.120 --> 0:32:49.200 out and he says, how come you didn't tell me 0:32:49.200 --> 0:32:51.440 about your leg. I said, well, my leg doesn't hurt anymore. 0:32:51.440 --> 0:32:53.360 It's my chest. I got pneumonia. That's what that's raised. 0:32:53.920 --> 0:32:56.600 This is where equity research guys talk themselves into a hole. 0:32:56.680 --> 0:32:58.720 They think they know more than they do. I know 0:32:58.760 --> 0:33:00.800 a lot about telecom, I know no thing about healthcare, 0:33:01.040 --> 0:33:04.000 all right. Um, So the guy comes out and he says, well, 0:33:04.000 --> 0:33:06.560 we gotta do give you what we call a d dimer. Right, 0:33:06.600 --> 0:33:11.520 there's a test for blood clots essentially. Um, they do 0:33:11.600 --> 0:33:16.360 the tests. I am at this point the second sickest person, 0:33:16.520 --> 0:33:19.880 highest priority in the emergency. They rolled me in, They 0:33:19.880 --> 0:33:22.160 give me an m R I. They see the blood 0:33:22.200 --> 0:33:24.720 clots in my lungs, they see some remnants in my leg. 0:33:25.080 --> 0:33:29.880 I'm immediately, um, you know, brought into the hospital and 0:33:29.880 --> 0:33:32.840 and I'm there for several days. They give me blood thinner. 0:33:33.120 --> 0:33:36.360 They want to make sure that these clots don't pass 0:33:36.440 --> 0:33:38.800 or anything crazy like no, no, no, no, no, so 0:33:39.120 --> 0:33:41.040 what I had was was a blood clot, right, so 0:33:41.240 --> 0:33:43.480 I did not have a heart attack. Um, I'm in 0:33:43.520 --> 0:33:46.120 the Strokes Center there, the hospital in d C. And 0:33:46.760 --> 0:33:50.480 for me, it was really a point where you start 0:33:50.560 --> 0:33:52.800 thinking about your life in a different way. It had 0:33:52.840 --> 0:33:55.479 to be terrifying when your wife comes in and the 0:33:55.520 --> 0:33:58.440 head of the R e R says, stat, let's let's 0:33:58.560 --> 0:34:02.440 let's get this guy taking care of immediately. It is, 0:34:03.480 --> 0:34:06.680 but not as scary until you realize what's really happening, 0:34:07.400 --> 0:34:09.800 and that you know, there's things that they called widow makers, 0:34:09.800 --> 0:34:12.960 which are these bilateral blood clots that you get across 0:34:12.960 --> 0:34:15.680 the aortic valve. And I mean you just go away, 0:34:16.239 --> 0:34:21.880 you're done right. As somebody that's kind of steeped in mathematics, probabilities, investment, 0:34:21.880 --> 0:34:25.240 you always have you thinking about the future, and um, 0:34:25.280 --> 0:34:26.920 you know my great story from that is that I 0:34:26.960 --> 0:34:30.520 actually upgraded a stock Pandora media from the I see 0:34:30.560 --> 0:34:35.839 you in the hospital. Um, yeah, to which my wife responded, 0:34:36.160 --> 0:34:38.759 you know, if you die writing a research report, I'll 0:34:38.840 --> 0:34:42.480 kill you, right. Um. So this is where you start 0:34:42.640 --> 0:34:44.800 putting it together. You put a little bit of life together, 0:34:45.560 --> 0:34:48.760 and you start thinking like an investor. And you start 0:34:48.800 --> 0:34:51.279 investing in yourself and thinking about you know, how are 0:34:51.280 --> 0:34:53.640 you going to measure the return in your life? And 0:34:53.719 --> 0:34:57.279 for me, I've done well UM as an analyst. You know, 0:34:57.360 --> 0:35:00.160 we we we did well. And I said, I really 0:35:00.160 --> 0:35:02.839 want to find ways that I can impact and help 0:35:02.880 --> 0:35:05.440 others with with the years that I have left, because 0:35:05.680 --> 0:35:07.719 it could have gone away right then and there. So 0:35:07.960 --> 0:35:11.279 is that what led to Management Leadership for Tomorrow? And 0:35:11.320 --> 0:35:14.919 then old finance tell us about what took place when 0:35:14.920 --> 0:35:17.359 you get out of the hospital. Yeah, so I got 0:35:17.400 --> 0:35:20.040 out of the hospital. UM stuck around for a few 0:35:20.040 --> 0:35:23.400 more months at at the firm that I was working UM, 0:35:23.440 --> 0:35:25.640 and then decided to do some other things and and 0:35:25.680 --> 0:35:29.160 that included UM doing some work with small and medium 0:35:29.160 --> 0:35:33.960 sized businesses providing some outsourced CFO type of service UM 0:35:34.000 --> 0:35:36.680 to really understand how some of these small businesses worked. 0:35:36.880 --> 0:35:40.239 An organization that I looked at doing some work with 0:35:40.239 --> 0:35:43.279 with Management Leadership for Tomorrow and John Rice and the 0:35:43.320 --> 0:35:46.160 team and MLT do a great job. UM. They have 0:35:46.320 --> 0:35:50.520 absolutely moved the needle and changed the trajectory for thousands 0:35:50.560 --> 0:35:53.680 of UM, Black, Latino and Native American students. Over twenty 0:35:53.719 --> 0:35:56.640 plus years, uh knew John a little bit and knew 0:35:56.680 --> 0:35:58.440 about the work that he had done. I had written 0:35:58.480 --> 0:36:02.719 recommendations for or mintyes of mine into that program UM, 0:36:02.719 --> 0:36:04.480 and John asked me to come out and you know, 0:36:04.560 --> 0:36:07.800 can you help raise some money right running business development? 0:36:07.920 --> 0:36:10.600 And for me that was a step away from the 0:36:10.680 --> 0:36:15.040 industry UM. And what I recognized is I got tremendous 0:36:15.080 --> 0:36:18.680 fulfillment out of seeing young people that were, you know, 0:36:19.320 --> 0:36:22.560 ten twenty years younger than myself, but helping them get 0:36:22.600 --> 0:36:25.640 to the next level, helping give them the opportunities that 0:36:25.640 --> 0:36:28.360 that woman gave me from Goldman when she said here's 0:36:28.360 --> 0:36:31.480 the path you should think about taking. Quite quite interesting. 0:36:31.560 --> 0:36:34.840 I'm Barry Ritults. You're listening to Masters in Business on 0:36:34.880 --> 0:36:38.839 Bloomberg Radio. We're talking to Marcus Shaw. He is the 0:36:38.880 --> 0:36:42.600 CEO of alt Finance, a firm which seeks to increase 0:36:42.640 --> 0:36:48.520 diversity across alternative asset management firms. So we've been talking 0:36:48.840 --> 0:36:53.759 earlier about UM, the lack of recruiting and the lack 0:36:53.800 --> 0:36:57.880 of diversity historically on Wall Street, but let's talk about 0:36:57.920 --> 0:37:00.719 the other side. You you often speak to gups of 0:37:00.840 --> 0:37:04.080 smart college kids and you asked them, Hey, what do 0:37:04.120 --> 0:37:07.760 you guys know about private equity or credit or venture capital? 0:37:08.200 --> 0:37:10.640 What what sort of answer do you get when you 0:37:10.719 --> 0:37:14.719 ask those college students those questions. So, the most interesting 0:37:14.800 --> 0:37:17.880 thing that I've seen in assessing college students and talking 0:37:17.920 --> 0:37:23.239 to them is that students generally have very little knowledge 0:37:23.400 --> 0:37:25.960 of the companies that are operating in the private equity, 0:37:26.000 --> 0:37:29.520 private credit markets, real estate. They're knowing they know some 0:37:29.560 --> 0:37:32.040 of the venture capital firms, because I think venture capital 0:37:32.080 --> 0:37:35.320 has done a great job of pr over the past 0:37:35.360 --> 0:37:37.759 ten years or so. I mean, everybody wants to be 0:37:37.800 --> 0:37:41.840 a venture capitalist and an entrepreneur. Um. I always attribute 0:37:41.880 --> 0:37:44.640 that to a low interest rate environment where oh no, 0:37:44.760 --> 0:37:48.200 go back to the nineties and venture capitalists were rock stars. 0:37:48.239 --> 0:37:50.719 That's right, that's right, right. Well, also, though you know 0:37:50.760 --> 0:37:52.920 a period there where you had the FED being a 0:37:52.920 --> 0:37:57.400 little accommodative, right. I think that by nature and by design, 0:37:57.960 --> 0:38:00.680 many of the firms that operate in in the private 0:38:00.680 --> 0:38:03.040 equity and private credit space don't want to be known. 0:38:03.080 --> 0:38:06.560 But our students know many of the holding companies, right, 0:38:06.640 --> 0:38:10.160 And that's what's really interesting. That they know the publicly 0:38:10.160 --> 0:38:13.760 traded companies, they know the private companies, but they don't 0:38:13.800 --> 0:38:17.080 know the holding companies for the private companies. You use 0:38:17.160 --> 0:38:21.440 the example and I think it's fascinating. Rihanna partnered with 0:38:21.480 --> 0:38:24.600 a private equity firm for her fashion line. The students 0:38:24.640 --> 0:38:28.520 know who Rihanna is and they know how wildly successful 0:38:28.600 --> 0:38:31.799 she's become, but they don't know who the financers are. 0:38:31.880 --> 0:38:35.520 That's right, and and how do you get them to 0:38:36.400 --> 0:38:39.839 look behind the curtain and or under the hood and 0:38:40.080 --> 0:38:44.000 see that that capital is what's driving the business. I 0:38:44.000 --> 0:38:46.520 think the key to that and we we we check 0:38:46.600 --> 0:38:49.960 for this when we're interviewing students for our program is 0:38:50.000 --> 0:38:54.000 intellectual curiosity, Right, That's the key to being an investor. 0:38:54.080 --> 0:38:57.560 Are you always thinking about peeling back another layer to 0:38:57.600 --> 0:38:59.680 the onion? You go in a store, you see a 0:38:59.719 --> 0:39:05.719 great product? Mm hmm. Where's that product made? Who's the 0:39:05.760 --> 0:39:09.000 company that owns that? If there's several different pieces to 0:39:09.040 --> 0:39:11.440 the product, how many where are they getting the components from? 0:39:11.480 --> 0:39:14.719 Where they sourcing them from? Who owns that company? Who 0:39:14.840 --> 0:39:18.400 finances those companies? That's the way we're teaching students to 0:39:18.520 --> 0:39:23.160 think because that brings about the type of intellectual curiosity 0:39:23.200 --> 0:39:25.600 that you need to have when ultimately you want to 0:39:25.600 --> 0:39:28.359 put some capital behind a company that you really like. 0:39:29.080 --> 0:39:32.480 So So let's go back to first principles. Why are 0:39:32.600 --> 0:39:36.560 companies interested in in diversity? What's in it for them? 0:39:36.600 --> 0:39:38.759 So I think they're There are a number of reasons 0:39:38.800 --> 0:39:43.120 why companies are and should be interested in diversity. UM. 0:39:43.200 --> 0:39:47.960 We have hundred million students out here UM coming through 0:39:48.160 --> 0:39:51.239 you know, K through twelve and university system that are 0:39:51.360 --> 0:39:54.840 operating at a higher level than we were twenty years ago. 0:39:55.160 --> 0:39:58.600 Students are very smart, independent of their color, their background, 0:39:58.640 --> 0:40:01.600 their religion, their central owner Asian right. What we know 0:40:01.800 --> 0:40:06.200 is is that students are being educated at tremendous levels today. 0:40:06.280 --> 0:40:10.319 There have so much more access that their intellectual curiosity 0:40:10.840 --> 0:40:14.239 is going to be UM really fueled by a lot 0:40:14.280 --> 0:40:18.359 more information that's delivered in a more equitable way. If 0:40:18.360 --> 0:40:22.160 I'm hiring for talent, I want access to all of that. 0:40:22.719 --> 0:40:25.480 I want to know the brightest kid from every corner 0:40:25.520 --> 0:40:29.960 of the country, boy, girl, gay, straight, black, white, it 0:40:30.040 --> 0:40:33.160 doesn't matter. I want to know that student because that 0:40:33.239 --> 0:40:36.560 student can help me. That student can help me build 0:40:36.600 --> 0:40:40.160 and invest in find opportunities and generate alpha and bring 0:40:40.200 --> 0:40:43.600 more clients into my business. And so if I'm a 0:40:43.680 --> 0:40:47.080 senior leader at a company, I think that's the business operative, right, 0:40:47.120 --> 0:40:50.200 I've got to have the brightest talent. The talent that's 0:40:50.280 --> 0:40:54.520 most differentiated and intelligent is also helpful. I think the 0:40:54.640 --> 0:40:58.480 social part of this is that you know, a lot 0:40:58.520 --> 0:41:02.040 of these dollars are public dollars that that companies are managing. 0:41:02.360 --> 0:41:05.919 My mother again, a fifty year school teacher who put 0:41:06.000 --> 0:41:11.080 money into her retirement for fifty years. It would benefit 0:41:11.120 --> 0:41:14.200 her and it would benefit the other teachers and firefighters 0:41:14.280 --> 0:41:18.440 and police officers. To represent diverse communities, to have people 0:41:18.840 --> 0:41:21.520 who are investing their money look like them as well, 0:41:21.640 --> 0:41:24.799 really interesting. So this is more than just a checkbox 0:41:25.360 --> 0:41:29.319 on any list. Companies are actually looking to expand their 0:41:29.320 --> 0:41:33.920 diversity and inclusion practices because they see a genuine benefit 0:41:34.000 --> 0:41:38.600 to both their decision making process and their businesses. I 0:41:38.640 --> 0:41:42.560 think that's the obvious answer, um, and that's why with 0:41:42.600 --> 0:41:44.839 all finance, you know, this is a long term plan. 0:41:44.960 --> 0:41:47.960 We've got a tenure commitment from our three uh initial 0:41:47.960 --> 0:41:51.080 partner firms, and so this is not about checking the box. 0:41:51.520 --> 0:41:55.640 This is about changing the paradigm um for recruiting talent 0:41:55.680 --> 0:42:01.799 in this industry. So this industry has been notorously laggered 0:42:02.040 --> 0:42:04.759 when it comes to diversity, but there are lots of 0:42:04.760 --> 0:42:09.680 other industries. Technology has been accused of having a diversity issue, 0:42:10.440 --> 0:42:14.360 medicine law, pretty much wherever you look. The United States 0:42:14.360 --> 0:42:19.040 has its own history with some of its dark pockets. 0:42:19.600 --> 0:42:24.719 What other sectors could benefit from an organization like ALD Finance, 0:42:24.840 --> 0:42:27.960 ALD DOT. What else can we focus on? Yeah, I 0:42:28.000 --> 0:42:31.640 think there are a number of sectors that could benefit 0:42:31.719 --> 0:42:35.160 from this strategy, even sectors like tech that have already 0:42:35.200 --> 0:42:40.000 developed some strategies. I think again, we're focused around education, exposure, 0:42:40.000 --> 0:42:43.760 and experience, the three elements that are going into preparing 0:42:43.840 --> 0:42:47.560 students for careers. This is not just about scholarships. Right. 0:42:47.600 --> 0:42:50.120 You give us in the scholarship, but then you don't 0:42:50.120 --> 0:42:52.719 really give them access to the people at your firm 0:42:52.800 --> 0:42:55.040 that are going to help that student not only get 0:42:55.040 --> 0:42:58.160 a job at that firm, but feel a sense of belonging, 0:42:58.600 --> 0:43:00.560 right once they get to that firm, so that they 0:43:00.680 --> 0:43:04.759 maximize their individual output. That's what you're trying to go for. Right. 0:43:04.880 --> 0:43:07.239 I'll tell you a story about a student. So we 0:43:07.280 --> 0:43:09.919 have a student in our program, and when you talk 0:43:09.960 --> 0:43:14.080 about counseling and coaching, it was a phenomenal story. A student, 0:43:14.520 --> 0:43:16.920 very bright student who had the ability to graduate in 0:43:16.960 --> 0:43:20.440 three years and worked last summer at at a fairly 0:43:20.440 --> 0:43:24.399 reputable consulting company. And I asked a student, I said, 0:43:24.640 --> 0:43:26.440 why are you in a hurry to graduate? You've got 0:43:26.440 --> 0:43:30.719 a students, got a pretty good scholarship package. Student comes 0:43:30.719 --> 0:43:33.720 from a background where you know, he's having to support 0:43:33.760 --> 0:43:37.319 families still at home. I mean, you know, a tough situation, 0:43:37.400 --> 0:43:39.040 and he wanted to get out in the workplace where 0:43:39.040 --> 0:43:43.080 he can earn I said, trust me, if you stay 0:43:43.160 --> 0:43:46.719 for your full four years, you'll have the opportunity through 0:43:46.760 --> 0:43:50.800 this program to get access to a career in alternatives. 0:43:52.440 --> 0:43:55.040 You have a great opportunity. Last summer you'll come out. 0:43:55.360 --> 0:43:58.560 You could make two x, even three X if you 0:43:58.680 --> 0:44:01.799 stay and pursue this opportun any alternatives. So the young 0:44:01.840 --> 0:44:06.320 man stayed, had multiple opportunities selected one. But here's here's 0:44:06.360 --> 0:44:09.880 the real power of the network. As he's making his 0:44:10.000 --> 0:44:12.880 decision to which role he's going to take, and you know, 0:44:12.960 --> 0:44:17.360 at one of three mega funds, he calls up his mentor, 0:44:18.160 --> 0:44:19.719 who is not at one of the firms that he 0:44:19.760 --> 0:44:21.960 has an offer from, and he says, well, what do 0:44:22.000 --> 0:44:25.520 you think I should do. In the course of that conversation, 0:44:25.560 --> 0:44:27.480 not only does he get guides from the mentor. The 0:44:27.520 --> 0:44:30.799 mentor connects him with another gentleman who used to work 0:44:30.840 --> 0:44:33.319 at one of the firms in the same group that 0:44:33.400 --> 0:44:37.239 he was going to. Now he has a decision that 0:44:37.320 --> 0:44:40.200 he's made that's been informed by two people that he 0:44:40.280 --> 0:44:44.600 did not know a year ago dinner table, and we 0:44:44.640 --> 0:44:49.320 will we will take those conversations for granted. If, especially 0:44:49.360 --> 0:44:52.239 someone grown up in a New York area where you 0:44:52.320 --> 0:44:55.040 know people who work in finance or people's parents were 0:44:55.040 --> 0:44:59.960 in finance, that network just doesn't develop elsewhere without focus 0:45:00.120 --> 0:45:03.719 exposure to it. That's right, that's really intriguing. So you 0:45:03.760 --> 0:45:06.120 were a Bank of America a decade ago, you let 0:45:06.160 --> 0:45:08.319 it uh, you had some important teams you worked with, 0:45:08.600 --> 0:45:11.359 and you led some groups. How do you see Wall 0:45:11.400 --> 0:45:15.280 Street having changed over the past ten or twenty years? 0:45:16.120 --> 0:45:19.479 Were the signs on the on the road that things 0:45:19.520 --> 0:45:23.880 were getting better? Were they ripe for moving the right direction? 0:45:24.000 --> 0:45:27.520 Or is Wall Street just calcified and needed to really 0:45:27.560 --> 0:45:31.080 be shaken up? Well, Barry, I think that question really 0:45:31.200 --> 0:45:34.920 highlights something that's that's amazing to me. Number One, that 0:45:34.960 --> 0:45:37.840 I've been in this business, you know, a long time 0:45:38.000 --> 0:45:43.759 goes by very fast, And Number two. How much things change, 0:45:44.280 --> 0:45:46.960 you know, in a fairly short amount of time. You know, 0:45:47.000 --> 0:45:51.360 when I started my career in finance, I was the 0:45:51.400 --> 0:45:55.880 only black person in in my group, in my division. Okay, Um, 0:45:56.040 --> 0:45:59.040 another young woman came shortly after. We had a great relationship. 0:45:59.080 --> 0:46:01.759 In fact, she's been a lifelong friend and I, you know, 0:46:02.239 --> 0:46:05.240 was a mentor to her. And um, was that something 0:46:05.280 --> 0:46:07.719 that was very consistent. You were the only black guy 0:46:07.840 --> 0:46:10.520 working at the other shops you worked at, or at 0:46:10.560 --> 0:46:14.040 least the only person in the department. Well, um, for 0:46:14.120 --> 0:46:16.040 a couple for a couple of firms that I also 0:46:16.160 --> 0:46:18.920 did work at a minority own firm UM down in 0:46:18.960 --> 0:46:22.359 North Carolina, And and that was it was refreshing. I mean, 0:46:22.480 --> 0:46:24.960 I actually, you know, some of the brightest people that 0:46:25.000 --> 0:46:27.839 I ever worked with, and much of my investment philosophy 0:46:27.840 --> 0:46:30.440 and the thesis the way I think about investing was 0:46:30.520 --> 0:46:36.120 developed there amongst an incredibly diverse group of investors who had, 0:46:36.320 --> 0:46:41.400 you know, tremendous experience and success. Really intriguing. So given 0:46:41.480 --> 0:46:46.640 that you were at some big firms early tens, you know, 0:46:46.719 --> 0:46:49.560 what what did you see? What was what was it 0:46:49.640 --> 0:46:54.000 that led Wall Street to finally being ripe to accept changes. 0:46:54.760 --> 0:46:59.440 I think there is an inevitable pressure from society that 0:46:59.560 --> 0:47:03.839 helps drive change. And I think Wall Street, while we 0:47:03.920 --> 0:47:08.880 talk about it in this compartmentalized concept of it's Wall Street, 0:47:08.880 --> 0:47:12.320 it's in New York, it's you know, the bull down 0:47:12.320 --> 0:47:14.799 on Wall Street, right, and it's it's the movies that 0:47:14.880 --> 0:47:20.280 we see in reality, the funds that Wall Street is managing, 0:47:20.320 --> 0:47:23.440 the capital that it's managing, it's coming from all over 0:47:23.480 --> 0:47:26.080 the country. It's coming from people that look like me, 0:47:26.120 --> 0:47:28.440 It's coming from people that look like you. It's coming 0:47:28.440 --> 0:47:30.760 from people that look like our parents and our children. 0:47:30.920 --> 0:47:33.080 So at the end of the day, and I think 0:47:33.080 --> 0:47:35.359 we saw this in two thousand and eight, I think 0:47:35.400 --> 0:47:38.000 we saw it again during COVID that the end of 0:47:38.040 --> 0:47:42.000 the day, these companies are accountable to the people, right 0:47:42.040 --> 0:47:45.040 and to the people that are their investors, their LPs 0:47:45.080 --> 0:47:48.759 and and entities that their LPs represent um in their clients. 0:47:48.800 --> 0:47:53.279 And so I think that what we've evolved into is 0:47:53.640 --> 0:47:57.880 a more human Wall Street that is more inclusive by nature. 0:47:58.239 --> 0:48:01.160 And I do believe that what we're seeing now right, 0:48:01.200 --> 0:48:04.000 we will continue to see because we'll have people that 0:48:04.040 --> 0:48:07.000 come throughout finance, but also people more senior that are 0:48:07.080 --> 0:48:10.000 at the table and helping make decisions on where and 0:48:10.040 --> 0:48:12.319 how we invest in people, and where are we how 0:48:12.360 --> 0:48:15.160 and where and how we invest in companies. So so 0:48:15.239 --> 0:48:20.680 that leads me to um a pretty straightforward question, which is, first, 0:48:20.800 --> 0:48:24.280 how do you measure your own success with all finance? 0:48:24.680 --> 0:48:29.520 And second, how do people like oak Tree, Apollo and aries. 0:48:30.040 --> 0:48:34.880 How did they ask you to track uh, your your progress? 0:48:34.920 --> 0:48:37.799 What metrics do they look at to say, hey, we're 0:48:37.800 --> 0:48:41.240 getting our our money's worth for standing up this company 0:48:41.239 --> 0:48:45.720 and giving them a decade long horizon. So I'll address 0:48:45.960 --> 0:48:49.960 the ladder first, right. Number one, we had our first 0:48:50.239 --> 0:48:53.920 CYC in September. We started our first cohort of our 0:48:54.000 --> 0:48:57.560 fellowship in January. We now have the second coort. I've 0:48:57.560 --> 0:49:01.000 got seventy five students from eight hbs you use. There 0:49:01.040 --> 0:49:05.840 are now building relationships, getting education, getting exposure and ultimately 0:49:05.880 --> 0:49:10.439 getting experience to the alternative investment industry. That is fascinating. 0:49:10.800 --> 0:49:13.120 We've got students in our program that have their first 0:49:13.120 --> 0:49:17.640 full time offer with alternative investment firms that will graduate 0:49:17.680 --> 0:49:21.239 in two thousand three and May. So we're already in 0:49:21.400 --> 0:49:24.520 a few months really hitting the cover off the ball. UM. 0:49:24.560 --> 0:49:27.320 That's the quantitative element. Right, those are the KPI s 0:49:27.400 --> 0:49:29.480 up on the dashboard that are saying, you know, how 0:49:29.480 --> 0:49:33.640 many students are are you getting to exposure to these jobs? 0:49:33.640 --> 0:49:36.960 How many students are getting these jobs? What I also measure, 0:49:36.960 --> 0:49:39.839 and this is who the conversation with students? How many 0:49:39.880 --> 0:49:44.960 students are building confidence, skills and relationships that will help 0:49:45.040 --> 0:49:48.719 improve their wealth and economic mobility as they grow. How 0:49:48.719 --> 0:49:52.240 many students are having a conversation around the learning session 0:49:52.280 --> 0:49:55.520 that we do on interest rates and they're calling mom 0:49:55.600 --> 0:49:58.400 or dad at home and saying, you know, what is 0:49:58.400 --> 0:50:00.680 your credit card? You know what sort of interest rate 0:50:00.719 --> 0:50:03.400 on your credit card? Did you refile your house? How 0:50:03.440 --> 0:50:06.480 should I think about my student loans? Right? That are 0:50:06.520 --> 0:50:10.120 really taking an active position and the way that they 0:50:10.120 --> 0:50:13.000 think about their personal finance, but also the way they 0:50:13.040 --> 0:50:16.239 think about investing. And I hear those conversations and have 0:50:16.360 --> 0:50:20.360 those conversations with students almost on a daily basis, and 0:50:20.440 --> 0:50:22.439 that's what fulfills me and lets me know we're moving 0:50:22.440 --> 0:50:25.040 in the right direction. When I look down the road 0:50:25.320 --> 0:50:28.320 in ten years, I believe that I will have hundreds 0:50:28.320 --> 0:50:32.279 of students that are actively working in alternative investments. But 0:50:32.360 --> 0:50:36.400 I'll have thousands that are knowledgeable and have relationships with 0:50:36.480 --> 0:50:39.040 people in this business and are better off for it. 0:50:39.520 --> 0:50:43.080 So we've been talking a lot about alt investments. Are 0:50:43.160 --> 0:50:52.280 there parallel entities to old finance for traditional asset management, investing, banking, stocks, bonds, 0:50:52.480 --> 0:50:55.520 I p o s, etcetera. It seems like there should 0:50:55.520 --> 0:50:59.080 be something similar to what you're doing for that space 0:50:59.120 --> 0:51:02.640 as well, which arguably is even bigger than alter finance. 0:51:02.880 --> 0:51:06.040 So I think there are some some organizations that have, um, 0:51:06.080 --> 0:51:10.719 you know, been active and in providing similar opportunities for 0:51:10.800 --> 0:51:13.400 students for traditional banking. Right. I mean when you think 0:51:13.440 --> 0:51:17.080 about what Reginald Lewis did you know almost thirty years 0:51:17.080 --> 0:51:21.560 ago um and and breaking grounds for for blacks and 0:51:21.640 --> 0:51:26.200 investment banking. Um, I think that we're doing some of 0:51:26.239 --> 0:51:30.080 that today in the alternative space. Remember when I have 0:51:30.640 --> 0:51:33.040 we had our first group of fellows. We had thirty 0:51:33.040 --> 0:51:38.560 three fellows in our first cohort. So this is January two, 0:51:38.640 --> 0:51:40.879 This is just you know a few months ago, right, 0:51:41.440 --> 0:51:44.480 And I asked the students, all right, how many of 0:51:44.520 --> 0:51:47.920 you know Morning Stanley Goldman City Group. Everybody raises their hand. 0:51:47.920 --> 0:51:50.080 They all know what they see, the commercials, they get 0:51:50.360 --> 0:51:54.040 the commercials on on the internet. I asked, how many 0:51:54.120 --> 0:51:58.240 of you know areas of Pollo oak Tree one student, 0:51:59.040 --> 0:52:03.080 so roughly three were sent. These students are brilliant, all 0:52:03.160 --> 0:52:07.640 high performers, all strong academic performers. I mean they will 0:52:07.680 --> 0:52:09.480 not fail to get a job. They could get a 0:52:09.560 --> 0:52:12.920 job doing anything. But they did not have the awareness 0:52:12.960 --> 0:52:16.680 of how the pathway to enter one of the most 0:52:16.760 --> 0:52:21.000 rewarding careers in investing. And that's that That's a key. 0:52:21.080 --> 0:52:23.080 And so when I look at other industries and what 0:52:23.160 --> 0:52:27.880 other organizations are doing, we are squarely focused on helping 0:52:27.960 --> 0:52:32.040 move the needle and the alternative investment space, places where 0:52:32.040 --> 0:52:35.399 people can help do deals, be long term owners. It's 0:52:35.440 --> 0:52:39.200 not about you know, the transactional element of investment banking, 0:52:39.520 --> 0:52:42.800 right be an owner, a direct owner of a brand 0:52:42.840 --> 0:52:44.920 that you know, but you never knew who the holding 0:52:44.960 --> 0:52:48.160 company was. I have seventy five students now that can 0:52:48.200 --> 0:52:52.160 answer that question of what's the pathway? How much larger 0:52:52.480 --> 0:52:56.359 can you expand this to be? So Barry, we will 0:52:56.440 --> 0:53:00.520 expand the fellowship program ultimately to be a round a 0:53:00.600 --> 0:53:03.120 hundred or a hundred and twenty students in you know, 0:53:03.200 --> 0:53:06.200 each year about fourty or so in each class. We 0:53:06.280 --> 0:53:09.759 are also partnering with the Warden School of University of 0:53:09.760 --> 0:53:14.400 Pennsylvania to develop an institute, the Warden Alt Finance Institute, 0:53:14.600 --> 0:53:17.920 which will be an online community and platform providing AGAIN 0:53:18.320 --> 0:53:22.560 curriculum and content and community as well as resources to 0:53:22.600 --> 0:53:27.320 help students at any HBCU gain access to AGAIN education, 0:53:27.400 --> 0:53:30.600 exposure and opportunities for experience in the space. And so 0:53:31.000 --> 0:53:33.920 through the institute will be able to scale some of 0:53:33.960 --> 0:53:36.399 the best parts of our fellowship, which is a real 0:53:36.520 --> 0:53:39.160 high touch part of our programming, but we'll be able 0:53:39.200 --> 0:53:42.000 to scale that to the students that are at HBC 0:53:42.239 --> 0:53:46.399 is that we don't partner with directly. Really really quite fascinating. 0:53:46.880 --> 0:53:49.240 I know I only have you for a couple of minutes. 0:53:49.280 --> 0:53:51.520 More So before I let you go, I want to 0:53:51.560 --> 0:53:54.920 ask uh the standard questions that I ask all of 0:53:54.960 --> 0:53:58.480 my guests, starting with what have you been streaming these days? 0:53:58.480 --> 0:54:02.600 What's been keeping you entertained a post lockdown? Yeah, so Barry, 0:54:02.640 --> 0:54:05.480 I would say, I tend to read a lot and 0:54:05.520 --> 0:54:08.799 follow a lot obviously in news channels, UM on finance, 0:54:09.440 --> 0:54:11.960 on podcasts. I mean, I love Howard marks the memo 0:54:12.040 --> 0:54:14.480 and I read his his memos that he puts out. 0:54:14.520 --> 0:54:17.320 But I love what he's doing in the podcast format 0:54:17.360 --> 0:54:19.840 that he's developed. But I listened to a lot of sports. 0:54:19.880 --> 0:54:23.239 I'm a huge Jalen and Jacoby fan. Um. I love 0:54:23.280 --> 0:54:25.520 what those guys are doing in terms of sports and 0:54:25.640 --> 0:54:28.880 entertainment and so, uh, you know, probably not as heady 0:54:28.920 --> 0:54:31.120 as some of the other answers you get, UM, but 0:54:31.239 --> 0:54:35.759 I I love sports talk radio. That's interesting. Tell us 0:54:35.760 --> 0:54:39.000 about some of your early mentors who helped shape your career. 0:54:40.880 --> 0:54:45.279 So you know a couple of the mentors that I had, Um, 0:54:45.440 --> 0:54:47.560 there was a woman named Stacy Gorn who hired me 0:54:47.560 --> 0:54:50.960 actually too IBM, And it's amazing to think this is 0:54:51.120 --> 0:54:56.920 over twenty years ago. Um. Stacy was a long term 0:54:57.280 --> 0:55:00.680 executive at IBM and has now moved to an resulting firm. 0:55:01.480 --> 0:55:05.239 But what she really helped me focus on early in 0:55:05.280 --> 0:55:09.680 my career was continuous improvement. Right. You think about it 0:55:09.760 --> 0:55:11.840 as an engineer a lot, right, kind of the causing 0:55:11.920 --> 0:55:16.759 principle right that Toyota used, but personal improvement of yourself? Right, 0:55:17.000 --> 0:55:19.879 how do you continue to develop as a person? If 0:55:19.920 --> 0:55:23.280 you're strong technically, how do you develop into a person 0:55:23.360 --> 0:55:27.160 that people feel comfortable managing? Others and feel comfortable being 0:55:27.200 --> 0:55:29.680 managed by um. And so as I developed into an 0:55:29.680 --> 0:55:33.280 executive and the CEO, I always reflect on those lessons 0:55:33.320 --> 0:55:36.120 that she gave me early on about being vulnerable and 0:55:36.160 --> 0:55:39.600 being coachable, even being coached up right. So having somebody 0:55:39.760 --> 0:55:42.520 that reports to you have the ability to coach you 0:55:42.680 --> 0:55:45.200 up on things where you can be more helpful for 0:55:45.239 --> 0:55:49.279 your organization. Uh. You mentioned books and you like to 0:55:49.320 --> 0:55:51.319 do a lot of reading. Tell us what some of 0:55:51.320 --> 0:55:56.319 your favorites are and what are you're reading now? Yeah? So, Um, 0:55:56.360 --> 0:55:58.920 you know a book that I go too often and 0:55:59.239 --> 0:56:02.479 I you know you read this, you know, probably once 0:56:02.520 --> 0:56:06.160 every couple of years, is uh Peter Burnsteins against the Gods? 0:56:06.400 --> 0:56:10.879 Um kind of. It's just it's it's fascinating to think 0:56:10.920 --> 0:56:15.719 about this concept of risk and how it's affected us 0:56:15.760 --> 0:56:19.800 since the very beginning of time, right, and then really 0:56:19.880 --> 0:56:24.480 how we have taken risk from something that was deified 0:56:24.600 --> 0:56:27.800 right kind of this religious concept and turned it into 0:56:28.400 --> 0:56:34.520 an economic tool that we can arbitrage for for personal gain. Unbelievable. Um, 0:56:34.560 --> 0:56:37.160 well written. I love the historical context and bringing it 0:56:37.239 --> 0:56:40.759 into the future. And so that's one um that I 0:56:40.800 --> 0:56:43.200 that I go too often I'll tell you a book 0:56:43.280 --> 0:56:47.200 that that I want to pick up and um, the 0:56:47.200 --> 0:56:51.240 title here, it's John Max's new book. And I thought 0:56:51.239 --> 0:56:54.799 it's interesting because you know, John is somebody, um that 0:56:54.880 --> 0:56:57.880 I don't know personally, but I've always respected kind of 0:56:57.920 --> 0:57:02.400 the way that he organized and ran businesses. And you know, 0:57:02.800 --> 0:57:07.040 it's a note that um, he's dealing. You know, I 0:57:07.080 --> 0:57:10.440 think has talked publicly about the aging process that he 0:57:10.560 --> 0:57:14.040 is going through himself. And uh, I found that particularly 0:57:14.160 --> 0:57:16.320 endearing because it's something that that I've dealt with in 0:57:16.360 --> 0:57:21.520 my family and to recognize that, you know, in this business, 0:57:21.520 --> 0:57:26.280 we're still human and we're not excluded from the human process. 0:57:26.280 --> 0:57:28.760 And so that's a book. John max new book is 0:57:28.760 --> 0:57:30.920 one that I certainly want to pick up up close 0:57:31.000 --> 0:57:34.120 and all. In life Lessons from a Wall Street Warrior 0:57:34.160 --> 0:57:37.440 is that is? That's a hell of a title. Hell 0:57:37.480 --> 0:57:41.280 of a guy. Um, what sort of advice would you 0:57:41.320 --> 0:57:44.440 give to a recent college grad? This is kind of 0:57:44.440 --> 0:57:47.520 a funny question because I asked this to everybody, but 0:57:47.720 --> 0:57:51.520 essentially I'm asking you a question, which is what old 0:57:51.600 --> 0:57:55.720 finance does. But I'll ask it anyway. What advice do 0:57:55.760 --> 0:57:58.440 you give to a recent college grad who was interested 0:57:58.480 --> 0:58:03.360 in a career in either investments or alternative finance. So 0:58:03.400 --> 0:58:06.880 there are two things that I tell all of our students. UM. 0:58:07.000 --> 0:58:11.840 Number one is a bigger picture and probably pretty simple. 0:58:11.920 --> 0:58:15.160 You've got to have intellectual curiosity. You can never run 0:58:15.160 --> 0:58:18.480 out of questions. I mean you you run incredible podcasts. 0:58:18.600 --> 0:58:21.280 You can never run out of questions. You've always got 0:58:21.320 --> 0:58:24.440 to have something that you're thinking about in terms of 0:58:24.520 --> 0:58:27.200 what's the next layer. How can I think about it 0:58:27.200 --> 0:58:29.560 in a different perspective, How can I put myself in 0:58:29.600 --> 0:58:32.560 somebody else's shoes and think about it? And how does 0:58:32.680 --> 0:58:36.160 that change the value of what I'm looking at right? 0:58:36.200 --> 0:58:40.000 I think it's that's critical to being successful as an investor. 0:58:40.440 --> 0:58:43.640 Number two is something that somebody shared with me and 0:58:44.000 --> 0:58:46.600 essentually John Rice, who runs m LT and is a 0:58:46.640 --> 0:58:48.760 partner and a great friend and and really one of 0:58:48.760 --> 0:58:52.920 the great leaders in the D and I space. Um, 0:58:53.040 --> 0:58:56.880 when you're young and you're bright, you've got to take 0:58:57.040 --> 0:59:00.919 risk early in your career, and in fact act not 0:59:01.040 --> 0:59:04.600 taking risk is actually the riskiest thing you can do. 0:59:04.920 --> 0:59:08.080 It's a little bit of a parable, right, but when 0:59:08.160 --> 0:59:11.520 you're young, you can recover from failure. You don't have 0:59:11.560 --> 0:59:14.920 that same luxury when you're older. It's so hard to 0:59:14.920 --> 0:59:18.040 appreciate that when you're you know, twenty or twenty one, 0:59:18.360 --> 0:59:21.280 when you're you're afraid of failure, When you're afraid of failure, 0:59:21.400 --> 0:59:26.000 when you should actually be seeking failure. Right. You should 0:59:26.120 --> 0:59:28.880 not be doing anything when you're twenty two or twenty 0:59:28.960 --> 0:59:31.920 or twenty one that you can't fail it right. Playing 0:59:31.960 --> 0:59:36.560 it safe is risky. It is risky. That's really interesting. 0:59:36.800 --> 0:59:39.240 And our final question, what do you know about the 0:59:39.280 --> 0:59:42.720 world of investing and old finance today? You wish you 0:59:42.760 --> 0:59:45.520 knew twenty or so years ago when you were really 0:59:45.760 --> 0:59:50.800 exploring the field in its early days. So the biggest 0:59:50.800 --> 0:59:54.400 thing I would say procedurally that that that I see 0:59:54.400 --> 1:00:00.200 in the investment hiring cycle is that you got be 1:00:00.280 --> 1:00:03.960 ready for the gig before you get it, which means 1:00:04.600 --> 1:00:09.720 that the recruiting process for alternative investments may start. Even 1:00:09.720 --> 1:00:12.920 if you're going to investment banking as an analyst, it 1:00:12.960 --> 1:00:16.320 may start before you actually start that job. There may 1:00:16.360 --> 1:00:18.680 be people that are reaching out to you trying to 1:00:18.720 --> 1:00:22.200 assess your interests in what you're gonna do after banking, 1:00:22.840 --> 1:00:25.080 and that was you know, I say one of the 1:00:25.120 --> 1:00:27.720 secrets of the industry that you know. I was well 1:00:27.720 --> 1:00:30.520 into my career before I knew that's how people were 1:00:30.560 --> 1:00:33.040 getting recruited into the industry. And so you gotta have 1:00:33.080 --> 1:00:35.040 your ear to the ground right. You got to know 1:00:35.560 --> 1:00:38.160 who's who, where the players are, who you should be 1:00:38.160 --> 1:00:40.840 expecting emails and calls from, and when you get those 1:00:40.840 --> 1:00:44.120 emails and calls, you gotta be ready for it. Really 1:00:44.160 --> 1:00:48.320 really interesting answer. We have been speaking to Marcus Shaw, 1:00:48.560 --> 1:00:53.040 CEO of ult Finance. If you enjoy this conversation, well, 1:00:53.200 --> 1:00:55.360 be sure and check out any of the previous four 1:00:55.400 --> 1:00:57.920 hundreds or so we've done over the past eight and 1:00:57.920 --> 1:01:02.480 a half years. You can find those at iTunes, Spotify, YouTube, 1:01:02.800 --> 1:01:06.640 wherever you get your podcast from. We love your comments, 1:01:06.640 --> 1:01:10.880 feedback and suggestions right to us at m IB podcast 1:01:10.920 --> 1:01:14.160 at Bloomberg dot net. Sign up for my daily reading 1:01:14.200 --> 1:01:18.120 list at rihults dot com. Follow me on Twitter at dhults. 1:01:18.560 --> 1:01:20.520 I would be remiss if I did not thank the 1:01:20.560 --> 1:01:24.280 crack team that helps put this conversation together each week. 1:01:24.760 --> 1:01:28.640 Justin Milner is my audio engineer. Attica val Bron is 1:01:28.640 --> 1:01:33.160 our project manager. Paris Wold is my producer. Sean Russo 1:01:33.680 --> 1:01:37.600 is my researcher. I'm Barry Rihults. You've been listening to 1:01:37.680 --> 1:01:43.280 Masters and Business on Bloomberg radioa