Speaker 1: M HM. This is mesters in Business with Very Results
Speaker 1: on Bluebird Radio here this weekend. On the podcast, Jonathan
Speaker 1: Levine of Bain Capital really a fascinating career, just absolutely intriguing.
Speaker 1: How he was able to convert his experiences doing M
Speaker 1: and A at Drexel and then being a consultant of
Speaker 1: Mackenzie uh to not just joining a private equity firm,
Speaker 1: but really founding and creating the entire capital credit at Bain.
Speaker 1: Really an interesting um history. He is extremely knowledgeable about
Speaker 1: all sorts of different aspects of private equity and aware,
Speaker 1: very aware of how there is a spill over from
Speaker 1: the equity markets as well as the impact of alternatives
Speaker 1: like bonds and and how that's given rise to different
Speaker 1: types of private equity. We we talked about everything from
Speaker 1: operating on during the pandemic to what is going to
Speaker 1: happen as rates rise, what that might mean for private
Speaker 1: equity and for credit spreads. I found this conversation to
Speaker 1: be absolutely fascinating and I think you will also with
Speaker 1: no further ado. My interview with Jonathan Levine, co managing
Speaker 1: partner at Bain Capital. This is Masters in Business with
Speaker 1: Very Results on Bluebird Radio. My extra special guest this
Speaker 1: week is Jonathan Levine. He is the managing partner at
Speaker 1: Bain Capital, which manages about a hundred and fifty five
Speaker 1: billion dollars. He is also the chief investment officer at
Speaker 1: Bain Capital, credit about fifty eight billion dollars in assets.
Speaker 1: He is the co chair of the board of Trustees
Speaker 1: of Columbia University, where he got his undergraduate degree before
Speaker 1: going on to earn an m b A. At Harvard.
Speaker 1: Jonathan Levine, Welcome to Bloomberg. Thank you very much. I'm
Speaker 1: glad to be here. So so, given your background, you
Speaker 1: study economics undergrad, you get an m b A. How
Speaker 1: did you find your way to Wall Street? What what
Speaker 1: did you do? Uh between your undergraduate and your m
Speaker 1: b A. Interestingly enough, I actually didn't study economics as
Speaker 1: an undergrad. I studied political science and English literature, and
Speaker 1: I took one economics course. I think that that's why
Speaker 1: I'm so good at always reducing things to basic supply
Speaker 1: and demand, because that's how far I got. And I
Speaker 1: was into Columbia Law School and I was planning on attending,
Speaker 1: and a friend of mine said, Uh, you know, these
Speaker 1: investment banks now have analyst programs and they claim they're
Speaker 1: just looking for smart people and you don't need to
Speaker 1: know anything. And I thought I was smart, and I
Speaker 1: still wasn't sure. I said, well, I'm going to law
Speaker 1: school and I'll never forget. You said to me, well,
Speaker 1: there's free food, and I said, well, free food, I'll
Speaker 1: definitely show up. And I literally showed up, interviewed with
Speaker 1: a few places, was fortunate enough to get some offers,
Speaker 1: and I decided to go to Drexel Burnham and I
Speaker 1: worked at Drexel Burnham for the UH just short of
Speaker 1: two years between business business School and college because obviously
Speaker 1: Drexel didn't make it the full two years. But it
Speaker 1: was an amazing experience before I went to business school,
Speaker 1: really really intriguing. I never knew that uh NBA programs
Speaker 1: came with free food. Otherwise I might not have gone
Speaker 1: to law school had I known that. That's a that's
Speaker 1: really interesting. So so you go from Drexel UH, which
Speaker 1: you're primarily known as an M and A shop, to
Speaker 1: Mackenzie the big consultancy. What was that transition, like, how
Speaker 1: did you find yourself operating when you were no longer
Speaker 1: you know what was essentially was one of the hottest
Speaker 1: and in a shops on the street. So when I
Speaker 1: went to business school, a couple of things happened. One is,
Speaker 1: because I didn't have you know, traditional undergraduate economics or
Speaker 1: finance or accounting, I really only knew about finance because
Speaker 1: that's where I wound up, and so I learned so
Speaker 1: much more about the strategic aspects of business. Second of all,
Speaker 1: I met my wife the third day of business school
Speaker 1: and we discussed where we wanted to be, and we
Speaker 1: wanted to be in Boston, and at the time, there
Speaker 1: weren't a lot of finance jobs in Boston, and I
Speaker 1: had the good fortune of meeting the people from the
Speaker 1: mckensey Boston office, which was quite small at the time.
Speaker 1: I was able to go there at the summer. Really
Speaker 1: found the work interesting, and probably even more so, the
Speaker 1: people were truly extraordinary people, great teachers, really you know,
Speaker 1: intellectually curious. And the second year of business school, because
Speaker 1: my clients were local, I was able to actually work
Speaker 1: part time in that office. The second year of business
Speaker 1: school and I had accepted the offer, I went back there.
Speaker 1: My wife actually was working at a different consulting firm.
Speaker 1: She was at BCG, but there was part of me
Speaker 1: that always thought I would get back to some form
Speaker 1: of finance or investing and uh staying capital in early
Speaker 1: was raising its first institutional fund historically. We were less
Speaker 1: than ten years old and historically had basically had high
Speaker 1: net worth UM funds, and we were jumping from a
Speaker 1: hundred and twenty million dollars UH fund to a three
Speaker 1: hundred million dollar fund, which at the time seemed enormous.
Speaker 1: And I got a call from somebody I knew here
Speaker 1: and she said, we're trying to quote beef up a
Speaker 1: little bit. I think the firm had fewer than twenty investors,
Speaker 1: and we want somebody with consulting and banking experience. Are
Speaker 1: you interested in talking to it? And I literally came
Speaker 1: over on a Friday met virtually everybody came back the
Speaker 1: following Monday. Mitt Romney interviewed me and made me an offer,
Speaker 1: and I tell people I accepted it because it felt right. Huh,
Speaker 1: really really interesting. So So let's talk a little bit
Speaker 1: about UM about that experience. Well, is it just that simple?
Speaker 1: There wasn't anything else that that made you say, yes,
Speaker 1: I want to move to away from consultancy and towards
Speaker 1: private equity. It just was a gut Hey, this feels right.
Speaker 1: I think it did in my heart. I think there
Speaker 1: were two things. I think it played better to my skill,
Speaker 1: a certain entrepreneurial bent, uh the ability to combine what
Speaker 1: I had learned at Wreckvil and as a consultant, and
Speaker 1: that is the heritage of the firm. Obviously, the the
Speaker 1: firm started as a spinoff from the consulting firm Bain
Speaker 1: and Company. It's so the approach to investing made sense
Speaker 1: to me. It made sense to me on a fundamental
Speaker 1: basis how you think about looking at companies. And it
Speaker 1: was also differentiated because at the time nobody was approaching
Speaker 1: investing that way. And while the firm was quite small,
Speaker 1: there was an energy and aspiration and the hunger that
Speaker 1: really really appealed to me. And I said, I think
Speaker 1: this group is going to go somewhere and I can
Speaker 1: help make that happen. And one thing that I'm really
Speaker 1: really proud of is that even today, with a hundred
Speaker 1: and fifty billion dollars under management and a hundred and
Speaker 1: fifty partners in twenty one offices throughout the globe, I'm
Speaker 1: still proud we have that hunger and we have that
Speaker 1: int intellectual curiosity in the aspiration to do more and
Speaker 1: do better. So five years later you found Sancity Advisors,
Speaker 1: which eventually morphed into being Capital Credit. Tell us about
Speaker 1: what you were thinking, UH, creating a new credit division,
Speaker 1: and especially in light of you know, late nineties, the
Speaker 1: equity markets were they were on fire. Why start a
Speaker 1: credit focused investment farm? And the firm believed that what
Speaker 1: we did, our approach to investing was applicable to multiple
Speaker 1: asset classes, and we made the strategic decision in the
Speaker 1: mid nineties to expand both across asset classes and geographies,
Speaker 1: not all at once. So in the mid nineties we
Speaker 1: founded a public equity business and I founded the credit business.
Speaker 1: And the general belief was that we had been successful
Speaker 1: in investing in the equity of leverage companies, and therefore
Speaker 1: you would think that we would be able to apply
Speaker 1: to skill to the depth of LeVert companies. My experience
Speaker 1: from Drectful and the fact that I had worked on
Speaker 1: a bunch of our financings UH previously at ben Capital
Speaker 1: made me a logical choice to to start that business.
Speaker 1: At the time, there were really no other A few
Speaker 1: of our peers or competitors were doing the same thing.
Speaker 1: But we were one of the first to do this,
Speaker 1: and although the equity markets were hot at the time,
Speaker 1: we invest for very long periods of time and therefore
Speaker 1: it wasn't like we saw a two year window or
Speaker 1: at any time one asset was better than the other.
Speaker 1: We thought that we had a sustainable advantage in this space.
Speaker 1: The market was changing profoundly at the time. The concept
Speaker 1: of a syndicated bank loan was very very new. Clos
Speaker 1: weren't even around yet. We did one of the first
Speaker 1: clos and and uh we decided that institutionally it was
Speaker 1: worth doing that. Said, it was so unusual for a
Speaker 1: private equity firm to have, particularly a debt firm, and
Speaker 1: we didn't want people to misread when we were buying
Speaker 1: the debt of of l b O s sponsored by
Speaker 1: other sponsors. We put a different name on it. It's
Speaker 1: always been part of bing capital um, but Thankity is
Speaker 1: a lighthouse in Massachusetts, and we thought stability it was
Speaker 1: a good a good, a good symbol, and we kept
Speaker 1: that name for a while because we weren't sure how
Speaker 1: people would think about buying their debt. Ultimately, obviously, firms
Speaker 1: like ours having debt affiliates became quite mainstream, and UH
Speaker 1: in about seven years ago, we changed the name UH
Speaker 1: to ban Capital Credit. Our public equity business had the
Speaker 1: name Brooks. We changed the name of that to Bank
Speaker 1: Capital Public Equity. And you know, I joked that that
Speaker 1: is the official story, the unofficial story for why they
Speaker 1: picked me, as I think Mitt thought that I was
Speaker 1: senior enough to be credible and young enough to be
Speaker 1: expendable if it didn't work. But fortunately we never had
Speaker 1: to test that hypothesis. That's very funny, So so let's
Speaker 1: let's stay with that. Given what subsequently happens a few
Speaker 1: years later with the dot com implosion in the market crash,
Speaker 1: how did that spill over to the credit markets. It's interesting.
Speaker 1: So I still remember the first bond trade I did.
Speaker 1: I bought Riverwood bonds at about cents on the dollar
Speaker 1: and they went up to about a hundred and five,
Speaker 1: and I said, Wow, this is going to be an
Speaker 1: easy business. There were several things I did not realize
Speaker 1: at the time. One, I knew nothing about trader trading.
Speaker 1: And the first thing we did in our first year
Speaker 1: is higher a great trader, a guy named Jamie Kellogg,
Speaker 1: who was with us for twenty years and two. People
Speaker 1: forget that. In August Russia defaulted and that put a
Speaker 1: shock wave through the bond markets. So we were already
Speaker 1: dealing with turbulence when the dot com bubble hit um
Speaker 1: and then shortly after the dot com bubble, obviously we
Speaker 1: had nine eleven. And what we learned learned through that
Speaker 1: period of time is actually one of the important things
Speaker 1: in credit is you get paid back at the end
Speaker 1: if you made good selections. Nobody likes price volatility, but
Speaker 1: I highlight that all those things I just described had
Speaker 1: no impact on how much pizza people were buying. And
Speaker 1: therefore we lent money to a pizza company and those
Speaker 1: bombs and loans went up and down, But at the
Speaker 1: end of the day, that company went public and we
Speaker 1: got paid back. And realizing too to filter out the
Speaker 1: signal versus the noise, or filter out the noise versus
Speaker 1: the signal is a really really important part of credit investing.
Speaker 1: When we do distress investing, that's more of a hybrid
Speaker 1: and you think more about enterprise value and what does
Speaker 1: it take to get paid back. But in the part
Speaker 1: of our business that's a lending business, and back then
Speaker 1: we had mostly just the lending business. It was all
Speaker 1: about did we picked good credits, were they paying their interests?
Speaker 1: And would they ultimately be capable of paying back when
Speaker 1: they were supposed to. So, so let's talk a little
Speaker 1: bit about your role at bin UH and what you do,
Speaker 1: starting with what what does the co managing partner do?
Speaker 1: Is that like a CEO or a CEO role? How
Speaker 1: do you how do you define that? The co managing
Speaker 1: partner role is the equivalent of being the co CEO.
Speaker 1: But our firm is partnership and we chose not to
Speaker 1: put the title CEO on the leaders of the firm
Speaker 1: because it is a partnership. We are lead partners. We
Speaker 1: do not run the firm top down. We are an
Speaker 1: old fashioned partnership where the voices of all the partners matter.
Speaker 1: Everybody is a leader and everybody needs to contribute. That said,
Speaker 1: it falls on myself and my co managing partner, John Connaughton,
Speaker 1: to help drive strategy at the firm, to help make
Speaker 1: sure that our expansion is being done in a in
Speaker 1: a thoughtful way. There's um standards across the firm and
Speaker 1: as a real organizing force among our partners as we
Speaker 1: deliver great results for our investors and drive the business forward.
Speaker 1: So it's really a reflection. Sorry, it's good. It's really
Speaker 1: a reflection of our culture. So let's talk a little
Speaker 1: bit about how that culture manifests itself in your investment strategy.
Speaker 1: And this is a loose quote from you. Your investment
Speaker 1: strategy is described as thoughtful, not aggressive, not cautious. Explain
Speaker 1: that a little bit, and and how does that reflect
Speaker 1: the culture of the farm. I use a driving analogy
Speaker 1: a lot to try to explain what we mean about this.
Speaker 1: You can cause as many accidents going fifteen miles an
Speaker 1: hour in the right lane on a highway as you
Speaker 1: can driving a hundred and twenty five in the left lane.
Speaker 1: You have to know when to put on the gas,
Speaker 1: when to slow down, and you drive differently on different
Speaker 1: stretches of highways at different times during the day, and
Speaker 1: that applies to investing. You have to know that sometimes
Speaker 1: you have a view of the market that may be
Speaker 1: different than others. You have confidence to that view is
Speaker 1: well considered and analyzed, and therefore you might choose to
Speaker 1: put on a little more risk. You may choose to
Speaker 1: lean in um when everybody else is running away. There
Speaker 1: are also other times when we may decide, you know
Speaker 1: what we need time diversity or industry diversity, or we're
Speaker 1: not entirely certain what uh what the vision ahead is,
Speaker 1: and we will slow down a little bit. And I
Speaker 1: think what we do really well philosophically is we understand
Speaker 1: the difference between pricing risk and understanding uncertainty. There's a
Speaker 1: famous economists, um Then Knight, who who wrote back in
Speaker 1: the twenties and thirties about understanding that trying to quantify
Speaker 1: the difference between risk and uncertainty. And you can price
Speaker 1: and quantify risk, you have to learn to live and
Speaker 1: mitigate uncertainty, and you need to understand that difference between
Speaker 1: the two. Really really interesting, let's let's stick with that.
Speaker 1: Given how fast the recession was in equity markets plunged
Speaker 1: and then came back very strongly, Um, did you see
Speaker 1: something similar in the credit markets? How did they behave
Speaker 1: over that time? So the credit markets were as volatiled
Speaker 1: for a while as the equity markets, although I only
Speaker 1: remind people volatility implies going up and down, and they
Speaker 1: were going straight now, um. And it's at that time
Speaker 1: that as a leader of firm and the managing directors
Speaker 1: who had seen different cycles before had to make sure
Speaker 1: that the team focused on first principles, what would happen
Speaker 1: over the long run, would these companies be able to
Speaker 1: pay us back? How much cash could they burn? How
Speaker 1: long could this last? And we were able to find
Speaker 1: opportunities and had near record deployment during that period of time.
Speaker 1: Because the recovery was industry specific, so not everything came
Speaker 1: back at the same time. As you know, indussease, stock market, induscries,
Speaker 1: credit indusseries lie because their averages um. Secondly, there were
Speaker 1: different needs by geography and those those needs continue today.
Speaker 1: Where in Europe in particular, banks still had to shed
Speaker 1: lots and lots of bad assets and it became increasingly
Speaker 1: important to clean up their balance sheets. UH In the
Speaker 1: US there were a lot of industries, airlines, restaurants that
Speaker 1: did not recover the same way. We obviously made a
Speaker 1: very high profile airline investment with Virgin Australia UH in Australia,
Speaker 1: which we bought in partnership with our private equity team
Speaker 1: out of out of bankruptcy. And while there was a recovery,
Speaker 1: there was some sense that people did not fully believe
Speaker 1: it was over and therefore there was a reticence to
Speaker 1: deploy a new capital. We saw periods of time where
Speaker 1: the safer assets were way over priced at the expense
Speaker 1: of riskier assets. And if you got the default picture correct,
Speaker 1: which fortunately we did, and the team did a great
Speaker 1: job thinking about how much money companies would need and
Speaker 1: how they would access cash if they needed it, and
Speaker 1: we UM we said we could take a little more risk.
Speaker 1: We are not going to just buy double bees and
Speaker 1: ride the interest rate decline waves, and that was was
Speaker 1: the right decision. And then lastly, events like oh a like,
Speaker 1: like the dot com boom, they leave some scars, and
Speaker 1: we saw a lot of companies that had just gotten
Speaker 1: through that wanted to shore up their capital structures and said,
Speaker 1: you know what, having too much senior bank at with
Speaker 1: covenants or not enough equity, or perhaps they wanted preferred
Speaker 1: to doc But we spent a lot of time working
Speaker 1: with companies all over the globe on very structured sources
Speaker 1: of debton capital to help them make sure that they
Speaker 1: could ride through a second wave a third wave. Really
Speaker 1: really intriguing. UM, did you see as much distressed debt
Speaker 1: opportunities that you thought initially when when the pandemic really
Speaker 1: took root and we started to see all sorts of
Speaker 1: economic dislocations or was that recovery just shockingly quick? So
Speaker 1: we clearly didn't see as much distressed as we thought
Speaker 1: we were going to see because we thought everything was
Speaker 1: going to be distressed. I mean, when you put yourself
Speaker 1: back in you know, March of nobody had any idea
Speaker 1: what was going on. I remember being on debate where
Speaker 1: we were wondering whether we would have our offices closed
Speaker 1: until Memorial Day or Labor Day, and we were right,
Speaker 1: we just had the wrong years. Uh. And but that said,
Speaker 1: there was a lot of uh. There was a lot
Speaker 1: of distressed opportunities and rescue opportunities that available that we
Speaker 1: could do. The footprint that we operate with the twenty
Speaker 1: one offices throughout the globe also made a big difference
Speaker 1: because being proximate to so many different geographies and being
Speaker 1: able to participate in um so many different ways. We
Speaker 1: were able to do business locally as different geographies were
Speaker 1: opening and closing, and we could visit real estate sites
Speaker 1: some places in in Ireland or in Greece, or in
Speaker 1: uh In in Spain because we had a presence there.
Speaker 1: When we were looking at Virgin Australia. We have two
Speaker 1: offices in Australia, so we were able to UM do
Speaker 1: analysis US and have a view that others weren't able
Speaker 1: to have because you couldn't get to Australia. So we
Speaker 1: really felt the value of our platform during that period
Speaker 1: of time. And and let's stick with the idea of value.
Speaker 1: A lot of people of the equity markets as let's
Speaker 1: call them fully valued and or or more. Uh, does
Speaker 1: any of that spill over to the credit markets? What
Speaker 1: do you see in terms of private credit investments? Are
Speaker 1: are things available at the same sorts of valuations that
Speaker 1: you like to see? I would say that what we're
Speaker 1: seeing is once again more bespoke opportunities. On the one hand,
Speaker 1: in our special situations business that you know, there's no
Speaker 1: cookie cutter solutions out there, and access to capital um
Speaker 1: is still in some segments still pretty tight. I think
Speaker 1: that there are some people who own a lot against
Speaker 1: enterprise value, and we will do that a little, but
Speaker 1: we're not comfortable relying on getting paid back. We're okay
Speaker 1: taking returns from the equity markets, but we need to
Speaker 1: believe we're going to get paid back on debt instruments.
Speaker 1: In traditional debt ways UH preferred stock and structured equity
Speaker 1: and things like that are are a different story. And
Speaker 1: that's obviously where equity valuations make a difference. On the
Speaker 1: lending side of our business. In our private credit business
Speaker 1: and our cello business and our bank loan and bond business,
Speaker 1: default rates are incredibly low, and the economic outlook vise
Speaker 1: are the default vise are. The company's ability to access
Speaker 1: traditional capital markets is pretty good. And when you make
Speaker 1: a credit investment, when you make a loan, you look
Speaker 1: at the spread you're getting and then you always net
Speaker 1: out what you presume you're gonna lose um in default
Speaker 1: over a period of of the next two or three years.
Speaker 1: And I think not enough people look at loss adjusted
Speaker 1: spread that in bad markets, people probably underestimate what the
Speaker 1: losses would be, and in good markets they probably overestimate
Speaker 1: what they're going to lose because of defaults. And just
Speaker 1: like during we correctly thought that the whole world wasn't
Speaker 1: done a default and at a three percent four percent
Speaker 1: default rate, wasn't the end of the world. The default
Speaker 1: rate year to date is less than one percent, so
Speaker 1: it is well below average. And when default rates are
Speaker 1: below average, you would expect the spreads that people are
Speaker 1: lending money at to be below average, which is what
Speaker 1: we're seeing. So so let me flip that question over
Speaker 1: a little bit. A lot of what has made private
Speaker 1: credits so attractive, at least for the past decade anyway,
Speaker 1: has been that interest rates have really been so low
Speaker 1: and the yields from fixed income has in less attractive.
Speaker 1: What does that mean in terms of rising rates these days?
Speaker 1: If we continue to see um Man yields tick up,
Speaker 1: if the FED is early in their rate hiking cycle,
Speaker 1: and we could see you know, four or five six
Speaker 1: rate increases over the next two years, what does that
Speaker 1: do to your expectations for the private credit sector. Our
Speaker 1: expectations actually go up in that scenario for two reasons.
Speaker 1: One is, most of the way we loan in private
Speaker 1: credit is through floating rate instruments, and therefore, as rates
Speaker 1: go up UH, the amount of interest we received goes up.
Speaker 1: There's very little fixed rate in UH in the private
Speaker 1: credit space. Now. Secondly, you have to step back and
Speaker 1: ask yourself why are rates going up? And they're going up, yes,
Speaker 1: because there's some inflation, but also because the economy is
Speaker 1: growing and the economy is doing well. And the FAD
Speaker 1: needs to tap the brakes a little bit, and that
Speaker 1: would suggest that there will be fewer defaults, so it
Speaker 1: would be a good market to lend private credit. Let's
Speaker 1: talk a little bit about Baine because they really are
Speaker 1: kind of an interesting um private equity shop. Uh, they
Speaker 1: have employees across the US and around the world. How
Speaker 1: did they manage this during the lockdown? Were you able
Speaker 1: to deal with this or did you go into the
Speaker 1: pandemic semi virtual anyway? So, because we have such a
Speaker 1: big global footprint and such a diversity of businesses from
Speaker 1: life sciences to obviously private equity and credit and check
Speaker 1: ropes and venture capital and uh, you know many others,
Speaker 1: we were used to working across our platform and how
Speaker 1: do we activate our platform when we're looking at various situations. Now,
Speaker 1: we obviously had never encountered anything like we saw in March,
Speaker 1: but we had the technology and play in huge credit
Speaker 1: to our technology team that everything worked. We decided early
Speaker 1: on that we were going to make sure everybody from
Speaker 1: the most junior analysts to the most senior people in
Speaker 1: the firm had any technology they needed at their homes,
Speaker 1: if they needed routers, if they needed their internets be
Speaker 1: sped up, new laptops, screens. A lot of firms spent
Speaker 1: a lot of time figuring out what they were going
Speaker 1: to do, and we made the concerted effort to enable
Speaker 1: people as fast as possible. In Boston, we even had
Speaker 1: a group going around with literally a pickup truck and
Speaker 1: they moved our trade stations, our trader stations and reset
Speaker 1: them up in their homes. Within the first week of
Speaker 1: the pandemic. We never missed in an hour. But when
Speaker 1: I stepped back and I reflect on that period of
Speaker 1: time and what we've learned over the last two years,
Speaker 1: it really has brought out the entrepreneurial spirit that defines us,
Speaker 1: and it has brought us closer together. People hop on
Speaker 1: a zoom with colleagues in Mumbai with more ease and
Speaker 1: more comfort today than they used to, you know, go
Speaker 1: from the thirty seventh floor to the thirty eight floor
Speaker 1: to ask somebody a question. It's just been amazing to
Speaker 1: see the resourcefulness that individual people have brought to to
Speaker 1: to this situation, and the aggregation of that and the
Speaker 1: sharing of learnings has made a huge difference in our
Speaker 1: ability to be effective. We've hired hundreds of people during
Speaker 1: the pandemic, We've continued to increase our assets under management.
Speaker 1: We have found great investment opportunities across all of our
Speaker 1: business units. And you know, while I never would like
Speaker 1: to do it again, I am just incredibly proud of
Speaker 1: what the team has accomplished and to be part of it.
Speaker 1: And I know that may sound corny, but it truly
Speaker 1: has been the finest hour for our people, and the
Speaker 1: compassion and resourcefulness people have shown has been amazing. Sure,
Speaker 1: it's a baptism of fire. It's similar to what UM
Speaker 1: people when the Armed services go through, where everybody has
Speaker 1: to pull together and and rise to the challenge of
Speaker 1: a of a common enemy. I could certainly understand that.
Speaker 1: Let's talk a little bit about your overseas business. You
Speaker 1: you guys have fairly substantial investments both in Europe and
Speaker 1: and UH Asia and the Pacific. Tell us a little
Speaker 1: bit about what the challenges are of UH private investments
Speaker 1: outside of the US and does your thought process differ
Speaker 1: when you're considering those sorts of opportunities. So we view
Speaker 1: ourselves as a global firm. One of the things culturally
Speaker 1: is we don't view London or Hong Kong or Melbourne
Speaker 1: as overseas because to them at home, and in fact,
Speaker 1: about half our partners are outside the United States now.
Speaker 1: And so we have learned a lot from our global
Speaker 1: expansion over the last twenty two years, and one is
Speaker 1: that each market there are some core principles of what
Speaker 1: makes a good company what makes a bad company. That
Speaker 1: does translate. Our investment style does translate. But there are
Speaker 1: different norms, different ways people do business. There are different laws.
Speaker 1: Lending is different from uh from geography to geography, and
Speaker 1: you want to be sensitive to that, which is why
Speaker 1: all of our offices are predomina at Lee people who
Speaker 1: are from the local market. We didn't send a bunch
Speaker 1: of people over to London and say Hi, I'm from
Speaker 1: Boston and New York, You're happy to meet me. We
Speaker 1: actually built a local team that um does business. It
Speaker 1: has participated in the market, but early on worked very
Speaker 1: closely with people who had moved over from Boston or
Speaker 1: they spent time in Boston, so that the culture of
Speaker 1: the firm could grow um as it um as as
Speaker 1: we moved across the globe. And I think that's really
Speaker 1: really important. Is the biggest challenge you have in these
Speaker 1: types of situations when you are growing globally. You've been
Speaker 1: very successful in its single geography is just trying to
Speaker 1: replicate it without being sensitive to local norms and local networks.
Speaker 1: And what you need to do is find a way
Speaker 1: to maintain the core firm culture and the platform advantage
Speaker 1: that you bring your your reason for being, but make
Speaker 1: sure that you find ways to incorporate people with different
Speaker 1: experiences and people who know different markets better than we do. Uh.
Speaker 1: Let's talk about diversity a little bit. Finance has been
Speaker 1: criticized for for lacking in diversity. We we tend to
Speaker 1: be a bit of a white male industry. There are
Speaker 1: signs that's improving, but finance still lags a lot of
Speaker 1: other industries. UH, tell us a little bit about what
Speaker 1: pain is doing to address that issue. This is a
Speaker 1: huge issue in finance, in in a lot of industries
Speaker 1: across the US, and we recognize that we have to
Speaker 1: apply the esteem creativity we do to our investments in
Speaker 1: to our portfolio companies too, um to bringing a more
Speaker 1: diverse group of people in to the industry, obviously underrepresented groups,
Speaker 1: but also diversity of thought, diversity of geography, diversity of
Speaker 1: socioeconomic backgrounds. And we also recognize that we can't solve
Speaker 1: it ourselves, and we have made sure to consult with
Speaker 1: expertise and partner with organizations like m LT and s CEO,
Speaker 1: and we have found that technology has really helped us
Speaker 1: reach a broader group of people. When you don't hire
Speaker 1: a lot of people in any given year, we have
Speaker 1: fifteen hundred people UM, and you know, we may hire
Speaker 1: twenty associates and analysts, maybe forty associates and analysts in
Speaker 1: the United States a year. That's not a huge amount,
Speaker 1: and therefore it was really easy to just lapse into
Speaker 1: keep going to the same schools you're going to, and
Speaker 1: we recognize that that wasn't going to solve the problem.
Speaker 1: So we are you zoom to host informational forum UH two,
Speaker 1: teach people about what investing is, who we are UM,
Speaker 1: to coach people on the interview process, whether the interview
Speaker 1: with us or somebody else, and really start engaging with
Speaker 1: larger groups UM across the country. And we think it's
Speaker 1: it's incumbent upon everybody in our industry to make the
Speaker 1: industry more accessible and not just think about what I
Speaker 1: want ten more recruits. And just the other day we
Speaker 1: did a a informational session on Zoom and had two
Speaker 1: hundred or three hundred students from colleges across the United
Speaker 1: States learning about what we do, learning about the case
Speaker 1: method of interviewing, and we're going to see how that works.
Speaker 1: And you just have to keep experimenting, leaning in, and
Speaker 1: you know, be willing to take some risk, because doing
Speaker 1: the same thing over and over again and expecting a
Speaker 1: different outcome is definition of insanity. Really really interesting. I
Speaker 1: saw a really wonderful quote of yours before the pandemic began.
Speaker 1: It was it was around February four. Quote. I really
Speaker 1: think nobody could possibly understand the impact. And until we
Speaker 1: see how it plays out, how the quarantine works out,
Speaker 1: and whether or not we can find some sort of
Speaker 1: a vaccine, We're going to study this very closely and
Speaker 1: look at it very carefully. Unquote that that was a
Speaker 1: solid month and change before the lockdowns began, And it
Speaker 1: very much tells as to your approach, uh, not too aggressive,
Speaker 1: not too cautious, but really looking at things closely. Uh,
Speaker 1: tell us a bill a little bit about what you
Speaker 1: were thinking about a month before things really got bad
Speaker 1: here in the States. Investing is not the prediction business.
Speaker 1: It's really about adapting. And I use a framework a
Speaker 1: lot with the team, all the Udha loop, which actually
Speaker 1: comes from the military, and how they would teach fighter
Speaker 1: pilots to orient themselves in a dog fight at time
Speaker 1: of high uncertainty, and it tells you that you need
Speaker 1: to orient yourself to where you are, you need to
Speaker 1: observe what's going on, then you need to decide, and
Speaker 1: then you need to act. And it's a loop because
Speaker 1: you do it over and over and over again. And
Speaker 1: at that time, it was clear that we were in
Speaker 1: a situation where we were not being asked to price risk.
Speaker 1: We were being asked to price uncertainty. And we were
Speaker 1: humble enough to see that nobody had exactly gotten this
Speaker 1: right yet, and sensitive enough to recognize that there was
Speaker 1: a human tole that this was taking both in human life,
Speaker 1: and people were starting to die as well as fear.
Speaker 1: And I thought at the time, and in my partner
Speaker 1: Um and I talked about it that boy, we don't
Speaker 1: really know what's going on. And sometimes people think you
Speaker 1: should zig or you should dad, but really what you
Speaker 1: should do when you don't know what's going on to
Speaker 1: stand still and watch. And that's what we did. We
Speaker 1: didn't panic, We didn't try to guess one way or
Speaker 1: the other. We set out a framework for how we
Speaker 1: were going to look at this, how we were going
Speaker 1: to think about the safety of our team as well
Speaker 1: as the um security of our portfolio companies. And we're
Speaker 1: very fortunate at Bank Capital because we have a life
Speaker 1: sciences group with real doctors and people with pH d
Speaker 1: s who played a huge role at that time in
Speaker 1: trying to help us understand how this could play out
Speaker 1: and also what it took to develop a vaccine. And
Speaker 1: I had never put much thought into how developing vaccines
Speaker 1: work and how they worked and who would take them
Speaker 1: um and that was incredibly helpful. And uh, that part
Speaker 1: of the firm continues to be incredibly helpful today to
Speaker 1: this point, to this day. So let's talk a little
Speaker 1: bit about some of the philanthropic work you do. You
Speaker 1: were a major supporter of of City Year, Lift, you Aspire,
Speaker 1: and you were one of the earliest donors to Brian
Speaker 1: Stevenson's Equal Justice Initiative. Tell us a little bit about
Speaker 1: what the connection is between all of these different clauses.
Speaker 1: My wife and I both went to public high schools
Speaker 1: and had the ability to obtain incredible education, both undergrad
Speaker 1: and graduate, And at no point in my life when
Speaker 1: I was walking through the halls of my public high
Speaker 1: school in downtown Providence, did I ever question that there
Speaker 1: might be a ceiling on what I could do and
Speaker 1: what I could accomplish. And that's just not the case today.
Speaker 1: And we recognize that we have been incredibly, incredibly lucky.
Speaker 1: There's a lot of people with the same skills I
Speaker 1: have that just never had the opportunities that I have had,
Speaker 1: and we focus a lot of our philanthropy on what
Speaker 1: we call leveling the playing field. So City Year was
Speaker 1: the UM, the organization that was used as the models
Speaker 1: for AmeriCorps, which is the National service organization UM. City
Speaker 1: Year when we started volunteering with City Year, they had
Speaker 1: come to my Business school section. A friend of mine
Speaker 1: had helped them with their business plan, and they had
Speaker 1: a vision of putting near peer mentors and public schools
Speaker 1: across the United States and UM and using them to
Speaker 1: help UH students see their potential and help prevent the
Speaker 1: help prevent students from dropping out. We didn't have much
Speaker 1: money back then, but we gave them eighteen dollars, which
Speaker 1: was which is high in the Jewish faith, which stands
Speaker 1: for lock in life, and for some weird reason, I
Speaker 1: kept the check. I still have that check and have
Speaker 1: been involved with City Or for more than thirty years.
Speaker 1: I chaired the board, I was on the I was
Speaker 1: on the board for fifteen years, and I've watched that
Speaker 1: organization grow to three thousand young core members volunteering in
Speaker 1: schools in thirty cities in the United States, London, UM,
Speaker 1: Northern England and South Africa, and Johannesburg. And I've seen
Speaker 1: the power of UH commitment and idealism to help solve
Speaker 1: problems that the problems we have of opportunity aren't intractable
Speaker 1: UM And along that theme, we were introduced to smaller
Speaker 1: organizations at the time. You Aspire helps students find financial aid.
Speaker 1: The financial aid process in the United States is unbelievably complicated,
Speaker 1: and it started by helping Boston Public school kids just
Speaker 1: learn how to apply for financial aid. It's one of
Speaker 1: the number one reasons that students don't apply to college
Speaker 1: is they just assume it's not accessible to them. People
Speaker 1: don't realize that even understanding financial aid is super complicated.
Speaker 1: One of the things the CEO did when I first
Speaker 1: met him. Is gave me three financial aid letters and
Speaker 1: asked me to read them and tell him what I
Speaker 1: thought the best package was. And it was really hard,
Speaker 1: and he said, now, imagine your kid in South Boston
Speaker 1: whose parents didn't go to college and this arrives in
Speaker 1: the mail. How do we help explain that to them?
Speaker 1: And they now work UM once again using technology, with
Speaker 1: hundreds of thousands of kids across the country. UH and
Speaker 1: LIFT Communities. UH was founded by a woman named Kirsten Lodel,
Speaker 1: who I met through an organization called New Profit here
Speaker 1: in Boston which does venture philanthropy, and Kirsten started LIFT
Speaker 1: for junior year at Yale and with the belief that
Speaker 1: people need a helping hand to it's not always people
Speaker 1: need money and money will will solve a problem. And effectively,
Speaker 1: what LIFT does is their life coaches. They help people budget,
Speaker 1: they help with financial literacy, they help people learn how
Speaker 1: to take care of their health. And it's almost like
Speaker 1: life coaches for people who otherwise don't have it, how
Speaker 1: to do a resume, and it it follows the great line.
Speaker 1: You know, give a person a fish, you feed them
Speaker 1: for a day, teach them how to fish, and you
Speaker 1: feed them for a lifetime and LIFT has done just
Speaker 1: amazing work. They very much focus on underrepresented communities. It's
Speaker 1: generally mother and UM, they have had just amazing, amazing results. UM.
Speaker 1: It's now run by a woman named Michelle Roan Collins.
Speaker 1: And then lastly, the several years ago, just when Just
Speaker 1: Mercy came out, the founder or co founder of City Or,
Speaker 1: Michael Brown, gave me Brian's book for Hanaka. He always
Speaker 1: sends me a book every year, and he had gone
Speaker 1: to law school with Brian. I had met Brian once
Speaker 1: briefly at a City Year event. And I don't know
Speaker 1: if you've read Just Mercy, but you're reading it, and
Speaker 1: it's about how Brian Uh. One of his first major
Speaker 1: cases he got somebody off of death Row who was
Speaker 1: basically framed and it was completely and totally um racially
Speaker 1: motivated and uh discriminatory, and he did a There's a
Speaker 1: section in there about children who have been sentenced to
Speaker 1: life in jail and the horrible trauma that they've go through.
Speaker 1: And I read this and I, you know, UM humble
Speaker 1: enough to tell you I was shocked. I thought I
Speaker 1: was pretty aware of what was going on. And this
Speaker 1: is years and years and years before uh, George Floyd,
Speaker 1: and I was like, how can this be happening in America?
Speaker 1: And I actually called Michael and said, can you introduce
Speaker 1: me to Brian Jennie and I would love to meet him?
Speaker 1: And um, we got to meet him. We've gotten to
Speaker 1: be friendly with him. UM. We gave him one of
Speaker 1: his largest early gifts. He had been around for a while,
Speaker 1: but we gave him a substantial gift. And you know,
Speaker 1: I thought it was so important that people understand the
Speaker 1: top both the type of work that he is doing,
Speaker 1: but the need to do that type of work, which
Speaker 1: is just incredible that that's still necessary in this country. Um.
Speaker 1: He and I actually did a joint to parents on
Speaker 1: ntr UM six years ago to talk about it, um
Speaker 1: and talk about how somebody like me had come across
Speaker 1: the work he's doing down in Alabama and how I
Speaker 1: just thought it was so important as an American to
Speaker 1: do whatever I could to help not just rectify these
Speaker 1: types of injustices, but actually make sure they stop happening.
Speaker 1: And that his book Just Mercy eventually became a film
Speaker 1: with Michael Jordan and Jamie Fox. So so let's let's
Speaker 1: stick with that concept of social and economic mobility. Why
Speaker 1: do you think that there is a ceiling today in
Speaker 1: the United States that didn't exist decades ago? And what
Speaker 1: can we do about improving economic mobility? You know, if
Speaker 1: I had all the answers, uh, I hope it would
Speaker 1: be solved, because other people smarter than I am would
Speaker 1: have figured it out. But I do think it starts
Speaker 1: with the educational system and making sure that public school
Speaker 1: was in the United States aren't just good, they're great. Um.
Speaker 1: The number of folks I went to public school with
Speaker 1: who now send their children to private school is staggering
Speaker 1: to me. And UM, So it starts with making sure
Speaker 1: that education in the United States works. Um. Secondly, I
Speaker 1: think we've all got to recognize the problem. We've got
Speaker 1: to recognize, um uh, that people with different lived experiences
Speaker 1: do not have the same access to starting businesses, the
Speaker 1: same access to UM capital, the same access to all
Speaker 1: the resources that you might see you know more obviously
Speaker 1: in a traditional sense in Silicon Valley as an institution,
Speaker 1: we have committed ourselves to try to help improve that,
Speaker 1: um UH in in business equity in the City of Boston,
Speaker 1: UM and many of us support other organizations across the country,
Speaker 1: which are all trying to to level the playing field,
Speaker 1: as I discussed, But the first thing is we've got
Speaker 1: to be aware of the disparity. You can't fix it
Speaker 1: until you name it and you own it, and then
Speaker 1: people have got to recognize that there's work to do.
Speaker 1: Quite quite interesting, you end up in a similar place
Speaker 1: to Joel Greenblatt, who also points to the education system
Speaker 1: as the key to improving UH economic mobility. I think
Speaker 1: the book is something common sense, the guide, Investor's Guide
Speaker 1: to a quality opportunity in growth. You guys are very similar.
Speaker 1: Let me ask you about a different project that you
Speaker 1: were involved in. You helped to fund the teen uh
Speaker 1: ten part documentary series by Ken Burns and Lynn Novak
Speaker 1: The Vietnam War. Tell us how we're going to find
Speaker 1: the next great filmmaker like Ken Burns. So while Ken's
Speaker 1: film came out in seventeen, I had met him about
Speaker 1: seven years earlier. One thing as I've become friendly with
Speaker 1: Ken over the years, and my my wife and I've
Speaker 1: become really good friends with him, is he starts thinking
Speaker 1: about his projects a decade out. He literally can tell
Speaker 1: you what he's going to do in and um when
Speaker 1: he approached me on the Vietnam War. It was very
Speaker 1: important to him that this have funding from people who
Speaker 1: would be associated with being Democrats and Republicans to immediately
Speaker 1: take away any possibility people would think that this had
Speaker 1: a political agenda. He also, very purposely in the film
Speaker 1: does not interview John McCain or John Kerry because a
Speaker 1: lot of people reduce the um, you know, some of
Speaker 1: the Vietnam stories to two very famous people, both of
Speaker 1: whom are heroes, UM who served in What he wanted
Speaker 1: to do is tell the story of you know, a
Speaker 1: whole mix of Americans and what that story was. And
Speaker 1: that is the beauty of Ken's work and Um, as
Speaker 1: we've gotten to know each other, we helped fund a film.
Speaker 1: He did a short film on the Holocaust um and
Speaker 1: he's actually got a multi part series on the Holocaust
Speaker 1: coming coming out um UH. Later this year, we um
Speaker 1: talked about the importance of who is the next Ken Burns?
Speaker 1: Burns and he came up with this idea and asked
Speaker 1: my wife Jeanie and I if we would join him
Speaker 1: in funding a prize given by the Library of Congress
Speaker 1: to emerging filmmakers. Because he remembered that when he started.
Speaker 1: The toughest thing he had was getting what's called the
Speaker 1: completion grant. He could do all the raw filming, but
Speaker 1: really pulling it together in something that was production worthy.
Speaker 1: But so we agreed to sponsor and we do to
Speaker 1: this day a prize through the Library of Congress which
Speaker 1: provides completion grants not just to the winner of the
Speaker 1: of of the Content of the of the Award, but
Speaker 1: also to a couple of other runner ups. They are
Speaker 1: different size grants so that the next can Burns can
Speaker 1: can have an opportunity. UM over the last couple of
Speaker 1: years can recognize that UM their diversity and documentary filmmakers,
Speaker 1: just like we talked about incindance, UM wasn't what it
Speaker 1: should be. And we came together with him and also
Speaker 1: fund a fellowship and mentorship program that he started to
Speaker 1: help UM UM mentor up and coming filmmakers from underrepresented groups.
Speaker 1: And UM he's just an amazing person. Uh when you
Speaker 1: look at polls of people still trust his films and
Speaker 1: trust his storytelling and know that it's up the middle
Speaker 1: and in this time when people do not trust media
Speaker 1: for whatever reasons and people polarized to their networks, to
Speaker 1: know that there's people like Ken, and hopefully a generation
Speaker 1: behind Ken, who are presenting history in a really approachable
Speaker 1: and important way. I think is incredibly important to strengthening
Speaker 1: some of the social fabric we've talked about. And one
Speaker 1: of the amazing things about the Vietnam War, where you
Speaker 1: would have thought everything that had been done and written
Speaker 1: in all that, is that was the first film I
Speaker 1: had ever seen that actually interviewed North Vietnamese soldiers and
Speaker 1: interviewed North Vietnamese citizens, and we forget that there were
Speaker 1: two sides in that war, both of which suffered incredible
Speaker 1: human loss, and learning the lessons of Vietnam applies to
Speaker 1: so many things we're looking at today. Um and UM.
Speaker 1: I think that's true of almost alocains film. You mentioned
Speaker 1: he's working on a Holocaust film. Towards the end of
Speaker 1: his presidency, UH Barack Obama appointed you a member of
Speaker 1: the US Holocaust Memorial Museum Council. Tell us a little
Speaker 1: bit about that experience. It was an absolute honor to serve.
Speaker 1: It's a cause that really important to me and my wife.
Speaker 1: The Holocaust is not just a moment in history. It's
Speaker 1: not just uh A, you know, a a time of
Speaker 1: a group was anti Semitic. It shows you that when
Speaker 1: you forget the lessons of history, those atrocities can be
Speaker 1: repeated again and again and again. But there's also a
Speaker 1: lesson of the Holocaust, which Ken is gonna focus on
Speaker 1: in his film about what people didn't do and Um
Speaker 1: there's a whole section that was UM was opened while
Speaker 1: I was on the UM the Memorial Board, which is
Speaker 1: about America in the Holocaust and what we did or
Speaker 1: more appropriately, didn't do during the thirties and how easy
Speaker 1: it was to look away, say it was far away,
Speaker 1: and there are a lot of lessons to be learned
Speaker 1: to see what happens when people, UM are bystanders and
Speaker 1: I think it's not their problem. And when you look
Speaker 1: at Charlotte's Felle, you know, I'm not sure people understood
Speaker 1: the symbolism of people with tiki torches chanting people Jews
Speaker 1: will not replace us, and that that comes from Nazi Germany.
Speaker 1: And UM. You know, there's an old adage that you know,
Speaker 1: when you forget the history, you're doomed to repeat it.
Speaker 1: And there's just so many lessons to be learned, and
Speaker 1: the work, the educational work is more than a museum.
Speaker 1: The educational work that UM the Holocaust UM Memorial Museum
Speaker 1: Council does in the in the county, in the museum
Speaker 1: does UM not just on Holocaust, on the Holocaust, but
Speaker 1: on genocide more broadly. I think it's really really important,
Speaker 1: and I am incredibly proud to have served UM and
Speaker 1: UH continue to support support them because it's so important
Speaker 1: that we learned the lessons and that we do not
Speaker 1: repeat them. Really really fascinating stuff. Let me throw you
Speaker 1: a little bit of a curveball here and talk about
Speaker 1: the Boston Celtics. You've been a member of that ownership
Speaker 1: group for a while. Tell us a little bit about
Speaker 1: that experience, how that came about, and what's it like
Speaker 1: being a Celtics owner. So with somebody who grew up
Speaker 1: in the Boston area, I grew up in Providence, Rhode Island,
Speaker 1: UH and went to games with my dad since I
Speaker 1: was little. UM. The opportunity to be part of the
Speaker 1: investor group was, you know, so exciting. UM. The Steve Paluco,
Speaker 1: one of my partners, was friendly with Wick Rossback and
Speaker 1: UH Bob Epstein, and the three of them put together
Speaker 1: the group that that bought it a little more than
Speaker 1: fifteen years ago. Um, they had a vision of local
Speaker 1: business leaders, people who cared about philanthropy. UM, I cared
Speaker 1: about you know what the team meant to the city
Speaker 1: of Boston, and UM, you know it's been great. Uh
Speaker 1: we you know. I was on the board for the
Speaker 1: worst season we ever had and on the board for
Speaker 1: a championship. So it's been UM, it's been amazing. They
Speaker 1: started out this season looking pretty strong. They have a
Speaker 1: better than record. What what do you think they have
Speaker 1: a shot at winning the East this year? I always
Speaker 1: believe that we not only have a shot, but will
Speaker 1: win until um, events or otherwise proved me wrong. I'm
Speaker 1: a true believer and I think that the talent we
Speaker 1: have on this team is capable of winning any any
Speaker 1: day and if they get it all working, the beauty
Speaker 1: of basketball is the playoffs are like a second season. Um.
Speaker 1: And uh, as long as we make it into the playoffs,
Speaker 1: I think we can do anything. So I know I
Speaker 1: only have you for a limited amount of time. Let
Speaker 1: me jump to my favorite questions that I ask all
Speaker 1: of my guests, starting with tell us what you're streaming
Speaker 1: these days? Give us your favorite Netflix or Amazon Prime.
Speaker 1: What's been keeping you entertained over the past two pandemic years.
Speaker 1: So besides ted Lasso, the morning show Shifts Creek, which
Speaker 1: I think everyone UM loves and and and people have
Speaker 1: really really taken to. I I think ted Lasso may
Speaker 1: go Down is one of the great philosophers of our time.
Speaker 1: My wife and I actually, particularly with you know, all
Speaker 1: the difficult events that have been going on in the world,
Speaker 1: and you can focus so much on what's going wrong.
Speaker 1: We actually enjoy periodically just streaming comedy concerts, and Netflix
Speaker 1: and HBO have great a great array of comedy concerts
Speaker 1: where you can just laugh, because I do think we
Speaker 1: need to all laugh a little bit. Um. I Also,
Speaker 1: as we've talked about, I very much enjoyed documentaries, and
Speaker 1: not just uh Ken Burns stuff, but some more offbeat
Speaker 1: stuff I really enjoyed on UM HBO. UH they had
Speaker 1: a documentary called mcmillions which was riveting, I believe it
Speaker 1: or not, which basically examined how the McDonald's Monopoly game
Speaker 1: UH in the mid nineties and late nineties was rigged
Speaker 1: and nobody realized it for a while, and that somebody
Speaker 1: had rigged the game, even Monopoly, I mean even McDonald's
Speaker 1: didn't know, and I'm not doing it justice, but it's
Speaker 1: fascinating and UM and I UH also very much enjoyed
Speaker 1: on Netflix the the documentary about the uh theest of
Speaker 1: art from the Isabella Stewart Gardner Museum here in Boston. UM.
Speaker 1: It was the largest art heist in history and remains
Speaker 1: unsolved decades later, and it's called I think it's called
Speaker 1: this is a heist or this is a robbery. My
Speaker 1: wife and I saw that that was really quite fascinating,
Speaker 1: and I mean, the Isabel Stewart Gardner Museum is walking
Speaker 1: distance from our office, and it was just fascinating to
Speaker 1: watch and so much UM, I didn't I didn't know.
Speaker 1: And then I'm a huge sports fan and I think
Speaker 1: the ESPN thirty for thirties are just absolutely fantastic and
Speaker 1: you can find all sorts of stuff that that that
Speaker 1: can keep your interest. UH. I even watched to the
Speaker 1: hour long documentary on the Tuck Rule, which was that
Speaker 1: first UH that playoff game that made Tom Brady's career
Speaker 1: where there was a debate whether or not he fumbled
Speaker 1: the ball in the snow and UH and UH there
Speaker 1: was a little known rule in the NFL which they
Speaker 1: took away the next year called the tuck rule, and
Speaker 1: he had not tucked the ball back in and uh
Speaker 1: and he um, so it was ruled an incomplete pass.
Speaker 1: And because of that, the Patriots beat the Raiders and
Speaker 1: went on to win their first Super Bowl. And I
Speaker 1: know that sounds crazy, but I watched it for an
Speaker 1: hour and I just thought it was fascinating to listen
Speaker 1: to Tom Brady and Charles Woodson, who had been a
Speaker 1: college teammate, who was the guy on the Raiders who
Speaker 1: knocked the ball out, relived that twenty years later. So
Speaker 1: I think that you can find lots of interesting things
Speaker 1: to do and things to watch, and UM, I don't
Speaker 1: think it always needs to be business material. I listened
Speaker 1: to a lot of podcasts on politics, on um on
Speaker 1: um history, and UM, I think that we're so lucky
Speaker 1: to live in an age where we can where we
Speaker 1: can stream all that stuff. And of course, uh, I
Speaker 1: always make sure to listen to this business podcast. Well
Speaker 1: appreciate you say that. Lets let me skip over that
Speaker 1: and and just ask you two uh more streaming questions. Um.
Speaker 1: The first is I assume you saw the Last Dance,
Speaker 1: the series about Jordan and the Bulls, believe it or not,
Speaker 1: I have not watched the whole thing because I couldn't
Speaker 1: get my wife to watch the whole thing. So um
Speaker 1: as travel is picking up that's on the stream it alone. Camp.
Speaker 1: I was a giant Knicks fan, and I have vivid
Speaker 1: recollections of that era in in the late eighties and nineties,
Speaker 1: just thwarted every time the Knicks ran into that buzz.
Speaker 1: So you mentioned in stand up comedy on Netflix, UM,
Speaker 1: I'm curious any any couple in particular stand out? What
Speaker 1: what have you really enjoyed in terms of stand up Sure,
Speaker 1: there's this guy, Nate BARGOTSI. Um, he has the Tennessee
Speaker 1: Kid in the All American Average Guy or something like that.
Speaker 1: I mean, it's something funny like that, and you know,
Speaker 1: he's hilarious and his it's self deprecating humor. It's it's clean,
Speaker 1: it's not political, it's he's really really good. And the
Speaker 1: beauty of Netflix is you find one you like and
Speaker 1: then you can watch two or three others because they
Speaker 1: probably have have UM have a whole library. And then
Speaker 1: UM Mike Rabiglia UM has some really really interesting, thought
Speaker 1: provoking UM thought provoking UM comedy specials there too that
Speaker 1: we really like. And then UM Aliza Slessinger who won
Speaker 1: Last Comics Standing on NBC. UM had gone to college
Speaker 1: here in the Boston area. UM is hilarious and has
Speaker 1: a number of a number of interests of fun concerts
Speaker 1: on on on Netflix. The one of hers I remember
Speaker 1: was Elder Millennial and it it is hilarious. I'm gonna
Speaker 1: recommend to to you because I have a flavor of
Speaker 1: what you like. UM, I'm gonna go out on a
Speaker 1: on a llege with inside inside with Bo Burnham. It's
Speaker 1: a ethlectic and here's a guy just locked in an
Speaker 1: apartment making comedy all by himself in the early days
Speaker 1: of the Lockdown. But the one that I'm I'm so
Speaker 1: that people either love or or completely perplexed by it.
Speaker 1: But the one that's a slam dunk is going to
Speaker 1: be the Tom Pappus comedy. He talks about his wife,
Speaker 1: his kids, and it's just your your You and I
Speaker 1: are about the same age, and that is right talking
Speaker 1: right to our generation. And it's also pretty hilarious. Awesome.
Speaker 1: I will definitely, I will definitely do that, all right,
Speaker 1: So let me keep working my win and my questions.
Speaker 1: UM tell us about your early mentors who helped to
Speaker 1: shape your career. I'm really lucky that I showed up
Speaker 1: at a firm that really believes in partnership and mentorship.
Speaker 1: And we use the word sponsorship. It's more than just mentoring.
Speaker 1: It's it's we're responsible for each other's success. When we
Speaker 1: were quite small and early on, I worked with two
Speaker 1: partners really closely, guy named Mark Nunley and the guy
Speaker 1: named Bob white Um. And Mark was from Kentucky, Bob
Speaker 1: was from Woburn, Massachusetts, had been a hockey goalie in college.
Speaker 1: And it's so reflective of who we are as a firm.
Speaker 1: Mark went to Center College and HBS. Bob went to
Speaker 1: Bowden Um played hot there and also went to HBS,
Speaker 1: so very very different background. They had very very different
Speaker 1: approaches to investing, and I learned with working with them
Speaker 1: that one people really matter. People on your team and
Speaker 1: how you treat people at the various companies you're investing in,
Speaker 1: that makes a big difference. All money is green and
Speaker 1: people want to want to do business with you, and
Speaker 1: you've got to leave your values every day. Secondly, there's
Speaker 1: not only one way of doing it. Um. Mark was
Speaker 1: always a little bit more of an engineer and Bob
Speaker 1: was always a little bit more of an artist and
Speaker 1: they recognize that in each other. And for me to
Speaker 1: become the third musketeer of that group early in my
Speaker 1: career really, uh really was was helpful. And um they've
Speaker 1: both since retired from the firm, but you know, I
Speaker 1: spoke to Bob last Sunday. Um he's teaching at HBS
Speaker 1: and Marx got an office right around the corner. And
Speaker 1: that's I think part of the beauty of the firm
Speaker 1: and how we grew up together. And also, honestly, being
Speaker 1: in Boston, it's just a little bit smaller. And then
Speaker 1: my father in law has uh really helped helped me
Speaker 1: in my business career. He was a senior banker. He
Speaker 1: ran investment banking UM at Drexel Burnham. UM. I actually
Speaker 1: met my wife after I worked for him. UM so
Speaker 1: that was a little odd, but um so he understood, um,
Speaker 1: the choices that you make and um and um how
Speaker 1: to think through things from review processes too. You know,
Speaker 1: how to compensate people fairly, how you've got your own
Speaker 1: career and um he always um made sure that you
Speaker 1: don't forget that you are measured not only by what
Speaker 1: you do, but what you choose not to do. UM.
Speaker 1: And I've always thought that that's incredibly good. UM, good advice.
Speaker 1: Let's talk about every buddy's favorite question books. Tell us
Speaker 1: some of your favorites and what you're reading now. So
Speaker 1: we uh talked about Brian Stevenson's book and what an incredible, uh,
Speaker 1: incredible impact it had on me. Another interesting book. A
Speaker 1: woman who I become friendly with through the Holocaust Memorial
Speaker 1: named Sarah herwit Um was Michelle Obama's lead speech writer.
Speaker 1: But when she left government, she didn't write a book
Speaker 1: on politics. She actually had rediscovered her Jewish roots. She
Speaker 1: had been fairly non observant, and um reimagined religion and
Speaker 1: seeing it as an adult. Um. You know, and somebody
Speaker 1: who who focuses on language reimagines or just or investigates
Speaker 1: her Jewish roots and the Jewish faith through the use
Speaker 1: of language, through the difference between what the values of
Speaker 1: the religion are versus the observances that you know, our
Speaker 1: traditions that came along well afterwards. And while clearly it's
Speaker 1: about Judaism, you could apply this to any religion and
Speaker 1: just think about um, you know, the philosophical under pinnings
Speaker 1: of religion and when people move away from their faith,
Speaker 1: do they do so because of belief because it's unapproachable.
Speaker 1: It's just brilliantly written. I I there's a chapter in
Speaker 1: there about imagining God, and she's like, you actually don't
Speaker 1: have to believe in God UM in any sort of
Speaker 1: traditional sense to UM to be a person of faith.
Speaker 1: And uh, She's like, I can't tell you what God is.
Speaker 1: I can tell you it's not an old man with
Speaker 1: a beard sitting on a chair. And it could be
Speaker 1: anything from the energy between us all as people to
Speaker 1: some concept of the force from Star Wars. And it's
Speaker 1: just a fascinating book. And I also just finished Bob
Speaker 1: Iger's memoir The Right of a Lifetime, and I thought
Speaker 1: it's just a both a fascinating personal story as well
Speaker 1: as UM interesting thoughts on management. And I always try
Speaker 1: to read UM fiction and nonfiction. I have one going
Speaker 1: of each at the same time. And UM. I discovered
Speaker 1: during the pandemic an author named Frederick Bachman who's a
Speaker 1: Swedish author UM and he wrote a book called UM
Speaker 1: A Man named Uva, which is ov so until I
Speaker 1: heard an interview with him I thought it was pronounced
Speaker 1: ov um and uh. And he also wrote a book
Speaker 1: called Anxious People in bear Town, and there he tells
Speaker 1: incredibly interesting stories. They're all very different. Um. They all
Speaker 1: sort of have twists. Um. And they explore some some
Speaker 1: some really important and sometimes heavy topics, but with a
Speaker 1: humor and in approachability that is fascinating. And I just
Speaker 1: think his books are so incredibly well written and so
Speaker 1: readable that during the course of the pandemic I read
Speaker 1: three of them. Huh. Really interesting. And what was the
Speaker 1: full title of the first first book about faith? It
Speaker 1: went by too quick? A Sarah's. Sarah's book is called
Speaker 1: here all Along, Here all Along. What she's saying is
Speaker 1: is that the religion in the belief existed all along.
Speaker 1: She just had to find it. It's been whether her.
Speaker 1: It's been here all along. Got it? Finding meaning, spirituality
Speaker 1: and a deeper connection to life. Got it. Um. We're
Speaker 1: down to our final two questions. What sort of advice
Speaker 1: would you give to a recent college grad who was
Speaker 1: interested in a career in investment management or finance or
Speaker 1: private equity. You know why you want to do it.
Speaker 1: If you do it just for the money, at some
Speaker 1: point that won't be enough. And if you're only doing
Speaker 1: it for the money and not because you're interested in it,
Speaker 1: then the money won't be there UM. And I think
Speaker 1: with any any um, any career you choose, it's got
Speaker 1: to you've got to pique your interest. You've got to
Speaker 1: be good at it um and you want to make
Speaker 1: sure you know why you're doing it. Good good advice,
Speaker 1: And our final question, what do you know about the
Speaker 1: world of investing and private equity today that you wish
Speaker 1: you knew thirty or so years ago when you were
Speaker 1: first starting out. I have an expression I use a
Speaker 1: lot with the team, which is it's never as good
Speaker 1: as it looks or as bad as it feels, and
Speaker 1: that when the markets are doing great, avoid the temptation
Speaker 1: of enjoying it too much. And when the markets are bad,
Speaker 1: remember that markets operating cycles and there is another side.
Speaker 1: And for our twentieth anniversary a few years back, I
Speaker 1: wrote um a letter to investors, and I had three
Speaker 1: pictures that summed up of the things I had learned.
Speaker 1: One was a picture of clothing tag that said one
Speaker 1: size fits all, the other one was a picture of
Speaker 1: Roger Federer, and the last one was a picture of
Speaker 1: the moon landing. And the point I was making was
Speaker 1: one we know that you never walk into a store
Speaker 1: and say I want a sweater? Do you have one
Speaker 1: that's one size fits all? That you can't be all
Speaker 1: things to all people. So um, no, what know what
Speaker 1: it is that you're doing and and and do that?
Speaker 1: Um too. I'm a huge tennis fan and um, and
Speaker 1: I should mention Christopher Clary's book on Roger Federer that
Speaker 1: just came out was was phenomenal. Um. But Roger Federer
Speaker 1: over the years, early on people thought I wasn't going
Speaker 1: to make it. He insisted on playing with you know,
Speaker 1: a low technology, under sized racket when people were really
Speaker 1: turning to power games to just crank up their serves. Um.
Speaker 1: He continued to to to to focus on the techniques
Speaker 1: or that he has and he has a one handed backhand,
Speaker 1: and as everyone was trying to tell him to change
Speaker 1: his game and it was unsustainable. Um, he actually knew
Speaker 1: who he was and he knew what his game was,
Speaker 1: and over time he's made tweaks. He did finally get
Speaker 1: a slightly bigger racket, but still not one of the
Speaker 1: huge ones, and he's added some things to his game.
Speaker 1: But at his core, he knows who he is, he
Speaker 1: knows what he's good at, and that is what has
Speaker 1: been the key to his success. He has focused on
Speaker 1: making that better rather than chasing the newest tennis fat.
Speaker 1: And then lastly, the picture of the moon landing is
Speaker 1: to remind people and this is really important and investing
Speaker 1: in everything in life. Just because you've never seen it
Speaker 1: before doesn't mean it can't happen, and that, Um, you
Speaker 1: need imagination and you need to be able to adapt
Speaker 1: to new realities all the time. Huh, really really fascinating stuff.
Speaker 1: Do you remember, I don't know, maybe it was like
Speaker 1: fifteen twenty years ago there was a David Foster Wallace
Speaker 1: article on Roger Federer. Um, I'm sure I can find
Speaker 1: it in in Google. But it was essentially Federer as
Speaker 1: like a near religious experience experience and how there has
Speaker 1: never been anybody like him. If I'm going to dig
Speaker 1: that up, because if you're I'm a tennis fan, I'm
Speaker 1: I'm late to the game. I started playing only over
Speaker 1: the past decade um, and have always been impressed just
Speaker 1: as a spectator of Federer. But if you read this
Speaker 1: um one piece, it's just a beautiful combination of writing
Speaker 1: and subject. Um, I think you'll find it, you know,
Speaker 1: absolutely intriguing. I will I will look that up. I
Speaker 1: think it was in the New York Times, and um,
Speaker 1: I will definitely look that up. I do think, you know,
Speaker 1: there's so many metaphors that can translate from sports to life.
Speaker 1: UM and UM. I who think that his discipline and
Speaker 1: the class and grace of his game teach us a
Speaker 1: lot about how we can conduct our lives. But also
Speaker 1: when you look at Nadal, there's lessons from how, um,
Speaker 1: how he conducts himselves and he has a particular humility.
Speaker 1: And UM, I just think that, as we said, the
Speaker 1: metaphor does translate really really interesting stuff. Well, well, thank
Speaker 1: you Jonathan for being so generous with your time. I
Speaker 1: really enjoyed this. We have been speaking with Jonathan Levine.
Speaker 1: He is the co managing partner of Being Capital. If
Speaker 1: you enjoy this conversation, be shure and check out any
Speaker 1: of our previous four hundred interviews. You can find those
Speaker 1: at your favorite podcast sources iTunes, Google, Bloomberg, Spotify, ETCETERA.
Speaker 1: Sign up from my daily reads at rialts dot com,
Speaker 1: follow me on Twitter at Rihalts. I would be remiss
Speaker 1: if I did not thank the crack team that helps
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Speaker 1: Mohammed Ramaui is my audio engineer. Paris Wald is my
Speaker 1: producer ATKO val Bron is our project manager. I'm Barry Ritolts.
Speaker 1: You're listening to Masters in Business on Bloomberg Radio.