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Speaker 1: You're listening to Bloomberg Business Week from Bloomberg Radio. I'm

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Speaker 1: Jason Kelly and I'm Carol Masser. Welcome to the Bloomberg

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Speaker 1: Business Week Extra. It's our weekly podcast bringing you an

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Speaker 1: in depth interview you will not hear anywhere else. And Jason,

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Speaker 1: you caught up with David Musser. I was so excited

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Speaker 1: to do this. I have to say, full disclosure, this

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Speaker 1: was an interview that I set in motion right as

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Speaker 1: this was getting underway. Mustafer is a guy I've gotten

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Speaker 1: to know over the past few years, one of the

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Speaker 1: world's leading but maybe lesser known private equity executives. And

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Speaker 1: one of the reasons I got to know him was

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Speaker 1: he's the lead director, was the chairman of Lulu Lemon,

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Speaker 1: an investment that his firm went into twice. He understands

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Speaker 1: the world so well. Check it out. Well, David, let

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Speaker 1: me start by asking you, first of all, how are

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Speaker 1: you like? What's it like for you personally, family wise,

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Speaker 1: just sort of as a human being here. Well, I mean, firstly,

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Speaker 1: that's the first question that we share with every body,

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Speaker 1: which is firstly, just how are you doing? Because this,

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Speaker 1: the physical element of this is unlike anything we've ever

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Speaker 1: dealt with before, and so thank you for asking. Personally,

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Speaker 1: I'm I'm doing well, and actually I'm I'm quarantined here

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Speaker 1: in outside of Boston. So we're in the suburbs in Boston,

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Speaker 1: and I've got uh four tunity twenty year old kids,

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Speaker 1: and three of them are actually here with us. So, um,

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Speaker 1: it's been in the face of some really difficult times,

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Speaker 1: some unique elements of being with your family. And how

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Speaker 1: how is it uh feeling and looking there on the

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Speaker 1: ground in Boston. I mean, I know you're outside the city,

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Speaker 1: but I know you're in touch with a lot of people.

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Speaker 1: You're very active from a civic perspective. You know. I

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Speaker 1: feel like different cities and different parts of the country

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Speaker 1: are at a different moment here, and you know, we're

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Speaker 1: recording on March thirty one, and it's a it's changing daily.

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Speaker 1: But what does it feel like in and around Boston

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Speaker 1: right now? Well, I mean, I think it's probably equivalent

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Speaker 1: to the major metro areas if you think about obviously

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Speaker 1: New York, which is so such the epicenter right now,

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Speaker 1: ben Boston is behalf of stuff behind and right there,

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Speaker 1: So there's a lot of fear and concern that I

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Speaker 1: think exists here in London, in Paris, certainly Madrid, and

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Speaker 1: you know, so many of our major metropolitan areas today

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Speaker 1: and Boston. You know, we have terrific medical care here

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Speaker 1: in the city. But I think everybody is certainly mindful

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Speaker 1: of the time and where we sit today at near

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Speaker 1: the you know, the peak of this crisis. And so

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Speaker 1: let's talk about the firm and your portfolio companies. And

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Speaker 1: I guess I'd start with the firm. How do you

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Speaker 1: everybody started learning these lessons? We are certainly day to day.

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Speaker 1: How do you run the firmative time like this remotely?

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Speaker 1: This is such a people intensive business in many ways

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Speaker 1: relationship intensive. Well, I mean, Jason, the one thing, you know,

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Speaker 1: we have offices in UH, Shanghai and Hong Kong, so

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Speaker 1: badly we we had a little preview of of how

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Speaker 1: we were going to need to manage remotely, and so

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Speaker 1: we were prepared and and UH set up for remote

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Speaker 1: access once, you know, we got to that point. And

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Speaker 1: I think one of the lessons we actually distributed this

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Speaker 1: the very first day of our um. You know that

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Speaker 1: when we went to remote work worldwide, we shared a

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Speaker 1: lessons learned memo that we had asked our team in

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Speaker 1: Asia to prepare, and it was both you know, pointers

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Speaker 1: serious points, light hearted elements, but the key theme that

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Speaker 1: we heard loud and clear was the need to over

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Speaker 1: communicate the need for video because as humans, we take

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Speaker 1: so much of our cues from facial expressions that you

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Speaker 1: actually can can't get over the phone like we're doing

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Speaker 1: right now. And so, you know, those were some elements

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Speaker 1: that we realized early on, we're going to be really

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Speaker 1: important to make sure that we were prepared to do that.

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Speaker 1: And so is that a situation, David, where I mean

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Speaker 1: you sort of have to invest in some infrastructure that

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Speaker 1: maybe you would normally have or does all of this

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Speaker 1: does all of that already exists for you? Well, I

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Speaker 1: think the you know, the critical infrastructure that allows you

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Speaker 1: to have access to all of your uh, you know,

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Speaker 1: your data as well as to have systems that you

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Speaker 1: can use remotely were the access points. But I think,

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Speaker 1: like everybody, you know, they're spending much more time in

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Speaker 1: the video conversations and so literally you know, just using

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Speaker 1: WebEx and Zoom and a host of other resources like

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Speaker 1: that have become the critical lengths. And we had a

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Speaker 1: really incredible Milestone last variety. So, um, like a lot

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Speaker 1: of groups, we held a global town hall. We did

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Speaker 1: it at ten in the morning, so that was you know,

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Speaker 1: near midnight in some places of the world, in you know,

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Speaker 1: in Europe, and we connected all fifteen of our offices

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Speaker 1: worldwide and all five hundred people and we actually put

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Speaker 1: all five hundred on a zoom and it was incredible,

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Speaker 1: you know, doing the whole uh sort of Brady Bunch

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Speaker 1: type of visual with your entire office infrastructure and it

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Speaker 1: actually worked. And so you know, we're really finding there's

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Speaker 1: just so many incredible ways to stay connected and that's

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Speaker 1: the most important thing today. Well, and I do wonder,

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Speaker 1: you know, as you're looking beyond the firm, I mean

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Speaker 1: you're obviously talking to a lot of different c e

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Speaker 1: o s, you know, CEOs that you have invested in

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Speaker 1: that you're you know, you own partner or most of

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Speaker 1: the company, um, but also presumably excuse me, perspective investments

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Speaker 1: as well. What are you hearing from c e o

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Speaker 1: s that you work with closely? Well, I'll tell you

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Speaker 1: I've been incredibly impressed with the CEOs that I've spoken to,

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Speaker 1: and I've spoken to a lot, so we have about

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Speaker 1: eighty portfolio companies globally at Advent and obviously, the you know,

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Speaker 1: the pressure and challenges that these these companies face is enormous.

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Speaker 1: And you know, to a man or woman that are

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Speaker 1: leading our portfolio companies, they have a clarity, focus and

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Speaker 1: a resolution that just gives them, gives everyone the competence

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Speaker 1: that we've got the tools, we're gonna get through this,

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Speaker 1: and you know, and really trying to think about how

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Speaker 1: do you think of creative ideas to help the company

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Speaker 1: in the interim as well as long term solutions that

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Speaker 1: are going to help the company be even stronger when

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Speaker 1: we get on the other side of this. So, you know,

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Speaker 1: c e O s are right in the midst of

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Speaker 1: their most challenging times, and so they're not spending a

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Speaker 1: lot of time philosophizing about broader issues. They're thinking about

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Speaker 1: the here and now. What can they do to protect

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Speaker 1: their people, what can they do to make sure that

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Speaker 1: we keep everyone safe, and what can they do to

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Speaker 1: stay connected with their customers even if they're forced to

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Speaker 1: disconnect in certain ways? And so financially, I know that

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Speaker 1: there's been a lot of talk among your peers in

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Speaker 1: the private equity space of you know, managers telling their

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Speaker 1: portfolio companies draw down your lines, you know, make sure

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Speaker 1: you have a financial cushion. How much of that did

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Speaker 1: you do or did you feel like you needed to

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Speaker 1: do well? I mean, I think that we recognized early

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Speaker 1: on this is so different than any other crisis we've faced.

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Speaker 1: And so we've had different times in all of our

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Speaker 1: business careers when we've seen a downturn, a recession, a

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Speaker 1: deep great recession. We've never had an interruption in global

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Speaker 1: uh commerce like we're experiencing today, and so I think

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Speaker 1: the need for liquidity we recognized that early on. We

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Speaker 1: didn't do it across the board, but went case by

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Speaker 1: case with our companies and tried to make sure that

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Speaker 1: we maximize the liquidity and the tools that they would

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Speaker 1: have as they went into this. So I feel like,

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Speaker 1: you know, we've done the best we can with our

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Speaker 1: teams and working closely with them to to to give

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Speaker 1: them the tools that um that they need today. So

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Speaker 1: I want to ask you a question that we're asking

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Speaker 1: all of the top leaders and investors that we're talking

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Speaker 1: to these days, which is what's the most important and

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Speaker 1: in your view, maybe underappreciated way that the world or

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Speaker 1: at least sort of the investment world in in your case,

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Speaker 1: will be different. On the other side of this, I mean, Jason,

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Speaker 1: it will be different. And you know, we we don't

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Speaker 1: know exactly. But I've spent a lot of my time

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Speaker 1: asking talking to so many different people because you know,

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Speaker 1: to all too often I think we rely on our

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Speaker 1: own personal experience. If you think to this crisis. We

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Speaker 1: knew we had this problem in Asia as late as

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Speaker 1: early February, and yet because we hadn't visualized this type

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Speaker 1: of global scenario in our lifetime, it was really hard

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Speaker 1: for so many people to visualize, and so trying to

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Speaker 1: think about how will things be different? I think, you know, inevitably, um,

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Speaker 1: you know, things will and so I think we're trying

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Speaker 1: to think about that very question. Uh, there's a prospect

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Speaker 1: that you know, it could be a long recovery and

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Speaker 1: you could see, you know, entirely different approaches that people

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Speaker 1: take given that they've they've spent more time working from home.

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Speaker 1: So you know, I don't think we have a hard

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Speaker 1: and fast idea to say you're going to see this change.

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Speaker 1: Partly what's going to happen is that it depends on

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Speaker 1: the severity of um you know, how we come out

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Speaker 1: of this this crisis period, and so I think making

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Speaker 1: sure that you're preparing for some pretty difficult times. But

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Speaker 1: then there's an optimist in all of us, and in

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Speaker 1: so many ways, I think you're always surprised by the

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Speaker 1: power and creativity of all of the people that you're

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Speaker 1: connected with globally. And I think that's another way that

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Speaker 1: we will be surprised that today we're at the peak

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Speaker 1: of the concern and and being so nervous about what

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Speaker 1: stands ahead of us. But what I think will also

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Speaker 1: surprise you is that people will come up with incredibly

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Speaker 1: powerful new ways that will shine optimism on you know,

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Speaker 1: the future going forward. Well, and to that end, I mean,

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Speaker 1: as a private equity investor, you are investing for the

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Speaker 1: long term. Your job, quite literally on on behalf of

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Speaker 1: your investors is to look around the corner. So through

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Speaker 1: you know, your existing portfolio companies, through your teams who

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Speaker 1: presumably are still working hard analyzing opportunities. Are there any

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Speaker 1: themes that are emerging at this point? Well, I mean

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Speaker 1: in terms of themes um you know, clearly the frontline

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Speaker 1: businesses are the ones that are facing the enormous pressure today.

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Speaker 1: So you know, literally with mandated shutdowns, and so our restaurants,

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Speaker 1: our hotels, our businesses that are basically consumer facing are

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Speaker 1: all thinking about how do they develop and fine tune

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Speaker 1: their business model so that they can lean into whether

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Speaker 1: if it's restaurants into curbside delivery take out, or if

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Speaker 1: there other consumer facing businesses thinking about ways that they

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Speaker 1: connect directly more specifically with their customer. And then longer term, inevitably,

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Speaker 1: I think to your previous question, you know, people will, uh,

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Speaker 1: there will be some changes. So there was a massive

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Speaker 1: wave towards you know, urbanization, and maybe you may see

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Speaker 1: you know, some some people say, uh, you know that

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Speaker 1: that distance that they had was something that they were

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Speaker 1: happy to live with a little bit more So, I

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Speaker 1: don't think we know all of the impacts that we're

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Speaker 1: going to see coming out of this. I think that clearly,

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Speaker 1: you know, we were at the peace of the economic cycle,

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Speaker 1: and this abrupt stop is something that is something we've

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Speaker 1: never experienced before. And so I think, you know, the

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Speaker 1: hope that and when I talked to so many of

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Speaker 1: our CEOs, their first concern is the safety and the

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Speaker 1: care of their employees and their broader teams and so

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Speaker 1: given you know, the pressure that everyone's under today. That's

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Speaker 1: a big part of what people are worried about, just

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Speaker 1: making sure that that we can do the best job

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Speaker 1: we can to help everyone. Yeah, I mean I do

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Speaker 1: wonder and this this sort of gets to some things

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Speaker 1: you and I have talked about over the years, David,

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Speaker 1: especially through your investment with Lulu Lemon, which I want

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Speaker 1: to talk about in a minute. But you know, at

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Speaker 1: times like this, it does feel like human beings change,

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Speaker 1: and human beings you know, can't help but change in

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Speaker 1: some ways. And I feel like you know you and

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Speaker 1: maybe it's because you and I are fellow Southerner as

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Speaker 1: maybe maybe than others. But you know, this notion of

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Speaker 1: our relationships with people and and sort of the changing

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Speaker 1: nature of them, but but also you know, the strong

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Speaker 1: reminder of our own humanity. I do wonder how that

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Speaker 1: works through you know, the investment world and public markets

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Speaker 1: and private markets and businesses to some extent. Well, I

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Speaker 1: mean I think you see it going on right now.

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Speaker 1: So you know, we put together, we uh a little

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Speaker 1: our c c o s because each of our companies

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Speaker 1: are taking on initiatives and they aren't doing it for

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Speaker 1: any reason other than it's just the right thing to

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Speaker 1: do to try to help people anyway they can. And

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Speaker 1: so almost all of our companies are taking on public

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Speaker 1: health initiatives. Of create are shifting production if they can

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Speaker 1: to create UM protective gear. They're shifting to alleviate pressure

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Speaker 1: in hospitals by creating other forms, the other avenues to

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Speaker 1: I think Bloomberg, you guys had an article yesterday where

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Speaker 1: where we're actually taking our hotels that we manage and

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Speaker 1: working with post responders and healthcare providers to provide housing

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Speaker 1: healthy while they're doing the front line work that's so

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Speaker 1: critical right this minute. And so you also, I mean

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Speaker 1: this is also a time for philanthropy in in many ways,

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Speaker 1: and I know that you and the partners have come

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Speaker 1: together to fund some of that. You and I side

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Speaker 1: note have worked together on our Brackets for a Cause

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Speaker 1: charity effort at Bloomberg which it took a pivot thanks

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Speaker 1: to you and and others, you know, to sort of

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Speaker 1: direct some of the money that normally folks would be

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Speaker 1: betting uh gamely on the n C Double A tournament.

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Speaker 1: But but you did something of an even larger magnitude

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Speaker 1: with with the firm. Tell me about that. I mean, Jason,

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Speaker 1: I think that that um. You know, for us, it

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Speaker 1: was just a question of what can we do right

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Speaker 1: now to try to help in any way. And so

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Speaker 1: in the scheme of the problem worldwide, you know, the

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Speaker 1: need is ammens. But we had Advent came together as

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Speaker 1: the partners individually to begin a fund that hopefully will

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Speaker 1: be matched or uh multiplied as we begin to distribute

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Speaker 1: these funds. And we're channeling this effort towards uh, you know,

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Speaker 1: today's equivalent of the first responders, people that are in

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Speaker 1: the healthcare profession and people that are in frontline positions

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Speaker 1: and really trying to support them their families, UM with

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Speaker 1: any way we can. And so this is something we created,

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Speaker 1: uh and we're the Advent Relief Fund. We funded it

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Speaker 1: with twenty million dollars and we're gonna work to get

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Speaker 1: this out as soon as we possibly can to as

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Speaker 1: many people as we can to try to help them

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Speaker 1: through this time period. It includes you know, our portfolio

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Speaker 1: companies as well and some of their employees. But this

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Speaker 1: is a broader effort on behalf of you know, Advent

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Speaker 1: to just try to to help anyway that we that

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Speaker 1: we can. Quite frankly interesting. Well, tell me a little

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Speaker 1: bit about Lulu Lemon. You're the executive chairman there. You

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Speaker 1: understand that business, uh innately and for those of you

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Speaker 1: who need more information about this is a great story

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Speaker 1: I think that we did and then interview that I

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Speaker 1: did with you, uh and Calvin McDonald back in December

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Speaker 1: feels like a hundred years ago. We were sitting in

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Speaker 1: a store together. Those stories now all closed for at

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Speaker 1: least a few more days or weeks. Tell me the

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Speaker 1: view of this through Lulu. Well, Um, at first I

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Speaker 1: want to correct you. I'm now lead director, so incredible

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Speaker 1: chairman Glenn Murphy. But um, I'm still you know, very active.

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Speaker 1: That's right. I knew that. I apologize. Well, we'll clean

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Speaker 1: that up. And in terms of Lulu, Um, you know,

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Speaker 1: Lululemon is an incredible business and we're really really proud

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Speaker 1: of our involvement. You know, in particular that business, um,

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Speaker 1: you know remains incredibly strong. We invested in that business

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Speaker 1: near over five years ago and today it's still debt

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Speaker 1: free with nearly a billion dollars in cash, and so

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Speaker 1: they're able to do a lot of things that you know,

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Speaker 1: I think again, we're really proud of the leadership that

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Speaker 1: they're able to take. So they've committed to um, you know,

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Speaker 1: covering all of their store employees for as as long

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Speaker 1: as they can, and um they're also doing some amazing

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Speaker 1: things to support their ambassadors. So this is these are

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Speaker 1: people that are largely part of the gig economy and

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Speaker 1: so again they're part of the Lulu world. They are

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Speaker 1: Lulu is stepping up in other ways and you'll hear

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Speaker 1: more from Calvin and the team directly very soon. But

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Speaker 1: they've got a host of initiatives that they're unleashing to

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Speaker 1: try to be a supportive citizen. In terms of the

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Speaker 1: business itself, the stores are closed and so um you

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Speaker 1: know are the stores that are ironically open at Lulu

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Speaker 1: or in China. So and our worldwide stores are are

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Speaker 1: closed otherwise and so clearly the businesses is shifted to

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Speaker 1: online and uh E com And so you know, I

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Speaker 1: think that that again Lulu is in a very fortunate position,

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Speaker 1: given that people are thinking more about their own personal

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Speaker 1: health and wellness in In any event, you know, we're

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Speaker 1: confident that that that the company's very well positioned to

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Speaker 1: continue to do well when we come out of this well.

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Speaker 1: I was thinking as we were preparing for this interview,

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Speaker 1: I have gone full ath leisure in my my current

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Speaker 1: work arrangement. I don't think I put on a colored shirt.

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Speaker 1: I know you make colored shirts too, but I don't

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Speaker 1: think I put on a colored shirt. Uh. And in

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Speaker 1: the last three weeks, So I mean it is to

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Speaker 1: be slightly more serious. I mean, I know that we

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Speaker 1: talked about this late last year, this notion that the

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Speaker 1: e commerce side was something you guys invested heavily in

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Speaker 1: over the past few years, right, I mean that was

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Speaker 1: that was almost a redo in many ways. Well, it

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Speaker 1: was part of a broader effort to really lean in,

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Speaker 1: uh from a data and analytics and technology standpoint, and

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Speaker 1: so Lulu had an incredible connection with their customers, but

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Speaker 1: they really just hadn't invested heavily to be able to

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Speaker 1: to to to work directly in the way that they

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Speaker 1: needed to. And so we invested significant dollars in our

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Speaker 1: eCOM capability so that um, the experience was better for customers,

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Speaker 1: the sortment, the ability to create ideas and offer product.

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Speaker 1: But you know, today I think that you know, everybody

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Speaker 1: is clearly just trying to think about, you know, how

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Speaker 1: do you stay healthy and get on the other side

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Speaker 1: of this, and so, um, you know, we're certainly there

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Speaker 1: for for people today and uh, you know, please that

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Speaker 1: we made some of those investments in the past, but

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Speaker 1: you know, I think that that we see so much

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Speaker 1: more that we can do, uh to work directly with customers,

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Speaker 1: and you know, you're seeing more of what we're offering.

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Speaker 1: I think we're offering a host of digital classes and

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Speaker 1: other things too, you know, people that are that are

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Speaker 1: connected with the company, so that you know, again we

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Speaker 1: can just try to connect directly and help out, uh,

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Speaker 1: you know during this this incredible time period and retail

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Speaker 1: clothes for this foreseeable future. What's the update there? Well,

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Speaker 1: I mean I think that that um, you know, the

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Speaker 1: need to to really create social distancing and be as

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Speaker 1: firm as we can is really paramount to get to

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Speaker 1: the other side of this. So short of a therapeutic

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Speaker 1: or something that really gets released, we've got to make

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Speaker 1: sure that you know, the country um stays healthy and

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Speaker 1: you've seen uh, you know the impact of this terrible

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Speaker 1: virus isn't uniform. And so seeing the incredible um, you know,

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Speaker 1: pain and suffering that its inflicted on places like Spain

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Speaker 1: and Italy or certainly something that I think gives everyone

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Speaker 1: pause to say, we really need to make sure that

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Speaker 1: we do everything we can as a community to stop that.

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Speaker 1: And so you know, the commerce and business is a secondary,

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Speaker 1: you know, affair until we get on the other side

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Speaker 1: of this pandemic. Alright, So, uh, as we wrap up,

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Speaker 1: David musta for any any predictions from an investment perspective,

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Speaker 1: you know, how do you look at this through that

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Speaker 1: lens having invested through recessions, through great recessions, through downturns,

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Speaker 1: through uh, you know, international crises, what does this look

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Speaker 1: like on the other side for an investor? Well, I

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Speaker 1: think what you're you're seeing the impacts all ready. So

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Speaker 1: businesses that were weak are certainly going to suffer tremendously

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Speaker 1: in this. And so what I think you're going to

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Speaker 1: see is strong businesses get even stronger. And you know,

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Speaker 1: those are part of the type of investment opportunities that

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Speaker 1: we're seeing a lot more today. So certainly they're going

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Speaker 1: to be restructuring related opportunities where their businesses that are suffering,

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Speaker 1: and you know, maybe you're looking at an opportunity to

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Speaker 1: buy the debt at a discount. I think what we're

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Speaker 1: thinking about an advent is more of the opportunity to

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Speaker 1: invest in great businesses and to really try to help them,

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Speaker 1: like we did with Lulu Limit and so you know,

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Speaker 1: that's really I think where we've excelled. We've done probably

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Speaker 1: a dozen carve out deals where we bought incredible divisions,

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Speaker 1: and I know that that you guys saw that we're

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Speaker 1: buying Dissan Craft elevators, which which we announced just as

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Speaker 1: this pandemic is really beginning to take hold. And so

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Speaker 1: leaning in to buy some incredible businesses and really investing

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Speaker 1: heavily to help them be even stronger and more impactful

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Speaker 1: on the other side of the crisis is the way

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Speaker 1: that I think, you know, we'll see and when we

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Speaker 1: look back at a time period if you if you

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Speaker 1: think back to the oh nine ten crisis, uh during

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Speaker 1: the last recession, we were one of the most active

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Speaker 1: investors in the world for that two year period in

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Speaker 1: private Equity and we bought some amazing companies like TransUnion, World,

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Speaker 1: pay Vantive and um. You know, I think that given

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Speaker 1: the connection and the stewardship that hopefully, you know, we're

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Speaker 1: able to bring, that that's gonna continue to be an

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Speaker 1: opportunity for us. And as we you know, get into, uh,

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Speaker 1: the other help parts of this cycle. And that was

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Speaker 1: David Mustfer. He's the chairman, managing partner of Advent International,

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Speaker 1: also the lead director at Lulu Lemon and a fun,

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Speaker 1: wide ranging conversation. I have to say, Carol, here's a

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Speaker 1: guy who is running a global firm making investments, but

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Speaker 1: also keeping an eye on existing investments and figuring out

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Speaker 1: how to run a bunch of companies in an unprecedented time.

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Speaker 1: You've been listening to Bloomberg Business Week Extra, and be

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Speaker 1: sure to tune into Bloomberg Business Week Radio Live Monday

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Speaker 1: through Friday at two pm Wall Street Time on Bloomberg Radio.

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Speaker 1: I'm Jason Kelly and I'm Carol Masser. This is Bloomberg