WEBVTT - Peter Orszag 0:00:02.960 --> 0:00:05.080 One of the most interesting and smartest people running an 0:00:05.120 --> 0:00:08.119 investment bank today is Peter or Zag. He previously serves 0:00:08.119 --> 0:00:10.399 as head of the Congressional Budget Office, the office in 0:00:10.440 --> 0:00:12.920 a Management Budget, and has a PhD in economics from 0:00:12.920 --> 0:00:15.280 the London School of Economics. I sat down with him 0:00:15.320 --> 0:00:18.239 his offices at Lazard Freyer to talk about his career 0:00:18.480 --> 0:00:22.200 and also the future of investment banking as Lizard practices it. So, 0:00:22.520 --> 0:00:25.960 you have been in the financial service world as an 0:00:25.960 --> 0:00:28.560 advisor for quite some time, but you also served in government. 0:00:28.600 --> 0:00:31.760 We'll talk about both aspects of your career. But right now, 0:00:31.840 --> 0:00:33.960 one of the things that has held back and A 0:00:34.560 --> 0:00:36.800 people say is the regulatory environment. 0:00:36.880 --> 0:00:37.640 In Washington. 0:00:37.880 --> 0:00:40.440 There hasn't been as much M and A activity as 0:00:40.479 --> 0:00:42.440 some people in the M and A advisory business like 0:00:42.560 --> 0:00:45.440 Lazard would like. Do you think it's the regulatory environment 0:00:45.520 --> 0:00:47.520 where you think it's high interest rates? What has kept 0:00:47.600 --> 0:00:49.519 M and A from going forward at the pace that 0:00:49.600 --> 0:00:51.560 maybe some people think it should be going forward at. 0:00:51.680 --> 0:00:55.760 Well, let's start with what's driving it, sort of the tailwind, 0:00:55.880 --> 0:01:02.080 So the biotech revolution, ongoing technology. I mean, we're seeing 0:01:02.280 --> 0:01:06.280 a revolution in generative AI, de risking and changes in 0:01:06.440 --> 0:01:09.000 supply chains and the energy transition. 0:01:09.040 --> 0:01:10.640 I mean, there are some big. 0:01:10.400 --> 0:01:14.920 Building blocks that propel deal activity forward. And then on 0:01:14.959 --> 0:01:17.840 the headwinds, I think there have been a few. The 0:01:17.920 --> 0:01:20.640 rate at which interest rates went up meant that there 0:01:20.760 --> 0:01:24.319 was a disconnect between buyers and sellers on the value 0:01:24.319 --> 0:01:28.800 of the assets. It also meant that financing was challenging, 0:01:28.920 --> 0:01:33.039 the financing markets were a little bit more liquid. And 0:01:33.080 --> 0:01:36.760 then yes, regulatory, but all three of those headwinds have 0:01:36.880 --> 0:01:40.280 been abating. First as interest rates have topped out and 0:01:40.440 --> 0:01:43.160 now we're debating how quickly they'll come down. And then 0:01:43.200 --> 0:01:47.480 secondly on the regulatory front, the government has lost some 0:01:47.600 --> 0:01:50.560 important cases in court. And what that has meant, in 0:01:50.760 --> 0:01:54.040 turn is that many more boards and C suites are 0:01:54.080 --> 0:01:56.000 willing to say, you know what, we'll see you in court, 0:01:56.040 --> 0:01:57.440 will litigate for those. 0:01:57.360 --> 0:01:59.280 People that are not really involved in the M and 0:01:59.320 --> 0:02:01.560 A world of the financial service world. They may not 0:02:01.720 --> 0:02:05.640 know about Lazard. Tell us about the brothers that started Lazard. 0:02:05.920 --> 0:02:09.560 How did they convert themselves from dry goods sellers to 0:02:09.840 --> 0:02:10.919 financial experts. 0:02:11.680 --> 0:02:14.040 So the story of Lazard. We're one hundred and seventy 0:02:14.040 --> 0:02:17.680 six years old. We began in New Orleans three French 0:02:17.720 --> 0:02:20.639 brothers start a dry goods store like many other firms, 0:02:20.639 --> 0:02:22.840 and this is documented in a great book called The 0:02:22.880 --> 0:02:26.800 Money Kings. So the Seligman's, the Schieffs and others follow 0:02:26.880 --> 0:02:30.560 the gold rush out to California, realized that lending gold 0:02:30.600 --> 0:02:33.560 to your customers, or shipping the gold back to their 0:02:33.560 --> 0:02:37.760 home countries and then lending on credit to your customers 0:02:37.840 --> 0:02:41.200 was more attractive than selling the suits and the other 0:02:41.280 --> 0:02:45.120 dry goods moved back to New York to set up 0:02:45.120 --> 0:02:47.800 a bank, and then had correspondent banks in our case, 0:02:48.120 --> 0:02:51.040 in Paris and London, and the rest is history. So 0:02:51.240 --> 0:02:53.000 it is, And I would say out of all those 0:02:53.000 --> 0:02:56.520 firms that started that way were the only ones still standing. 0:02:56.919 --> 0:03:00.760 Lazard today manages money. You have asset management, and you 0:03:00.800 --> 0:03:02.400 have an M and a advisory business. 0:03:02.480 --> 0:03:02.959 Is that right? 0:03:03.200 --> 0:03:03.480 Yes? 0:03:03.919 --> 0:03:06.560 And you're a leader in M and a advisory. Tell me, 0:03:06.600 --> 0:03:09.760 when CEOs want to do deals, why do they need 0:03:09.760 --> 0:03:12.880 an advisor? Because if they're smart CEOs, can't they get 0:03:12.919 --> 0:03:15.200 together without an advisor? What does an advisor really do 0:03:15.560 --> 0:03:18.520 for smart CEOs when they want to do an acquisition 0:03:18.600 --> 0:03:19.120 or merger? 0:03:19.760 --> 0:03:21.359 Well, I think there are several things. 0:03:21.440 --> 0:03:25.320 I mean, Blizard bankers are known as bankers with convictions, 0:03:25.360 --> 0:03:30.040 so a lot of content, a lot of backbone in 0:03:30.120 --> 0:03:32.480 terms of saying no, I don't actually think that's a 0:03:32.480 --> 0:03:34.679 good idea. So you know you've been in many of 0:03:34.760 --> 0:03:37.880 these positions. It is very helpful to have well informed, 0:03:37.920 --> 0:03:42.720 smart people who are willing to push back suggest this 0:03:42.840 --> 0:03:45.440 versus that, etc. I think the role of an advisor 0:03:45.520 --> 0:03:48.480 is not just the narrow you know, what's this thing worth? 0:03:48.560 --> 0:03:50.760 But do you really want to do this? What's the 0:03:50.800 --> 0:03:54.600 regulatory implications? How is this going to play from an 0:03:54.600 --> 0:03:59.400 investor relations and a PR perspective, It's the multidimensionality and 0:03:59.520 --> 0:04:04.280 having a thought partner or someone who's counsel you. 0:04:05.800 --> 0:04:07.200 Could benefit from. That's one part. 0:04:07.320 --> 0:04:10.600 The second part is in many negotiations, it's helpful to 0:04:10.720 --> 0:04:16.040 have a intermediary. It's why often you don't want to 0:04:16.040 --> 0:04:19.080 be your own lawyer. And so I think that's the 0:04:19.120 --> 0:04:21.560 second part of the advisory role. 0:04:21.680 --> 0:04:24.240 So when you call a CEO of a fortune fifty company, 0:04:24.240 --> 0:04:26.119 I assume you can get a meeting with that person 0:04:26.279 --> 0:04:28.520 not that hard. So do you always have an idea 0:04:28.560 --> 0:04:30.000 of saying this is a good thing that you might 0:04:30.080 --> 0:04:33.640 consider doing, or they come to ideas to you, they 0:04:33.640 --> 0:04:34.240 bring them to you. 0:04:35.160 --> 0:04:36.160 It works both ways. 0:04:36.160 --> 0:04:38.800 But what I like to do with CEOs is to 0:04:38.920 --> 0:04:42.200 have a broader discussion both about the world and then 0:04:42.240 --> 0:04:48.440 about what their objectives are. And we present ideas and 0:04:48.480 --> 0:04:50.520 then sometimes people will say, I'm thinking about this, could 0:04:50.560 --> 0:04:51.680 you work on this with us? 0:04:51.760 --> 0:04:55.400 Now, the m and a advisory business, you competing against 0:04:55.440 --> 0:04:59.000 people that have or organizations have large balance sheets. So 0:04:59.040 --> 0:05:00.880 if somebody wants to do it deal, they might say 0:05:00.880 --> 0:05:03.920 to JP Morgan, can you be my advisor? But can 0:05:03.960 --> 0:05:05.960 you also lend me money to do the deal? And 0:05:06.000 --> 0:05:08.480 the same is true with Morgan Stanley and Goldman Sacks. 0:05:08.800 --> 0:05:10.880 You don't use your balance sheet for that purpose. You 0:05:10.960 --> 0:05:13.480 just use your brain power to kind of say it's 0:05:13.480 --> 0:05:15.039 a good deal or not a good deal. Is that 0:05:15.080 --> 0:05:18.040 a competitive disadvantage or a competitive advantage? 0:05:18.200 --> 0:05:20.800 I think it's well, let the market speak. What's happened 0:05:20.839 --> 0:05:25.000 over the past fifteen or twenty years is massive share 0:05:25.680 --> 0:05:29.120 that went to independent advisory firms like ours that don't 0:05:29.200 --> 0:05:33.479 use their balance sheets to provide the advice, that only 0:05:33.480 --> 0:05:35.680 provide the advice and don't use their balance sheets. And 0:05:35.720 --> 0:05:38.839 I think to win in that kind of environment, you 0:05:38.880 --> 0:05:43.560 need to have differentiated content, great ideas, insight into the players, 0:05:44.200 --> 0:05:46.880 an ability to read between the lines on the regulatory 0:05:46.920 --> 0:05:52.200 and other developments, and also deep relationships. You need to 0:05:52.240 --> 0:05:54.200 be both trusted and discreet. 0:05:54.600 --> 0:05:58.120 So you became the CEO in October of twenty three, 0:05:58.200 --> 0:06:00.160 and I think shortly there after you said you one 0:06:00.160 --> 0:06:01.080 of the double revenues. 0:06:01.160 --> 0:06:03.200 Is that I actually said that right before I took 0:06:03.240 --> 0:06:03.839 over it before. 0:06:03.920 --> 0:06:07.920 Okay, so you want to double revenues by twenty thirty, right, 0:06:08.120 --> 0:06:10.000 So is that realistic? Are you on the path to 0:06:10.000 --> 0:06:10.280 do that? 0:06:10.320 --> 0:06:12.760 We're a head of schedule on accomplishing that, and I 0:06:12.760 --> 0:06:17.279 think I think that really reflects the power of Lizard's 0:06:18.360 --> 0:06:22.239 standing in the world, our brand, and what we needed 0:06:22.240 --> 0:06:28.120 to do is just up our ambition and increase from 0:06:28.120 --> 0:06:30.600 a cultural perspective, our focus on working together. 0:06:31.480 --> 0:06:33.120 And we're doing it. 0:06:33.240 --> 0:06:35.159 And so you're seeing that in the results I mentioned 0:06:35.200 --> 0:06:38.080 a record first half. We're really excited about the people 0:06:38.080 --> 0:06:40.400 that we're bringing on, and we're really excited about most 0:06:40.440 --> 0:06:43.400 importantly about what we're able to do on behalf of 0:06:43.400 --> 0:06:43.919 our clients. 0:06:44.000 --> 0:06:46.240 Now, you have an unit here, I guess it's called 0:06:46.279 --> 0:06:50.320 a geopolitical Advisory unit. Do clients pay for that, and 0:06:50.360 --> 0:06:52.359 are they happy to get that and pay for it 0:06:52.400 --> 0:06:54.200 or you kind of give it as a service. And 0:06:54.279 --> 0:06:56.839 do people really care about geopolitical events when they're doing it? 0:06:56.960 --> 0:06:59.839 M and A deals Absolutely, so, I mean in today's world. 0:07:00.000 --> 0:07:00.880 So let's stop back. 0:07:00.960 --> 0:07:03.400 What's happened over the past three or four decades is 0:07:03.440 --> 0:07:06.400 we've moved from an environment in which the oil and 0:07:06.440 --> 0:07:09.320 gas companies that always operated globally and needed to have 0:07:09.320 --> 0:07:12.760 geopolitical insight and maybe a few others had to take 0:07:12.800 --> 0:07:17.160 geopolitical considerations into account to a situation today in which 0:07:17.760 --> 0:07:21.800 pretty much every important business decision that is made has 0:07:21.880 --> 0:07:25.320 to take geopolitical issues into account or else you're going 0:07:25.360 --> 0:07:28.840 to go You're going to go wrong. It's a fundamental 0:07:29.480 --> 0:07:34.480 business need. And Lazard has always been known as a 0:07:34.560 --> 0:07:38.720 banker plus so people that had the ability to provide 0:07:38.760 --> 0:07:41.760 insight into not only what the other CEO was thinking, 0:07:41.800 --> 0:07:44.200 but what the prime minister was thinking or the president. 0:07:44.280 --> 0:07:47.720 So these are people who cross those boundaries between business 0:07:47.720 --> 0:07:51.280 and government. So Lazard was always known as having that 0:07:51.880 --> 0:07:55.000 skill set, and we thought we could professionalize it by 0:07:55.000 --> 0:07:58.680 bringing in people who have done that for a living 0:07:58.880 --> 0:08:02.320 in different settings. So The short answer is it's very 0:08:02.400 --> 0:08:05.320 much part of Blizard's DNA. We now have a unit 0:08:05.360 --> 0:08:09.400 that's dedicated to it in addition to just the bankers, 0:08:09.480 --> 0:08:14.000 and it is a revenue generating activity, but it's also 0:08:14.040 --> 0:08:17.400 something that is a great entree into boardrooms and c 0:08:17.520 --> 0:08:21.080 suites for our bankers also. So this has been a 0:08:21.240 --> 0:08:22.200 resounding success. 0:08:22.280 --> 0:08:25.000 What is the biggest geopolitical risk that you think now 0:08:25.080 --> 0:08:27.240 faces the world in certainly the United States. 0:08:27.600 --> 0:08:29.679 I think the fact of the matter is the biggest 0:08:29.760 --> 0:08:31.880 risk is that the world is changing and we don't 0:08:31.960 --> 0:08:35.720 yet have an intellectual framework that matches this new reality. 0:08:35.800 --> 0:08:41.640 So we have a splintering that's occurring between the major 0:08:41.640 --> 0:08:44.080 blocks of the US and Europe on the one hand, China, 0:08:44.160 --> 0:08:47.440 Russia and others on the other, and then some countries 0:08:47.480 --> 0:08:49.480 that are in between the two, and we have not 0:08:49.640 --> 0:08:55.040 adapted to that new world quite yet. Beyond that, there 0:08:55.080 --> 0:08:58.160 are flashpoints. There are two hot wars going on in 0:08:58.160 --> 0:09:01.360 Europe and the Middle East with uncle your trajectories on both. 0:09:01.679 --> 0:09:04.480 So there is obviously elevated risk even before you get 0:09:04.520 --> 0:09:07.440 to the traditional well, China invade Taiwan and other things 0:09:07.440 --> 0:09:07.959 that people. 0:09:07.840 --> 0:09:08.559 Often talk about. 0:09:08.640 --> 0:09:12.480 Many people who are running investment banks, come from Wall Street. 0:09:12.559 --> 0:09:15.440 Their whole career, you've been in government. Is there an 0:09:15.440 --> 0:09:18.679 advantage or a disadvantage in having served in government when 0:09:18.679 --> 0:09:20.000 you're doing the job you currently have. 0:09:20.640 --> 0:09:23.680 I view it as a significant advantage, and the reason 0:09:23.800 --> 0:09:29.400 is that it brings a perspective having served in government 0:09:29.480 --> 0:09:31.720 that is useful in lots of different settings. And it's 0:09:31.960 --> 0:09:37.400 that multidimensionality, the ability to stitch together pieces from different 0:09:37.400 --> 0:09:41.280 worlds that I think is very helpful. The other advantage 0:09:41.320 --> 0:09:44.760 that it gives, I believe, is that I have a 0:09:44.840 --> 0:09:49.600 lot of respect and admiration for our senior bankers at Lazard, 0:09:49.720 --> 0:09:52.240 and so I view it as my job to do 0:09:53.320 --> 0:09:55.480 part of the work, but then to hand things off 0:09:55.760 --> 0:09:57.840 to our senior bankers. And I think people who have 0:09:57.880 --> 0:10:02.000 spent their entire careers doing one thing, the natural inclination 0:10:02.160 --> 0:10:05.120 is to then go do it yourself, and then the 0:10:05.160 --> 0:10:09.800 problem becomes that you're not providing enough upward movement and 0:10:10.040 --> 0:10:13.760 ability to grow to the senior people. So this is 0:10:13.800 --> 0:10:16.480 a fantastic job, but I think, I hope and I 0:10:16.559 --> 0:10:18.880 believe that I'm better at it because of what I've 0:10:18.920 --> 0:10:19.520 done before. 0:10:19.880 --> 0:10:23.160 Let's talk about your own background as opposed to Azard's background. 0:10:23.280 --> 0:10:24.240 So where were you born. 0:10:24.640 --> 0:10:27.320 I was born in Lexington, Massachusetts, outside of the Boss. 0:10:27.520 --> 0:10:28.480 What did your parents do? 0:10:28.880 --> 0:10:31.880 My dad was a MIT math professor at the time, 0:10:31.960 --> 0:10:36.640 and he also ran a consulting firm that my mother managed. 0:10:37.160 --> 0:10:40.080 So if your father is teaching math at MIT, I 0:10:40.160 --> 0:10:42.640 presume you're pretty good at math and. 0:10:43.120 --> 0:10:46.040 Not by his standards. Oh no, but I was. 0:10:46.400 --> 0:10:46.800 You were good? 0:10:46.880 --> 0:10:47.440 I was. Okay. 0:10:47.640 --> 0:10:49.319 Did you get eight hundred year math SAT? 0:10:49.640 --> 0:10:51.319 I did very well on my math sat? 0:10:51.440 --> 0:10:53.720 Yes, right, So you chose not to go to MIT 0:10:54.120 --> 0:10:56.800 or another school up there called Harvard, but you went 0:10:56.840 --> 0:10:59.160 to Princeton I did, and you got a PhD at 0:10:59.160 --> 0:11:01.440 the London School of that's correct. Yeah, okay, So when 0:11:01.440 --> 0:11:03.200 you got your PhD, what did you decide to do 0:11:03.240 --> 0:11:05.920 with the PhD in economics? You want to go teach her? 0:11:06.040 --> 0:11:07.160 What did you do when you came back to the 0:11:07.240 --> 0:11:08.160 States with your PhD? 0:11:08.240 --> 0:11:11.520 Well, actually, I had in the meanwhile, in the middle 0:11:11.559 --> 0:11:14.120 of graduate school, and I think it reflects the fact 0:11:14.160 --> 0:11:17.079 that I clearly did not yearn to be a pure academic. 0:11:17.679 --> 0:11:20.079 I had spent a year, not quite a year, but 0:11:20.120 --> 0:11:22.960 a year in Moscow with a team of advisors to 0:11:23.000 --> 0:11:27.120 the government there. And then when President Clinton was elected, 0:11:27.160 --> 0:11:30.200 one of my undergraduate professors, Alan Blinder, called me up 0:11:30.240 --> 0:11:30.920 and said. 0:11:30.960 --> 0:11:32.559 Isn't it kind of cold in Moscow? 0:11:33.000 --> 0:11:35.479 Would you like to come join the new Clinton administration 0:11:35.760 --> 0:11:37.360 at the Council of Economic Advisors? 0:11:37.400 --> 0:11:37.839 Which I did? 0:11:38.040 --> 0:11:39.760 And how long were you in the Clinton administration? 0:11:39.920 --> 0:11:42.360 I did a couple stints, so I did a couple 0:11:42.360 --> 0:11:44.760 of years. I went back and quickly finished my PhD. 0:11:44.840 --> 0:11:47.040 I went back in for about a year or two, 0:11:47.080 --> 0:11:49.880 So it must have been accumulatively maybe four or five years. 0:11:50.240 --> 0:11:52.760 In the Clinton administration. You eventually left and you went 0:11:52.800 --> 0:11:54.200 to Brookings? Is that true? 0:11:55.160 --> 0:11:58.880 So I left the Clinton administration, I then have the 0:11:58.920 --> 0:12:02.959 shortest tenure of anyone who voluntarily left McKenzie. I went 0:12:02.960 --> 0:12:06.480 to McKinsey in San Francisco. After three weeks I decided 0:12:06.520 --> 0:12:08.640 that was not for me. My younger brother and I 0:12:08.720 --> 0:12:13.800 then founded an economic consulting firm, which subsequently grew. I 0:12:13.800 --> 0:12:17.079 taught at Berkeley. I then moved to Brookings in two 0:12:17.120 --> 0:12:17.640 thousand and one. 0:12:17.920 --> 0:12:21.760 So eventually the Congressional Budget Office people called you and said, 0:12:21.760 --> 0:12:24.040 can you come up and run the Congressional Budget Office? 0:12:24.160 --> 0:12:26.240 Right the Congressional Budget Office was set up under the 0:12:26.280 --> 0:12:29.600 Budget Act of nineteen seventy four. Correct, since the Budget 0:12:29.600 --> 0:12:32.800 Act of nineteen seventy four, deficits have been going this way. 0:12:33.160 --> 0:12:37.000 Budgets had been going with not balanced. Was the Budget 0:12:37.040 --> 0:12:39.160 Act a good idea because we were doing pretty well 0:12:39.160 --> 0:12:39.640 without it? 0:12:40.360 --> 0:12:43.600 Well, first I didn't deficits having quick They went up, down, 0:12:43.679 --> 0:12:46.640 and now they're backup. But I think what the Budget 0:12:46.679 --> 0:12:50.760 Act did is it gave Congress better tools. But ultimately, 0:12:50.800 --> 0:12:53.240 these decisions are not going to be up to an 0:12:53.280 --> 0:12:55.040 agency like the Congression Budget Office. 0:12:55.760 --> 0:12:58.800 They're up to our elected representatives. 0:12:59.520 --> 0:13:04.200 Soew the Congression Budget Office as empowering the legislature to 0:13:04.240 --> 0:13:07.480 make decisions, but those decisions are not you know, they're 0:13:07.559 --> 0:13:08.160 driven by. 0:13:08.040 --> 0:13:08.880 Other factors too. 0:13:09.120 --> 0:13:11.160 Okay, So you're doing that for a number of years, 0:13:11.160 --> 0:13:14.080 and then President Obama is elected and he asked you 0:13:14.120 --> 0:13:16.440 to be the head of the Office of Management Budget. So, 0:13:16.520 --> 0:13:18.480 for those who aren't familiar with that, what does that 0:13:18.559 --> 0:13:19.040 office do? 0:13:19.360 --> 0:13:20.480 So that's slightly different. 0:13:20.520 --> 0:13:23.400 It sounds similar to the Congression Budget Office, but think 0:13:23.400 --> 0:13:26.520 of the Congression Budget Office as an independent entity who's 0:13:27.200 --> 0:13:30.160 really analytical. In his job it is to evaluate the 0:13:30.200 --> 0:13:33.760 costs and implications of legislation and then to testify on 0:13:33.840 --> 0:13:37.320 those to Congress. The Office Management and Budget does some 0:13:37.480 --> 0:13:41.079 of that, but it also implements the president's policies. It's 0:13:42.040 --> 0:13:44.880 think of it as like a COO type role for 0:13:45.040 --> 0:13:48.280 a lot of the government. So the role is complex 0:13:48.320 --> 0:13:53.200 because you're, remember the of the Cabinet, but also a 0:13:53.240 --> 0:13:57.160 member of the White House staff effectively, and the organization 0:13:57.280 --> 0:14:01.720 is partly analytical but also quite operation. So it's an 0:14:01.800 --> 0:14:03.319 unusual organization. 0:14:03.520 --> 0:14:06.000 When I worked in the Carter administration, there were two 0:14:06.040 --> 0:14:08.760 budget directors. One the first one was Burt Lance, and 0:14:08.800 --> 0:14:11.280 he was a very good friend of Jimmy Carter's, and 0:14:11.320 --> 0:14:14.080 sometimes he would sit at the cabinet room where we're 0:14:14.080 --> 0:14:16.720 going through budget appeals and he would say, mister President, 0:14:17.040 --> 0:14:19.160 that's Omb's position. Let me tell you my view. 0:14:19.960 --> 0:14:20.600 I never did that. 0:14:20.680 --> 0:14:23.720 You never did that. Now, so before the administration was over, 0:14:23.800 --> 0:14:26.560 you decided to get it back into the private sector, 0:14:26.640 --> 0:14:29.840 and you left OMB to go to City Corp. And 0:14:30.080 --> 0:14:31.800 can you explain why you go to City Corp? A 0:14:31.880 --> 0:14:34.120 nice bank and everything, but how did you happen to 0:14:34.160 --> 0:14:35.680 pick City Corp as a place to go to? 0:14:36.160 --> 0:14:38.040 Well, actually, I spent a little bit of time at 0:14:38.040 --> 0:14:40.120 the council and form relations, which you know well, just 0:14:40.160 --> 0:14:42.800 to figure out what I wanted to do next. I 0:14:42.840 --> 0:14:46.160 was about to sign with one of Lizard's actually competitors, 0:14:47.120 --> 0:14:48.840 when I got a call from City, which I had 0:14:48.920 --> 0:14:53.080 not really been considering. And the argument was which I 0:14:53.120 --> 0:14:57.160 found some merit in, you've done other things, including consulting, etc. 0:14:57.760 --> 0:15:02.520 But you've never done bank. If you go to this 0:15:02.640 --> 0:15:05.320 other firm, you're only doing M and A. If you 0:15:05.360 --> 0:15:08.080 come to us, we've got ten different things you could try. 0:15:08.520 --> 0:15:10.640 If you're bad at all of them, that's your fault. 0:15:11.640 --> 0:15:15.200 And why don't you kind of get trained and get 0:15:15.240 --> 0:15:17.920 experience across a variety of things and see what you 0:15:18.000 --> 0:15:18.360 really like. 0:15:18.600 --> 0:15:19.880 And that logic made sense to me. 0:15:20.200 --> 0:15:22.840 So you eventually went to Lazard about I think two 0:15:22.880 --> 0:15:26.880 thousand and sixteen sixteen. Yes, So how did you rise 0:15:26.960 --> 0:15:29.040 up to be the CEO and a relatively short period 0:15:29.080 --> 0:15:31.320 of time? Were you really good at M and A advisory? 0:15:31.360 --> 0:15:33.080 And to be good at M and A advisory? Do 0:15:33.080 --> 0:15:35.760 you have to come up with ideas that clients want 0:15:36.040 --> 0:15:37.600 or do you have to kind of just execute the 0:15:37.640 --> 0:15:39.160 things that they say they want to do? 0:15:39.400 --> 0:15:41.720 All of the above on M and a advisory And 0:15:41.760 --> 0:15:46.080 with regard to my role Atlizard, I think Lizard is 0:15:46.120 --> 0:15:49.160 a special place. It's a place that has always valued 0:15:49.240 --> 0:15:52.800 people that are useful to their colleagues. So when I 0:15:52.840 --> 0:15:55.080 came here, my whole goal was, how can I be 0:15:55.200 --> 0:16:00.800 useful to you? You banker in industrials, you the banker 0:16:00.880 --> 0:16:04.880 in healthcare, you the banker in technology, And that's what 0:16:04.920 --> 0:16:05.480 I tried to do. 0:16:05.680 --> 0:16:08.040 So let's suppose that next president of the United States 0:16:08.160 --> 0:16:11.000 is a Democrat, and you've served in two Democratic administrations, 0:16:11.080 --> 0:16:14.400 on the Clinton administration the Obama administration. Suppose the next 0:16:14.400 --> 0:16:17.600 president is President Harris, and she calls you up and says, 0:16:17.640 --> 0:16:20.120 I need a Secretary of Treasury who knows Wall Street, 0:16:20.280 --> 0:16:22.840 also knows Washington. You're one of the few people who've 0:16:22.840 --> 0:16:25.800 worked in Wall Street and also worked in Washington. What 0:16:25.880 --> 0:16:27.520 would you say if she offered you that job. 0:16:27.800 --> 0:16:30.760 I think with regard to the question of returning to government, 0:16:30.840 --> 0:16:33.000 there's neither supply nor to band, So I don't think 0:16:33.040 --> 0:16:36.920 you're hypothetical is going to happen. But more importantly, I'm 0:16:36.960 --> 0:16:39.280 really excited about what we're doing here at Lazard. We've 0:16:39.320 --> 0:16:44.480 got a lot of momentum, and Lazard is a special place. 0:16:44.520 --> 0:16:48.840 It's an important place, and I have a vision of 0:16:48.960 --> 0:16:50.720 what we'd like to accomplish here that I'd like to 0:16:50.720 --> 0:16:51.120 see through. 0:16:51.280 --> 0:16:54.080 So I'll take that you're not interested in being Secretary 0:16:54.080 --> 0:16:55.160 to the Treasury for the time being. 0:16:55.680 --> 0:16:58.480 I have a great, unbelievably great job. 0:16:58.840 --> 0:17:01.800 Is ESG seen at high water mark in the United States, 0:17:01.840 --> 0:17:04.720 and there's a pushback against it, And do you see 0:17:04.720 --> 0:17:08.040 clients not as interested in pursuing ESG as before. 0:17:08.160 --> 0:17:11.000 I think there's a big difference between the United States 0:17:11.119 --> 0:17:17.160 and Europe where there are probably the pendulum is swinging 0:17:17.240 --> 0:17:21.120 back more in the United States, including among investors, than 0:17:21.840 --> 0:17:23.080 is the case in Europe. 0:17:22.840 --> 0:17:24.160 On some of these topics. 0:17:24.160 --> 0:17:25.879 And again, what we're trying to do at Lizard is 0:17:26.080 --> 0:17:30.640 see through that and kind of have an underlying north 0:17:30.680 --> 0:17:31.960 star in terms of where we're going. 0:17:32.040 --> 0:17:35.680 Another acronym is DEI, which is a lot of pushback. So, 0:17:35.920 --> 0:17:39.280 for example, do you try to get women African America 0:17:39.320 --> 0:17:41.959 and Latino investment bankers here? Is it hard to do? 0:17:42.080 --> 0:17:44.960 Investment bank is largely still a male dominated profession. I 0:17:45.080 --> 0:17:46.480 soon is that fair to say? 0:17:46.640 --> 0:17:50.400 More diverse teams produce better outcomes when the problems are 0:17:50.400 --> 0:17:53.600 not routine. So when you're dealing with a novel issue, 0:17:53.640 --> 0:17:58.080 something that's different out of people's wheelboxes, having multiple different 0:17:58.119 --> 0:18:01.440 perspectives where people are coming at it from angles, produces 0:18:01.440 --> 0:18:04.560 better outcomes. That's the only kind of scenario where Lizard 0:18:04.600 --> 0:18:07.960 is getting hired. And so from our perspective, having more 0:18:08.000 --> 0:18:11.840 diverse teams, it's not just better work environment and a 0:18:11.880 --> 0:18:17.399 more interesting dynamic and the ability to tap untapped labor 0:18:17.440 --> 0:18:20.159 pools of people that are highly talented, but also the 0:18:20.240 --> 0:18:22.520 thought that we're going to be better on behalf of 0:18:22.560 --> 0:18:23.760 our clients as a result. 0:18:24.040 --> 0:18:26.600 What's the difference between advising a president of the United 0:18:26.640 --> 0:18:29.720 States and advising a CEO. Do you ever say to 0:18:29.760 --> 0:18:32.919 a CEO, Look, I've advised presidents and you're not a president, 0:18:32.920 --> 0:18:34.680 but I'll give you my advice, or you don't mention 0:18:34.760 --> 0:18:36.080 that you've been an advisor to president. 0:18:36.280 --> 0:18:39.840 I think perhaps the most important thing in providing good 0:18:39.880 --> 0:18:43.320 advice to either a president or a CEO is first, 0:18:43.400 --> 0:18:46.119 do your homework, don't you know it is too easy 0:18:46.200 --> 0:18:49.080 to make things up that never works. And the second 0:18:49.119 --> 0:18:51.880 thing is to have conviction. The number of times I've 0:18:51.920 --> 0:18:55.560 seen people who say, I'm going to tell the president, 0:18:56.040 --> 0:18:58.280 you know, put them in his place or put maybe 0:18:58.359 --> 0:19:00.600 her in her place. And then they get into the 0:19:00.640 --> 0:19:06.160 Oval Office and they say, and I one episode really 0:19:06.200 --> 0:19:08.760 sticks out in my mind on this front, and it's 0:19:08.800 --> 0:19:10.840 something I try to remember in this job. And it 0:19:11.040 --> 0:19:13.840 was something that I definitely remember when I was in Washington, 0:19:14.080 --> 0:19:17.399 which is I was in my mid twenties and I 0:19:17.520 --> 0:19:19.679 happened to be in the Oval Office, which, as you 0:19:19.720 --> 0:19:22.560 know in your mid twenties, is quite a thrill. And 0:19:22.600 --> 0:19:25.560 there was a discussion with Bob Ruben and President Clinton. 0:19:26.200 --> 0:19:28.840 President Clinton said something like, well, we're going to go 0:19:28.840 --> 0:19:31.359 out and say X and Bob you'll give this speech. 0:19:31.440 --> 0:19:34.399 And there are a lot of people nodding their head yes, 0:19:34.400 --> 0:19:37.160