WEBVTT - Greg Fleming on Shaping Wall Street (Podcast) 0:00:02.200 --> 0:00:06.800 This is Masters in Business with Barry Ridholts on Bloomberg Radio. 0:00:07.320 --> 0:00:10.520 This week on the podcast, I have an extra special guest. 0:00:11.039 --> 0:00:13.640 His name is Greg Fleming, and he is currently the 0:00:13.680 --> 0:00:19.400 CEO of Rockefeller Capital Management, formally the family office of 0:00:19.480 --> 0:00:24.599 the famous Rockefeller family fortune. Uh. Gregg is one of 0:00:24.640 --> 0:00:27.600 these people that a lot of folks who are not 0:00:27.720 --> 0:00:31.160 in the industry may not know his name, but he's 0:00:31.200 --> 0:00:36.559 been instrumental in shaping a really shaping Wall Street. He's 0:00:36.640 --> 0:00:41.320 he's done a number of, you know, incredible deals that uh, 0:00:41.520 --> 0:00:46.920 starting out with UM black Rock and the purchase of 0:00:47.080 --> 0:00:51.920 Merrill Lynch's wealth management sides or asset management side. UH. 0:00:51.960 --> 0:00:55.800 That was really quite a fascinating deal that allowed what 0:00:55.920 --> 0:00:59.680 was essentially in house Merrill Lynch assets to be sold 0:01:00.080 --> 0:01:02.960 to anybody who wanted to buy them. You can imagine 0:01:03.640 --> 0:01:08.240 prior to that transaction why people at other firms, let's 0:01:08.240 --> 0:01:10.840 say UBS or Morgan Stanley, wouldn't want to buy a 0:01:10.880 --> 0:01:14.319 Merrill Lynch product. Once it went to an outside party 0:01:14.400 --> 0:01:19.240 like black Rock, that changed the dynamic and eventually led 0:01:19.319 --> 0:01:24.680 to black Rock becoming an eight trillion dollar asset manager. UH. 0:01:24.760 --> 0:01:28.399 He also was instrumental in the sale of Merrill Lynch 0:01:28.480 --> 0:01:32.920 itself to Bank America in the midst of the financial crisis, 0:01:33.440 --> 0:01:36.160 and he has been an advisor on a number of 0:01:36.160 --> 0:01:40.240 other deals um too numerous to mension, the most recently 0:01:40.319 --> 0:01:44.039 the sale of UM the Miami Marlins to a group 0:01:44.160 --> 0:01:48.360 led by Derek Jeter, who he's been working with and 0:01:48.400 --> 0:01:52.800 has known both personally and professionally for decades. Uh. This 0:01:52.880 --> 0:01:56.840 is really a fascinating conversation with someone who is as 0:01:56.920 --> 0:02:02.520 knowledgeable of the business of estment banking and wealth management 0:02:02.520 --> 0:02:06.240 and financial planning as really anybody in the world. So, 0:02:06.320 --> 0:02:11.119 with no further ado, my conversation with Rockefeller Capital Managements, 0:02:11.639 --> 0:02:17.880 Greg Fleming. This is Masters in Business with Barry Ridholts 0:02:18.000 --> 0:02:22.040 on Bloomberg Radio. My special guest today is Greg Fleming. 0:02:22.480 --> 0:02:27.400 He is the founding CEO of Rockefeller Capital Management, which 0:02:27.800 --> 0:02:33.359 essentially is a re envisioning of the Rockefeller family office 0:02:33.560 --> 0:02:37.120 that has been around for quite a long time. He 0:02:37.240 --> 0:02:40.960 comes to us from both senior positions in Merrill Lynch 0:02:41.080 --> 0:02:45.600 and Morgan Stanley, where he worked as an acclaimed investment banker. 0:02:46.480 --> 0:02:49.639 Welcome to Bloomberg. Thank you very much, Barry. It's great 0:02:49.680 --> 0:02:53.000 to be here. So I mentioned you you began your 0:02:53.040 --> 0:02:56.360 career as an investment banker. I know you were at 0:02:56.400 --> 0:02:59.919 Merrill Lynch in the ninety nineties. How do you transition 0:03:00.200 --> 0:03:05.960 from consulting with one set of clients to finance with 0:03:06.040 --> 0:03:11.520 a somewhat different set of clients. In some ways, it 0:03:11.639 --> 0:03:14.640 was It was a pretty seamless transition in the sense 0:03:14.680 --> 0:03:19.800 that I was providing strategic and management advice to multiple 0:03:19.880 --> 0:03:24.200 clients at Booze Allen Hamilton's, and then I was also 0:03:24.280 --> 0:03:28.960 providing strategic, tactical and financial advice to clients as an 0:03:29.000 --> 0:03:31.520 investment banker. So I do think that that training helped 0:03:31.520 --> 0:03:34.840 me to position myself more quickly to be able to 0:03:34.880 --> 0:03:39.000 counsel senior executives and CEOs on whether I would do 0:03:39.040 --> 0:03:41.120 a deal of fire with them or were we recommending 0:03:41.160 --> 0:03:44.480 something and helping them think through what are the next 0:03:44.480 --> 0:03:48.240 steps in their businesses. So when I left, I left 0:03:48.240 --> 0:03:52.520 boz Allen in late and joined Merrill Lynch, and frankly, 0:03:52.520 --> 0:03:54.560 one of the reasons I left Barry was because I 0:03:54.640 --> 0:03:58.600 wanted to get closer to the follow up the execution, 0:03:59.480 --> 0:04:03.119 and I found, uh, you know, eventually I went from 0:04:03.160 --> 0:04:06.840 being an investment banker and an advisor there to leading businesses, 0:04:06.880 --> 0:04:08.640 which I like the most, and I'll get to that. 0:04:09.160 --> 0:04:12.200 But when I when I went to UH Who's Allen, 0:04:12.240 --> 0:04:15.360 When I went to Marri Lynch from Who's Allen, UH, 0:04:15.400 --> 0:04:17.640 my thought was to get into a company and get 0:04:17.640 --> 0:04:21.160 closer to being able to actually UH see through the 0:04:21.279 --> 0:04:23.960 vision that you work with clients on as a management consultant. 0:04:24.680 --> 0:04:27.240 So Merrill Lynch in UM in the early nineties was 0:04:27.279 --> 0:04:30.440 a tremendous place. UH. It was taking off as an 0:04:30.440 --> 0:04:34.880 institutional firm. It had been a retail focus firm for 0:04:35.040 --> 0:04:40.520 decades really from its founding early in the twentieth century. UH. 0:04:40.560 --> 0:04:42.800 In the nineteen nineties they had done a series of 0:04:42.839 --> 0:04:46.839 acquisitions that had positioned them well to build an institutional business. 0:04:47.440 --> 0:04:51.600 I found the culture to be meritocratic, performance based. If 0:04:51.600 --> 0:04:54.880 you did well, you could move quickly. I joined in 0:04:54.960 --> 0:04:59.279 late nine. I started more on the management side, UH 0:04:59.440 --> 0:05:02.919 within municipal finance, helping run that business, and then I 0:05:02.960 --> 0:05:07.000 moved to investment banking in the Financial Institutions group UH, 0:05:07.000 --> 0:05:10.600 and I started working directly with clients, particularly interestingly enough 0:05:10.640 --> 0:05:14.279 in the asset management space, where I really UH spent 0:05:14.360 --> 0:05:17.640 the first years of my career as an investment banker 0:05:18.160 --> 0:05:22.240 advising asset management companies on potential sales UH and UH 0:05:22.880 --> 0:05:26.240 public offerings including UH, we can get to this UH 0:05:26.279 --> 0:05:29.640 black Rock. Let's stay with Meryl before we move forward 0:05:29.680 --> 0:05:32.440 to black Rock Coasts. I want to talk about your transactions, 0:05:32.960 --> 0:05:37.480 especially some of the ones that really reshaped UM Wall 0:05:37.560 --> 0:05:42.440 Street in a bit. UM thees were a pretty wild 0:05:42.600 --> 0:05:46.800 go go time on Wall Street. What was the atmosphere 0:05:46.839 --> 0:05:49.839 like at Merrill Lynch did did people have a sense 0:05:50.000 --> 0:05:53.240 of how unique that decade was or did it just 0:05:53.279 --> 0:05:55.960 seem business as usual? You know, when you're in it, 0:05:56.960 --> 0:06:00.640 a decade like that are really now that you know, 0:06:00.640 --> 0:06:04.400 I've worked through multiple decades. When you're in it, you 0:06:04.440 --> 0:06:08.520 don't necessarily stand back and say, uh, this is uh 0:06:09.080 --> 0:06:11.080 unique in all the following ways, you have a sense 0:06:11.080 --> 0:06:13.720 of it. You might observe some of them. But as 0:06:13.760 --> 0:06:17.760 you said, it was a very positive environment for the 0:06:17.800 --> 0:06:23.000 American economy. UH. As you recall that, I think Bill 0:06:23.040 --> 0:06:26.640 Clinton was president from two thousand. By the time two 0:06:26.680 --> 0:06:29.240 thousand came, we had a balanced budget, We had tremendous 0:06:29.240 --> 0:06:33.920 growth in the in the country. Trade was growing all 0:06:33.960 --> 0:06:36.920 over the world, and new countries were starting to enter 0:06:37.080 --> 0:06:40.840 the the capitalist realm, including UH. You know, towards the 0:06:40.920 --> 0:06:43.000 end of that period, China started coming on the on 0:06:43.040 --> 0:06:46.480 the horizon. So it was, as you said, a very 0:06:46.600 --> 0:06:49.159 vibrant time in the United States and around the world 0:06:49.200 --> 0:06:53.880 from a economic standpoint. Maryland expanded into Europe. I bought 0:06:53.880 --> 0:06:58.159 a company called Smith new Court, expanded in Japan and 0:06:58.279 --> 0:07:01.840 Canada and in many different places. Uh. We continued to 0:07:01.880 --> 0:07:05.200 build out the investment banking business, and really UH started 0:07:05.200 --> 0:07:09.240 competing directly with the firms that had been successful in 0:07:09.279 --> 0:07:14.240 that farther back and longer, like Goldman, Zax and Morgan Stanley. 0:07:14.280 --> 0:07:18.040 So it was, as you say, with hindsight, a tremendous decade. 0:07:18.400 --> 0:07:21.240 And even in it, UH you had the sense that 0:07:21.320 --> 0:07:24.600 this was a robust time and mary Lynch was a 0:07:24.640 --> 0:07:29.080 place that that was on the move and going in 0:07:29.120 --> 0:07:35.000 a very positive direction. So you eventually become chief operating 0:07:35.080 --> 0:07:39.160 officer at Meryll, a title you held right in the 0:07:39.160 --> 0:07:43.400 middle of the Great financial crisis. That had to be madness. 0:07:43.440 --> 0:07:46.760 What was that experience like just a few short years 0:07:46.800 --> 0:07:50.040 after the go go nineties, oh, seven oh eight, must 0:07:50.080 --> 0:07:53.680 have just been insane. There was a very challenging time, Barrier. 0:07:53.720 --> 0:07:57.240 I have to say, uh, I've had great uh success 0:07:57.280 --> 0:08:00.680 and luck in my career and and uh ladder is 0:08:01.080 --> 0:08:07.360 important for everybody, um and uh in. And because of 0:08:07.360 --> 0:08:10.560 of working hard and doing well but getting opportunities, I 0:08:10.640 --> 0:08:15.119 moved quickly into different positions of increasing responsibility at Meryl 0:08:15.680 --> 0:08:19.160 and I was named co president and coaching operating officer 0:08:19.400 --> 0:08:22.600 in April of two thousand and seven. That turned out, 0:08:22.640 --> 0:08:26.200 with hindsight and pretty quickly actually to have been a 0:08:26.440 --> 0:08:30.440 challenging time to step into that because by the fall 0:08:31.440 --> 0:08:33.480 on the fixed income side of Mery Lynch there were 0:08:33.600 --> 0:08:37.040 significant challenges, as there were throughout the industry, particularly with 0:08:37.080 --> 0:08:41.560 subprime assets, so that the whole period turned into one 0:08:41.600 --> 0:08:46.040 of the most intense and stressful of my career, probably 0:08:46.080 --> 0:08:51.360 of many careers. I worked for Stan O'Neill leading up 0:08:51.400 --> 0:08:54.120 to the fall of oh seven, and then he was 0:08:54.160 --> 0:08:57.600 replaced with John Fain, who became my new boss. And 0:08:57.720 --> 0:09:03.080 John and I raised a lot of capital to help 0:09:03.120 --> 0:09:07.280 Marylynch deal with its balance sheet challenges, uh, literally turning 0:09:07.280 --> 0:09:10.280 the capital base of the company almost over. I think 0:09:10.280 --> 0:09:13.880 we raised north of billion in capital and a company 0:09:13.920 --> 0:09:16.840 that going into all of this had approximately thirty billion 0:09:17.000 --> 0:09:21.600 capital and we UH. We thought by the summer of 0:09:21.840 --> 0:09:24.520 oh eight we had worked the firm through it, but 0:09:24.880 --> 0:09:27.160 there were continuing challenges in the fall of o eight, 0:09:27.200 --> 0:09:30.559 so we ultimately sold the firm to Bank of America 0:09:30.840 --> 0:09:34.960 in a very stressful weekend UH in September of two 0:09:34.960 --> 0:09:38.720 thousand eight, memorable weekend. UH. And we closed that deal 0:09:38.800 --> 0:09:41.480 in early oh nine, and I left the firm and 0:09:41.760 --> 0:09:45.160 went on to other things. Lessons from that time for 0:09:45.240 --> 0:09:48.000 me and I have three children that are in their 0:09:48.000 --> 0:09:50.720 early twenties, and we talked about many different things, and 0:09:52.040 --> 0:09:54.320 we have a quote of the day on our text chain, 0:09:54.440 --> 0:09:59.840 and UM lots of advice across different topics. But the 0:10:00.000 --> 0:10:03.560 primary lesson from that time from my vantage point is that, UH, 0:10:04.040 --> 0:10:08.480 when you're in a position of a responsibility and authority 0:10:08.720 --> 0:10:12.240 UH and and things are happening around you, you need 0:10:12.280 --> 0:10:15.520 to step up. UH. There were times during that time 0:10:15.559 --> 0:10:18.880 because I had moved quickly in my career where uh, 0:10:19.080 --> 0:10:20.839 you know, seven or eight years earlier, I was a 0:10:20.960 --> 0:10:24.400 senior investment banker running the financial Institutions group at Mery Lynch, 0:10:24.800 --> 0:10:28.040 and now I was front and center on making decisions 0:10:28.080 --> 0:10:30.080 as to whether we would stay independent and could we 0:10:30.120 --> 0:10:34.160 get it sold and under what circumstances. Uh. And one 0:10:34.200 --> 0:10:36.520 of the things that I say, with hindsight and moving 0:10:36.559 --> 0:10:39.400 forward is somebody is going to be in that position, 0:10:39.559 --> 0:10:44.840 So don't spend any time wondering where everybody is. And uh, 0:10:44.880 --> 0:10:46.679 you know why the pressure is on your shoulders. It's 0:10:46.720 --> 0:10:48.320 there and you need to react to it, and you 0:10:48.360 --> 0:10:50.640 need to rise to that occasion and try to do 0:10:50.679 --> 0:10:53.880 the right thing by the many people that are depending 0:10:53.920 --> 0:10:56.720 upon you. And that is one of the major lessons 0:10:56.760 --> 0:10:59.160 I took away from that time. And fortunately we did 0:11:00.000 --> 0:11:02.640 at Merrill Lynch into a good spot and I think 0:11:02.640 --> 0:11:05.880 it's prospered under Bank of America. I think it could 0:11:05.880 --> 0:11:07.720 have been an amazing company if it stayed on a 0:11:07.760 --> 0:11:12.160 standalone basis, but that wasn't ultimately the result that was 0:11:12.200 --> 0:11:15.760 in the cards. My special guest today is Greg Fleming. 0:11:16.160 --> 0:11:20.600 He is the CEO of Rockefeller Capital Management. He has 0:11:20.679 --> 0:11:25.000 been really at the center of some pretty amazing deals 0:11:25.000 --> 0:11:28.960 that helped to reshape finance as we know it today. 0:11:29.880 --> 0:11:33.640 Let's let's discuss some of them, and we'll start with 0:11:33.760 --> 0:11:37.839 the sale of Merrill's money management business to black Rock. 0:11:37.960 --> 0:11:41.760 That was something like a nine billion dollar deal ultimately 0:11:41.920 --> 0:11:46.359 led to a number of aspects of black Rock, including 0:11:46.440 --> 0:11:48.800 I shares and and on and on down the road 0:11:49.360 --> 0:11:54.240 that allowed them to become one of the great powerhouses 0:11:54.280 --> 0:11:59.920 and finance. Tell us what was behind that deal? Okay, 0:12:00.200 --> 0:12:02.240 you know, Barry, I had a long history with black 0:12:02.360 --> 0:12:04.439 Rock at that point in time. In fact, it went 0:12:04.480 --> 0:12:07.480 all the way back to the mid nineties when I 0:12:07.559 --> 0:12:11.440 worked with them on on raising some closed and funds 0:12:11.440 --> 0:12:15.240 that they went to Marylynch's retail business to be part of. 0:12:15.840 --> 0:12:19.200 I got to know the leadership team, Larry Fink, the CEO, 0:12:20.080 --> 0:12:22.520 and some of the other senior executives there, Rob Compto, 0:12:22.640 --> 0:12:25.559 Ralph Flasstein. When we took a public Barry, the stock 0:12:25.679 --> 0:12:28.920 was that fourteen dollars a share and uh it's obviously 0:12:29.160 --> 0:12:33.439 uh many many uh years ago, and it's done tremendously 0:12:33.480 --> 0:12:36.400 over that time, and is uh wherever it is today 0:12:36.440 --> 0:12:39.680 six hundred dollars a share or more so, that transaction, 0:12:40.040 --> 0:12:43.640 uh cemented a relationship that I had already been building 0:12:43.640 --> 0:12:45.319 with them, and I stayed in close touch with them. 0:12:45.360 --> 0:12:49.160 I really was one of the strategic advisors that Larry 0:12:49.160 --> 0:12:52.000 and team relied upon, and that's what led to the 0:12:52.120 --> 0:12:55.600 Marylynch deal. UH we were thinking about what we were 0:12:55.600 --> 0:12:57.599 going to do with our asset manage of business. It 0:12:57.720 --> 0:13:02.240 was a very good business, primarily equity based and retail 0:13:02.280 --> 0:13:05.160 based in the US, and black Rock was looking for 0:13:05.200 --> 0:13:07.640 both of those things to fill out what was still 0:13:07.679 --> 0:13:12.880 at that time a primarily fixed income institutional manager. So 0:13:13.120 --> 0:13:16.800 we started h a negotiation and a dialogue on this one. 0:13:16.920 --> 0:13:20.000 I actually represented Merrill Lynch and and my boss at 0:13:20.000 --> 0:13:24.200 the time, Stan O'Neil, and Larry Fink had his financial advisor, 0:13:24.280 --> 0:13:27.720 who interestingly enough, was Gary Shedlin, who's now his CFO. 0:13:28.640 --> 0:13:32.040 And we put that deal together in two thousand and 0:13:32.120 --> 0:13:37.360 five and created the black Rock that really was positioned 0:13:37.400 --> 0:13:41.000 because it then had broad based product capabilities equity and 0:13:41.120 --> 0:13:46.000 fixed income, it had broad based retail access and distribution. 0:13:46.720 --> 0:13:50.240 We position black Rock to really go on the run. 0:13:50.280 --> 0:13:52.680 That has gone on since then. Obviously Larry and team 0:13:52.679 --> 0:13:56.719 has executed brilliantly. Mary Lynch took back a forty nine 0:13:56.760 --> 0:13:59.840 pcent ownership stake in black Rock. That was the part 0:13:59.840 --> 0:14:02.679 of the magic of the transaction. Larry continued to control 0:14:02.720 --> 0:14:05.680 the company, but he had a very big partner. I 0:14:05.760 --> 0:14:08.280 went on the board of black Rock UH and and 0:14:08.320 --> 0:14:11.880 stayed on the board until I left Merrill Lynch in 0:14:11.880 --> 0:14:15.120 in two thousand and nine. So I do take pride 0:14:15.120 --> 0:14:18.760 in having helped black Rock at multiple key points along 0:14:18.800 --> 0:14:23.720 the way in this company becoming the amazing company with 0:14:24.200 --> 0:14:29.200 I think approximately eight trillion in assets under management in 0:14:28.960 --> 0:14:35.600 h truly astonishing you. Um, you mentioned previously the transaction 0:14:35.680 --> 0:14:40.400 that brought Merrill Lynch to Bank Bank of America. That 0:14:40.520 --> 0:14:46.000 was quite the abbreviated process, Is it true? That was 0:14:46.240 --> 0:14:50.520 essentially completed over a weekend? And and just to remind 0:14:50.560 --> 0:14:55.800 everybody that transaction took place, um in the full of 0:14:55.840 --> 0:14:59.080 oh eight, you had a I. G. And Lehman teetering 0:14:59.200 --> 0:15:01.800 on bankruptc. The world looked like it was going to hell. 0:15:02.360 --> 0:15:05.080 How did that transaction happen? And how did it happen 0:15:05.120 --> 0:15:08.240 so quickly? Well, it did take place over a weekend, 0:15:08.240 --> 0:15:11.480 and we announced it the Monday morning of that weekend 0:15:11.600 --> 0:15:15.920 was September fifteenth. I will never forget it, but we 0:15:16.080 --> 0:15:19.920 had Bank America had been interested in Meryl for some time, 0:15:20.680 --> 0:15:24.040 and I had had dialogue in UH in the months 0:15:24.120 --> 0:15:27.400 leading up to it with some of the senior executives 0:15:27.440 --> 0:15:30.600 at Bank America and with a lawyer who does not 0:15:30.680 --> 0:15:34.000 get enough credit for having put this transaction together. Your 0:15:34.080 --> 0:15:36.720 friend of mine named Ed Hurley, he at Wachtel Lipton. 0:15:37.360 --> 0:15:40.520 So it wasn't like we talked to Bank America for 0:15:40.520 --> 0:15:43.240 the first time on on Friday and announced the deal 0:15:43.280 --> 0:15:46.120 on Monday. They had done a tremendous amount of work 0:15:46.160 --> 0:15:49.680 on Mery Lynch over the years as a prospective partner, 0:15:50.400 --> 0:15:54.520 and they were aware that circumstances might come to pass 0:15:54.600 --> 0:15:58.480 where we could potentially be interested in a transaction with 0:15:58.520 --> 0:16:01.600 Bank of America. So that backdrop, I think is important. 0:16:02.080 --> 0:16:05.120 But the reality is is that it did come together 0:16:05.680 --> 0:16:10.200 in the final analysis that quickly. On Saturday morning, September, 0:16:11.720 --> 0:16:14.320 very early in the morning, John Than and I had 0:16:14.400 --> 0:16:18.840 multiple conversations about him reaching out to Ken Lewis, the 0:16:19.000 --> 0:16:22.640 CEO of Bank of America, and saying we should talk 0:16:22.720 --> 0:16:26.680 this weekend. I was very focused on trying to get 0:16:26.720 --> 0:16:31.200 the transaction done on the weekend because I thought that 0:16:31.360 --> 0:16:35.760 Lehman had no partner that was on the on the grapevine, 0:16:35.800 --> 0:16:37.920 everybody was wondering what was going to happen to Lehman, 0:16:38.640 --> 0:16:42.920 and I believe if Lehman UH did file for Chapter eleven, 0:16:42.960 --> 0:16:46.240 as they did, on Sunday night that the markets on 0:16:46.280 --> 0:16:50.800 Monday would be a disaster and Mary Lynch would quickly 0:16:50.840 --> 0:16:55.760 come under pressure as the next smallest UH securities firm 0:16:55.800 --> 0:16:59.000 that was still in existence. So I knew this is 0:16:59.040 --> 0:17:02.000 one of the benefits of the training As an investment banker, 0:17:02.080 --> 0:17:04.720 I knew the value of a weekend, and I was 0:17:04.760 --> 0:17:10.119 pushing John Friday night and Saturday morning to UH initiate contact, 0:17:10.119 --> 0:17:13.800 and he ultimately did. And Kenna Lewis flew to New 0:17:13.880 --> 0:17:17.600 York on Saturday and had a meeting with Jonathan early 0:17:17.800 --> 0:17:24.280 Saturday afternoon, and they agreed on US allowing them to 0:17:24.359 --> 0:17:28.360 do diligence and starting a dialogue around a potential transaction. 0:17:29.320 --> 0:17:31.879 In that dialogue, I think John was thinking maybe a 0:17:31.920 --> 0:17:35.320 minority investment. Ken Lewis was clearly thinking he would buy 0:17:35.320 --> 0:17:39.600 the firm. Later that evening, we started due diligence in 0:17:40.080 --> 0:17:43.960 UH in an intensive way. UH. We were on one 0:17:44.000 --> 0:17:47.479 floor at Wachtel Lifton and Bank of America was on another. 0:17:48.000 --> 0:17:51.040 Chtell was the advisor, the legal advisor to Bank of 0:17:51.080 --> 0:17:54.399 America at this point in time, and on Sunday morning, 0:17:55.119 --> 0:17:57.720 a man named Greg Curle, who was the lead negotiator 0:17:57.920 --> 0:18:02.000 for and Lewis and I met very early I think 0:18:02.040 --> 0:18:06.000 it was seven am, to discuss the terms of of 0:18:06.040 --> 0:18:09.560 a transaction. I remember having gotten back to a hotel 0:18:09.600 --> 0:18:12.240 I was staying in a couple hours earlier and taking 0:18:12.240 --> 0:18:15.119 a shower. Nobody was sleeping we had slept in several days, 0:18:16.119 --> 0:18:18.920 and walking back to Wachtell Lipton, which is in Midtown, 0:18:18.920 --> 0:18:21.280 it was very quiet and thinking, if I didn't get 0:18:21.280 --> 0:18:25.480 this negotiation right. We have sixty five thousand employees, this 0:18:25.560 --> 0:18:28.920 firm has been around for almost ninety five years. Uh 0:18:28.960 --> 0:18:31.280 and a lot hung on what happened in the next 0:18:31.320 --> 0:18:34.120 twenty four hours, and I did feel the pressure of that. 0:18:35.119 --> 0:18:38.600 It was the will always be the most pressured moment 0:18:38.680 --> 0:18:42.440 of my career. I think when somebody will come into 0:18:42.480 --> 0:18:44.520 my office today or at any point since then and 0:18:44.640 --> 0:18:47.200 say we've got a big problem, I'll say that I'm 0:18:47.200 --> 0:18:49.639 sure we have an issue to deal with. But a 0:18:49.680 --> 0:18:53.120 big problem is being the president of a year old 0:18:53.200 --> 0:18:56.800 firm with a brand like Mary Lynch twenty four hours 0:18:56.800 --> 0:19:00.679 before a market may open and h and puts you 0:19:00.720 --> 0:19:03.639 in a very difficult position. And the stress was was 0:19:03.760 --> 0:19:09.640 frankly almost unbearable. I had colleagues on our team, thank 0:19:09.720 --> 0:19:12.320 to me, just get it sold at almost any price. 0:19:12.960 --> 0:19:14.879 I remember having a debate at two or three in 0:19:14.920 --> 0:19:18.520 the morning and uh uh. Andre Sorkin had this in 0:19:18.840 --> 0:19:21.960 his book Too Big to Fail with one of my 0:19:22.040 --> 0:19:27.840 colleagues about whether anybody ever finds something that they really 0:19:27.840 --> 0:19:29.640 want to buy if you say to them, you can 0:19:29.760 --> 0:19:32.760 virtually have it for nothing. You know. My view was 0:19:32.800 --> 0:19:35.920 Mary Lynch was an incredible firm. We had the best 0:19:35.960 --> 0:19:38.600 wealth management business that in the industry at the time 0:19:38.760 --> 0:19:42.760 we owned Black Rock. We had a first class investment bank. 0:19:43.680 --> 0:19:47.199 There were, as I said, ninety five years in the making. 0:19:48.440 --> 0:19:51.480 Bank of America should pay for all that, and ultimately 0:19:51.560 --> 0:19:54.520 they did, and to their credit, over the ensuing years, 0:19:54.520 --> 0:19:58.800 the deals worked out tremendously for Bank America. We negotiated 0:19:58.800 --> 0:20:01.080 the sale of Marylynch for twice nine dollars a share 0:20:01.119 --> 0:20:03.760 that Sunday morning. It had closed on Friday at seventeen 0:20:03.800 --> 0:20:07.000 dollars a share. That will still be one of the negotiations. 0:20:07.000 --> 0:20:10.960 I'm proud of stuff for my whole career. Again, I 0:20:11.000 --> 0:20:13.960 do think that it was fair value for America, given 0:20:14.000 --> 0:20:16.960 the quality of the people, the franchise, the brand that 0:20:17.000 --> 0:20:20.400 they bought at Mery Lynch. Now that the deal definitely 0:20:20.400 --> 0:20:24.560 worked out for everybody involved. Take a look at a 0:20:24.920 --> 0:20:27.879 recent deal that I don't believe you were involved in 0:20:28.040 --> 0:20:31.440 but in, but it involves one of your old chops. 0:20:31.800 --> 0:20:35.879 You were you were senior at Morgan Stanley. They just 0:20:36.320 --> 0:20:41.160 purchased Eaton Vance for about seven billion dollars. How does 0:20:41.240 --> 0:20:46.040 a friendly deal under terms where there isn't any sort 0:20:46.080 --> 0:20:52.280 of economic crisis or um real financial stress. Clearly we're 0:20:52.280 --> 0:20:57.280 going through is going through its own crisis, but in 0:20:57.400 --> 0:21:00.680 terms of asset managers, it's nothing like two thousand and 0:21:00.720 --> 0:21:04.360 eight or nine. How does a deal like Morgan scooping 0:21:04.440 --> 0:21:09.320 up Eating Vans differ than what you guys had accomplished 0:21:09.320 --> 0:21:14.879 with Bank America and Merrill Lynch. Well, it happens in 0:21:14.920 --> 0:21:19.959 a more traditional fashion. So, Uh, the leadership of Morgan Stanley, 0:21:20.080 --> 0:21:24.480 James Gorman, my old boss, UH, with whom I continue 0:21:24.520 --> 0:21:29.200 to stay in close touch, would be interested in building 0:21:29.200 --> 0:21:31.600 his asset manage of business and would be thinking about 0:21:31.680 --> 0:21:35.600 different firms that might enhance their capabilities, and he might 0:21:35.640 --> 0:21:38.080 have dialogue And none of this, by the way, in 0:21:38.119 --> 0:21:40.720 my repeating firsthand, it is just what what happens in 0:21:40.720 --> 0:21:44.760 cases like this, he would have dialogue in different potential 0:21:44.800 --> 0:21:48.840 directions about firms that might be a good fit. Uh and, 0:21:49.040 --> 0:21:50.920 and it would proceed that way. And in a firm 0:21:50.960 --> 0:21:55.320 like eating Vance might be thinking that they've had a 0:21:55.320 --> 0:21:59.119 good trajectory, but they could have their growth and capabilities 0:21:59.200 --> 0:22:03.520 enhanced by the right partner. That's the typical UH dance 0:22:03.560 --> 0:22:07.720 that occurs in in m in a situation. And that's 0:22:07.760 --> 0:22:10.600 been true for a long time and will always be true. 0:22:11.200 --> 0:22:15.280 Uh And And Frankly, that is the value of experience 0:22:16.160 --> 0:22:19.520 investment bankers who act more as advisors and counselors. And 0:22:19.520 --> 0:22:22.160 this will eventually lead me to what we'll talk about 0:22:22.240 --> 0:22:24.280 Rockefeller later. But one of the things we're trying to 0:22:24.280 --> 0:22:28.199 do at Rocketar Capital Management, whatever the business, is to 0:22:28.280 --> 0:22:31.719 act as an advisor or counselor to the client. And 0:22:31.760 --> 0:22:36.160 I like those words. I think the connotation coming out 0:22:36.160 --> 0:22:38.359 of that is that is an important part of how 0:22:38.960 --> 0:22:42.840 the client UH starts to trust and rely on the 0:22:42.920 --> 0:22:47.240 judgment that you provide. UM. So that's how a transaction 0:22:47.280 --> 0:22:50.439 like that would occur in an environment like this, in 0:22:50.480 --> 0:22:55.639 almost any environment. Frankly, Barry the two thousand, two thousand 0:22:55.760 --> 0:23:01.480 nine time UH in my career is unique because the 0:23:01.960 --> 0:23:06.440 stresses in the financial system there uh were greater than 0:23:06.480 --> 0:23:09.119 anything we've seen before or likely to see for a 0:23:09.119 --> 0:23:14.600 long time. Is its own unique crisis because of the 0:23:14.720 --> 0:23:17.600 breadth of the problems and the fact that COVID affects 0:23:17.640 --> 0:23:22.000 everybody UH and its economy wide. But in terms of 0:23:22.520 --> 0:23:25.960 UH the financial sector in particular, oh eight oh nine 0:23:26.080 --> 0:23:31.240 really was the reckoning uh so transactions that were occurring then, 0:23:31.840 --> 0:23:34.760 you know, Bank of America, Merrill Lynch in in some ways, 0:23:34.840 --> 0:23:37.000 as I said, there was some lead up to it, 0:23:37.000 --> 0:23:39.240 even though a lot of it was that weekend, But 0:23:39.280 --> 0:23:43.120 there are transactions that that were talked about and occurred 0:23:43.240 --> 0:23:45.400 or or didn't occur. But don't have to go through 0:23:45.400 --> 0:23:48.760 the list of very big banks in the in the 0:23:48.800 --> 0:23:53.520 weeks and months that followed that were suggestions suggested quickly 0:23:54.080 --> 0:23:56.960 and looked at very quickly, including the biggest names in 0:23:57.000 --> 0:23:59.840 the space. And that was because there was a real, 0:24:00.760 --> 0:24:04.240 uh sense of of almost panic even on the part 0:24:04.240 --> 0:24:07.720 of the regulators to make sure these big financial institutions 0:24:07.760 --> 0:24:12.080 were going to emerge from that crisis safely and you 0:24:12.119 --> 0:24:15.639 weren't going to have any more financial institutions go the 0:24:15.680 --> 0:24:19.119 path of Lehman Brothers. You know, it's funny, funny you 0:24:19.160 --> 0:24:23.600 say that I have a vivid recollection of my wife's 0:24:23.720 --> 0:24:29.600 Washington Mutual a t M card, and that transaction with 0:24:29.800 --> 0:24:34.520 them and JP Morgan Chase also took place over the weekend. 0:24:34.560 --> 0:24:38.119 And it seems so seamless that on Friday it was 0:24:38.160 --> 0:24:42.080 a Washington Mutual card and on Monday you could use 0:24:42.119 --> 0:24:45.640 it at any Chase a t M without being charged 0:24:45.800 --> 0:24:49.080 the non bank fee for a for a different account. 0:24:49.359 --> 0:24:54.040 The transaction was that fast and that seamless. Um. So 0:24:54.040 --> 0:24:59.399 so clearly that period was unique in in m and 0:24:59.480 --> 0:25:01.840 A history. I want to I want to ask you 0:25:01.880 --> 0:25:05.280 about two more transactions before we move on, um to 0:25:05.359 --> 0:25:09.240 our next set of topics. One is the sale of 0:25:09.320 --> 0:25:13.200 sky Bridge for Mooch for for Anthony Scaramucci, who took 0:25:13.240 --> 0:25:17.640 a position in the White House. Um, what was that 0:25:17.720 --> 0:25:22.000 like in the midst of all of that politicking and 0:25:22.359 --> 0:25:25.720 having the government look over your shoulder due to UH 0:25:25.960 --> 0:25:31.800