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Speaker 1: This is Master's in Business with Barry rid Holds on

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Speaker 1: Bloomberg Radio. This week on the podcast, once again, I

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Speaker 1: have an extra extra special guest. Jenny Johnson is CEO

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Speaker 1: of investment giant Franklin Templeton. They run about a trillion

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Speaker 1: and a half dollars. She's been CEO since February twenty twenty.

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Speaker 1: She's been with the firm for decades. Just an incredible

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Speaker 1: insightful conversation about how to build a company, how to

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Speaker 1: grow through acquisitions, how to make sure everybody on your

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Speaker 1: team understands their role is appreciated and is acting and

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Speaker 1: performing at the highest levels. I found this conversation to

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Speaker 1: be absolutely not only insightful and informative, but also delightful,

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Speaker 1: and I think you will also with no further ado,

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Speaker 1: my conversation with Franklin Templeton's CEO, Jenny Jen Jenny Johnson,

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Speaker 1: Welcome to Bloomberg.

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Speaker 2: Thank you, Berry. It's great to be here.

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Speaker 1: It's great to have you. I've been looking forward to

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Speaker 1: this for a long time. I've been back and forth

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Speaker 1: for a while, and then we had the pandemic hit.

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Speaker 1: Let's talk a little bit about your background. You joined

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Speaker 1: Franklin Templeton in nineteen eighty eight. Family members helped found

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Speaker 1: the farm, have run it for a long time. And

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Speaker 1: back then it was frank was a Franklin temple it.

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Speaker 2: Was, and it just we acquired tuble To nineteen ninety two. Right,

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Speaker 2: So I spent a year. My father said to me, look,

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Speaker 2: if you're going to be in the financial services business,

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Speaker 2: you should probably work in New York. And so I

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Speaker 2: spent a year working for Drexlburnham.

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Speaker 1: And that, by the way, that's tough when you're a

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Speaker 1: West coast coast gal used the sunshine and nice weather.

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Speaker 2: Right, Although I was born in New Jersey, Jersey, I

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Speaker 2: was born in Montclair, Okay. So, and I lived in

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Speaker 2: New Jersey till I was about nine. So I came

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Speaker 2: back and lived in Jersey City.

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Speaker 1: And said, now I remember why we moved to California, Right.

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Speaker 2: Hey, there's some beautiful parts of Jersey.

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Speaker 1: There are it's the weather. It's really the big Yes, Yeah,

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Speaker 1: it's hard to beat that, you know, sunshine three hundred

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Speaker 1: days a year, to say the least. So, since we're

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Speaker 1: talking about weather. Aside from the weather, what are the

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Speaker 1: cultural differences like, especially in finance, because California finance very

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Speaker 1: different than New York finance culturally.

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Speaker 2: Sure, I mean I think so Franklin's headquartered in Silicon Valley.

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Speaker 2: I actually think that what influences it more than anything

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Speaker 2: now is the tech culture that's going on on the

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Speaker 2: West Coast. And you know, it's kind of funny if

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Speaker 2: you and now you see it in New York City,

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Speaker 2: but you know, if you showed up in a meeting

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Speaker 2: in a coat and tie, you know, post the dot

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Speaker 2: com era and kind of you know, coming into the

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Speaker 2: more recent stuff, you're viewed as sort of the old economy, right,

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Speaker 2: And you know, now we see everybody walk around New

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Speaker 2: York City, hardly anybody where's a tie. Uh, you know,

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Speaker 2: the vest.

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Speaker 3: Is the new already they may post right, it's kind

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Speaker 3: of moved to Lululemon, Pansen and you know, button down

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Speaker 3: shorts is about as dressed up.

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Speaker 2: So I don't think anybody expected the West Coast to

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Speaker 2: lead the East Coast on uh, you know, culture and attire.

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Speaker 2: But I think that's happened a little bit on the

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Speaker 2: tech otherwise, you know, it the West Coast. You know,

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Speaker 2: if you were in the financial services business, it was

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Speaker 2: rough life you were you were in the office by

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Speaker 2: a lot of people get up at nine am lunch.

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Speaker 1: Yeah, right, I used to let But the good news

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Speaker 1: is you finish it one you could go out surfing.

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Speaker 2: Yeah, there you go.

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Speaker 1: Always a thing. So you're at Drexel for a year

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Speaker 1: in New York, you come back to Franklin Templeton. What

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Speaker 1: was your first role at ft O god or Franklin.

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Speaker 2: I was an executive administrative coordinator, right, so I was

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Speaker 2: working for the COO kind of on special projects, right.

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Speaker 2: And then I moved into we had a bank at

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Speaker 2: the time, and I moved into running part of the bank.

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Speaker 2: And I got to tell you we then spun out

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Speaker 2: in auto financing business, and as a CEO today, I

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Speaker 2: have to say that period of my career running the

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Speaker 2: auto finance business was probably the most significant. I also

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Speaker 2: ran our credit card business at the time.

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Speaker 1: Both both difficult businesses.

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Speaker 2: And learning how to do things as a CEO. One is,

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Speaker 2: we were securitizing the assets and the auto loan and

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Speaker 2: selling them off to other asset managers. We weren't able

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Speaker 2: to buy them ourselves. And I remember being on the

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Speaker 2: phone thinking, you know, as the as the pms were

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Speaker 2: asking questions about cash flows and things. So I was thinking,

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Speaker 2: you're asking all the wrong questions about whether this portfolio

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Speaker 2: will perform because it's things like down payment, you know,

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Speaker 2: there's there's you know, the credit score, average credit card,

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Speaker 2: what they risk exactly, And so it was really good

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Speaker 2: to kind of learn that side of the business. And then,

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Speaker 2: of course as a CEO, it doesn't matter the size

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Speaker 2: of the company. You're always talking about word allocate capital,

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Speaker 2: you know, should you add more to marketing or in

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Speaker 2: you know, collections, right, and those are the same problems

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Speaker 2: for big companies as little companies, And so I always

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Speaker 2: felt like it was great learning experience. And then the

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Speaker 2: biggest thing in the credit card business in the late

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Speaker 2: nineties or early nineties, those who were great at data

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Speaker 2: and data analytics, uh huh dominated the industry and essentially

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Speaker 2: put others out of it. And so I became a

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Speaker 2: big fan of data and how predictive it can be.

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Speaker 1: For all the obvious reasons. Right, if you have an

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Speaker 1: edge in data, you have an edge across the whole

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Speaker 1: business line, for sure. So Franklin obviously divests out of

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Speaker 1: the banking business, the credit card business, the ODO financing business.

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Speaker 1: What led to that decision? Did you guys just say

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Speaker 1: we really want to be pure investment management.

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Speaker 2: Well, wet. Part of it was, I think regulatory the

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Speaker 2: requirements for asset managers to have a bank were such

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Speaker 2: that it was it would it would inhibit us a.

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Speaker 1: Bit post SNL crisis, Yeah, came up exactly.

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Speaker 2: Yeah, And honestly, I think we divested post financial crisis.

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Speaker 2: So once the rules, yeah, so we kept it for

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Speaker 2: a long time. But once the rule, search became difficult

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Speaker 2: around things like seeding new funds. You had to within

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Speaker 2: a year. You couldn't be more than ten percent of

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Speaker 2: the fund. Well, that's hard to do in our business

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Speaker 2: because people look for a track record, so you seed

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Speaker 2: and get a track record. And we just looked at

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Speaker 2: it and said, you know, it's not material enough to

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Speaker 2: have it, cause it the complications that it causes on

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Speaker 2: our asset management.

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Speaker 1: It sounds like it was an easy decision to cut

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Speaker 1: it loose.

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Speaker 2: Yeah, except that we do have fiduciary trust, which is

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Speaker 2: a high net worth business.

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Speaker 1: Huh.

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Speaker 2: And it's always nice to have a lending arm when

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Speaker 2: you have a high net worth business.

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Speaker 1: All right, So we're going to get into the acquisitions

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Speaker 1: a little later. But from when you first started as

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Speaker 1: an administrative organizational assistant. Whatever, right, right, fetch me some

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Speaker 1: coffee please, that sort of And although I would imagine

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Speaker 1: that you still you know, you warn't the bottom bottom

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Speaker 1: of the tone and poll because people knew obviously knew

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Speaker 1: who you were and knew who the family was. But

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Speaker 1: from when you first started at was a let me

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Speaker 1: get my feet wet sort of roll. How has Franklin

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Speaker 1: changed over the ensuing decades.

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Speaker 2: Well, I have to say, when you say you know,

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Speaker 2: you're right, you know, in a business where founders are

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Speaker 2: still involved in your family member, you're gonna be treated

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Speaker 2: a little differently. But my father always was adamant you

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Speaker 2: have to work harder than everybody else because people would

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Speaker 2: look at how hard you work and work just a

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Speaker 2: little less, like they won't feel like they have to

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Speaker 2: do more. And I remember my first job was a

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Speaker 2: summer job and I took over from my older sister

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Speaker 2: who was twenty one at the time, and I was,

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Speaker 2: I don't know, fifteen or sixteen, and he was paying

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Speaker 2: her five dollars an hour and he was paying me

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Speaker 2: two dollars and fifty cents an hour. And I said

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Speaker 2: to him, look, I think I'm I think I'm a

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Speaker 2: harder worker, and I think I should get five dollars

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Speaker 2: an hour, and he said, well, you can always get

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Speaker 2: a job somewhere else. So that's what I learned. Okay,

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Speaker 2: there's certain Dad.

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Speaker 1: Was no nonsense, no noice. Serious here hit the bricks exactly.

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Speaker 1: That's really interesting. But by the way, that's really astute observation.

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Speaker 1: People are gonna look at how hard you're gonna you're working,

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Speaker 1: and they think I could work a little less hard. See,

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Speaker 1: I would think they would want to work a little

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Speaker 1: harder than you, just so no one accuses them of slacking.

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Speaker 1: But maybe it's a generational thing. Who who knows, And

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Speaker 1: we're not that far. I think we're about the same age.

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Speaker 1: I was always taught, hey, find the hardest, fastest guy

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Speaker 1: out there and just do a little more than him.

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Speaker 1: So you don't want to be on the underside. You

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Speaker 1: are be passing that. So uh so, so were you

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Speaker 1: In the early days, it was mutual funds, It was SMAs.

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Speaker 2: What what were you guys? Really just mutual funds? I

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Speaker 2: mean that's that was the That was the vehicle of choice.

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Speaker 2: And you know it evolved over time, uh to things

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Speaker 2: like SMAs and ETFs and collective investment trust. Now now

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Speaker 2: you have to be able to provide all of those

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Speaker 2: vehicles as outlets for your investment capabilities. And I think

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Speaker 2: a lot of that change happened. It was starting to happen,

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Speaker 2: but accelerated after the Global Financial crisis, where regulators pushed

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Speaker 2: for more transparency in distribution fees, and so you saw

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Speaker 2: this shift from kind of fees embedded in say the

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Speaker 2: mutual fund vehicle, to being external on the client statement.

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Speaker 2: And so then advisors wanted things like ETFs and SMAs

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Speaker 2: and other things because a client was seeing that they

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Speaker 2: were paying their advisor every month, and so that's changed.

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Speaker 2: I think that's been a dramatic change in the industry

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Speaker 2: on the type of vehicle we use.

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Speaker 1: I always thought that the marketplace would fix that on

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Speaker 1: its own, and I've been wrong about this for decades.

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Speaker 1: I always assumed people would see, oh, five percent front

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Speaker 1: load on a C share or a two and a

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Speaker 1: half percent annual. I assume people would see that and

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Speaker 1: steer away. But it doesn't appear that that really happened

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Speaker 1: until the Financial crisis. That seems to be where indexing

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Speaker 1: really took off and where people became a lot more

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Speaker 1: price sensing.

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Speaker 2: Well, I think you were seeing a big shift to

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Speaker 2: C shares where you know, you had a bigger back

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Speaker 2: end trail and a smaller upfront, So that was happening

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Speaker 2: a bit. And you know, look, I'm a big believer

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Speaker 2: that some of those type commission products are still important.

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Speaker 2: We look in the UK where they have something called RDR,

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Speaker 2: so they don't permit any kind of commission based selling,

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Speaker 2: and so it's all gone to fee based and you

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Speaker 2: have a huge percentage of population or orphan from advice

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Speaker 2: because essentially an advisor says, ah, that's too small of account,

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Speaker 2: it's not worth my time, whereas if they got that

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Speaker 2: upfront commission, they'd spend the time doing it. And the

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Speaker 2: key is the difference for people investing early. So if

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Speaker 2: you invest for ten years from age twenty five to

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Speaker 2: thirty five, say five thousand dollars a year, or you

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Speaker 2: wait till thirty five and invest for thirty years at

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Speaker 2: five thousand dollars a year, you will have more money

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Speaker 2: if you start for those investments over those ten year

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Speaker 2: period because of the compounding. And so getting people to

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Speaker 2: invest early is really really important and you don't want

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Speaker 2: to have mechanisms regulatory environments that kind of prohibit them

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Speaker 2: getting advice early.

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Speaker 1: Huh. That's interesting. Although in today's digital world, as you

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Speaker 1: guys know, there's so many ways to invest with no

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Speaker 1: minimum fees, and a lot of people, especially of the

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Speaker 1: younger generation, are very comfortable as di wires not do

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Speaker 1: it yourselfers. Not that robinhood is how they should be

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Speaker 1: necessarily investing, but hey, it gets some interested in finance.

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Speaker 1: It gets them thinking about money. That's not a terrible thing.

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Speaker 2: No, it's not a terrible it's actually great. And especially

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Speaker 2: because you can do some basic kind of asset allocation

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Speaker 2: models that the roboadvisor can be terrific for somebody who

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Speaker 2: doesn't have a complicated financial situation. What you tend to

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Speaker 2: see is people earn more and have more and more savings.

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Speaker 2: Somebody said to me anecdotally, if you have you know,

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Speaker 2: sort of three years worth of savings if your income,

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Speaker 2: that's when you start to look for advice because you realize,

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Speaker 2: you know what, this is more complicated. I'd rather have

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Speaker 2: somebody who's full time focused on this than me as

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Speaker 2: a part time person managing my money.

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Speaker 1: I just have to share a funny story. We just

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Speaker 1: got back from vacation, not like terribly long, but eight

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Speaker 1: or nine days, and you come back to all this

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Speaker 1: mail and it's, oh, here's the irs state the pass through.

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Speaker 1: I got to forward that to the accountant. Oh and

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Speaker 1: here's a disclosure about this fun we have. And then

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Speaker 1: here's the quarterly thing coming up. And all of a sudden,

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Speaker 1: like in a rush, I figured out, Oh, this is

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Speaker 1: why people pay a fee for someone to give them advice.

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Speaker 1: I don't want to deal with. I'm like relaxed, I'm

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Speaker 1: back from vacation. The last thing I want to do

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Speaker 1: is start thinking about New York State, pe Tech passed through.

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Speaker 1: Just take this off. What is it going to cost? Great?

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Speaker 1: Get this off my plate. I don't want to deal

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Speaker 1: with that.

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Speaker 2: Well, and I think a lot of people when like

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Speaker 2: TurboTax came out, they said, oh, it's going to be

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Speaker 2: the end of the CPA. Who are the number one

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Speaker 2: users of turbotaxes CPAPA? Yeah, Because in the end people

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Speaker 2: sit there and say, wait a second, Actually, the more

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Speaker 2: money people have, the more they have options to do

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Speaker 2: other things, and they think the opportunity cost of spending

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Speaker 2: their time trying to manage those things is not worth it.

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Speaker 1: It's the time. It's it's the time is crucial. Plus

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Speaker 1: the rules change every year and wants to have to

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Speaker 1: stay current with that. I find it's just like, you

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Speaker 1: know what, and it's funny. This is like a later

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Speaker 1: in life realization when you're young and have all the

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Speaker 1: time in the world and not a lot of money,

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Speaker 1: I could figure this out. I have to do my

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Speaker 1: own taxes. And then when you're old, it's like, whatever

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Speaker 1: it costs, just do it. Get this, get this junk

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Speaker 1: away from me. So so let's talk a little bit

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Speaker 1: about the history of acquisitions at Franklin Templeton. Just about

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Speaker 1: thirty years ago, Franklin acquired Templeton, Galbrith and Hansburger. That

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Speaker 1: new name of the company became Franklin Templeton. So it

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Speaker 1: was Franklin along with mutual fund pioneer Sir John Templeton.

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Speaker 1: You were kind of young in the farm in ninety

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Speaker 1: two when this took place. What do you recall from

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Speaker 1: that fairly substantial back then, a billion dollar acquisition was

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Speaker 1: not nothing.

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Speaker 2: Yeah, no, it was huge, and uh it was interesting

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Speaker 2: because a lot of people, uh we we sort of

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Speaker 2: came into that late as far as one of the

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Speaker 2: potential acquirers. So, you know, we basically viewed it as

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Speaker 2: Franklin had was very strong and fixed income, domestic equity,

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Speaker 2: and what Templeton did was open up this international investing,

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Speaker 2: which was really pretty new. So yeah, they were they

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Speaker 2: were you know, you you there were pioneers in emerging

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Speaker 2: markets and and uh and really kind of global equity.

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Speaker 2: And when we acquired it, a lot of people were

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Speaker 2: skeptical because asset management acquisitions don't always work right and

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Speaker 2: expected big cultural difference, and it was expensive. And I

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Speaker 2: have to say that my dad understood and we It's

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Speaker 2: been our philosophy, you know, throughout all our acquisitions in

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Speaker 2: the asset management business, what are you buying. You're buying

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Speaker 2: people their investment capability and their investment process, So don't

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Speaker 2: destroy value by going in and messing with it. So

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Speaker 2: we really left it standalone on the investment side and

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Speaker 2: then integrated the rest of the firm and that worked

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Speaker 2: out really well.

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Speaker 1: That's so different of an approach than we typically hear,

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Speaker 1: which is, we want to buy a company for the assets,

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Speaker 1: the revenue stream, maybe some technology or intellectual property, and

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Speaker 1: we're going to just mash you into our culture whether

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Speaker 1: you like it or not, that seems like a little

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Speaker 1: more nuanced approach that your dad took. I don't see

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Speaker 1: a lot of other mergers in the finance space that

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Speaker 1: are that hands off. Maybe the big acquisition of Pimco

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Speaker 1: twenty years ago was maybe a little too much hands off,

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Speaker 1: But for the most part, it seems like everybody just

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Speaker 1: mashes everybody together.

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Speaker 2: Yeah, I mean, I you know, in our case, I

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Speaker 2: wouldn't say it's totally hands off. It's hands off on

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Speaker 2: the investment process, uh huh, right, and really trying to

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Speaker 2: integate and integrate the rest of it, and then trying

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Speaker 2: to figure out ways that you can add value because

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Speaker 2: you have scale so that these firms you know, don't have.

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Speaker 2: That was less of an issue in the Templeton deal,

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Speaker 2: but with our more recent acquisitions that's been really important.

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Speaker 2: What can we do because we're bigger, that can enhance

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Speaker 2: the various investment teams.

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Speaker 1: So let's talk about some of those more recent acquisitions.

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Speaker 1: Twenty twenty, you buy leg Mason. I think it was

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Speaker 1: an old cash deal four and a half billion dollars

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Speaker 1: is that around, right, And then we took on some debt. Yeah,

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Speaker 1: what was the thinking that what did leg Mason bring

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Speaker 1: that you guys needed or didn't have.

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Speaker 2: Yeah, So in the case of LEG, they had Western

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Speaker 2: Asset Management, which is you know, core coreplus fixed income,

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Speaker 2: which is the largest category. We just didn't have scale there,

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Speaker 2: and you have to have scale to be in the

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Speaker 2: institutional space. And the other big one that was exciting

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Speaker 2: for us was Clarion Partners, which now is an eighty

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Speaker 2: two billion dollar I think they were probably forty five

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Speaker 2: at the time, forty five billion real estate manager. And

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Speaker 2: we knew that we wanted to get into alternative space

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Speaker 2: and so getting that as part of the LEG deal

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Speaker 2: was really exciting. And then you know unbelievable managers and

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Speaker 2: Clearbridge and Martin Curry and brandy Wine, and so we

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Speaker 2: just got great expertise there. They were seventy five percent institutional,

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Speaker 2: we were seventy five percent retail. So bringing the two

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Speaker 2: firms together, you really made us fifty to fifty retail

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Speaker 2: and institutional, and that's been very important.

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Speaker 1: Huh. And then this year you acquire Putnam for almost

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Speaker 1: a billion dollars. Puttenham almost the purchaser of Templeton, which

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Speaker 1: is kind of kind of amusing that everybody ended up

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Speaker 1: in the same place. That seems to be a very

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Speaker 1: strategic purchase. Tell us the thing behind acquiring Putnam, So

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Speaker 1: let me step back and just say sort of what

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Speaker 1: our strategy is in acquisition.

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Speaker 2: So we've done I think ten in the last Putnam

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Speaker 2: will be R tenth in the last three years, and

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Speaker 2: they've all been focused on. If you think about the

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Speaker 2: big macro trends going on in the industry, one is

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Speaker 2: private markets are here to stay, and they're here to stay.

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Speaker 2: One take private credit. Right the banking crisis of the

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Speaker 2: Global financial crisis, had regulators changed capital requirements for banks.

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Speaker 2: Banks preserve their capital for the best clients, and it

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Speaker 2: created this opportunity for you know, basically private credit outside

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Speaker 2: the banking system. And honestly, with the discussion around which

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Speaker 2: I have strong opinions on discussion around more capital requirements

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Speaker 2: post the regional banking crisis, I think that's only gonna

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Speaker 2: get worse and then you'll, well, that's going to.

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Speaker 1: Create opportunities for firms that are filling that void exactly.

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Speaker 1: And by the way, this really began in the late

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Speaker 1: nineties early two thousands as the big banks moved upscale.

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Speaker 1: They like to void underneath and private markets stepped right in.

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Speaker 2: That's exactly right. And then the other piece of that,

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Speaker 2: and you know this was definitely fueled by low interest rates,

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Speaker 2: but private equity. The fact is companies can stay private longer.

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Speaker 2: And you see that in the numbers. Right, two thousand,

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Speaker 2: average company went public after three years. That was probably

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Speaker 2: an anomaly in the dot com right. By twenty nineteen

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Speaker 2: it was I think nine to ten years, and by

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Speaker 2: twenty twenty two was fourteen to fifteen years before they

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Speaker 2: were going public. Right, you have half the number of

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Speaker 2: public companies that you had in two thousand and so

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Speaker 2: you look at it, well, why go public?

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Speaker 3: Right?

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Speaker 2: A public company has quarterly earning pressure. You know, there's

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Speaker 2: a lot of scrutiny around compensation of the staff, there's

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Speaker 2: a lot of uh, there's an expectation on political you know,

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Speaker 2: you're going to opine on certain political issues. If you're

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Speaker 2: private company, you don't have any of those pressures. Right,

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Speaker 2: And in a time of great technological advances, you need

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Speaker 2: to invest for things. I mean, some of the stuff

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Speaker 2: we're doing in the block change space won't be material

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Speaker 2: to the firm for seven to ten years, but we

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Speaker 2: think is really important that we're doing it now.

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Speaker 1: But if you're a private comp if you're a public company,

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Speaker 1: shareholders are going to give you grief about that sort.

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Speaker 2: Of if it's impacting your quarterly earnings. We're fortunate in

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Speaker 2: that we still have founders and employees and management that

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Speaker 2: have a significant amount of the stocks, so we can

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Speaker 2: sort of withstand some of that pressure. But if your

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Speaker 2: stock's under performing, you can always get an activist in

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Speaker 2: who's looking short term to capture the benefit and say

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Speaker 2: we'll be worth more if we break all this up.

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Speaker 2: That doesn't build a long term sustainable company. But that's

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Speaker 2: the type of pressure that public companies have, and so

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Speaker 2: we believe that trend is here to stay, and we

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Speaker 2: knew that we needed to add those capabilities. Soe I say,

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Speaker 2: there's three areas that we look for an acquisition. So

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Speaker 2: one is filling product gaps, particularly in the case of

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Speaker 2: private markets. The second is the second big trend was

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Speaker 2: when the financial crisis happened and you had we mentioned,

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Speaker 2: you know, the regulators made put pressure onto have transparency

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Speaker 2: around distribution fees and advisors became fee based that honestly

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Speaker 2: pushed much of the power to the distributor, and honestly

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Speaker 2: actually to the person who deals directly with a client,

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Speaker 2: to the financial advisor themselves and so, and the manufacturer

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Speaker 2: had less power, and so we look for ways that

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Speaker 2: we can build greater strength in distribution as being a

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Speaker 2: better strategic partner. Some of that's fintech. In the case

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Speaker 2: of the Putnam it's building a closer relationship with Power Corp.

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Speaker 2: Who has you know, who owns both Great West Life

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Speaker 2: Insurance or significant control of it, as well as Empower

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Speaker 2: the second fast the second largest retirement platform, fastest growing one.

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Speaker 2: And that's really important because the retirement channel is where

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Speaker 2: mutual funds still have growth, right.

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Speaker 1: Because there's no reason to put an ETF there Exactly

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Speaker 1: the negative on a mutual funds phantom taxes. Hey, if

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Speaker 1: it's a qualified account, it doesn't matter. It's it's irrelevant.

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Speaker 1: And there are advantages to mutual funds in terms of

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Speaker 1: trading and management that give it a leg up over

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Speaker 1: over ETFs, especially in that sort of environment.

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Speaker 2: Absolutely, so, I want.

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Speaker 1: To talk about the forty percent and a little bit

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Speaker 1: of insulation from public markets, but I'm going to circle

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Speaker 1: back to that. I got to ask you about one

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Speaker 1: last acquisition last year. You purchased O'Shaughnessey Investments, including their

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Speaker 1: direct indexing product called Canvas Full Disclosure, where one of

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Speaker 1: the early users of Canvas. I think my firm, Adults

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Speaker 1: Wealth Management is the largest, or at least was when

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Speaker 1: you acquired it, the largest client of Canvas. We love

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Speaker 1: the product and our clients have found it to be

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Speaker 1: tremendously useful in terms of managing and offsetting capital gain taxes.

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Speaker 1: What was the thinking behind the O'Shaughnessy acquisition and what

435
00:22:53,800 --> 00:22:55,879
Speaker 1: are the plans for Canvas fantastic?

436
00:22:56,160 --> 00:22:59,040
Speaker 2: I mean you probably could having being a user of it,

437
00:22:59,040 --> 00:23:01,480
Speaker 2: you probably could even speak this more than I can,

438
00:23:01,520 --> 00:23:03,360
Speaker 2: but I can tell you we think again, a big

439
00:23:03,359 --> 00:23:07,399
Speaker 2: trend is this direct indexing. But the reason we love Canvas,

440
00:23:07,480 --> 00:23:11,160
Speaker 2: and I know you know this is Canvas grew out

441
00:23:11,200 --> 00:23:15,600
Speaker 2: of a quant shop that built the technology to manage

442
00:23:15,640 --> 00:23:19,840
Speaker 2: their quant portfolio. And so when initially you just have

443
00:23:19,920 --> 00:23:23,119
Speaker 2: direct indexing with tax optimization, but we look at it

444
00:23:23,119 --> 00:23:26,000
Speaker 2: as a tool where we think you can take just

445
00:23:26,040 --> 00:23:29,280
Speaker 2: like the trend towards SMA separately managed accounts, you can

446
00:23:29,480 --> 00:23:34,480
Speaker 2: use the technology of Canvas express our active management strategies

447
00:23:34,560 --> 00:23:37,239
Speaker 2: in there. So take a mutual fund strategy, deliver it

448
00:23:37,520 --> 00:23:42,760
Speaker 2: through the Canvas platform overlay with tax optimization, and even

449
00:23:42,800 --> 00:23:45,159
Speaker 2: include some ESG overlay. So if you have a client

450
00:23:45,200 --> 00:23:48,160
Speaker 2: who says, you know, I really want to you know,

451
00:23:48,320 --> 00:23:50,440
Speaker 2: my daughter will say, I really want things that are

452
00:23:50,680 --> 00:23:54,399
Speaker 2: pushing towards net neutral, on net zero and carbon, so

453
00:23:54,680 --> 00:23:57,400
Speaker 2: she wants her portfolio manager. That way, you can put

454
00:23:57,400 --> 00:24:01,000
Speaker 2: those tags in there but still take a professionally managed

455
00:24:01,040 --> 00:24:04,440
Speaker 2: strategy and express it through that technology. So we looked

456
00:24:04,440 --> 00:24:06,440
Speaker 2: at that and said, this is going to be really

457
00:24:06,440 --> 00:24:09,240
Speaker 2: significant in the future. We have to be in the

458
00:24:09,240 --> 00:24:12,000
Speaker 2: direct index space, but more importantly, we have to have

459
00:24:12,080 --> 00:24:15,000
Speaker 2: great technology because we think this is just the beginning

460
00:24:15,080 --> 00:24:16,080
Speaker 2: of a trend. Right.

461
00:24:16,160 --> 00:24:19,120
Speaker 1: Not only is the software really good, but the O'Shaughnessy

462
00:24:19,200 --> 00:24:23,960
Speaker 1: database so that they've been polishing up for decades. Very

463
00:24:23,960 --> 00:24:26,920
Speaker 1: few things, I mean, Crisper is probably the only other

464
00:24:26,960 --> 00:24:30,560
Speaker 1: one that is that focus, that dedicated that clean. Most

465
00:24:30,600 --> 00:24:33,879
Speaker 1: databases are just problematic to do the solo work. And

466
00:24:34,600 --> 00:24:37,440
Speaker 1: Jim is now retired, but and a son, Patrick took over.

467
00:24:38,359 --> 00:24:40,880
Speaker 1: But it's a great product. They're a great team. I'm

468
00:24:40,920 --> 00:24:43,359
Speaker 1: sure you guys are gonna have a lot of success

469
00:24:43,440 --> 00:24:46,480
Speaker 1: with them. Let me go over a couple of more

470
00:24:48,080 --> 00:24:53,040
Speaker 1: acquisitions that really kind of surprise me. Managed options capabilities

471
00:24:53,040 --> 00:24:54,399
Speaker 1: tell us, tell us about that.

472
00:24:54,600 --> 00:24:57,520
Speaker 2: Well, we think that's going to be important to add

473
00:24:57,560 --> 00:25:01,399
Speaker 2: to the Canvas platform. Well really so, yeah, so managed

474
00:25:01,440 --> 00:25:06,280
Speaker 2: options are important part as part of the tax optimization strategy. Uh.

475
00:25:06,359 --> 00:25:09,879
Speaker 2: And so the feeling is that you needed that to

476
00:25:10,000 --> 00:25:13,240
Speaker 2: be included to where this where the technology WI ultimately

477
00:25:13,280 --> 00:25:16,960
Speaker 2: go for this where the uh the strategies ultimately.

478
00:25:17,119 --> 00:25:21,879
Speaker 1: So when I hear managed options and capital gains, I

479
00:25:21,920 --> 00:25:24,639
Speaker 1: think zero cost collars and things like that, is that

480
00:25:24,720 --> 00:25:25,520
Speaker 1: what's along the lines?

481
00:25:25,560 --> 00:25:28,159
Speaker 2: Heah, yeah, so they can include that now in in

482
00:25:28,400 --> 00:25:29,800
Speaker 2: like a separately managed account.

483
00:25:29,840 --> 00:25:34,400
Speaker 1: Oh, that's really really interesting. And then Alcentra you acquired

484
00:25:34,440 --> 00:25:40,000
Speaker 1: from bny Mellon Lexington Partners, who's another private equity and

485
00:25:40,080 --> 00:25:44,120
Speaker 1: secondary entity. And then I didn't realize you guys bought

486
00:25:44,160 --> 00:25:49,000
Speaker 1: Advisor Engine that was like a big sort of semi

487
00:25:49,119 --> 00:25:53,399
Speaker 1: robo advisor, uh for for advisors. I mean this is

488
00:25:53,440 --> 00:25:57,360
Speaker 1: a long line. And then Alternative Credit Manager, Benefit Street Partners,

489
00:25:57,640 --> 00:26:00,679
Speaker 1: and then Athena Capital. I mean, you guys have been

490
00:26:00,720 --> 00:26:04,840
Speaker 1: on a tear. All of these things are different products

491
00:26:04,880 --> 00:26:07,879
Speaker 1: filling in holes, different services, and you want to be

492
00:26:07,920 --> 00:26:10,639
Speaker 1: able to offer a full rounded set of products to

493
00:26:10,840 --> 00:26:12,240
Speaker 1: institutional and retail clients.

494
00:26:12,480 --> 00:26:15,400
Speaker 2: We want to be the first phone call. We want

495
00:26:15,400 --> 00:26:18,080
Speaker 2: to be the strategic partner where you know, somebody's thinking,

496
00:26:18,119 --> 00:26:20,760
Speaker 2: I've got this problem, let me think about how to

497
00:26:20,760 --> 00:26:22,720
Speaker 2: solve it. I want to talk to Franklin Templeton and

498
00:26:23,119 --> 00:26:24,840
Speaker 2: talk to them about how to approach it. And so

499
00:26:25,200 --> 00:26:29,720
Speaker 2: you take Advisor Engine. It has a CRM system that

500
00:26:29,920 --> 00:26:33,879
Speaker 2: was built by a financial advisor. So you know, a

501
00:26:33,920 --> 00:26:38,960
Speaker 2: lot of you know, a lot of smaller rias don't

502
00:26:38,960 --> 00:26:40,919
Speaker 2: have a tech team to sit there and say how

503
00:26:40,920 --> 00:26:44,160
Speaker 2: do I use Salesforce? How do I use Microsoft Dynamic?

504
00:26:44,600 --> 00:26:46,640
Speaker 2: And so they want something simple. So this is a

505
00:26:46,720 --> 00:26:49,879
Speaker 2: simple CRM system that's just for the business of being

506
00:26:49,880 --> 00:26:52,840
Speaker 2: a financial advisor. And if we can build that relationship

507
00:26:52,880 --> 00:26:56,280
Speaker 2: with that advisor, then we feel like we can be

508
00:26:56,520 --> 00:26:57,600
Speaker 2: a stickier partner.

509
00:26:58,119 --> 00:27:02,439
Speaker 1: How important is the registered investment advisor the ri A

510
00:27:02,560 --> 00:27:05,600
Speaker 1: space to Franklin Templeton, I always thought of you guys

511
00:27:05,720 --> 00:27:10,840
Speaker 1: back in the day as mutual fund managers, perhaps selling

512
00:27:11,080 --> 00:27:15,679
Speaker 1: into that vertical I sound like a marketing guy, But

513
00:27:16,520 --> 00:27:20,359
Speaker 1: how important is the ri A space to Franklin Templeton Today, well.

514
00:27:20,240 --> 00:27:23,320
Speaker 2: The ra as have been growing again as the fee

515
00:27:23,320 --> 00:27:26,200
Speaker 2: based environment and the fact that people honestly could take

516
00:27:26,200 --> 00:27:28,560
Speaker 2: their book and walk in and set up their own

517
00:27:28,560 --> 00:27:31,960
Speaker 2: shingle and be on a platform provider, and so it's

518
00:27:32,000 --> 00:27:34,520
Speaker 2: a really important channel for us. It's it's a we

519
00:27:34,600 --> 00:27:39,720
Speaker 2: are much bigger in the wirehouse and the UH in

520
00:27:39,760 --> 00:27:42,760
Speaker 2: the independent channels because that's kind of been our DNA historically.

521
00:27:43,320 --> 00:27:45,560
Speaker 2: UH and and those who who were big in the

522
00:27:45,600 --> 00:27:49,600
Speaker 2: ETF tended ra as have tended to lean more towards ETFs,

523
00:27:49,600 --> 00:27:53,760
Speaker 2: although that's a little bit of a stereotype, and so

524
00:27:54,160 --> 00:27:56,760
Speaker 2: it's been an important area of focus for us to

525
00:27:57,040 --> 00:27:57,919
Speaker 2: grow that channel.

526
00:27:58,520 --> 00:28:01,840
Speaker 1: And to be fair, the wirehouses have kind of been

527
00:28:01,880 --> 00:28:06,240
Speaker 1: slowly morphing into advisors. They're all hybrids these days. It's

528
00:28:06,320 --> 00:28:10,200
Speaker 1: less transactional, more fee based to the benefit of the clients.

529
00:28:10,280 --> 00:28:11,520
Speaker 2: Absolutely couldn't agree more.

530
00:28:11,600 --> 00:28:15,120
Speaker 1: Huh really really quite fascinating. Let's talk a little bit

531
00:28:15,359 --> 00:28:20,320
Speaker 1: about your experience as a woman running a corporation. You've

532
00:28:20,320 --> 00:28:24,520
Speaker 1: held leadership roles across just about every line of business

533
00:28:24,520 --> 00:28:27,640
Speaker 1: in the company. What was that experience like, what did

534
00:28:27,640 --> 00:28:31,760
Speaker 1: you learn from running things as diverse as investment management

535
00:28:32,240 --> 00:28:35,560
Speaker 1: and technology. It seems like totally opposite business.

536
00:28:35,640 --> 00:28:38,160
Speaker 2: It's funny, So you know, on the first question, people

537
00:28:38,160 --> 00:28:40,040
Speaker 2: ask me, what's it like to be a woman in finance? Well,

538
00:28:40,360 --> 00:28:41,840
Speaker 2: the problem is I don't know what it's like not

539
00:28:41,960 --> 00:28:43,959
Speaker 2: to be one, So I don't know that I have

540
00:28:44,440 --> 00:28:46,840
Speaker 2: a good answer to that, but I can say I

541
00:28:46,880 --> 00:28:50,000
Speaker 2: am so thankful today as a CEO to have having

542
00:28:50,200 --> 00:28:56,400
Speaker 2: run technology because so much I think of decisions that

543
00:28:56,440 --> 00:28:59,240
Speaker 2: we have to make in innovation that's happening requires a

544
00:28:59,240 --> 00:29:04,000
Speaker 2: basic understand of technology. And so I look at you know,

545
00:29:04,080 --> 00:29:07,640
Speaker 2: parts of your career you've sort of moved your way around,

546
00:29:07,760 --> 00:29:09,960
Speaker 2: and you wonder whether it's going to be relevant at

547
00:29:09,960 --> 00:29:12,760
Speaker 2: some point or not. And some of the things that

548
00:29:12,800 --> 00:29:17,120
Speaker 2: I think we would naturally people think wouldn't be relevant

549
00:29:17,160 --> 00:29:19,600
Speaker 2: to being CEO have been the most relevant. I mentioned

550
00:29:19,680 --> 00:29:23,080
Speaker 2: running the auto finance business and honestly, running the technology department.

551
00:29:23,280 --> 00:29:25,720
Speaker 1: You don't have a background in tech. How hard was

552
00:29:25,720 --> 00:29:29,280
Speaker 1: it to ramp up running a tech division when you're

553
00:29:29,360 --> 00:29:34,440
Speaker 1: not a natural geek And it's almost a different language sometimes.

554
00:29:34,440 --> 00:29:37,320
Speaker 2: So it's funny. I am divorced now, but I was

555
00:29:37,360 --> 00:29:41,960
Speaker 2: married to a guy who was a tech person, and

556
00:29:42,000 --> 00:29:43,880
Speaker 2: I'd always ask them all these questions. I was really

557
00:29:43,880 --> 00:29:47,400
Speaker 2: curious around it, and so I always felt like he

558
00:29:47,480 --> 00:29:50,400
Speaker 2: gave me a really good background in understanding technology. And

559
00:29:50,440 --> 00:29:54,200
Speaker 2: then I learned to be fearless in asking the question right.

560
00:29:54,400 --> 00:29:57,080
Speaker 2: Tech people are used to everybody's being so afraid of

561
00:29:57,120 --> 00:29:59,800
Speaker 2: tech that they give you They can sometimes give you

562
00:29:59,840 --> 00:30:03,880
Speaker 2: a a little bit of a blurred answer steam yeah,

563
00:30:03,880 --> 00:30:06,760
Speaker 2: and you're afraid to look stupid, so you don't ask. Well,

564
00:30:06,800 --> 00:30:09,960
Speaker 2: I learned, you know what, if you think about what

565
00:30:10,000 --> 00:30:12,320
Speaker 2: technology is, it's moving this piece of data from here

566
00:30:12,360 --> 00:30:15,760
Speaker 2: to here and maybe adding some new data. Dumb down

567
00:30:15,800 --> 00:30:17,400
Speaker 2: what you're talking about, and let me just try to

568
00:30:17,480 --> 00:30:20,920
Speaker 2: understand it right, and and things like cloud servicing right.

569
00:30:21,120 --> 00:30:23,320
Speaker 2: These are concepts that have existed in tech for a

570
00:30:23,320 --> 00:30:26,160
Speaker 2: long time. The technology gets better and we usually change

571
00:30:26,160 --> 00:30:29,480
Speaker 2: the name about every decade. But once you understand what

572
00:30:29,600 --> 00:30:33,200
Speaker 2: it's trying to achieve, you don't have to be a programmer.

573
00:30:33,280 --> 00:30:35,400
Speaker 2: You just you know. And I honestly, I think one

574
00:30:35,440 --> 00:30:37,360
Speaker 2: of the biggest things that people don't appreciate is the

575
00:30:37,440 --> 00:30:41,200
Speaker 2: quality of data, truly, garbage in, garbage out, and so

576
00:30:41,600 --> 00:30:45,960
Speaker 2: having discipline around your data management is really really important

577
00:30:45,960 --> 00:30:46,800
Speaker 2: in a tech department.

578
00:30:46,880 --> 00:30:49,240
Speaker 1: It's really hard. Also, we were talking earlier about the

579
00:30:49,240 --> 00:30:53,720
Speaker 1: O'Shaughnessy database. I know that they painstakingly triple check and

580
00:30:53,800 --> 00:30:56,880
Speaker 1: quadruple check stuff because you don't want an errant thing

581
00:30:56,960 --> 00:31:00,480
Speaker 1: in there that will change the outcome of a backtest

582
00:31:00,560 --> 00:31:01,360
Speaker 1: or a model.

583
00:31:01,160 --> 00:31:04,160
Speaker 2: For sure. And I think actually we all talk about

584
00:31:04,240 --> 00:31:08,040
Speaker 2: AI and AI understanding and the models that you use,

585
00:31:08,080 --> 00:31:10,160
Speaker 2: and the combination of models is going to be really important.

586
00:31:10,400 --> 00:31:12,880
Speaker 2: But honestly, I think the real competitive advantage is going

587
00:31:12,920 --> 00:31:14,880
Speaker 2: to be and this is why I think scale in

588
00:31:14,960 --> 00:31:18,560
Speaker 2: asset management is so important, is the breadth and depth

589
00:31:18,800 --> 00:31:22,520
Speaker 2: of the database. So we have an investment data like

590
00:31:22,920 --> 00:31:27,160
Speaker 2: that is shared by our eighteen individual investment teams and

591
00:31:27,240 --> 00:31:29,800
Speaker 2: so you know as they contribute. So maybe a team

592
00:31:29,840 --> 00:31:32,880
Speaker 2: like our Global Macro team has fourteen different feeds for

593
00:31:32,960 --> 00:31:37,360
Speaker 2: its ESG framework. They come in it's scrubs centrally. Now

594
00:31:37,400 --> 00:31:40,320
Speaker 2: that data is available to the other teams, right, and

595
00:31:40,360 --> 00:31:42,360
Speaker 2: we think over time it's going to be more about

596
00:31:42,400 --> 00:31:45,400
Speaker 2: what unique data do you have that you can apply

597
00:31:45,480 --> 00:31:47,200
Speaker 2: your models. It's going to be more and more important.

598
00:31:47,840 --> 00:31:51,160
Speaker 1: So let's talk a little bit about your leadership experience.

599
00:31:51,840 --> 00:31:55,920
Speaker 1: Your timing was impeccable. You step into the CEO role

600
00:31:56,480 --> 00:32:00,360
Speaker 1: February twenty twenty, Thank goodness, nothing was about to happen

601
00:32:00,440 --> 00:32:03,520
Speaker 1: over the next three years. What was it like, a

602
00:32:03,640 --> 00:32:06,960
Speaker 1: month into the new gig and suddenly the world shuts down.

603
00:32:07,040 --> 00:32:11,560
Speaker 2: Yeah, well, so I stepped in I think February eleventh,

604
00:32:11,600 --> 00:32:14,880
Speaker 2: I think February twentieth, we announced the acquisition of leg Mason,

605
00:32:14,880 --> 00:32:16,800
Speaker 2: which of course had been in the works right for

606
00:32:16,880 --> 00:32:18,680
Speaker 2: quite a while. So we had good plans in place,

607
00:32:18,720 --> 00:32:20,920
Speaker 2: and then about three weeks later, remember we were going

608
00:32:20,960 --> 00:32:22,520
Speaker 2: to flatten the curve with two weeks off.

609
00:32:22,600 --> 00:32:25,520
Speaker 1: Yeah, that's it turned into two years. It's yeah, that

610
00:32:25,600 --> 00:32:26,360
Speaker 1: was transitory.

611
00:32:26,440 --> 00:32:30,360
Speaker 2: Yeah, that was transitory. You know, you just deal with

612
00:32:30,400 --> 00:32:34,080
Speaker 2: the cards that are in front of you. And the

613
00:32:34,120 --> 00:32:37,520
Speaker 2: good news was when I was running technology, I became

614
00:32:37,680 --> 00:32:41,640
Speaker 2: very passionate because we had you know, developers in India,

615
00:32:41,760 --> 00:32:44,560
Speaker 2: uh and kind of around the world, Poland, in various places,

616
00:32:44,600 --> 00:32:47,240
Speaker 2: and I felt like it was really important that you

617
00:32:47,280 --> 00:32:51,440
Speaker 2: could see people when English was a second language, and

618
00:32:51,560 --> 00:32:54,640
Speaker 2: so we push, I pushed the tech team to get

619
00:32:54,960 --> 00:32:58,440
Speaker 2: a desktop video and so we had these devices. They

620
00:32:58,440 --> 00:33:01,080
Speaker 2: were called a Tanberg device and it's sat separately on

621
00:33:01,080 --> 00:33:04,680
Speaker 2: your desktop, and we would do video calls and so

622
00:33:05,400 --> 00:33:08,440
Speaker 2: the company had you been doing this for twenty years

623
00:33:08,560 --> 00:33:12,680
Speaker 2: Zoom before Zoom, Yeah, exactly, and so we were comfortable.

624
00:33:12,720 --> 00:33:14,760
Speaker 2: It was already part of our DNA to have meetings

625
00:33:14,760 --> 00:33:17,760
Speaker 2: where inevitably somebody was on video. So it was already

626
00:33:17,880 --> 00:33:20,840
Speaker 2: kind of how we operated. Now you had everybody on video,

627
00:33:21,520 --> 00:33:23,960
Speaker 2: and I think the thing that I appreciated was actually

628
00:33:24,000 --> 00:33:28,440
Speaker 2: people's finally believed you can run businesses that way. And so,

629
00:33:28,720 --> 00:33:30,400
Speaker 2: you know, in many ways, we closed the leg Mason

630
00:33:30,400 --> 00:33:34,000
Speaker 2: deal two months early, and I think it was because

631
00:33:34,040 --> 00:33:36,160
Speaker 2: we were in some ways more efficient by doing it

632
00:33:37,040 --> 00:33:39,280
Speaker 2: via video, not everybody getting on an airplane and going

633
00:33:39,280 --> 00:33:42,360
Speaker 2: and trying to work your calendars to go meet you know.

634
00:33:42,680 --> 00:33:47,360
Speaker 1: The crazy unexpected benefit of the new post nine to

635
00:33:47,360 --> 00:33:52,200
Speaker 1: eleven rules was that everybody had to have backup systems.

636
00:33:52,200 --> 00:33:55,680
Speaker 1: You couldn't just have everything in one location. I think

637
00:33:55,680 --> 00:33:59,960
Speaker 1: the SEC promulgated those, and when people were suddenly forced

638
00:34:00,160 --> 00:34:03,080
Speaker 1: to work from home, it was very easy to get

639
00:34:03,160 --> 00:34:05,680
Speaker 1: or relatively easy to get up and running. Just an

640
00:34:05,760 --> 00:34:09,120
Speaker 1: unexpected side effect of the new regulations that came in

641
00:34:09,719 --> 00:34:13,000
Speaker 1: after you know, we lost the twin towers. It's who

642
00:34:13,080 --> 00:34:17,400
Speaker 1: knew that the SEC can actually be so forward looking

643
00:34:17,480 --> 00:34:19,960
Speaker 1: And hey, you know, it all worked out. We were

644
00:34:19,960 --> 00:34:22,200
Speaker 1: all able to know for sure to get up and running.

645
00:34:23,320 --> 00:34:27,520
Speaker 1: So were there any complications from all this remote work

646
00:34:27,680 --> 00:34:31,000
Speaker 1: in your CEO transition or you were in place when

647
00:34:31,040 --> 00:34:33,279
Speaker 1: everything hit the fan and you know, it was just

648
00:34:33,320 --> 00:34:37,200
Speaker 1: a matter of tacking into the wind when the world changed.

649
00:34:37,200 --> 00:34:40,719
Speaker 2: I mean, I wouldn't attribute anything in particular to that.

650
00:34:41,000 --> 00:34:43,160
Speaker 2: I mean, you're you know, when you do an acquisition,

651
00:34:43,239 --> 00:34:45,360
Speaker 2: one of the most important things you do is assess talent,

652
00:34:45,440 --> 00:34:49,600
Speaker 2: and there's a bias towards your own talent, and it's

653
00:34:49,600 --> 00:34:52,840
Speaker 2: a missed opportunity if you don't infuse your organization with

654
00:34:52,920 --> 00:34:55,319
Speaker 2: talent from the company you acquired. And so we were

655
00:34:55,400 --> 00:34:57,839
Speaker 2: very focused on that. And sure, you'd love to meet

656
00:34:57,840 --> 00:35:00,440
Speaker 2: people in person versus doing zoom in or views, but

657
00:35:01,560 --> 00:35:02,759
Speaker 2: you know, we had to do it that way. We

658
00:35:02,840 --> 00:35:06,400
Speaker 2: ended up with I think two thirds of leg Mason's

659
00:35:06,480 --> 00:35:09,520
Speaker 2: kind of corporate services groups came into Franklin Templeton and

660
00:35:09,920 --> 00:35:12,480
Speaker 2: a big part of the distribution team became part of

661
00:35:12,520 --> 00:35:16,200
Speaker 2: Franklin Tumbleton. So you know, you're trying to kind of

662
00:35:16,200 --> 00:35:19,400
Speaker 2: build a best athlete, and it's not just the best athlete,

663
00:35:19,440 --> 00:35:23,400
Speaker 2: it's the best team. So sometimes you're just trying to

664
00:35:23,400 --> 00:35:27,799
Speaker 2: make sure the team will you know, coalesce. And I

665
00:35:27,800 --> 00:35:29,200
Speaker 2: think we did a pretty good job of that.

666
00:35:30,400 --> 00:35:34,040
Speaker 1: Really interesting you mentioned your dad. Let's talk about some

667
00:35:34,200 --> 00:35:41,040
Speaker 1: leadership lessons. What did your father teach you about managing people,

668
00:35:41,360 --> 00:35:45,560
Speaker 1: running a company and getting all of the horses pulling

669
00:35:45,600 --> 00:35:47,560
Speaker 1: the cart in the same direction.

670
00:35:48,239 --> 00:35:50,840
Speaker 2: I mean, one of the things my father has always said,

671
00:35:51,360 --> 00:35:53,000
Speaker 2: take care of the client and the business takes care

672
00:35:53,040 --> 00:35:57,680
Speaker 2: of itself. And so anytime there'd be and I still

673
00:35:57,719 --> 00:36:00,719
Speaker 2: talk to them about things. You know, how old now

674
00:36:00,880 --> 00:36:02,840
Speaker 2: he just turned ninety in January.

675
00:36:02,680 --> 00:36:05,799
Speaker 1: And sharp as attack. Absolutely, that's really you got some

676
00:36:05,840 --> 00:36:06,400
Speaker 1: good genes.

677
00:36:06,480 --> 00:36:11,680
Speaker 2: Yeah, you amazing And so you know, if you think

678
00:36:11,719 --> 00:36:15,239
Speaker 2: about that and you overlay that in any decision, is

679
00:36:15,239 --> 00:36:17,919
Speaker 2: this good for the client? Then I think that gives

680
00:36:17,920 --> 00:36:19,319
Speaker 2: you a lot of clarity. It's kind of a north

681
00:36:19,360 --> 00:36:22,440
Speaker 2: star there. And then I'd say, my dad is you know,

682
00:36:22,440 --> 00:36:25,719
Speaker 2: he's always incredibly fair to people, and you recognize that

683
00:36:25,960 --> 00:36:29,400
Speaker 2: every person contributes to who we are as a company.

684
00:36:29,719 --> 00:36:33,520
Speaker 2: When your call center employee picks up the phone and

685
00:36:33,640 --> 00:36:37,280
Speaker 2: is talking to a client. They're shouldering the entire reputation

686
00:36:37,320 --> 00:36:40,480
Speaker 2: of the firm on them with that client. And my

687
00:36:40,560 --> 00:36:43,280
Speaker 2: dad always understood that, And so there's just a genuine

688
00:36:43,360 --> 00:36:47,680
Speaker 2: respect for everybody's contribution to the company, and I think

689
00:36:47,680 --> 00:36:49,000
Speaker 2: that's part of our culture.

690
00:36:49,200 --> 00:36:54,440
Speaker 1: That's really interesting. You mentioned you took a slot from

691
00:36:54,480 --> 00:36:57,480
Speaker 1: your sister when you first started at an entry level.

692
00:36:57,840 --> 00:37:00,160
Speaker 1: I know one of your brothers was very involved with

693
00:37:00,160 --> 00:37:04,359
Speaker 1: with the firm. What's it like dealing with people that

694
00:37:04,440 --> 00:37:08,760
Speaker 1: you have this familial personal relationship. How do you manage

695
00:37:08,800 --> 00:37:10,960
Speaker 1: around that? I would think that's I'm just thinking about

696
00:37:10,960 --> 00:37:13,839
Speaker 1: my own siblings, and we would have killed each other

697
00:37:13,840 --> 00:37:15,120
Speaker 1: and gone bankrupt long ago.

698
00:37:15,640 --> 00:37:18,800
Speaker 2: Everybody asked me, is this succession not our family?

699
00:37:18,840 --> 00:37:20,800
Speaker 1: I wasn't even thinking about that. I'm just thinking about

700
00:37:20,800 --> 00:37:23,600
Speaker 1: my own family, and I know there would have been bloodshed,

701
00:37:23,640 --> 00:37:26,920
Speaker 1: But how do you navigate that challenging.

702
00:37:27,520 --> 00:37:29,720
Speaker 2: They were definitely tires where I'd say to my brother, listen, stop,

703
00:37:29,800 --> 00:37:31,920
Speaker 2: you can't treat me like your little sister in I

704
00:37:31,960 --> 00:37:37,319
Speaker 2: meeting but no people, right, But you know what, as

705
00:37:37,320 --> 00:37:39,239
Speaker 2: a family, we get along great, and my brother and

706
00:37:39,280 --> 00:37:41,680
Speaker 2: I get along great, and you know he's still executive

707
00:37:41,719 --> 00:37:45,000
Speaker 2: chairman today, and you know we talk about parts of

708
00:37:45,000 --> 00:37:47,120
Speaker 2: the business, things that I'm struggling with. I'll talk to him,

709
00:37:47,160 --> 00:37:48,000
Speaker 2: I'll talk to my dad.

710
00:37:48,480 --> 00:37:48,640
Speaker 1: Uh.

711
00:37:48,680 --> 00:37:53,480
Speaker 2: And I got to tell you what a great privilege

712
00:37:53,480 --> 00:37:56,719
Speaker 2: it is to be a CEO and have people who

713
00:37:57,120 --> 00:37:59,920
Speaker 2: care so much like you do, to be able to

714
00:38:00,080 --> 00:38:02,200
Speaker 2: talk to about things that you're thinking about.

715
00:38:02,320 --> 00:38:04,040
Speaker 1: You go to them for advice all the time.

716
00:38:04,120 --> 00:38:06,920
Speaker 2: We'll talk about, you know, before any acquisition is done.

717
00:38:07,040 --> 00:38:10,239
Speaker 2: That's clearly you know, part of the conversation as well

718
00:38:10,239 --> 00:38:12,839
Speaker 2: as my uncle. My uncle is still active in the firm,

719
00:38:12,920 --> 00:38:16,160
Speaker 2: and so you know, we'll have conversations about what we think,

720
00:38:16,280 --> 00:38:20,960
Speaker 2: does it make sense? And you know, it's just my father,

721
00:38:21,440 --> 00:38:24,880
Speaker 2: my uncle, my brother will never say you have to

722
00:38:24,960 --> 00:38:28,160
Speaker 2: do this. They'll say, here the thinking on it. And

723
00:38:28,200 --> 00:38:29,680
Speaker 2: my brother would say the same thing when he was

724
00:38:30,000 --> 00:38:33,120
Speaker 2: CEO for fifteen years. My father was a great resource,

725
00:38:33,200 --> 00:38:36,399
Speaker 2: but never would tell you what to do. And so

726
00:38:36,680 --> 00:38:39,160
Speaker 2: it's nice to have those voices in the room. But

727
00:38:39,239 --> 00:38:41,520
Speaker 2: in the end, the decisions mine as a CEO with

728
00:38:41,560 --> 00:38:46,960
Speaker 2: my board and my management team, and they're just great advisors.

729
00:38:47,440 --> 00:38:52,040
Speaker 1: That's great. I love the stock symbol Ben right, I

730
00:38:52,040 --> 00:38:58,560
Speaker 1: mean so great. You talked earlier about long termism versus

731
00:38:58,600 --> 00:39:03,120
Speaker 1: short termism. The family still owns like forty percent of

732
00:39:03,160 --> 00:39:06,600
Speaker 1: the outstanding shares. Yes, does that insulate you from the

733
00:39:06,680 --> 00:39:11,480
Speaker 1: sort of short term activist? What about this quarter's returns

734
00:39:11,560 --> 00:39:15,440
Speaker 1: when you're making those long term investments in technology, how

735
00:39:15,480 --> 00:39:17,280
Speaker 1: does that affect how you navigate?

736
00:39:17,360 --> 00:39:19,920
Speaker 2: Yeah? No, I mean for sure you're The risk in

737
00:39:19,960 --> 00:39:22,440
Speaker 2: asset management is that an activist comes in and says,

738
00:39:22,600 --> 00:39:24,120
Speaker 2: you know what, why don't we spin off all these

739
00:39:24,160 --> 00:39:26,520
Speaker 2: groups because we can get a bigger multiple for the

740
00:39:26,560 --> 00:39:30,040
Speaker 2: alts business and you know, various things, and that that

741
00:39:30,360 --> 00:39:33,719
Speaker 2: is a short term gain, right, and doesn't build a

742
00:39:33,760 --> 00:39:36,359
Speaker 2: long sustainable business. So it's better to have that, you know,

743
00:39:36,719 --> 00:39:39,759
Speaker 2: for and I genuinely believe scale is going to be

744
00:39:39,840 --> 00:39:41,520
Speaker 2: more and more important as I mentioned, for things like

745
00:39:41,600 --> 00:39:45,239
Speaker 2: data for asset managers, and so building a long term

746
00:39:45,239 --> 00:39:47,920
Speaker 2: business really important. An activist doesn't take on a company

747
00:39:47,960 --> 00:39:51,400
Speaker 2: that's got a forty percent you know, control, because you

748
00:39:51,440 --> 00:39:56,759
Speaker 2: can't get enough stock to be able to ultimately you know, right, it's.

749
00:39:56,920 --> 00:39:59,719
Speaker 1: Ninety percent of the remaining sixty it's a it's so

750
00:39:59,760 --> 00:40:01,800
Speaker 1: that it does create a little bit of a buffer,

751
00:40:01,880 --> 00:40:05,799
Speaker 1: so you guys can think very long term, make acquisitions

752
00:40:05,840 --> 00:40:09,799
Speaker 1: and make investments which other publicly traded companies might not

753
00:40:09,960 --> 00:40:10,880
Speaker 1: have that luxury.

754
00:40:11,320 --> 00:40:15,400
Speaker 2: And we're totally aligned with the shareholders because we're looking

755
00:40:15,440 --> 00:40:19,520
Speaker 2: for the best outcome for the stock. And again, sometimes

756
00:40:19,520 --> 00:40:21,560
Speaker 2: that's making some investments today that you know will pay

757
00:40:21,560 --> 00:40:22,400
Speaker 2: off in a few years.

758
00:40:22,520 --> 00:40:25,640
Speaker 1: So this is a ridiculous question, but tell us about

759
00:40:25,680 --> 00:40:29,319
Speaker 1: your next acquisition, meaning I don't expect you to say

760
00:40:29,360 --> 00:40:32,560
Speaker 1: we're gonna pay X for this, Like what areas do

761
00:40:32,600 --> 00:40:35,719
Speaker 1: you think are interesting? Where are you looking to say, hey,

762
00:40:35,760 --> 00:40:39,640
Speaker 1: we can acquire some talent and some technology in this space.

763
00:40:40,040 --> 00:40:45,200
Speaker 2: So with respect to kind of product gaps, the only

764
00:40:45,360 --> 00:40:47,319
Speaker 2: one that we really feel is out there as a

765
00:40:47,320 --> 00:40:50,600
Speaker 2: gap is infrastructure. So if interesting because we think there's

766
00:40:50,600 --> 00:40:51,640
Speaker 2: gonna be a lot of growth on the.

767
00:40:51,600 --> 00:40:53,480
Speaker 1: Bond side or on the equity side.

768
00:40:53,840 --> 00:40:58,640
Speaker 2: Probably equity, but because we can do on the private

769
00:40:58,640 --> 00:41:00,200
Speaker 2: credit teams, they can do it on the on the

770
00:41:00,200 --> 00:41:03,440
Speaker 2: bond side, but it would be that would be an

771
00:41:03,480 --> 00:41:08,200
Speaker 2: area that would be interesting to us. We like local

772
00:41:08,239 --> 00:41:10,959
Speaker 2: asset management, so you know we have clients one hundred

773
00:41:11,000 --> 00:41:15,040
Speaker 2: and fifty five countries. People tend to like home, they

774
00:41:15,040 --> 00:41:18,600
Speaker 2: have a home country bias. So you know eighty percent

775
00:41:18,640 --> 00:41:21,279
Speaker 2: flows in India tend to go to domestic products. We

776
00:41:21,520 --> 00:41:24,560
Speaker 2: were the first foreign manager in India and so we

777
00:41:24,640 --> 00:41:27,000
Speaker 2: have local equity, local fixed income, but we look for

778
00:41:27,080 --> 00:41:30,240
Speaker 2: markets that made sense to us. We'd be a buyer

779
00:41:30,280 --> 00:41:33,720
Speaker 2: of a local asset management. We have them spattered throughout

780
00:41:34,000 --> 00:41:37,080
Speaker 2: the world. And then, as I mentioned on the distribution side,

781
00:41:37,120 --> 00:41:39,960
Speaker 2: anything that builds that deeper relationship that can help us

782
00:41:40,160 --> 00:41:40,840
Speaker 2: with distribution.

783
00:41:41,160 --> 00:41:43,319
Speaker 1: So I don't want to talk about politics. I want

784
00:41:43,360 --> 00:41:47,279
Speaker 1: to talk about culture and environment. We're recording this. We

785
00:41:47,360 --> 00:41:50,880
Speaker 1: have President Modi here in the US. India seems to

786
00:41:50,880 --> 00:41:56,200
Speaker 1: be like a perennial next economic powerhouse after China, and

787
00:41:56,239 --> 00:42:00,359
Speaker 1: it just always seems to be not catching that next

788
00:42:00,400 --> 00:42:03,360
Speaker 1: bid when you look at a region like that, And

789
00:42:03,360 --> 00:42:05,399
Speaker 1: I don't want to just talk about India, but if

790
00:42:05,400 --> 00:42:07,640
Speaker 1: you're looking at India, or you're looking at China, or

791
00:42:07,719 --> 00:42:12,640
Speaker 1: you're looking at Taiwan or Singapore or Korea or Vietnam,

792
00:42:13,400 --> 00:42:17,120
Speaker 1: how do you think about building a presence in a

793
00:42:17,160 --> 00:42:22,680
Speaker 1: place like that and developing a relationship, either building or

794
00:42:22,719 --> 00:42:27,479
Speaker 1: acquiring a local entity, Because how do you pick let's

795
00:42:27,480 --> 00:42:30,239
Speaker 1: focus on this region over that region. It seems like

796
00:42:30,760 --> 00:42:33,080
Speaker 1: it changes from week to week, month to month.

797
00:42:33,640 --> 00:42:38,560
Speaker 2: It's going to matter the demographics of a country, the growth,

798
00:42:39,360 --> 00:42:42,160
Speaker 2: the policies, the regulation, all those going to the factors.

799
00:42:42,160 --> 00:42:46,480
Speaker 2: I mean, we were in India in nineteen ninety five,

800
00:42:46,640 --> 00:42:50,560
Speaker 2: We're in Taiwan in nineteen eighty five, China first investments

801
00:42:50,600 --> 00:42:54,239
Speaker 2: in nineteen eighty eight. So you know, we look at

802
00:42:54,239 --> 00:42:56,560
Speaker 2: those Asia is going to be. They say there's gonna

803
00:42:56,560 --> 00:42:59,040
Speaker 2: be a billion people who enter the middle class in

804
00:42:59,080 --> 00:43:01,480
Speaker 2: the next decade, and eighty seven percent of them we're

805
00:43:01,480 --> 00:43:04,400
Speaker 2: going to be in Asia. I lived in India for

806
00:43:04,400 --> 00:43:06,120
Speaker 2: a little while when I was running the Technology and

807
00:43:06,120 --> 00:43:09,719
Speaker 2: the Operations group, and I can tell you fifty six

808
00:43:09,760 --> 00:43:12,120
Speaker 2: percent of the population is under the age of twenty five.

809
00:43:12,640 --> 00:43:17,280
Speaker 2: It's got a British legal system, a British education system.

810
00:43:17,480 --> 00:43:20,640
Speaker 2: You know, while there's twenty three different languages that are spoken,

811
00:43:20,719 --> 00:43:24,800
Speaker 2: and more dialogical English. You know that certainly you aspire

812
00:43:24,840 --> 00:43:27,200
Speaker 2: to speak English, and so the people that you hire

813
00:43:27,239 --> 00:43:29,839
Speaker 2: from colleges are all English speaking. So that's those are

814
00:43:29,880 --> 00:43:33,920
Speaker 2: all great tailwinds for the economy. Many people say, you know,

815
00:43:34,000 --> 00:43:36,080
Speaker 2: India grows at night when the government sleeps. I think

816
00:43:36,080 --> 00:43:39,319
Speaker 2: Mony's been doing a really terrific job at you know,

817
00:43:39,360 --> 00:43:43,480
Speaker 2: trying to to you know, reduce the amount of kind

818
00:43:43,520 --> 00:43:47,600
Speaker 2: of bureaucracy that's there. I have to say that my

819
00:43:47,800 --> 00:43:50,680
Speaker 2: observation when I would be excited by all those statistics

820
00:43:51,120 --> 00:43:54,000
Speaker 2: was Indians were the most skeptical about India. On my

821
00:43:54,160 --> 00:43:58,520
Speaker 2: last trip, it was a clear difference in view that

822
00:43:58,520 --> 00:44:03,600
Speaker 2: that in India, India and Indian Americans are really excited

823
00:44:03,600 --> 00:44:06,080
Speaker 2: about what's going on. And for the first time I

824
00:44:06,160 --> 00:44:10,160
Speaker 2: found an optimism there that I hadn't really sensed before.

825
00:44:10,400 --> 00:44:13,880
Speaker 1: That's so interesting because that's what I meant by they're

826
00:44:13,920 --> 00:44:19,080
Speaker 1: perennially about to happen, Like they could very easily be

827
00:44:21,440 --> 00:44:26,400
Speaker 1: on par with China in terms of their economic prowess.

828
00:44:27,400 --> 00:44:30,359
Speaker 1: More along the lines on technology and software and other

829
00:44:30,400 --> 00:44:34,880
Speaker 1: areas where clearly there's a huge, huge infrastructure there and

830
00:44:34,960 --> 00:44:37,360
Speaker 1: it just seems to like always be about to happen.

831
00:44:37,400 --> 00:44:38,200
Speaker 1: It never happens.

832
00:44:38,280 --> 00:44:41,000
Speaker 2: Well, you know, they say there's six times the number

833
00:44:41,000 --> 00:44:43,960
Speaker 2: of engineers that graduate in India every year than the US.

834
00:44:44,640 --> 00:44:48,240
Speaker 2: And I can tell you, you know, an Indian would prefer

835
00:44:48,280 --> 00:44:50,360
Speaker 2: to go to an I than Harvard. They look at

836
00:44:50,360 --> 00:44:53,880
Speaker 2: Harvard as a safety school. I mean really and some

837
00:44:54,000 --> 00:44:58,319
Speaker 2: I t though is really still very difficult, right, but

838
00:44:58,400 --> 00:45:00,440
Speaker 2: the its are pretty phenomenal, and.

839
00:45:00,840 --> 00:45:04,600
Speaker 1: We end up, you know, importing a decent number of

840
00:45:04,760 --> 00:45:08,200
Speaker 1: engineers from the best Indian schools. Is that still going

841
00:45:08,239 --> 00:45:09,080
Speaker 1: on the way it used to?

842
00:45:09,280 --> 00:45:10,840
Speaker 2: Well, I think a lot of them are deciding that

843
00:45:10,880 --> 00:45:13,160
Speaker 2: there's more opportunity even at home. It used to be

844
00:45:13,200 --> 00:45:15,719
Speaker 2: they had to come to the US or Europe because

845
00:45:15,760 --> 00:45:17,279
Speaker 2: that was going to be where the opportunity is. But

846
00:45:17,360 --> 00:45:20,680
Speaker 2: now the domestic economy is growing so well that there's

847
00:45:20,719 --> 00:45:24,520
Speaker 2: a lot of excitement, so there's lesson choosing to leave.

848
00:45:25,360 --> 00:45:27,200
Speaker 2: And then I think, you know, China, A lot a

849
00:45:27,239 --> 00:45:30,480
Speaker 2: lot of discussion around China. You know, China's what's the

850
00:45:30,560 --> 00:45:33,840
Speaker 2: US twenty three percent of world's GDP in China's eighteen percent,

851
00:45:33,920 --> 00:45:36,359
Speaker 2: the next the third is like Japan at four point nine.

852
00:45:36,719 --> 00:45:40,879
Speaker 2: I mean, it's a big, big market and it's going

853
00:45:40,920 --> 00:45:44,560
Speaker 2: to be important, and so you know, we have a

854
00:45:44,640 --> 00:45:49,080
Speaker 2: joint venture there and we continue to you know, invest

855
00:45:49,080 --> 00:45:52,520
Speaker 2: in China. But then there's other markets you know that

856
00:45:52,600 --> 00:45:56,920
Speaker 2: you look at There're three hundred million people in Indonesia.

857
00:45:57,280 --> 00:46:00,960
Speaker 2: They get their policies, right, it's going to be amazing growth. Vietnam,

858
00:46:01,360 --> 00:46:03,879
Speaker 2: you know another one. Capital markets are really tough there,

859
00:46:03,920 --> 00:46:06,200
Speaker 2: but you know it should be a great opportunity and growth.

860
00:46:06,200 --> 00:46:09,359
Speaker 2: And you see some of the supply chains. People are diversifying.

861
00:46:09,400 --> 00:46:12,520
Speaker 2: India as one of the beneficiaries of that. Vietnam's another

862
00:46:12,520 --> 00:46:16,120
Speaker 2: beneficiary of that. Japan even in the case of semiconductors.

863
00:46:16,200 --> 00:46:18,600
Speaker 2: So I think there's just a lot going on there

864
00:46:19,120 --> 00:46:21,239
Speaker 2: that is pretty interesting. And then the Middle East is

865
00:46:21,280 --> 00:46:22,680
Speaker 2: another amazing U.

866
00:46:22,840 --> 00:46:25,960
Speaker 1: Yeah, they seem to be purposefully trying to morph their

867
00:46:26,000 --> 00:46:31,200
Speaker 1: reliance away from crude oil and energy towards more modern technologies.

868
00:46:31,760 --> 00:46:34,320
Speaker 1: How can you even think about making an investment in

869
00:46:34,360 --> 00:46:37,480
Speaker 1: the Middle East on anything other than oil. That's no

870
00:46:37,560 --> 00:46:38,280
Speaker 1: longer the case.

871
00:46:38,400 --> 00:46:41,200
Speaker 2: Right, I mean, I think what's interesting is they think

872
00:46:41,600 --> 00:46:45,800
Speaker 2: like a generational family thinks, right, and so in their mind,

873
00:46:45,960 --> 00:46:48,200
Speaker 2: oil runs out, I don't get three generations for it.

874
00:46:48,280 --> 00:46:51,879
Speaker 2: Whatever it is. They want to reinvest in their economies

875
00:46:52,239 --> 00:46:54,560
Speaker 2: to diversify it, to ensure that they're not out of

876
00:46:54,600 --> 00:46:58,480
Speaker 2: money when that happens, right, And I actually genuinely believe

877
00:46:58,560 --> 00:47:01,440
Speaker 2: some of the greatest innovation on renewable energy is going

878
00:47:01,520 --> 00:47:05,280
Speaker 2: to come out of places like Abu Dhabi and Saudi

879
00:47:05,320 --> 00:47:08,880
Speaker 2: Arabia because they are investing in it and they have

880
00:47:08,960 --> 00:47:11,239
Speaker 2: the balance sheet to be able to make those investments.

881
00:47:11,560 --> 00:47:15,120
Speaker 1: And keep in mind, oil isn't going to go away.

882
00:47:15,440 --> 00:47:18,000
Speaker 1: It's just gonna go away as an energy source. As

883
00:47:18,000 --> 00:47:22,359
Speaker 1: a material science source, it's enormous. The old joke used

884
00:47:22,400 --> 00:47:25,600
Speaker 1: to be the Arab cheeks says to the American businessman,

885
00:47:25,680 --> 00:47:28,280
Speaker 1: we're selling you all this oil. We can't believe you guys.

886
00:47:28,320 --> 00:47:30,600
Speaker 1: Burn this. You know what it's really good for. You

887
00:47:30,640 --> 00:47:33,799
Speaker 1: can make it into a million different things. And that's

888
00:47:33,840 --> 00:47:37,440
Speaker 1: the future of oil, not not energy, but materials. So

889
00:47:37,520 --> 00:47:40,239
Speaker 1: you have confidence in in what's going to take place

890
00:47:40,280 --> 00:47:43,920
Speaker 1: in the Middle East. How does one invest into that region?

891
00:47:44,280 --> 00:47:46,960
Speaker 1: If you're a retail investor, Hey, I like the idea

892
00:47:46,960 --> 00:47:49,560
Speaker 1: of India, I could go buy an ETF. I like

893
00:47:49,600 --> 00:47:52,319
Speaker 1: the idea of Middle East. How do I invest in that?

894
00:47:52,440 --> 00:47:54,960
Speaker 2: Well? I think you got to spend a little time

895
00:47:54,960 --> 00:47:58,120
Speaker 2: there and go see because I took my executive committee

896
00:47:58,160 --> 00:48:03,080
Speaker 2: to the Middle East and we have visited several countries there,

897
00:48:03,600 --> 00:48:06,279
Speaker 2: and honestly, I think that many of them felt that

898
00:48:06,360 --> 00:48:10,240
Speaker 2: we were going there to you know, think about raising

899
00:48:10,280 --> 00:48:12,920
Speaker 2: money from that region and came away thinking they're going

900
00:48:12,960 --> 00:48:15,719
Speaker 2: to be investment opportunities there. We actually acquired in two

901
00:48:15,760 --> 00:48:17,960
Speaker 2: thousand and seven a local asset management I mentioned local

902
00:48:18,040 --> 00:48:21,960
Speaker 2: asset management being important, So a local asset management team

903
00:48:22,800 --> 00:48:25,920
Speaker 2: that's based We've been in Dubai about twenty years and

904
00:48:25,960 --> 00:48:32,200
Speaker 2: we're the largest I think, you know, multinational Sharia manager

905
00:48:32,239 --> 00:48:33,360
Speaker 2: for Islamic finance.

906
00:48:33,440 --> 00:48:33,640
Speaker 1: Huh.

907
00:48:33,640 --> 00:48:36,239
Speaker 2: They came out of that local team and so they

908
00:48:36,280 --> 00:48:40,400
Speaker 2: do local GCC bonds and equity investments. So there's a

909
00:48:40,440 --> 00:48:42,120
Speaker 2: lot opportunity I think to invest there.

910
00:48:42,239 --> 00:48:45,759
Speaker 1: Huh. Really quite fascinating. So let's talk a little bit

911
00:48:45,800 --> 00:48:49,839
Speaker 1: about what's going on in the world today. We've seen

912
00:48:49,880 --> 00:48:53,720
Speaker 1: this massive change in rate regimes. How does that affect

913
00:48:53,760 --> 00:48:56,120
Speaker 1: your ability to run the firm and how does it

914
00:48:56,120 --> 00:49:00,400
Speaker 1: affect fund managers dealing with this sun in five hundred

915
00:49:00,400 --> 00:49:01,960
Speaker 1: bases point increase in rates.

916
00:49:02,600 --> 00:49:05,840
Speaker 2: Well, I think the good news is that fixed income

917
00:49:05,960 --> 00:49:08,400
Speaker 2: is now actually an asset class you want to be in.

918
00:49:08,400 --> 00:49:13,680
Speaker 2: And you yelled exactly, and so you know, I think

919
00:49:13,719 --> 00:49:17,080
Speaker 2: that's that's terrific, right, And then you know the other

920
00:49:17,120 --> 00:49:20,440
Speaker 2: thing is volatility is good for active managers, right, It

921
00:49:20,480 --> 00:49:23,600
Speaker 2: shows whether you have skill. And we've we've come off

922
00:49:23,640 --> 00:49:27,759
Speaker 2: a decade where basically government's been pumping money into the system.

923
00:49:28,280 --> 00:49:30,400
Speaker 2: If you didn't have access to private markets, you couldn't

924
00:49:30,400 --> 00:49:32,200
Speaker 2: make any money in fixed income. So where'd you go?

925
00:49:32,239 --> 00:49:36,800
Speaker 2: You went into equities. It just exploded equities up and.

926
00:49:37,160 --> 00:49:42,280
Speaker 1: Was twenty fourteen fifteen percent years exactly. That's that's double normal.

927
00:49:42,360 --> 00:49:44,680
Speaker 2: But it was hard if you're if you are an

928
00:49:44,719 --> 00:49:49,120
Speaker 2: active manager, your job is to have a diversified portfolio

929
00:49:49,120 --> 00:49:52,880
Speaker 2: and think about risk adjusted returns. And when you have

930
00:49:52,920 --> 00:49:56,759
Speaker 2: a momentum market like that and you have five companies

931
00:49:56,760 --> 00:49:58,560
Speaker 2: that take you know, twenty five percent of the index

932
00:49:58,640 --> 00:50:02,239
Speaker 2: or whatever it ended up, being a professional manager gets

933
00:50:02,320 --> 00:50:04,680
Speaker 2: nervous by that type of concentration, and say the S

934
00:50:04,719 --> 00:50:07,319
Speaker 2: and P five hundred, and there's not enough discussion about

935
00:50:07,320 --> 00:50:12,160
Speaker 2: how the indexes. The market risk of the index changes

936
00:50:12,360 --> 00:50:14,800
Speaker 2: depending on one you know, the day Tesla was added

937
00:50:14,800 --> 00:50:16,680
Speaker 2: to the S and P five hundred, it became a

938
00:50:16,760 --> 00:50:19,840
Speaker 2: much riskier investment by investing in the S and P

939
00:50:19,960 --> 00:50:23,560
Speaker 2: five hundred based on volatility and concentration. And so in

940
00:50:23,560 --> 00:50:26,120
Speaker 2: those types of market it's hard for an active manager

941
00:50:26,440 --> 00:50:29,080
Speaker 2: to actually beat that but when you have volatility, that's

942
00:50:29,120 --> 00:50:31,319
Speaker 2: when you start to see outperformance.

943
00:50:31,760 --> 00:50:34,840
Speaker 1: Huh. So let's talk about money market funds. Not only

944
00:50:34,880 --> 00:50:40,280
Speaker 1: are you seeing some yield on fixed income products, money

945
00:50:40,320 --> 00:50:43,560
Speaker 1: market funds used to yield nothing. Now you're actually seeing

946
00:50:43,600 --> 00:50:49,120
Speaker 1: some returns. Even though there's been some concerns about some

947
00:50:49,200 --> 00:50:53,400
Speaker 1: of the regulation around money market funds and the problem

948
00:50:53,400 --> 00:50:57,240
Speaker 1: we had in the financial crisis. What is Franklin Templeton

949
00:50:57,360 --> 00:50:58,160
Speaker 1: doing in this space?

950
00:50:58,360 --> 00:50:59,799
Speaker 2: Well, first of all, I don't think money market funds

951
00:50:59,800 --> 00:51:02,560
Speaker 2: look anything like they did when you had problems and

952
00:51:02,840 --> 00:51:05,400
Speaker 2: you just had a couple of huge difference and so

953
00:51:06,239 --> 00:51:09,719
Speaker 2: you know, there's if you have a certain amount of

954
00:51:09,760 --> 00:51:12,759
Speaker 2: risk and you're a prime floating fund. Otherwise you're you're

955
00:51:12,840 --> 00:51:15,760
Speaker 2: you know, tied to the dollar and it's it's short duration,

956
00:51:16,000 --> 00:51:20,279
Speaker 2: and uh, you know, I think very secure. And you

957
00:51:20,320 --> 00:51:22,320
Speaker 2: know today you can get five and a half percent

958
00:51:22,320 --> 00:51:24,840
Speaker 2: in a money market fund. I mean that's pretty aggressive,

959
00:51:24,960 --> 00:51:27,160
Speaker 2: right really, And I think that we've seen a lot

960
00:51:27,200 --> 00:51:32,439
Speaker 2: of money flow into money market funds because people saw

961
00:51:32,480 --> 00:51:34,160
Speaker 2: that they could get that and they weren't ready to

962
00:51:34,440 --> 00:51:37,120
Speaker 2: get back into the market. Now, having said that, we're

963
00:51:37,200 --> 00:51:39,520
Speaker 2: close to the end of the cycle. Uh, you know

964
00:51:40,040 --> 00:51:43,239
Speaker 2: the rate hike se right, Okay, you know, I think

965
00:51:43,280 --> 00:51:45,919
Speaker 2: the FED is saying they're going to still raise more,

966
00:51:46,000 --> 00:51:48,000
Speaker 2: and I think you could see one to two more

967
00:51:48,000 --> 00:51:50,040
Speaker 2: times that they raise this year. I think I think

968
00:51:50,040 --> 00:51:52,359
Speaker 2: people are finally over the they're going to cut this year.

969
00:51:52,719 --> 00:51:54,399
Speaker 2: I definitely don't think they're going to cut this year.

970
00:51:55,360 --> 00:51:57,080
Speaker 1: Those were the same people, by the way, who have

971
00:51:57,160 --> 00:52:00,200
Speaker 1: been forecasting recession for the past eighteen months. Yeah, so

972
00:52:00,320 --> 00:52:02,120
Speaker 1: of course they think the FED is going to cut.

973
00:52:03,160 --> 00:52:07,879
Speaker 1: What I find fascinating about the whole FED investor community

974
00:52:07,920 --> 00:52:11,359
Speaker 1: thing is that Jay Pal keeps saying this is what

975
00:52:11,360 --> 00:52:14,440
Speaker 1: I'm going to do, and nobody pretty right. I mean,

976
00:52:14,520 --> 00:52:16,600
Speaker 1: go back twenty years, you had no idea what the

977
00:52:16,600 --> 00:52:19,760
Speaker 1: FED was doing. He's telling you. Nobody wants to believe.

978
00:52:19,920 --> 00:52:22,440
Speaker 2: You know why. A huge percentage of fixed income managers

979
00:52:22,600 --> 00:52:25,960
Speaker 2: have only lived through the time that the FED bailed

980
00:52:26,040 --> 00:52:28,279
Speaker 2: us out every time, right right, And so they've been

981
00:52:28,320 --> 00:52:30,719
Speaker 2: in that and so they believe that that's going to

982
00:52:30,760 --> 00:52:33,200
Speaker 2: be the response. Whereas people that have a little more

983
00:52:33,200 --> 00:52:37,760
Speaker 2: experience like me, you right, we know that you can't always,

984
00:52:37,840 --> 00:52:40,440
Speaker 2: you know, count on the FED to bail you out

985
00:52:40,440 --> 00:52:42,160
Speaker 2: as as a matter of fact, Jay Pal's trying to

986
00:52:42,160 --> 00:52:44,800
Speaker 2: be very clear with it, and the market keeps fighting

987
00:52:44,800 --> 00:52:46,839
Speaker 2: the FED and thinking, you know, they're going to call

988
00:52:46,880 --> 00:52:49,319
Speaker 2: his bluff or something. I think that the FED is

989
00:52:49,360 --> 00:52:53,120
Speaker 2: being very data driven at this point and uh, and

990
00:52:53,200 --> 00:52:56,840
Speaker 2: he's trying to make it clear that if they're the

991
00:52:56,880 --> 00:52:59,919
Speaker 2: economy still remains pretty hot, he's going to raise rates.

992
00:53:00,640 --> 00:53:03,799
Speaker 1: Here's a crazy stat that someone shared with me. If

993
00:53:03,800 --> 00:53:08,120
Speaker 1: you were born after nineteen eighty and you work in finance,

994
00:53:08,960 --> 00:53:11,480
Speaker 1: you don't know what it was like when we had

995
00:53:11,520 --> 00:53:13,840
Speaker 1: no idea what the FED. I remember we used to

996
00:53:13,920 --> 00:53:17,400
Speaker 1: look at the Flow of Funds report to try and

997
00:53:17,560 --> 00:53:20,520
Speaker 1: tease out what might happen. Now the FED says we're

998
00:53:20,520 --> 00:53:22,080
Speaker 1: going to do this, and then they go out and

999
00:53:22,120 --> 00:53:25,560
Speaker 1: do it. I'm born before nineteen eighty, so this is

1000
00:53:25,600 --> 00:53:29,360
Speaker 1: all new to me. But imagine spending your whole career where,

1001
00:53:30,560 --> 00:53:33,160
Speaker 1: of course we're gonna get bailed out by the FED.

1002
00:53:33,160 --> 00:53:36,000
Speaker 1: If that happens, how do you recover from that as

1003
00:53:36,040 --> 00:53:41,560
Speaker 1: a professional. If you've never experienced wild market I guess

1004
00:53:41,560 --> 00:53:45,600
Speaker 1: that isn't true, because you have experienced wildmarket volatility. Just

1005
00:53:45,600 --> 00:53:47,400
Speaker 1: the cavalry has always come to the rescue.

1006
00:53:47,440 --> 00:53:49,239
Speaker 2: That's right. I think that's right. And I don't think that,

1007
00:53:49,880 --> 00:53:53,240
Speaker 2: you know, I don't think that the FED is going

1008
00:53:53,320 --> 00:53:55,680
Speaker 2: to oh I as I said, I think the FED

1009
00:53:56,320 --> 00:53:59,920
Speaker 2: is going to be very data driven. And right now,

1010
00:54:00,640 --> 00:54:03,480
Speaker 2: you know, unemployment is still what is it three point seven.

1011
00:54:03,480 --> 00:54:05,600
Speaker 1: Very low, right, historically low level.

1012
00:54:05,640 --> 00:54:08,640
Speaker 2: You're starting to see some labor participation coming back in

1013
00:54:08,760 --> 00:54:10,880
Speaker 2: a little bit. You know, look at a lot of

1014
00:54:10,920 --> 00:54:12,920
Speaker 2: people say is there gonna be a recession or not?

1015
00:54:13,520 --> 00:54:16,440
Speaker 2: There probably is. I mean they have to write, I

1016
00:54:16,440 --> 00:54:18,320
Speaker 2: mean that they have to cool it down. The question

1017
00:54:18,400 --> 00:54:20,560
Speaker 2: is is it a deep recession that causes a lot

1018
00:54:20,560 --> 00:54:22,960
Speaker 2: of We don't think, or at least I don't think.

1019
00:54:23,000 --> 00:54:25,040
Speaker 2: And by the way, we have five different fixed income

1020
00:54:25,040 --> 00:54:27,279
Speaker 2: teams at Franklin Templeton, so there are some different views

1021
00:54:27,280 --> 00:54:30,799
Speaker 2: on this. But that we'll have a deep recession. Uh

1022
00:54:31,160 --> 00:54:34,960
Speaker 2: and uh. You know, but the FED is definitely jammed

1023
00:54:35,000 --> 00:54:37,480
Speaker 2: on the brakes and it's still been hard.

1024
00:54:37,880 --> 00:54:38,040
Speaker 3: You know.

1025
00:54:38,080 --> 00:54:40,759
Speaker 2: The easy part was getting inflation from nine to five

1026
00:54:40,960 --> 00:54:43,360
Speaker 2: four and a half. Now is the real challenge.

1027
00:54:43,760 --> 00:54:47,000
Speaker 1: So less PPI that came out had a three handle

1028
00:54:47,040 --> 00:54:52,680
Speaker 1: on it. CPI usually follows PPI. J PAL can put

1029
00:54:52,680 --> 00:54:55,000
Speaker 1: a flag in the ground to clare victory. Take a

1030
00:54:55,000 --> 00:54:59,839
Speaker 1: long vacation. He's already won, right, Is am I oversimplifying

1031
00:54:59,880 --> 00:55:02,319
Speaker 1: that too much? Or can can he just say all right,

1032
00:55:02,520 --> 00:55:03,640
Speaker 1: I'm taking the summer off.

1033
00:55:04,080 --> 00:55:04,319
Speaker 3: Well.

1034
00:55:04,360 --> 00:55:07,399
Speaker 2: I think the challenge for him is that they've been

1035
00:55:07,560 --> 00:55:11,160
Speaker 2: very vocal about the two percent target, and which.

1036
00:55:10,960 --> 00:55:14,239
Speaker 1: Is a little weird because two percent target was post

1037
00:55:14,320 --> 00:55:18,000
Speaker 1: nine to eleven, post financial crisis, post pandemic, where rates

1038
00:55:18,000 --> 00:55:21,200
Speaker 1: were at zero and two percent was the upside target.

1039
00:55:22,280 --> 00:55:25,560
Speaker 1: Maybe that target should be rethought. Maybe three percent makes sense.

1040
00:55:25,960 --> 00:55:29,360
Speaker 2: So until we start to hear the FED start talking

1041
00:55:29,360 --> 00:55:31,880
Speaker 2: about maybe they're going to change that target or lighten

1042
00:55:32,000 --> 00:55:35,560
Speaker 2: up on that target, I think it's tough for him

1043
00:55:35,600 --> 00:55:38,080
Speaker 2: to just take too long of a break. Sure he

1044
00:55:38,120 --> 00:55:39,520
Speaker 2: can take the break through the summer.

1045
00:55:39,400 --> 00:55:42,480
Speaker 1: Yeah, take this summer off, go fishing. They had a

1046
00:55:42,560 --> 00:55:45,319
Speaker 1: Jackson hole his great fly fishing there you go, right,

1047
00:55:45,440 --> 00:55:47,120
Speaker 1: I mean he could just chill out for a while,

1048
00:55:47,160 --> 00:55:49,160
Speaker 1: all right. So I want to throw one curve ball

1049
00:55:49,239 --> 00:55:52,719
Speaker 1: at you. And as a West Coast girl, I got

1050
00:55:52,719 --> 00:55:54,920
Speaker 1: to ask you. You're on the board for the San

1051
00:55:54,920 --> 00:55:57,680
Speaker 1: Francisco Giants. What was that experience like?

1052
00:55:58,040 --> 00:56:02,600
Speaker 2: So I was Now my brother Greg is the control

1053
00:56:02,640 --> 00:56:05,120
Speaker 2: person of the Giants. It was a blast. I have

1054
00:56:05,160 --> 00:56:09,239
Speaker 2: to say, Uh, the thing that I learned, I think

1055
00:56:09,280 --> 00:56:10,800
Speaker 2: I know a little bit about baseball. I don't know

1056
00:56:10,880 --> 00:56:15,759
Speaker 2: anything about baseball. People talk about statisticians, they know everything.

1057
00:56:17,280 --> 00:56:19,520
Speaker 2: This guy's gonna move three feet with this picture, who

1058
00:56:19,520 --> 00:56:21,920
Speaker 2: goes up? And so pretty quickly I realized I don't

1059
00:56:21,920 --> 00:56:25,279
Speaker 2: actually know that much about baseball. But I loved it.

1060
00:56:24,880 --> 00:56:26,239
Speaker 2: It was It was a lot of fun. And of

1061
00:56:26,239 --> 00:56:29,840
Speaker 2: course I was there as I tease my brother about,

1062
00:56:29,920 --> 00:56:31,440
Speaker 2: you know, when I was on the board, we won

1063
00:56:31,480 --> 00:56:33,080
Speaker 2: three World Series? Have you done?

1064
00:56:33,120 --> 00:56:34,360
Speaker 1: What have you done? Right? Exactly?

1065
00:56:34,920 --> 00:56:36,839
Speaker 2: He actually knows a lot about baseball, and.

1066
00:56:37,400 --> 00:56:40,240
Speaker 1: That's very funny. Just goes to show you that breath

1067
00:56:40,239 --> 00:56:43,600
Speaker 1: of and depth knowledge doesn't necessarily help you win win.

1068
00:56:44,480 --> 00:56:47,040
Speaker 2: I think the key was Jenny wasn't really involved in

1069
00:56:47,080 --> 00:56:48,239
Speaker 2: making too many decisions.

1070
00:56:48,800 --> 00:56:51,799
Speaker 1: You are telling when to bring in the left, we

1071
00:56:51,840 --> 00:56:56,120
Speaker 1: need to switch pictures. That wasn't part of your responsibilities,

1072
00:56:56,239 --> 00:56:57,880
Speaker 1: all right, So I know I only have you for

1073
00:56:57,920 --> 00:57:00,120
Speaker 1: a little while. Let me jump to my favorite question

1074
00:57:00,520 --> 00:57:03,759
Speaker 1: that we ask all our guests, starting with tell us

1075
00:57:03,800 --> 00:57:06,480
Speaker 1: what you've been keeping yourself entertained with? What are you

1076
00:57:06,520 --> 00:57:09,440
Speaker 1: watching or listening to these days.

1077
00:57:10,719 --> 00:57:13,800
Speaker 2: I just finished. I'm always way behind on these things,

1078
00:57:14,719 --> 00:57:17,640
Speaker 2: So I just finished. I think it's called Dead to Me,

1079
00:57:17,760 --> 00:57:20,760
Speaker 2: which is a hufflick seriously, which I thought was it's

1080
00:57:20,800 --> 00:57:22,320
Speaker 2: a it's like a dark comedy book.

1081
00:57:22,440 --> 00:57:22,880
Speaker 1: Very darny.

1082
00:57:22,960 --> 00:57:25,040
Speaker 2: Yeah, very good, but very good. It was funny.

1083
00:57:25,560 --> 00:57:26,120
Speaker 3: Uh.

1084
00:57:26,160 --> 00:57:31,800
Speaker 2: And I've been watching a little bit of Manifest, so

1085
00:57:32,000 --> 00:57:32,840
Speaker 2: that was one that.

1086
00:57:32,920 --> 00:57:34,880
Speaker 1: I've heard about Manifest. I haven't seen it yet.

1087
00:57:34,960 --> 00:57:40,000
Speaker 2: Yeah. So anyway, and then you know, I uh, I

1088
00:57:40,040 --> 00:57:43,080
Speaker 2: love to watch there's a there's a streaming service called

1089
00:57:43,080 --> 00:57:45,880
Speaker 2: Curiosity Stream. Uh huh oh sure, and you know it's

1090
00:57:45,920 --> 00:57:49,880
Speaker 2: got great documentaries on science and history and stuff like that.

1091
00:57:49,960 --> 00:57:52,479
Speaker 2: So I tend to watch some things. I was trying

1092
00:57:52,480 --> 00:57:56,960
Speaker 2: to understand quantum computing and what it does and quantum

1093
00:57:57,120 --> 00:57:59,880
Speaker 2: entanglement and because from.

1094
00:57:59,800 --> 00:58:03,560
Speaker 1: A entanglement, spooky action out of and so you know,

1095
00:58:03,760 --> 00:58:05,960
Speaker 1: Curiosity Stream is one of my favorite has one of

1096
00:58:05,960 --> 00:58:11,720
Speaker 1: my favorite astronomy. It's really they do like deep crazy

1097
00:58:11,760 --> 00:58:13,280
Speaker 1: stuff and it's you just get.

1098
00:58:13,120 --> 00:58:16,200
Speaker 2: Lost the Yeah, no exactly, So I love watching that.

1099
00:58:16,200 --> 00:58:19,840
Speaker 1: Kind of thing. Huh really really interesting. Uh. I know

1100
00:58:19,920 --> 00:58:22,080
Speaker 1: the answer, but I got to ask anyway, tell us

1101
00:58:22,120 --> 00:58:25,440
Speaker 1: about your early mentors who helped shape your career.

1102
00:58:25,760 --> 00:58:30,760
Speaker 2: Well, my father is, uh, my early mentor and continues

1103
00:58:30,800 --> 00:58:32,000
Speaker 2: to be my greatest mentor.

1104
00:58:32,600 --> 00:58:33,320
Speaker 3: Uh.

1105
00:58:33,400 --> 00:58:37,720
Speaker 2: I feel incredibly blessed to have them and and I'm grateful.

1106
00:58:38,280 --> 00:58:38,600
Speaker 1: Uh.

1107
00:58:38,640 --> 00:58:40,920
Speaker 2: And like I said, he's uh, he never tells you

1108
00:58:40,960 --> 00:58:42,880
Speaker 2: what to do, but he's always a great if you ask,

1109
00:58:43,000 --> 00:58:45,880
Speaker 2: he's he's always great at giving you, you know, his opinion.

1110
00:58:46,480 --> 00:58:49,480
Speaker 2: Uh and really incredibly thoughtful.

1111
00:58:50,080 --> 00:58:52,120
Speaker 1: Huh. Really interesting. Let's talk about books.

1112
00:58:52,160 --> 00:58:54,600
Speaker 2: I have to say something about my mom for a second. Okay,

1113
00:58:54,600 --> 00:58:57,200
Speaker 2: so you got to undership my mom had seven kids

1114
00:58:57,280 --> 00:58:59,800
Speaker 2: and then went back to Stanford medical school. So really

1115
00:59:00,200 --> 00:59:02,800
Speaker 2: my dad was building Franklin. She was she was doing

1116
00:59:02,800 --> 00:59:07,160
Speaker 2: that and they you know, she's eighty seven. They're amazing.

1117
00:59:07,440 --> 00:59:09,600
Speaker 2: And you know, how long was the leadership?

1118
00:59:09,640 --> 00:59:11,360
Speaker 1: How long did she practice for? Oh?

1119
00:59:11,400 --> 00:59:15,560
Speaker 2: I think she practiced probably you know, twenty five years.

1120
00:59:15,640 --> 00:59:18,640
Speaker 1: Wow, after seven kids went to medical school, that's a hell.

1121
00:59:18,800 --> 00:59:20,600
Speaker 2: I think she probably decided she needed a reason to

1122
00:59:20,600 --> 00:59:21,280
Speaker 2: be out of the house.

1123
00:59:22,520 --> 00:59:25,320
Speaker 1: That's very funny. Let's talk about books. What are some

1124
00:59:25,360 --> 00:59:27,560
Speaker 1: of your favorites and what are you reading right now?

1125
00:59:28,600 --> 00:59:33,320
Speaker 2: I am reading a book on Kissinger right now.

1126
00:59:34,320 --> 00:59:37,520
Speaker 1: But I think you know his book or the someone

1127
00:59:37,520 --> 00:59:38,520
Speaker 1: else's biography.

1128
00:59:38,800 --> 00:59:45,480
Speaker 2: I'm reading Walter Isaacson's book on Kissinger. I loved his

1129
00:59:45,520 --> 00:59:50,240
Speaker 2: book on Steve Jobs, and he's done so. I like

1130
00:59:50,400 --> 00:59:56,120
Speaker 2: historical fiction, and I like history books. Probably can fall it.

1131
00:59:56,360 --> 00:59:58,960
Speaker 2: I really enjoy his historical fiction books. She once in

1132
00:59:59,040 --> 01:00:01,840
Speaker 2: World War One, World War two. He's a great one

1133
01:00:01,880 --> 01:00:05,880
Speaker 2: called it's about the building of cathedrals, pillars of the Earth.

1134
01:00:05,920 --> 01:00:06,480
Speaker 2: I think it is.

1135
01:00:06,600 --> 01:00:10,120
Speaker 1: Everyone of his books could absolutely be a movie, right,

1136
01:00:10,200 --> 01:00:13,120
Speaker 1: I mean they all are like a James Bond online.

1137
01:00:13,320 --> 01:00:19,720
Speaker 1: But by the way, if you liked Isaacson's biography on Jobs,

1138
01:00:20,120 --> 01:00:22,440
Speaker 1: I'm drawing a blank on his name is on the

1139
01:00:22,480 --> 01:00:24,760
Speaker 1: tip of my tongue. Did you see the book on

1140
01:00:24,800 --> 01:00:29,320
Speaker 1: the right Brothers? Oh, David McCullough, Oh yeah, yeah, so fascinating.

1141
01:00:30,840 --> 01:00:32,680
Speaker 2: Yeah, he's another one. I'm a big fan.

1142
01:00:32,880 --> 01:00:35,960
Speaker 1: Right, Everything he writes it's just amazing. Right, It's like

1143
01:00:36,000 --> 01:00:38,600
Speaker 1: he was there reporting on it, and one hundred years

1144
01:00:38,600 --> 01:00:42,200
Speaker 1: forward exactly, just so much details. Down to our final

1145
01:00:42,240 --> 01:00:45,600
Speaker 1: two questions, what sort of advice would you give to

1146
01:00:45,680 --> 01:00:49,040
Speaker 1: a recent college graduate who is interested in a career

1147
01:00:49,360 --> 01:00:51,560
Speaker 1: in either investment management or finance.

1148
01:00:52,360 --> 01:00:55,640
Speaker 2: You know, I feel like as an industry, we don't

1149
01:00:55,640 --> 01:00:57,720
Speaker 2: do a good enough job at selling people and what

1150
01:00:57,760 --> 01:01:00,360
Speaker 2: we do. And I tell the story about I have

1151
01:01:00,440 --> 01:01:04,080
Speaker 2: five kids and with my daughter I I was talking

1152
01:01:04,080 --> 01:01:05,760
Speaker 2: to my daughters and I said, so are you going

1153
01:01:05,800 --> 01:01:08,240
Speaker 2: to join me in this industry? And one of my

1154
01:01:08,320 --> 01:01:09,880
Speaker 2: daughters said, no, Mom, I want to do something that

1155
01:01:09,960 --> 01:01:13,600
Speaker 2: helps people. I'm like, are you kidding me? This industry

1156
01:01:13,640 --> 01:01:17,680
Speaker 2: is a great industry to help people. You know, you

1157
01:01:17,720 --> 01:01:21,360
Speaker 2: wouldn't have the vaccines that we had without you know,

1158
01:01:21,440 --> 01:01:23,840
Speaker 2: the businesses that were out there that we're investing in

1159
01:01:23,960 --> 01:01:29,080
Speaker 2: trying to you know, find opportunities. We help people I

1160
01:01:29,080 --> 01:01:32,000
Speaker 2: say it Franklin Templeton to achieve the most important financial

1161
01:01:32,040 --> 01:01:34,000
Speaker 2: goals of their life. And know, by the way, every goal,

1162
01:01:34,440 --> 01:01:37,640
Speaker 2: not every goal, most goals require some financially.

1163
01:01:37,600 --> 01:01:41,040
Speaker 1: Buy a house, retirements, kids, education, down the line.

1164
01:01:41,280 --> 01:01:44,600
Speaker 2: Sadly, So, I my first thing is to say, this

1165
01:01:44,720 --> 01:01:46,920
Speaker 2: is just a great industry to be in if you

1166
01:01:46,960 --> 01:01:48,760
Speaker 2: want to make a difference and you want to help people.

1167
01:01:49,560 --> 01:01:51,640
Speaker 2: You think about some of the stuff on esg. You know,

1168
01:01:51,680 --> 01:01:54,440
Speaker 2: the kind of impact investing those types of things. All

1169
01:01:54,480 --> 01:01:57,600
Speaker 2: of those things require money, and so uh, one is

1170
01:01:57,640 --> 01:02:00,720
Speaker 2: it's a great industry too is go in and be

1171
01:02:01,320 --> 01:02:05,800
Speaker 2: just curious, ask questions. Read I always, you know, say

1172
01:02:05,800 --> 01:02:08,479
Speaker 2: to people, read the CEO's letter in an annual report

1173
01:02:08,480 --> 01:02:10,160
Speaker 2: if you want to know what's on your boss's mind, right,

1174
01:02:10,200 --> 01:02:13,240
Speaker 2: because they're going to lay it out there and try

1175
01:02:13,280 --> 01:02:15,320
Speaker 2: to connect what you do to the bigger picture of

1176
01:02:15,360 --> 01:02:16,600
Speaker 2: whatever a company.

1177
01:02:16,320 --> 01:02:20,280
Speaker 1: Is really interesting. And our final question, what do you

1178
01:02:20,320 --> 01:02:23,200
Speaker 1: know about the world of investing today you wish you

1179
01:02:23,240 --> 01:02:26,280
Speaker 1: knew thirty five years or so ago when you were

1180
01:02:26,320 --> 01:02:27,480
Speaker 1: first starting out.

1181
01:02:28,440 --> 01:02:32,000
Speaker 2: Well, I think the tenants that have always been important,

1182
01:02:32,000 --> 01:02:36,280
Speaker 2: which we talked about earlier, like diversification get invested early,

1183
01:02:36,800 --> 01:02:40,240
Speaker 2: the value of compounding dollar cost averaging where you just

1184
01:02:40,440 --> 01:02:43,960
Speaker 2: keep committing, you know, and investing month after month after month.

1185
01:02:45,320 --> 01:02:48,320
Speaker 2: Those things get lost sometimes in the stories, and yet

1186
01:02:48,400 --> 01:02:51,040
Speaker 2: they're probably the most important things about.

1187
01:02:50,880 --> 01:02:55,480
Speaker 1: Investing, really really, really good stuff. Jenny Johnson, thank you

1188
01:02:55,560 --> 01:02:58,400
Speaker 1: so much for being so generous with your time. This

1189
01:02:58,440 --> 01:03:02,760
Speaker 1: has just been delightful. We have been speaking with Jenny Johnson.

1190
01:03:03,080 --> 01:03:07,440
Speaker 1: She is the CEO of Franklin Templeton. If you enjoy

1191
01:03:07,520 --> 01:03:11,080
Speaker 1: this conversation, well, be sure and check out any of

1192
01:03:11,120 --> 01:03:15,240
Speaker 1: the five hundred other such conversations we've had over the

1193
01:03:15,280 --> 01:03:21,400
Speaker 1: past nine years. You can find those at iTunes, Spotify, YouTube,

1194
01:03:21,600 --> 01:03:25,800
Speaker 1: wherever you find your favorite podcast. You can sign up

1195
01:03:25,840 --> 01:03:29,320
Speaker 1: from my daily reading list at ridults dot com. Follow

1196
01:03:29,360 --> 01:03:32,760
Speaker 1: me on Twitter at Ridults, follow all of the Bloomberg

1197
01:03:32,800 --> 01:03:36,960
Speaker 1: Family of podcasts on Twitter at podcast I would be

1198
01:03:37,040 --> 01:03:39,080
Speaker 1: remiss if I did not thank the crack team that

1199
01:03:39,120 --> 01:03:43,040
Speaker 1: helps put these conversations together each week. Attika of Albron

1200
01:03:43,080 --> 01:03:46,920
Speaker 1: is my project manager. Justin Milner is my audio engineer.

1201
01:03:47,280 --> 01:03:51,160
Speaker 1: Paris Wald is my producer. Sean Russo is my researcher.

1202
01:03:51,960 --> 01:03:55,320
Speaker 1: I'm Barry Ridholts. You've been listening to Masters in Business

1203
01:03:55,800 --> 01:03:58,600
Speaker 1: on Bloomberg Radio.