WEBVTT - Fund Steers HBCU Endowments Into VC 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all parnessing the power of Business 0:00:13.680 --> 0:00:17.160 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:20.000 analyst in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.479 Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot Com. You 0:00:23.480 --> 0:00:25.439 can also listen to our radio show at two pm 0:00:25.480 --> 0:00:28.400 Eastern Time on Bloomberg Radio or watch us on YouTube 0:00:28.400 --> 0:00:31.480 search Bloomberg Global News. So Tim got to say a 0:00:31.520 --> 0:00:33.880 favorite event where we get to check in with what's 0:00:33.880 --> 0:00:36.840 on the minds of investment professionals, the trends they care about, 0:00:37.560 --> 0:00:39.559 that their clients want to know about, the voices they 0:00:39.560 --> 0:00:40.960 want to hear from, and just kind of how to 0:00:41.120 --> 0:00:44.000 get it all done. It usually happens at the annual 0:00:44.000 --> 0:00:47.240 bny Mail and Pershing Inside event. It's being held virtual 0:00:47.280 --> 0:00:50.320 this year, getting underway next Tuesday. So great to have 0:00:50.440 --> 0:00:51.839 with us and to be talking again with B and 0:00:51.960 --> 0:00:55.080 Y Mail and Pershing's CEO Jim Crowley. He's with us 0:00:55.120 --> 0:00:57.440 on the phone in New Jersey. Also with us is 0:00:57.440 --> 0:01:00.120 the company CEO, Emily Schlosser. She's on the phone in 0:01:00.160 --> 0:01:03.520 New York City, Jim, Emily, great to have you here 0:01:03.560 --> 0:01:05.360 with Tim and myself. Jim, I want to kick it 0:01:05.400 --> 0:01:08.319 off with you. How are you and what's the past 0:01:08.440 --> 0:01:12.000 year been like for you folks? Well, Carol, Tim, first, 0:01:12.080 --> 0:01:14.720 thanks for having us. It's a great pleasure to be back, 0:01:14.760 --> 0:01:18.560 and wish we were in person. It has been yeah, 0:01:18.840 --> 0:01:23.320 well two will be there. Um, it has been. You know, 0:01:23.480 --> 0:01:27.479 obviously the last fifteen months fifteen months have been quite 0:01:27.520 --> 0:01:30.760 a challenge, and you know, two priorities really. First was 0:01:30.920 --> 0:01:34.200 obviously the safeguarding, you know, the health and the well 0:01:34.240 --> 0:01:37.000 being of all of our people. That was priority one. 0:01:37.360 --> 0:01:39.720 And then, you know, the second thing, Carol, that really 0:01:39.720 --> 0:01:41.880 became clear to us is that there really is no 0:01:42.120 --> 0:01:47.760 substitute for business continuity planning and testing of your business 0:01:47.760 --> 0:01:51.920 continuity processing. Because it became clear in March when we 0:01:52.000 --> 0:01:55.880 left the office on March thirteenth, literally overnight, we were 0:01:56.000 --> 0:02:00.040 virtual working from home, and thankfully we didn't miss a 0:02:00.280 --> 0:02:04.880 true what was really tremendous volume and volatility. Emily, come 0:02:04.920 --> 0:02:07.360 on in here and talk a little bit about what 0:02:07.400 --> 0:02:10.679 it's been like for you as as chief operating officer. UM, 0:02:10.919 --> 0:02:13.320 what are the changes that you've made and how are 0:02:13.360 --> 0:02:15.320 you thinking that some of those changes are going to 0:02:15.360 --> 0:02:18.919 be permanent on the other side of this, Thanks him, Yeah, 0:02:18.919 --> 0:02:22.040 and thanks thanks to bilth to you for having us. Uh, 0:02:22.480 --> 0:02:25.320 it's been it's been quite a ride. As Jim pointed out, 0:02:25.360 --> 0:02:28.440 So I joined the company as chief operating officer last 0:02:28.480 --> 0:02:34.639 July in a fully virtual environment, which is interesting. UM. 0:02:34.760 --> 0:02:37.240 I did have the privilege of meeting Jim briefly before 0:02:37.280 --> 0:02:41.120 I started, but otherwise I've worked largely for the last 0:02:41.160 --> 0:02:45.240 year virtually with all of my new colleagues. UM. But 0:02:45.440 --> 0:02:49.160 it's been great. Like we we have adopted very quickly 0:02:49.280 --> 0:02:53.720 to the virtual environment, UH, and we are thinking very 0:02:53.720 --> 0:02:56.720 carefully about what does this mean for the future. And 0:02:56.760 --> 0:02:59.440 I think we're you know, we're seeing employees that are 0:03:00.320 --> 0:03:03.840 really getting accustomed to working from home and having that flexibility, 0:03:03.880 --> 0:03:06.440 and then also people who are a chained to get 0:03:06.440 --> 0:03:09.360 back in and and interact with people in person. So 0:03:09.760 --> 0:03:12.320 we're looking at options for how we continue with a 0:03:12.400 --> 0:03:15.440 hybrid work environment to achieve both of those needs, while 0:03:16.080 --> 0:03:19.079 you know, building the best environment to serve our clients. 0:03:19.120 --> 0:03:20.639 I just want to dive right into that because men 0:03:20.680 --> 0:03:24.000 Tim and I every day there are stories on the Bloomberg, 0:03:24.080 --> 0:03:27.800 especially within the financial community, that you are seeing a 0:03:27.840 --> 0:03:30.120 lot of. It feels like we've got to be back 0:03:30.120 --> 0:03:32.440 in the office. Uh. And it feels like the tone 0:03:32.440 --> 0:03:35.440 of the conversation Jim has changed a little bit from 0:03:35.520 --> 0:03:37.200 maybe a year ago we were like, well, maybe this 0:03:37.280 --> 0:03:40.880 hybrid stuff makes sense. Remember James Gorman thinking about maybe 0:03:40.920 --> 0:03:44.320 we give up some real estate space um to where 0:03:44.320 --> 0:03:45.840 everybody now says, way, we got to be back in 0:03:45.880 --> 0:03:49.120 the in the environment your financial community, you guys are 0:03:49.160 --> 0:03:52.600 working with folks that are dealing with you know, millions 0:03:52.600 --> 0:03:55.520 and millions of investor accounts globally on a daily basis. 0:03:55.760 --> 0:03:58.040 What are they saying? Are they hybrid or they back 0:03:58.040 --> 0:04:01.720 in the office? What what do they anticipate? Well, many 0:04:01.800 --> 0:04:05.560 of our clients, Carol, are back in the office. I 0:04:06.000 --> 0:04:09.520 can't say though, that there is any one client that 0:04:09.760 --> 0:04:13.480 is back in the office full time UM with their 0:04:13.520 --> 0:04:17.440 full staff. I think most people are still sort of 0:04:17.480 --> 0:04:20.520 working through this environment and trying to figure out how 0:04:20.560 --> 0:04:24.000 to be hybrid. Who really is essential in office and 0:04:24.040 --> 0:04:27.760 who really isn't necessary to be an office. And in fact, 0:04:28.200 --> 0:04:30.240 you know, for our clients, the most important thing for 0:04:30.279 --> 0:04:32.840 them is being in front of investors, being in front 0:04:32.880 --> 0:04:36.000 of their clients. And that's a lot more virtual going 0:04:36.000 --> 0:04:39.520 on with that, and people are clients comfortable with that, Jim, 0:04:39.640 --> 0:04:43.400 much more virtual though, I have to say though, clients, 0:04:43.960 --> 0:04:46.320 you know, particularly when you're talking about their investments and 0:04:46.360 --> 0:04:48.880 their life planning, they really do want to have a 0:04:48.920 --> 0:04:53.000 personal relationship. And having a personal relationship through a WebEx 0:04:53.000 --> 0:04:58.200 serve any other sort of form of video conferencing isn't 0:04:58.240 --> 0:05:02.200 the same as sitting across the table or meeting in 0:05:02.240 --> 0:05:07.120 the restaurant. And you know, I've actually myself and Emily 0:05:07.160 --> 0:05:08.960 we've been on a couple of business trips now where 0:05:08.960 --> 0:05:13.159 we've actually met with clients in offices and it's it's 0:05:13.320 --> 0:05:17.279 the energy so much better and the opportunity to communicate 0:05:17.440 --> 0:05:19.719 clearly and sort of get a sense for what the 0:05:19.720 --> 0:05:23.440 other person is feeling and thinking. It's much more valuable. Suddenly. 0:05:23.480 --> 0:05:25.480 What does that mean for well, yeah, jumping jump in, 0:05:25.560 --> 0:05:27.920 go ahead now, I was just gonna say, and we 0:05:28.040 --> 0:05:30.600 have seen their investors coming in and out of their 0:05:30.839 --> 0:05:34.080 their offices to write, so so we are seeing that 0:05:34.200 --> 0:05:39.479 interpersonal interaction happening again in their offices too with their clients. Hey, Emily, 0:05:39.520 --> 0:05:41.360 we only have about a minute left here and we're 0:05:41.360 --> 0:05:42.920 going to talk more about this on the other side 0:05:42.960 --> 0:05:44.720 of the break after we do some news, but talk 0:05:44.720 --> 0:05:47.360 a little bit about how programming for Insight twenty one 0:05:47.760 --> 0:05:50.880 is different this year, given the different needs and what 0:05:51.000 --> 0:05:55.680 you're hearing from clients. Yeah, so having a virtual conferences 0:05:55.720 --> 0:05:58.640 here actually gives us an awesome opportunity to reach a 0:05:58.760 --> 0:06:03.120 much broader range of participants. I think we will have 0:06:03.839 --> 0:06:08.440 attendance from well across the globe, and we are anticipating 0:06:08.480 --> 0:06:12.960 having many more people. Uh. We are focusing our topics 0:06:13.160 --> 0:06:16.840 on growth, driving technology and innovation. What does this new 0:06:16.960 --> 0:06:20.520 digital virtual world mean? Of course, we will hit topics 0:06:20.600 --> 0:06:24.080 like we always have, on market insights and investment solutions, 0:06:24.640 --> 0:06:28.760 and how we're thinking differently about organizational constructs in light 0:06:28.880 --> 0:06:31.279 of everything that's changed over the last fifteen months. Let's 0:06:31.279 --> 0:06:34.599 get back to our guests, B and Y, Melons Pershing 0:06:34.800 --> 0:06:37.040 CEO Jim Crowley. He's with us on the phone in 0:06:37.080 --> 0:06:39.480 New Jersey. Still with us also is being why Melons 0:06:39.480 --> 0:06:42.160 Pershing CEO Emily Schloss er. She's on the phone in 0:06:42.200 --> 0:06:44.800 New York City. It's all about being why Melon Pershing 0:06:44.880 --> 0:06:50.240 inside held virtually this year. It gets underway next Tuesday. Um, Jim, 0:06:50.720 --> 0:06:54.200 something we talk about on a daily basis here at Bloomberg. 0:06:54.920 --> 0:06:57.440 Even today we're looking at a MC. It's just kind 0:06:57.480 --> 0:06:59.880 of off the charts, these meme stocks and the right 0:07:00.000 --> 0:07:03.880 eyes of alternative investing platforms, whether it's Reddit, whether it's 0:07:03.960 --> 0:07:07.240 Robin Hood. Uh, we are really kind of watching this 0:07:07.400 --> 0:07:09.720 and how it's upending what seems to be kind of 0:07:09.840 --> 0:07:14.640 the mainstay financial community. What are your members, what are 0:07:14.720 --> 0:07:17.760 your you know, the groups that the folks that come 0:07:17.800 --> 0:07:20.880 to insight, what do they want to know about this? Yeah, 0:07:20.920 --> 0:07:25.760 so it's been quite quite interesting, Carol. You know, thankfully, Um, 0:07:25.960 --> 0:07:29.960 you know, our platform has through all the Reddit and 0:07:30.760 --> 0:07:34.160 beame stock. You know, volume volatility has performed quite well 0:07:34.920 --> 0:07:39.800 our clients. Interestingly enough, while we see elevated transaction volumes 0:07:39.960 --> 0:07:44.080 in these names, the overall dollar value notional value of 0:07:44.160 --> 0:07:47.040 the of the transactions and things that we're doing for 0:07:47.120 --> 0:07:50.840 our clients, it's relatively small because our clients are much 0:07:50.960 --> 0:07:54.240 more what I would call financial planning based, wealth based, 0:07:54.800 --> 0:07:58.040 and so while there may be some transaction activity in 0:07:58.160 --> 0:08:01.680 these names on all the basis is really it's a 0:08:01.800 --> 0:08:04.840 fraction of their overall what they're dealing with when they 0:08:04.920 --> 0:08:07.920 talk about the wealth of their clients. Jim, what about 0:08:08.000 --> 0:08:10.760 when it comes to SPACs. We interviewed Anthony Nodo yesterday. 0:08:10.920 --> 0:08:13.720 Here's the CEO of so far they went public vs 0:08:13.840 --> 0:08:16.720 back yesterday. If we're talking talking about this, you know, 0:08:16.800 --> 0:08:18.679 at the beginning of the pandemic last year, we probably 0:08:18.680 --> 0:08:23.480 wouldn't even have asked you about SPACs. Yeah, yeah, another 0:08:24.000 --> 0:08:26.800 another sort of rebirth. Rebirth, that's a good way of 0:08:26.840 --> 0:08:30.600 putting it, because it's not These are not new, right, 0:08:30.640 --> 0:08:34.240 We've seen them before and again I would say that 0:08:34.480 --> 0:08:36.280 if you were to talk to any one of our 0:08:36.400 --> 0:08:38.960 clients or a number of our clients, they would they 0:08:39.040 --> 0:08:41.760 have an interest obviously. I mean, this is it's an 0:08:41.800 --> 0:08:44.559 interesting vehicle for which clients are coming in public and 0:08:44.640 --> 0:08:48.959 coming to market and some very innovative companies and so um. 0:08:49.280 --> 0:08:51.480 You know, it's it's something that our clients have an 0:08:51.559 --> 0:08:53.559 interest in. But if you were to take again take 0:08:53.600 --> 0:08:56.760 a look at their overall portfolio, it's very small at 0:08:56.800 --> 0:09:00.640 what they're putting into portfolios, which is an interesting and 0:09:00.920 --> 0:09:03.040 that's good to get that perspective. Hey, Emily, come on 0:09:03.120 --> 0:09:07.120 back in on our conversation. You know you worked at Goldman. 0:09:07.320 --> 0:09:09.800 You were in charge of their global markets division. You 0:09:10.000 --> 0:09:12.800 operationally have had to look at b and Y, MAL 0:09:12.840 --> 0:09:15.240 and Pershing and you know, look at what the needs 0:09:15.280 --> 0:09:19.800 are for clients and your team around the globe. How 0:09:19.880 --> 0:09:21.880 do things look in terms of us getting on the 0:09:21.960 --> 0:09:26.000 other side of the pandemic. Yeah, you know, I think 0:09:26.120 --> 0:09:29.319 UM for I thought I could come from Goldman. I 0:09:29.440 --> 0:09:32.040 was in charge of change management there at their globle 0:09:32.120 --> 0:09:35.959 Markets division, and so I'm excited to bring much of 0:09:36.080 --> 0:09:40.280 my transformation expertise to Pershing. You know, some of the 0:09:40.360 --> 0:09:45.640 things that clients are looking for really around some digital capabilities, 0:09:46.080 --> 0:09:49.319 which not surprising and has certainly been accelerated by what 0:09:49.440 --> 0:09:52.199 we've seen through the course of pandemic. I think the 0:09:52.320 --> 0:09:55.880 clients are really looking for enhanced usability. I mean really, 0:09:56.360 --> 0:09:59.480 their expectations are being set by the ease with which 0:09:59.559 --> 0:10:01.840 they can do anything else in the digital world, from 0:10:01.960 --> 0:10:05.120 personal banking to ordering a new word and getting food 0:10:05.160 --> 0:10:09.120 and groceries delivered. Right, So we're seeing an elevated expectation 0:10:09.480 --> 0:10:14.480 around the ultimate UM usability and experience, and as such, 0:10:14.679 --> 0:10:20.400 we are uplifting our advisory and investment platforms to improve 0:10:20.520 --> 0:10:23.360 the way that our advisors can help their clients move 0:10:23.440 --> 0:10:27.800 money so they can onboard new accounts. UM. We're providing 0:10:27.920 --> 0:10:31.240 new modern look and field streamline navigation. So we're really 0:10:31.280 --> 0:10:33.280 excited about what we can bring to bear in terms 0:10:33.320 --> 0:10:36.360 of our our digital platforms. UM just got about thirty 0:10:36.400 --> 0:10:40.559 seconds left here, Jim or Emily. You guys have Dr Gupta, 0:10:40.640 --> 0:10:43.640 Sanjay Gupta, CNN, Leslie Autam Jr. I've met him at 0:10:43.679 --> 0:10:46.760 the Boston Pops. Really nice guy. I haven't even seen Hamiltons. 0:10:48.640 --> 0:10:50.600 I'm excited for you. I wish we were there, Jim, 0:10:50.679 --> 0:10:54.240 any thoughts on some of the speakers and just quickly, oh, okay, 0:10:54.320 --> 0:10:56.600 well look, one of the speakers I've been talking about 0:10:56.760 --> 0:10:59.880 is Adam Grant and m his his book that he 0:11:00.080 --> 0:11:03.280 got out, and Emily and I've been rethinking everything that 0:11:03.400 --> 0:11:07.000 we've been doing around around the company really to this 0:11:07.080 --> 0:11:10.000 topic of transformation and not assuming that we know what 0:11:10.160 --> 0:11:13.760 our clients are expecting. So it's been UM, it's been 0:11:13.800 --> 0:11:15.760 a great ride for the last fifteen months getting through 0:11:15.760 --> 0:11:18.560 this pandemic. Looking forward to getting to the other side. Yeah, 0:11:18.800 --> 0:11:22.160 and and and seeing you all hopefully in Dallas with 0:11:22.320 --> 0:11:25.240 us in June next year. Fingers crossed all of them. 0:11:25.520 --> 0:11:27.760 Uh So, looking forward to guys, have a great event. 0:11:27.920 --> 0:11:30.079 Good luck with it all. Jim Crowley, CEO at B 0:11:30.200 --> 0:11:33.199 and Y Malon's Pershing and Emily Schlosser, she's the chief 0:11:33.240 --> 0:11:36.080 operating officer at B and Y Melons pershing. You're listening 0:11:36.200 --> 0:11:40.000 to Bloomberg Business Week with Carol Masser and Bloomberg Quick 0:11:40.080 --> 0:11:44.080 Takes Tim Stinovic on Bloomberg Radio. In the current issue 0:11:44.120 --> 0:11:47.079 of Bloomberg business Week magazine is a story about the 0:11:47.840 --> 0:11:50.880 million dollar initiative Tim that is on a mi isssue 0:11:50.920 --> 0:11:53.720 to help less prosperous schools bridge the wealth gap through 0:11:53.760 --> 0:11:57.440 investments in late stage startups. We're really talking about accessing 0:11:57.480 --> 0:12:00.400 the venture scene. Yeah, and for a good reason, because 0:12:00.880 --> 0:12:05.240 HBCUs have a tiny fraction of the endowments of colleges 0:12:05.280 --> 0:12:08.160 and universities in the United States. Joining us as Janet Lauren, 0:12:08.240 --> 0:12:11.120 higher education finance reporter at Bloomberg News. She joins us 0:12:11.120 --> 0:12:12.720 on the phone from New York. Janet, before we get 0:12:12.760 --> 0:12:16.200 into into what HBCUs are doing right now, hystorically black 0:12:16.200 --> 0:12:20.960 colleges and universities. Yes, um, take us into the finances 0:12:21.000 --> 0:12:24.360 of higher education and who has the endowments and why 0:12:24.840 --> 0:12:29.400 they're so concentrated at the top. So the richest schools 0:12:29.520 --> 0:12:32.559 also happened to be some of the oldest school Harvard, Yale, 0:12:32.679 --> 0:12:37.119 and Princeton, for example, And they've been pretty sophisticated investors 0:12:37.200 --> 0:12:40.120 for a long time. Yale, for example, got into venture 0:12:40.200 --> 0:12:43.880 capital in nineteen seventy six, and some of their early 0:12:44.000 --> 0:12:47.720 investments in you know, VC firms have been quite fruitful. 0:12:48.080 --> 0:12:50.920 For example, if you look at their investment in LinkedIn 0:12:51.000 --> 0:12:53.760 of a few million dollars turned into about eighty five 0:12:53.840 --> 0:12:57.559 million dollars when Lincoln went public. And you know, you 0:12:57.679 --> 0:13:00.800 have to have money to make these out locations in 0:13:01.080 --> 0:13:05.760 in venture capital. UM. And these HBCUs, their their endowments 0:13:05.760 --> 0:13:08.520 are quite small. Um. You know, we mentioned a few 0:13:08.600 --> 0:13:11.000 in the story. Howard is the largest with about seven 0:13:11.120 --> 0:13:15.120 hundred million, but more more averages about is Florida A 0:13:15.160 --> 0:13:17.760 and M with about a hundred million. And you know, 0:13:17.880 --> 0:13:20.200 you can't make money in some ways if you don't 0:13:20.240 --> 0:13:22.920 have money, and it's hard to get access to some 0:13:23.040 --> 0:13:25.200 of the best funds if you can't if you don't 0:13:25.600 --> 0:13:27.839 have the money to invact. Well, before we get into 0:13:27.960 --> 0:13:30.360 the well, before we get into whether it's a good idea, 0:13:30.400 --> 0:13:33.679 because you do wonder about the exposure. If you're kind 0:13:33.720 --> 0:13:36.840 of a smaller school or school with a smaller endowment, 0:13:37.080 --> 0:13:39.640 you know, risk reward, but if things don't turn out well, 0:13:39.720 --> 0:13:42.360 it could really impact your endowment. But one thing that 0:13:42.520 --> 0:13:44.840 you make, Janet, that's so important. I think the point 0:13:44.840 --> 0:13:48.120 in your story why this matters, is that the difference 0:13:48.120 --> 0:13:51.559 in these endowments and the size of them, you know, 0:13:52.120 --> 0:13:56.120 impacts the ability to offer student aid, to attract students, 0:13:56.240 --> 0:14:01.280 top professors, build facilities. I mean there is a trickle down, 0:14:01.360 --> 0:14:06.800 trickle up, trickle across the side impact as a result. Absolutely, 0:14:07.040 --> 0:14:09.280 And you know a lot of these HBCUs. You look 0:14:09.320 --> 0:14:12.120 at the shaff students who are recipients of TELL grants 0:14:12.360 --> 0:14:15.120 for the lowest income students, and the shares are very high, 0:14:15.760 --> 0:14:18.080 and these schools would like to be able to offer 0:14:18.160 --> 0:14:20.480 a lot more financial aid, but you know, they're just 0:14:20.680 --> 0:14:23.000 trying to make the lights go on, and they don't 0:14:23.040 --> 0:14:25.280 have a lot of money for you know, not only 0:14:25.360 --> 0:14:28.640 building glorious stem buildings, but you know, making repairs to 0:14:28.720 --> 0:14:31.680 their you know, often hundred year old buildings. So for them, 0:14:31.800 --> 0:14:34.840 you know, they're operating on very same margins to function, 0:14:35.280 --> 0:14:37.160 you know, to give the aid they can to try 0:14:37.200 --> 0:14:40.520 to attract professors UM and they just don't have a 0:14:40.600 --> 0:14:46.400 lot of risk room to loose. So what are HBCUs 0:14:46.480 --> 0:14:49.880 doing or or what is Based ten partners doing to 0:14:50.000 --> 0:14:54.280 try to alleviate this. So they're trying to UM to 0:14:54.560 --> 0:14:58.520 entice h species to to to invest in a new fund. 0:14:59.120 --> 0:15:02.680 And what a unusual is they're not charging fees, which 0:15:02.840 --> 0:15:05.960 as you know, you know they're students could be quite high, 0:15:06.160 --> 0:15:10.200 especially when UM private equity and venturing are successful. You're 0:15:10.200 --> 0:15:13.240 paying fees UM and then they're giving some of the 0:15:13.320 --> 0:15:17.280 carry to create scholarships for these students, but also trying 0:15:17.360 --> 0:15:22.760 to help build the pipeline of recruiting intern tiring practice 0:15:22.800 --> 0:15:26.120 with job interviews for some of these students in the 0:15:26.320 --> 0:15:30.480 portfolio companies that they can UM invest. The mean they're 0:15:30.520 --> 0:15:35.520 also very interested in improving diversity and having assets to 0:15:35.520 --> 0:15:39.000 sudents that they tifically may not be recruiting from. Well. 0:15:39.120 --> 0:15:41.720 One issue though with venture capital is that you have 0:15:41.800 --> 0:15:44.640 to be in a position in order to be comfortable 0:15:44.680 --> 0:15:47.600 losing your entire investment, because that's what venture capital is 0:15:48.160 --> 0:15:52.200 for every Facebook or linked In, there are dozens of 0:15:52.480 --> 0:15:56.120 of bets that don't end up working out. Um, what 0:15:56.240 --> 0:15:58.640 are they doing to to try to offset some of 0:15:58.680 --> 0:16:02.800 that risk. Well, we're talking about later stage companies, not 0:16:03.120 --> 0:16:06.680 early stage companies that you know may likely fail. And 0:16:06.960 --> 0:16:08.640 I think that's part of the part of the a 0:16:08.720 --> 0:16:12.320 little bit of alleviating the risk, because if you are 0:16:12.760 --> 0:16:15.280 an endowment of about a hundred million, you often just 0:16:15.400 --> 0:16:17.800 don't have a lot of options. You know, if you were, 0:16:18.120 --> 0:16:20.080 you might put it in an index fun you know. 0:16:20.160 --> 0:16:22.920 We had a comment from part the former Carthage College 0:16:23.120 --> 0:16:26.200 CEO in Wisconsin who beat the pants off of Harvard 0:16:26.600 --> 0:16:29.680 his tenure average because he had a very simple formula 0:16:29.760 --> 0:16:32.280 of vanilla funds or if you could invest in some 0:16:32.400 --> 0:16:36.120 fund of funds but you're still paying sees. So, so 0:16:36.280 --> 0:16:38.640 tell us about this two and a fifty million dollar 0:16:38.720 --> 0:16:42.760 fund and the individual behind it all um So. He 0:16:43.320 --> 0:16:47.440 is a Stanford alum he um you know, has been 0:16:47.480 --> 0:16:51.800 successful um Aud and a Joe and he was really 0:16:51.880 --> 0:16:54.320 interested in moved by the death of George Floyd to 0:16:54.400 --> 0:16:57.040 try to help these companies these these schools. You know, 0:16:57.120 --> 0:17:01.280 as he said, systematic inequality is really about wealth inequality. UM. 0:17:01.480 --> 0:17:04.320 You know his he was born in Spain, he didn't 0:17:04.400 --> 0:17:07.600 have the typical UM experience growing up as an African 0:17:07.600 --> 0:17:10.720 American in the United States. He went to Stanford and 0:17:10.800 --> 0:17:13.600 made some connections and decided this was something that he 0:17:13.680 --> 0:17:18.920 wanted to do. How have HBCUs reacted and how have 0:17:19.040 --> 0:17:24.200 they embraced or not embraced the strategy. So some HBCUs 0:17:24.359 --> 0:17:28.080 have invested, including the schools we included in the story 0:17:28.520 --> 0:17:31.720 Howard and Florida, A and M. But you know, not everybody, 0:17:31.840 --> 0:17:34.840 if you're a small fifty million dollar in Diamond or 0:17:34.840 --> 0:17:37.320 a hundred million dollar Damon, you may not be familiar 0:17:37.359 --> 0:17:39.520 with the idea of venture capital UM, and you just 0:17:39.680 --> 0:17:42.400 may think it's too risky. You still have to turn 0:17:42.480 --> 0:17:45.119 the lights on every year of the school. Yeah, I mean, 0:17:45.160 --> 0:17:49.200 but you do think about you know, the conversation in 0:17:49.320 --> 0:17:52.160 many ways over the past year, right, tim has evolved 0:17:52.280 --> 0:17:55.240 from you know, we've learned it's not just about income gaps, 0:17:55.320 --> 0:17:57.840 it's about wealth gaps, and that can be generational and 0:17:58.080 --> 0:18:00.240 and and I do feel like, you know, don't you 0:18:00.280 --> 0:18:02.080 get to that in your story that you do think 0:18:02.080 --> 0:18:04.760 about these schools that maybe don't have the same access 0:18:05.440 --> 0:18:07.639 to the funds that some of the really wealthier schools do, 0:18:07.800 --> 0:18:11.320 that tend to be predominantly white, you know, and it 0:18:11.440 --> 0:18:15.800 just perpetuates a cycle that somehow it's gotta it's gotta change, 0:18:16.640 --> 0:18:18.919 all right. And if you look at say gale Um 0:18:19.400 --> 0:18:23.720 heard a lot of c i os, really big schools, Crinceton, 0:18:24.000 --> 0:18:26.639 m I T, Stanford, and they tend to invest together 0:18:26.800 --> 0:18:29.399 on the same deal. So again it's very it becomes 0:18:29.480 --> 0:18:31.800 very clubby and very insular. And if you didn't work 0:18:31.840 --> 0:18:33.960 in the Dale investment opportunity may not be invited to 0:18:34.040 --> 0:18:36.520 participate in these deals that you know, one of the 0:18:36.560 --> 0:18:39.560 other very wealthy schools found out about. But then again 0:18:39.640 --> 0:18:41.920 then you can't even make you can't write the test 0:18:42.000 --> 0:18:45.240 because you're endowment is so small. You know, what's the 0:18:45.320 --> 0:18:48.000 time horizon for an investment like this and when do 0:18:48.119 --> 0:18:49.760 we find out and when do they find out if 0:18:49.840 --> 0:18:53.800 this was a successful way to to grow their endowment? Um, 0:18:54.080 --> 0:18:56.040 you know, in some ways, it could be a couple 0:18:56.080 --> 0:18:58.320 of years or could be Kenny, It's in the typical 0:18:58.400 --> 0:19:02.560 life of a of a uh private equity fund. Yeah, 0:19:02.640 --> 0:19:04.600 but this is a really kind of thoughtful story and 0:19:04.680 --> 0:19:06.800 just thinking how you change the dynamics and the trends 0:19:06.840 --> 0:19:09.359 that we've seen for such a long time. Genal Lauren, 0:19:09.359 --> 0:19:11.720 thank you so much. Higher Education Finance Report at Bloomberg 0:19:11.760 --> 0:19:13.760 News on the phone from New York City too. Maybe 0:19:13.840 --> 0:19:15.720 it's because my daughter has gone through, you know, the 0:19:15.760 --> 0:19:18.359 college application process, and we've learned about a lot of schools. 0:19:18.359 --> 0:19:22.560 But you know, there's so much money involved in these endowments, 0:19:22.680 --> 0:19:25.360 and you do wonder about the advantages for those really 0:19:25.400 --> 0:19:28.119 really rich schools versus some other ones. Yeah, it was 0:19:28.320 --> 0:19:31.600 shocking to reading this story, the concentration of endowments of 0:19:31.720 --> 0:19:33.800 just the top ten schools. I mean, in some ways 0:19:33.880 --> 0:19:36.840 it really mimics the ultra wealthy in the United States 0:19:36.920 --> 0:19:41.240 and individuals. You control the vast majority of the welcoming country, 0:19:41.280 --> 0:19:43.080 a lot of wealth in the hands of a very few, 0:19:43.119 --> 0:19:51.240 whether you're talking about colleges, universities or individuals. This is 0:19:51.320 --> 0:19:55.280 Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes 0:19:55.359 --> 0:19:59.320 Tim Stinovik on Bloomberg Radio. All right, folks, we like 0:19:59.440 --> 0:20:01.639 to do a daily check on the virus and the 0:20:01.760 --> 0:20:05.560 vaccine rollout and one headline that just crossed catching our attention. 0:20:06.600 --> 0:20:08.800 We are seeing that New Jersey planning to shut some 0:20:08.840 --> 0:20:11.760 of the mega sites UH and New York City planning 0:20:11.800 --> 0:20:13.920 some school vaccines. So there's a lot still going on here, 0:20:14.440 --> 0:20:16.879 certainly in the US and on a global basis. One 0:20:16.920 --> 0:20:19.040 of our go to people. I don't know that he's 0:20:19.080 --> 0:20:21.920 gotten any sleep in the last twelve, thirteen, fourteen months, 0:20:22.040 --> 0:20:25.120 but he's back in our student He did the virus tracker. 0:20:25.480 --> 0:20:28.240 He and his team did the vaccine tracker. You saw 0:20:28.359 --> 0:20:32.040 his tweets each and every day. We created five vaccines. 0:20:33.160 --> 0:20:35.600 The man, the myth, the legend. Drew Armstrong is senior 0:20:35.760 --> 0:20:39.560 editor for US Healthcare for Bloomberg News. Didn't create the vaccines. 0:20:39.560 --> 0:20:41.440 I'm going to get in trouble, but I think he 0:20:41.520 --> 0:20:43.560 probably cut off. I think I think people know you 0:20:43.640 --> 0:20:45.960 were joking, UM, but we do love him anyway. He 0:20:46.200 --> 0:20:48.240 is senior editor for Your Southcare. Bloomberg News joins us 0:20:48.240 --> 0:20:52.200 from Bloomberg Interactive Broker Studios. Um, Drew, you mentioned that 0:20:52.280 --> 0:20:55.480 this is your first day back in the office. It is, 0:20:55.720 --> 0:21:00.080 it is since the fall September, but I feel like 0:21:00.160 --> 0:21:03.119 that symbolizes something so big for where we are as 0:21:03.160 --> 0:21:05.560 a city. Yeah, I think that's exactly right. I mean, 0:21:05.600 --> 0:21:08.359 you know, I was I got my second dose of 0:21:08.600 --> 0:21:11.960 maderna vaccine about a month ago. My wife and I 0:21:12.080 --> 0:21:15.800 immediately booked a trip to Mexico for exactly two weeks 0:21:15.880 --> 0:21:19.480 after my land does UM and and left our lovely 0:21:20.040 --> 0:21:23.240 children who we've seen so much of UM at home 0:21:23.440 --> 0:21:25.960 with Art Annie. And you know, here I am back 0:21:25.960 --> 0:21:27.399 in the office, and I've been talking to a lot 0:21:27.440 --> 0:21:29.639 of other people who's their first day back again UM 0:21:29.760 --> 0:21:31.479 as well. Yeah, I mean, you know, you look at 0:21:31.520 --> 0:21:34.200 some of the stats where you know, there's certainly a 0:21:34.640 --> 0:21:38.959 strong downward trend in cases, hospitalizations, deaths all around the country. UM. 0:21:39.200 --> 0:21:41.679 Certainly some underlying things to be worried about. And if 0:21:41.720 --> 0:21:43.960 you look around the globe, it's a very different picture 0:21:44.160 --> 0:21:47.399 in UM a lot of places. But you know, a 0:21:47.480 --> 0:21:49.200 lot of my attention, just as a as a news 0:21:49.320 --> 0:21:52.560 editor is really now focused elsewhere outside the United States 0:21:52.600 --> 0:21:54.639 in terms of where the story is and where the 0:21:54.960 --> 0:21:57.160