Greg Fleming on Shaping Wall Street (Podcast)

been instrumental in shaping a really shaping Wall Street. He's he's done a number of, you know, incredible deals that uh, starting out with UM black Rock and the purchase of Merrill Lynch's wealth management sides or asset management side. UH. That was really quite a fascinating deal that allowed what was essentially in house Merrill Lynch assets to be sold

to anybody who wanted to buy them. You can imagine prior to that transaction why people at other firms, let's say UBS or Morgan Stanley, wouldn't want to buy a Merrill Lynch product. Once it went to an outside party like black Rock, that changed the dynamic and eventually led

to black Rock becoming an eight trillion dollar asset manager. UH. He also was instrumental in the sale of Merrill Lynch itself to Bank America in the midst of the financial crisis, and he has been an advisor on a number of other deals um too numerous to mension, the most recently the sale of UM the Miami Marlins to a group led by Derek Jeter, who he's been working with and

has known both personally and professionally for decades. Uh. This is really a fascinating conversation with someone who is as knowledgeable of the business of estment banking and wealth management and financial planning as really anybody in the world. So, with no further ado, my conversation with Rockefeller Capital Managements, Greg Fleming. This is Masters in Business with Barry Ridholts on Bloomberg Radio. My special guest today is Greg Fleming.

He is the founding CEO of Rockefeller Capital Management, which essentially is a re envisioning of the Rockefeller family office that has been around for quite a long time. He comes to us from both senior positions in Merrill Lynch and Morgan Stanley, where he worked as an acclaimed investment banker. Welcome to Bloomberg. Thank you very much, Barry. It's great to be here. So I mentioned you you began your career as an investment banker. I know you were at

Merrill Lynch in the ninety nineties. How do you transition from consulting with one set of clients to finance with a somewhat different set of clients. In some ways, it was It was a pretty seamless transition in the sense that I was providing strategic and management advice to multiple clients at Booze Allen Hamilton's, and then I was also providing strategic, tactical and financial advice to clients as an

investment banker. So I do think that that training helped me to position myself more quickly to be able to counsel senior executives and CEOs on whether I would do a deal of fire with them or were we recommending something and helping them think through what are the next

steps in their businesses. So when I left, I left boz Allen in late and joined Merrill Lynch, and frankly, one of the reasons I left Barry was because I wanted to get closer to the follow up the execution, and I found, uh, you know, eventually I went from being an investment banker and an advisor there to leading businesses, which I like the most, and I'll get to that.

But when I when I went to UH Who's Allen, When I went to Marri Lynch from Who's Allen, UH, my thought was to get into a company and get closer to being able to actually UH see through the vision that you work with clients on as a management consultant. So Merrill Lynch in UM in the early nineties was a tremendous place. UH. It was taking off as an institutional firm. It had been a retail focus firm for

decades really from its founding early in the twentieth century. UH. In the nineteen nineties they had done a series of acquisitions that had positioned them well to build an institutional business. I found the culture to be meritocratic, performance based. If you did well, you could move quickly. I joined in

late nine. I started more on the management side, UH within municipal finance, helping run that business, and then I moved to investment banking in the Financial Institutions group UH, and I started working directly with clients, particularly interestingly enough in the asset management space, where I really UH spent the first years of my career as an investment banker advising asset management companies on potential sales UH and UH public offerings including UH, we can get to this UH

black Rock. Let's stay with Meryl before we move forward to black Rock Coasts. I want to talk about your transactions, especially some of the ones that really reshaped UM Wall Street in a bit. UM thees were a pretty wild go go time on Wall Street. What was the atmosphere like at Merrill Lynch did did people have a sense of how unique that decade was or did it just seem business as usual? You know, when you're in it, a decade like that are really now that you know,

I've worked through multiple decades. When you're in it, you don't necessarily stand back and say, uh, this is uh unique in all the following ways, you have a sense of it. You might observe some of them. But as you said, it was a very positive environment for the American economy. UH. As you recall that, I think Bill Clinton was president from two thousand. By the time two thousand came, we had a balanced budget, We had tremendous

growth in the in the country. Trade was growing all over the world, and new countries were starting to enter the the capitalist realm, including UH. You know, towards the end of that period, China started coming on the on the horizon. So it was, as you said, a very vibrant time in the United States and around the world from a economic standpoint. Maryland expanded into Europe. I bought a company called Smith new Court, expanded in Japan and

Canada and in many different places. Uh. We continued to build out the investment banking business, and really UH started competing directly with the firms that had been successful in that farther back and longer, like Goldman, Zax and Morgan Stanley. So it was, as you say, with hindsight, a tremendous decade. And even in it, UH you had the sense that this was a robust time and mary Lynch was a place that that was on the move and going in

a very positive direction. So you eventually become chief operating officer at Meryll, a title you held right in the middle of the Great financial crisis. That had to be madness. What was that experience like just a few short years after the go go nineties, oh, seven oh eight, must have just been insane. There was a very challenging time, Barrier. I have to say, uh, I've had great uh success and luck in my career and and uh ladder is

important for everybody, um and uh in. And because of of working hard and doing well but getting opportunities, I moved quickly into different positions of increasing responsibility at Meryl and I was named co president and coaching operating officer

in April of two thousand and seven. That turned out, with hindsight and pretty quickly actually to have been a challenging time to step into that because by the fall on the fixed income side of Mery Lynch there were significant challenges, as there were throughout the industry, particularly with subprime assets, so that the whole period turned into one of the most intense and stressful of my career, probably

of many careers. I worked for Stan O'Neill leading up to the fall of oh seven, and then he was replaced with John Fain, who became my new boss. And John and I raised a lot of capital to help Marylynch deal with its balance sheet challenges, uh, literally turning the capital base of the company almost over. I think we raised north of billion in capital and a company that going into all of this had approximately thirty billion

capital and we UH. We thought by the summer of oh eight we had worked the firm through it, but there were continuing challenges in the fall of o eight, so we ultimately sold the firm to Bank of America in a very stressful weekend UH in September of two thousand eight, memorable weekend. UH. And we closed that deal in early oh nine, and I left the firm and

went on to other things. Lessons from that time for me and I have three children that are in their early twenties, and we talked about many different things, and we have a quote of the day on our text chain, and UM lots of advice across different topics. But the primary lesson from that time from my vantage point is that, UH, when you're in a position of a responsibility and authority UH and and things are happening around you, you need

to step up. UH. There were times during that time because I had moved quickly in my career where uh, you know, seven or eight years earlier, I was a senior investment banker running the financial Institutions group at Mery Lynch, and now I was front and center on making decisions as to whether we would stay independent and could we get it sold and under what circumstances. Uh. And one of the things that I say, with hindsight and moving forward is somebody is going to be in that position,

So don't spend any time wondering where everybody is. And uh, you know why the pressure is on your shoulders. It's there and you need to react to it, and you need to rise to that occasion and try to do the right thing by the many people that are depending upon you. And that is one of the major lessons I took away from that time. And fortunately we did at Merrill Lynch into a good spot and I think

it's prospered under Bank of America. I think it could have been an amazing company if it stayed on a standalone basis, but that wasn't ultimately the result that was in the cards. My special guest today is Greg Fleming. He is the CEO of Rockefeller Capital Management. He has been really at the center of some pretty amazing deals that helped to reshape finance as we know it today.

Let's let's discuss some of them, and we'll start with the sale of Merrill's money management business to black Rock. That was something like a nine billion dollar deal ultimately led to a number of aspects of black Rock, including I shares and and on and on down the road that allowed them to become one of the great powerhouses and finance. Tell us what was behind that deal? Okay, you know, Barry, I had a long history with black

Rock at that point in time. In fact, it went all the way back to the mid nineties when I worked with them on on raising some closed and funds that they went to Marylynch's retail business to be part of. I got to know the leadership team, Larry Fink, the CEO, and some of the other senior executives there, Rob Compto,

Ralph Flasstein. When we took a public Barry, the stock was that fourteen dollars a share and uh it's obviously uh many many uh years ago, and it's done tremendously over that time, and is uh wherever it is today six hundred dollars a share or more so, that transaction, uh cemented a relationship that I had already been building with them, and I stayed in close touch with them. I really was one of the strategic advisors that Larry and team relied upon, and that's what led to the

Marylynch deal. UH we were thinking about what we were going to do with our asset manage of business. It was a very good business, primarily equity based and retail based in the US, and black Rock was looking for both of those things to fill out what was still at that time a primarily fixed income institutional manager. So we started h a negotiation and a dialogue on this one.

I actually represented Merrill Lynch and and my boss at the time, Stan O'Neil, and Larry Fink had his financial advisor, who interestingly enough, was Gary Shedlin, who's now his CFO. And we put that deal together in two thousand and five and created the black Rock that really was positioned because it then had broad based product capabilities equity and fixed income, it had broad based retail access and distribution. We position black Rock to really go on the run.

That has gone on since then. Obviously Larry and team has executed brilliantly. Mary Lynch took back a forty nine pcent ownership stake in black Rock. That was the part of the magic of the transaction. Larry continued to control the company, but he had a very big partner. I went on the board of black Rock UH and and stayed on the board until I left Merrill Lynch in

in two thousand and nine. So I do take pride in having helped black Rock at multiple key points along the way in this company becoming the amazing company with I think approximately eight trillion in assets under management in h truly astonishing you. Um, you mentioned previously the transaction that brought Merrill Lynch to Bank Bank of America. That was quite the abbreviated process, Is it true? That was

essentially completed over a weekend? And and just to remind everybody that transaction took place, um in the full of oh eight, you had a I. G. And Lehman teetering on bankruptc. The world looked like it was going to hell. How did that transaction happen? And how did it happen so quickly? Well, it did take place over a weekend, and we announced it the Monday morning of that weekend

was September fifteenth. I will never forget it, but we had Bank America had been interested in Meryl for some time, and I had had dialogue in UH in the months leading up to it with some of the senior executives at Bank America and with a lawyer who does not get enough credit for having put this transaction together. Your friend of mine named Ed Hurley, he at Wachtel Lipton. So it wasn't like we talked to Bank America for the first time on on Friday and announced the deal

on Monday. They had done a tremendous amount of work on Mery Lynch over the years as a prospective partner, and they were aware that circumstances might come to pass where we could potentially be interested in a transaction with Bank of America. So that backdrop, I think is important. But the reality is is that it did come together

in the final analysis that quickly. On Saturday morning, September, very early in the morning, John Than and I had multiple conversations about him reaching out to Ken Lewis, the CEO of Bank of America, and saying we should talk

this weekend. I was very focused on trying to get the transaction done on the weekend because I thought that Lehman had no partner that was on the on the grapevine, everybody was wondering what was going to happen to Lehman, and I believe if Lehman UH did file for Chapter eleven, as they did, on Sunday night that the markets on Monday would be a disaster and Mary Lynch would quickly come under pressure as the next smallest UH securities firm

that was still in existence. So I knew this is one of the benefits of the training As an investment banker, I knew the value of a weekend, and I was pushing John Friday night and Saturday morning to UH initiate contact, and he ultimately did. And Kenna Lewis flew to New York on Saturday and had a meeting with Jonathan early Saturday afternoon, and they agreed on US allowing them to do diligence and starting a dialogue around a potential transaction.

In that dialogue, I think John was thinking maybe a minority investment. Ken Lewis was clearly thinking he would buy the firm. Later that evening, we started due diligence in UH in an intensive way. UH. We were on one floor at Wachtel Lifton and Bank of America was on another.

Chtell was the advisor, the legal advisor to Bank of America at this point in time, and on Sunday morning, a man named Greg Curle, who was the lead negotiator for and Lewis and I met very early I think it was seven am, to discuss the terms of of a transaction. I remember having gotten back to a hotel I was staying in a couple hours earlier and taking

a shower. Nobody was sleeping we had slept in several days, and walking back to Wachtell Lipton, which is in Midtown, it was very quiet and thinking, if I didn't get this negotiation right. We have sixty five thousand employees, this firm has been around for almost ninety five years. Uh and a lot hung on what happened in the next twenty four hours, and I did feel the pressure of that. It was the will always be the most pressured moment

of my career. I think when somebody will come into my office today or at any point since then and say we've got a big problem, I'll say that I'm sure we have an issue to deal with. But a big problem is being the president of a year old firm with a brand like Mary Lynch twenty four hours before a market may open and h and puts you in a very difficult position. And the stress was was frankly almost unbearable. I had colleagues on our team, thank to me, just get it sold at almost any price.

I remember having a debate at two or three in the morning and uh uh. Andre Sorkin had this in his book Too Big to Fail with one of my colleagues about whether anybody ever finds something that they really want to buy if you say to them, you can virtually have it for nothing. You know. My view was Mary Lynch was an incredible firm. We had the best wealth management business that in the industry at the time we owned Black Rock. We had a first class investment bank.

There were, as I said, ninety five years in the making. Bank of America should pay for all that, and ultimately they did, and to their credit, over the ensuing years, the deals worked out tremendously for Bank America. We negotiated the sale of Marylynch for twice nine dollars a share that Sunday morning. It had closed on Friday at seventeen dollars a share. That will still be one of the negotiations.

I'm proud of stuff for my whole career. Again, I do think that it was fair value for America, given the quality of the people, the franchise, the brand that they bought at Mery Lynch. Now that the deal definitely worked out for everybody involved. Take a look at a recent deal that I don't believe you were involved in but in, but it involves one of your old chops. You were you were senior at Morgan Stanley. They just

purchased Eaton Vance for about seven billion dollars. How does a friendly deal under terms where there isn't any sort of economic crisis or um real financial stress. Clearly we're going through is going through its own crisis, but in terms of asset managers, it's nothing like two thousand and eight or nine. How does a deal like Morgan scooping up Eating Vans differ than what you guys had accomplished with Bank America and Merrill Lynch. Well, it happens in

a more traditional fashion. So, Uh, the leadership of Morgan Stanley, James Gorman, my old boss, UH, with whom I continue to stay in close touch, would be interested in building his asset manage of business and would be thinking about different firms that might enhance their capabilities, and he might have dialogue And none of this, by the way, in my repeating firsthand, it is just what what happens in cases like this, he would have dialogue in different potential

directions about firms that might be a good fit. Uh and, and it would proceed that way. And in a firm like eating Vance might be thinking that they've had a good trajectory, but they could have their growth and capabilities enhanced by the right partner. That's the typical UH dance that occurs in in m in a situation. And that's been true for a long time and will always be true. Uh And And Frankly, that is the value of experience

investment bankers who act more as advisors and counselors. And this will eventually lead me to what we'll talk about Rockefeller later. But one of the things we're trying to do at Rocketar Capital Management, whatever the business, is to act as an advisor or counselor to the client. And I like those words. I think the connotation coming out of that is that is an important part of how the client UH starts to trust and rely on the

judgment that you provide. UM. So that's how a transaction like that would occur in an environment like this, in almost any environment. Frankly, Barry the two thousand, two thousand nine time UH in my career is unique because the stresses in the financial system there uh were greater than anything we've seen before or likely to see for a long time. Is its own unique crisis because of the breadth of the problems and the fact that COVID affects

everybody UH and its economy wide. But in terms of UH the financial sector in particular, oh eight oh nine really was the reckoning uh so transactions that were occurring then, you know, Bank of America, Merrill Lynch in in some ways, as I said, there was some lead up to it, even though a lot of it was that weekend, But there are transactions that that were talked about and occurred

or or didn't occur. But don't have to go through the list of very big banks in the in the weeks and months that followed that were suggestions suggested quickly and looked at very quickly, including the biggest names in the space. And that was because there was a real, uh sense of of almost panic even on the part of the regulators to make sure these big financial institutions were going to emerge from that crisis safely and you weren't going to have any more financial institutions go the

path of Lehman Brothers. You know, it's funny, funny you say that I have a vivid recollection of my wife's Washington Mutual a t M card, and that transaction with them and JP Morgan Chase also took place over the weekend. And it seems so seamless that on Friday it was a Washington Mutual card and on Monday you could use it at any Chase a t M without being charged the non bank fee for a for a different account.

The transaction was that fast and that seamless. Um. So so clearly that period was unique in in m and A history. I want to I want to ask you about two more transactions before we move on, um to our next set of topics. One is the sale of sky Bridge for Mooch for for Anthony Scaramucci, who took a position in the White House. Um, what was that like in the midst of all of that politicking and having the government look over your shoulder due to UH

national security concerns, what was that Skybridge transaction? Like, you know, I'd known Anthony for a long time, way back to after he left Goldman Sachs. He he uh. He started a company that was sold to Newburger Berman UH and UM I represented him on that and helped him get that spail done right around September eleven. And actually the president of New Burger at the time was a guy named Bob Mantza, who went on to become a good friend and counselor to Anthony as well. So, I don't

know whatever it was. Fifteen or sixteen years later, UH I had left Morgan Stanley and Anthony called me and asked me if I would help with the sale of the business, and I said I would do that for him. UH, and we we basically did what we always do. We UH put some materials together describing what skybridges and why

it would be an attractive opportunity. UH. And I had a team working with me, and we contacted prospective buyers and we took first round bids and then we ultimately, UH, we're on a path to negotiate a transaction UH with the Chinese buyer, and we we announced it and we signed it and then UH it was early two thousand seventeen and President Trump took office and UH it ultimately never got all the regulatary approvals that needed to and

UH the deal didn't go forward. So from my vantage point though, it was more of an ordinary course transaction where I was helping Anthony put his business in in a new hand. The ocean was that they were going to leverage that Skybridge product based outside the US and bring distribution, particularly in Asia. It was all kind of more of a of a logical regular transaction. Huh. So let me ask you about what might be a totally

different type of transaction. You were involved in several variations of the deal to sell uh the Miami Marlins ultimately and ended up in the hands of a consortium of people that, if I recall correctly, included both Derek Jeter and Michael Jordan's tell us about the h the Marlins transaction and what was some of the early iterations of that like, well, actually, Barry I represented the group buying new Marlins because of a friendship I have with with

Derek Uh. When I had left Morgan Stanley, Derek had read tired and he was very focused on being an owner of a major league franchise. He and I have been friends back to my early years at Morgan Familey about ten years now, so we were looking at different baseball clubs that we might be able to buy the Marlins for for sale. Derek was focused on different parts of the of the country that he'd like to own a team in. In In Miami was certainly on that list.

So we put a group together to buy the Marlins and and ultimately, Uh, we're the winning bidders. UM. I advised the group, I advised Derek Uh. He and I, as you know, continue to work closely together today. I'm one of the owners in the in the Marlins, although one of the smaller owners, and I do UH sit sit on the board and continue to advise the Derek on a on a range of things. UM. One of the things that we're proud of with the Marlins is that the franchise is in a really good spot, having

gone through two or three years of turnaround. Here Derek is the CEO of the Marlins. He runs the whole club, baseball and business. He's put his own team in place, and you saw he made a terrific higher last week. The first female general manager in Major League Baseball history. Who Derek and this says a lot about who Derek is thought was the best person for the job. But he also was pleased to see a barrier like that broken.

So that was announced just last week. So uh the the Uh, I'm not going to comment on who other owners are as it is a private club and um, the names of specific owners are. It's up to them to say whether they're an owner or not. But Derek has many, as you know, uh friends across the landscape and lots of people rooting for him and supporting him. And uh he's he's done a terrific job leading this uh this club so far. And uh you saw that we uh the Marlins were in the playoffs last year,

they were the surprise team. They have one of the top of farm systems in baseball. Now dark put that together with people he hired Gary Denbo who was with the Yankees, and we expect the Miami Marlins to do well. You're in in Europe for a long time under the enlightened leadership of Derrick here. Huh quite quite fascinating. Let's talk a little bit about your current place of employment. The Rockefeller Family Office has been around for a really

long time. What was the thinking behind transforming this into Rockefeller Capital Management? Barry, Let let me walk you through how Rockefeller Capital Management came into existence and it will

provide some color on the Rockefeller legacy. So in March of two thousand and eighteen, we bought Rock and Co. Rock and Co. Was originally the family office of John Rockefeller Senior, the the guy, the one who started it all way back in two It became a multifamily office in the nineteen seventies, and when we bought it in March of two thousand eighteen, we rebranded it renamed it Rockefeller Capital Management because we wanted to be clear that

we were in partnership with the Rockefellers, but that we were taking care of clients across a broad spectrum of clients. So we thought Rock and Co. Sounded more like a specific family office, So it's Rockefeller Capital Management. We are in partnership with the Rockefellers, though many of them are our clients. Two of them sit on our board, David

Rockefeller Jr. And Peter O'Neill. They are part owners of Rockefeller Capital Management, the family UH, and they're important partners, and they care about what we do with their iconic name UH and how we treat it. And the name has been spectacular. It is an aim that is respected in every corner of the United States and around the world. What the family has done over decades, over many decades in philanthropy UH in the United States and in different

parts of the world. There's a hospital in Beijing at the family started in n that's still there and highly regarded. The Rockefellers started Spellman College way back in the eighteen eighties. The reach of the Rockefellers in terms of the imprints that they've made in a positive sense on society, the philanthropy. They were one of the earliest in sustainable investing. In fact, the Rockefellers coined impact investing at one of our sister organizations,

Rockefeller Foundation. So the Rockefellers are an amazing part of the United States history, an iconic name around which we're building our business. So our business is UH really advising and counseling clients across wealth management, strategic advisory, investment banking, and asset management, and all those different pieces fit together well. The wealth management is the business that the predecessor company was in, and it's really what we're putting at the

heart of Rockefeller Capital Management. And what we've been working on Barry in the last two and a half years is building from scratch a private wealth business focused on um best in class private wealth advisors taking care of clients as they do throughout the industry, and marrying that to a family office that have capabilities including trust companies and other things that the business that we bought bring to the table to create a holistic offering for clients.

We're trying on the wealth management side to take care of clients across all of their needs, not just investments and asset allocation, but generational work. We've taken care of seven generations of Rockefeller as we have to trust companies were integrating involved in helping clients figure out what they do with their money for follow up generations. So that's our wealth management platform. In addition to what we do for those clients. On the wealth management side, we do

have a strategic advisory business and this was intentional. This comes out of my background and it was part of the vision that we had for rock Stellar Capital Management. In the United States, much of the wealth for families comes from starting businesses. That's the defining characteristic of the United States and to this day there's so many private businesses that are started by families that get built up.

So we wanted to make sure that we had the capabilities to advise those families and what they should do with those business, whether it's to continue to invest in them and run them and keep them private, whether it's potentially to sell the business or take it public. So we have Rockefeller Strategic Advisory, which is there to provide

that kind of advice to the family. We obviously do a fair amount of investment banking work away from just taking care of our families, and we have some of the most senior and seasoned investment bankers, advisors, counselors as I like to say, working at Rockefeller Capital Management with us.

And then I'll ask the management business often serves those uh wealthy clients on the wealth management side, but we're also building our usset management business through institutions and intermediaries, so it's a standalone opportunity for clients outside of our wealth manager business. Our asset manager business focuses on E s G investing. They've been doing it longer than most firms because the family, the Rockefeller family, got into this

sooner than many. So we're very focused in our Rockefeller st management business, not sustainable investing, and we're raising assets around the world and things like ocean engagement and climate solutions and other strategies that are increasingly getting a following not just among millennials and Generation Z, but mainstream investors.

I would imagine clients like the Rockefeller family or other people of great wealth that have been um managing that wealth for many generations, are going to demand a certain level of service. And as I was kicking around your website, I noticed that some of the services were really kind of interesting. Obviously, philanthropic advisory service is pretty standard in the wealth management space, but you also do things like

private health advisory and personal security. Tell us a little bit about some of these UH concierge level services that

you're offering to the ultra high net worth investor. Berry, I'm glad you were going around the website, and I'm pleased to get that question because it's at the heart of what we're trying to do for our clients, and we believe it differentiates us at Rockefellar Capital Management because our exclusive focus is on high net worth and ultra high net worth clients and and UH families, and what we're trying to do with them is provide them holistic

thinking and service. We want to solve their problems wherever they like. And that includes conflict free advice on on whatever they come to us with. It includes things like what you were just describing. We call it Rocket Rockefeller a lifestyle advisory. We have relationships joint ventures with different partners who brings things to bear that our clients might be looking for along the way, even if it's not tied to investing and generational planning and the specific financial side.

And I'll give you an example. I have a twenty year old son who is traveling a few years ago and we were a little bit uh focused, my wife and I on security in some of the places he wanted to travel in, and we UH were put into contact with a private security company who which was run and we link this. The founder was somebody who had expertise in the space and it was his firm, and they gave us some advice on how to make sure that he acted safely in the places he was in.

You know, they offered a GPS chip to UH that we could uh we and they could keep an eye on where he was safely things like that, and he took the trip. There are many clients that UH that have family members that might benefit from that advice and they don't know where to turn, they can turn to us. It's the same thing on on We have a joint venture with the healthcare company, and even high net worth and ultra hignet worth clients sometimes if they leave a job,

they don't have healthcare. We can help them get the healthcare in a in a ficial and and cost effective manner through our joint venture partner. So we want to be there for the client, whatever the need, and that's one of the reasons why we put together Rockefeller Lifestyle Advisory. We deliver all of this barry through the person who's at the center of the relationship with the client, so we're not having lots of different people reach out to

the client. We have a private wealth advisor who is the point of contact for the client on all of this. We're just channeling this through to the private wealth advisor and the people focused on managing the client relationship so that they have access to all this but is delivered in a holistic, efficient manner to the specific client. One one of the things in that lifestyle grouping is philanthropic advisory. And I have to note how many different boards that

you yourself are either on or have been on. We mentioned black Rock previously, but you're on the board of advi users for the Yale Law School Center for the Study of Corporate Law. Um, you were a former director at Colgate University, you know, on the Council of Foreign Relations, the Economic Club of New York, the Ronald McDonald House Board of Directors. How does that experience color the sort of advice you're capable of providing to ultra high net

worth investors. You know, we we do a tremendous amount of work with these ultra high net worth investors in terms of both talking this through and helping them set up, you know, the efficient structures foundations through which they can direct their wealth. One of the things that that I'm proud of personally given my background, and I'm proud of of a lot of Americans, is the notion of giving back. You know, my father was the first one in his

family to go to college. His father and my grandfather graduated from the second grade and went to work. My mother, his father, my grandfather on that side, graduated from the eighth grade and went to work. So I feel incredibly lucky to have had the career and the life that I'm living, and I want to do what I can wherever I can to have an impact on others and inculcating that in my children, and they already feel that. We have so many clients to think that way, and

one of the great things about this country. Lots of challenges in this country at this point in time, but one of the reasons I remained very upbeat on the United States going forward is because of the people in it, the breadth of talent, the desire to have a positive impact. So this is barrio topic. We've spent a tremendous amount of time with clients, including how to give back and where they want to give back and what are they most interested in and how can we help them do

that efficiently. We also talk to clients about how to talk to their children about money, because a lot of the money in this country is first generation, maybe second generation, and we want to make sure that the dialogues occurring in as constructive away as possible, always factoring in the individual interests in the individual situation of a specific family.

But these are very important topics for for people once they create well, what to do with it, how it impacts their children, and grandchildren, what to do with them in society where they can use it to have a positive impact on something they personally care about. That's at the heart of the kinds of advice that we're giving our clients. You know, we saw a report today about

hedge fund under performance. There's been a lot of interest in private equity and venture capital, but there hasn't been as much alpha as a lot of ultra high net investors would have liked. Do you find this group of investors getting a little fed up for for the expense of for the expensive alpha Chafer's chasers, for the expensive

alpha chasing. Are they still willing to stick with hedge funds and venture capital or is it a price let's call it underperforming asset class that people are starting to get a little run out of patients with Well, Barry, I'll give a broader answer, and then we can dig

into the different pieces. I think for UH wealthy investors, you know, the traditional sixty forty or seventy thirty asset allocation rule might be less relevant as they might have lower liquidity need and therefore it can take a longer term view less impacted by what happens in UH. In short term market movements, so they might not be focused just on equity and fixed income, but more on growth assets,

income and asset protection assets as as corollary buckets. And there's no question that private equity remains a big component of ultra high network portfolios and it has continued to perform well over over cycles. And actually companies are increasingly staying private longer and this has allowed wealthy investors to do something called direct investing, which is being part of

capital rounds of private companies. H and that's been a significant change and something that's much more pronounced in recent years. So it's not just private equity, it's also direct investing, and we see a fair amount of appetite on the part of our clients for uh those types of opportunities as well. Now as fund as you said, have struggled

more in general. And you know, we have a private investment platform where we diligence many private equity firms and many hedge funds, and you need to be careful in picking the sector and the strategy across alternatives that makes sense for clients, and manager selection within that is a very important process making sure that the client is investing in a manager that you're thoroughly diligence and you're comfortable with the way they're approaching the strategy and how they're

likely to perform over over time. And we think you can you can put together a diversified mix of top quartile managers UH. And you know that doesn't mean you're not going to move some in and out. But there's still significant demand from our wealthy investors for a broader cross section of alternatives, including, as they said, direct investment. Let's talk a little bit about something we're discussing earlier, the transfer and advisements on generational wealth. A lot of

complexities within each families. There are a lot of internal dynamics that nobody really wants to get in them in the middle of how do you how do you navigate all that? It seems kind of could be challenging. You know, very give been what I've described you here, which is that we see ourselves as advisors and counselors to our clients across all of the different needs that they have. This is an area that we spend a lot of time in and we talked to clients about how to

talk to UH younger generations about money. We spend a lot of time talking to clients about how to direct resources into philanthropy and into specific areas of giving back that they're interested in. And it varies from from family to family. This is where you want to be thinking holistically, but bringing the counsel on an individualistic basis. But it is something that is an important part of what we do for our clients. So so there's an old expression.

It's you know, shirts leaves to shirts leaves in three generations that by the time you get that far away from the original founders creation of wealth, it tends to get squandered. How do you manage around that issue? How do you how do you prevent that third generation from squandering all that wealth? You know, first of all, Barry, I'm sure there are examples of that being true, a third generation having a challenge with money, and there are

examples where it's not true. And I can tell you that we're working now with the seventh generation of Rockefellers. So they have been good stewards of the capital that John Rockefeller primarily was the the creator of over many generations. Uh, And they've done that while giving back on such a comprehensive basis. So I think, you know, like a lot of phrases, maybe some truth in that and and uh

and not so. In many cases, we do view ourselves as having a real role in providing candid, direct advice to clients on the amount of wealth and what makes sense in terms of current consumption versus things they would link to do uh, in terms of leaving money to follow on generations or setting up philanthropic organizations to give back during their lifetimes. And it's an important part of the council that that we provide on a regular basis. But I know so many of our clients and so

many people that have done well in this society. And as I said earlier, often from creating a business and growing it. And if you're starting a business from scratch and growing it, and this would be true even if you get all the way to where Amazon is, there are countless hours so hard to do. So there are a lot of admirable characteristics running through that successful business generation, and that often gets transferred to the next generation and

the generation after that. I know a lot of people with resources, many of whom have created it for themselves and their families first generation who are very focused on how to raise their children, how to have an impact on grandchildren so that they are good stewards of capital and they're continuing to give back into society in generations down the line. Mhm. Interesting. So we you mentioned briefly before that Rockefeller was um coined the phrase impact investing.

We've been hearing about the rise of e s G Environmental, social, and governance investing, but it doesn't seem like this space has been capturing a lot of assets yet. How do you see this E s G investing develop Where do you think this goes from here? We think it's a secular growth trend. Uh And in fact, over time, we think E s G investing could really become almost a rapper for all investing. And I'll tell you why. And first of all, in on a geographic basis, UH, the

Europeans are ahead in this. They've been pushing this for a while. We've had real success in in UH in raising assets from clients in Europe. But the reason that we think it's a secular growth trend is simply because of the focus of the generations that are coming and how millennials and Generation Z are. They view this not as something transitory that they're not in the kind of feel good part of their lives, and they're gonna let

it go. The belief in investing in a sustainable way that takes into account the environment in which we live, the governance structure of companies, the social issues in society. Uh, you know, when I started, when I came out of law school in the late nineteen eighties, it was very clear that the mandate of the corporation was to maximize profits for shareholders and to allow those shareholders to do

what they will with those profits. Companies today are much focused on our broader cross section of issues and they have been prodded there by society and it's now been embraced on a much broader basis. So companies do think about constituents other than shareholders. How do they operate in

their community, how do they treat their employees? You know, what are they're responding to in terms of things that are happening in society And and really corporations are taking even the lead on some of these things where thirty years ago they would have been dissuaded or frowned on from doing that. So that ripples itself all the way through to investing companies are focused on how they operate

in society. Companies are being asked, tell us about your environmental footprint, what are you doing to make it better? Tell us about how you're you're governing yourselves. What is your board makeup look like? How are you working in terms of diversity. All of this is UH is tied together.

And on the investing side, those millennials and Generation Z. And I fancy myself uh an armshare expert here because I have three kids in their twenties the first part of their twenties, and I know a lot of their friends, and UH, I think that these generations are are going to hold on to this for their lifetimes, and they're about to be the dominant part of the workforce, of the capital structure, of the investing structure. You know, that's

all happening. In fact, they're also increasingly, as you know, very influencing elections. UH and the group between the ages of eighteen and thirty nine were approximately of the voting electorate in this election. That's just going up every year now.

So our view is it's secular, it's real. We were one of the front runners in developing these capabilities and our asset management business and we're going to work hard to continue to grow those capabilities and offer them through it to clients both on the institutional and inter mediary side of our st management but also across our wealth management client So so let's stick with that idea and and stay focused with both UM E, s G and philanthropy.

Wealth inequality has has really expanded dramatically over the past few decades, but COVID and the pandemic lockdown has really had a giant impact. It certainly has hurt people who are at the bottom of the economic scale, and in some ways it's been helpful to a lot of industries at the top of the scale, from finance, the technology, and and even some of the retail aspects that that

are Internet based. What sort of philanthropic steps do you see clients undertaking in order to address UH the ongoing issues generated by the coronavirus. Well, first of all, as you said, Barry, the wealth inequality was and is a major topic for the United States and for all of us pre COVID. COVID has certainly accelerated and reinforced that in some of the ways you talked about, including the fact that a lot of the UH non work from home businesses are more there's a broader cross section of

workers that are affected in those businesses. Uh that uh that COVID has had the biggest impact on. So this notion of wealth in equality is something that that people are focused on across the spectrum from an age uh and and demographic standpoint. Uh. The whole uh way that this country has thrived and succeeded over generations is the

concept that everybody has a shot. Everybody has a fair shot of creating in existence for them and their families that is better than the existence that they personally might have had. And and UH, you know, I was listening last week too. There's a West Virginia senator who's a Democrat who was talking about a centrist agenda. And that's one of the things that that I comment on coming

out of this election. I think people really aren't as divided as uh some of the pundits say that Americans want more centrist policies that uh, and and politicians, whether Republican or Democrats, that helps solve problems. And this this Senator Joe Mention said his constituents want to have an opportunity to take care of themselves and their families in the best possible way. Education, skill sets, opportunities for jobs. That's something that I think is held on a broad

basis across the country. So we have a lot of clients that look for different ways of impacting that, including giving money to to UH to universities to broaden their ability to admit different kinds of students. I could give a whole laundry list of things that that our clients are are focused on. UH two get to the heart of of the inequality of income issue and the need for the United States to flourish for the next hundred or two hundred or more years, tied to everybody feeling

like they've got the shot. Quite interesting. So I have before I get to my favorite questions, I have two last questions for you. The first is UM I got to meet Derek Jeter earlier this year at UH an Inside et F conference, and I was taken by just how thoughtful and articulate and funny and warm he was. He really was a delightful UH speaker. I got to

spend some time with him after the event. But I notice on your again on the rough Fell website, Derek Jeter is the special Advisor to the CEO, which is you, what sort of advice does Derek Jeter give you? Well, Derek UH and I spend a fair amount of time together and he provides me a lot of important advice and I returned the favor. UM. So he provides advice to me and to Rockefeller on on a range of topics, you know, including UH, strategic and personnel and some of

the things I'm doing. He's got terrific instincts on that. He has built a first class team at the Miami Marlins and has uh really taken an organization that had real challenges and put uh put it on a whole different track. So I'll bounce lots of things off of him. He UH. He also is very helpful with clients and

and UH and and client prospects as well as potential hires. UH. He's willing to get on the phone with virtually anybody and tell them UH why he's affiliated with Rockefeller Capital Management. We feel like we share a lot of the same values when I first started getting close to Derek, given the fact that he needs to be and is careful about those around him, given how many people are looking for access for all sorts of reasons. I spent time with his parents. He met my children, His parents met

my children. You know, we did. We went to different sporting events. You know, my children in the early twenties. They've known Derek for a decade. Uh. You know, I know his family. The values are similar, the career path and the things that we've done. You know, my baseball career ended with senior year of high school. Um, we've We've done different things in life. But I have a lot of the things that matter to each of us

in common. So I race something with Derek around a key personnel issue and get his views because he's got great judgment as a leader and great judgment as a motivator of people. He does the same. Uh. So it's a it's not the relationship. He's a special advisor to the CEO, and it's a that's an active, regular role that he provides. Uh. And I talked to him on a very regular basis on the Miami Marlins and what's

happening there quite interesting. All right, let me throw a curve ball at you, speaking of baseball, for our final question, anyone ever give you a gratuity or throw you a tip at the end of a banking deal. The only uh person who uh ever I think paid us more than was in a contract that I can recall, and he's reminded me of this. So was Anthony Scaramucci way back in the deal that we did around September eleven

where we sold his business to Newberger Berman. We had a deal to sell the business and it was going to close after September eleventh, and September eleventh occurred, and Bob Matza, the president of New Burger Berman, called me and he said, Greg, I've given everything going on here. Uh, I don't know that we can do this deal in the same terms. And I said, okay, Bob, we'll adjust the terms, but we want to have some upside if it works out as well as we think it can,

and he agreed. I believe it might have been options in uh a New Burger. I forget exactly what it was, um, but we put something in place that provided some upside to Anthony and his team and he was elated and never forgot it. And uh, I think pade us a investment banking feed through Mary Lynch that was beyond what was negotiated. Quite quite funny, all right, So I only have you for about five minutes. Let's plow through our

speed rounds. These are our favorite questions we asked all of our guests and starts out with what do you stream me these days? Tell us what you're watching on Netflix? You know. One of the things I want to say Barry at the asset here is I never, over the years watched a lot of TV from you know they

call it content today. Uh, My wife and I there were certain certain shows that we liked, like Seinfeld and Friends in the Office sp typically like The Edge, Humor and h and by the way, Jeopardy uh and and Alex Trebek is such a sad thing for for us as uh and I was married and he started that in the eighties and I read that, Uh there were two shows that he did. I think we saw half of them at least, So that was a picture for us.

And when I wasn't traveling and when I was home and I still do to this day and trying to catch as many of the final ones here as I can. That was something we watched, but not much beyond that content today. And this is one of the things I say to my kids all the time. The world today, there's so much in it for young people and for people today. Uh and contents and example of that because it's terrific. So uh, you know, from a streaming standpoint,

we liked the historically based thing program. So we've watched Chernobyl. Uh, we watched something on the Challenger. Um, you know, we just on the on the movie side, we just watched the trial of the Chicago Seven, which was fascinating. Uh. You know, we also like some of the suspense type UH shows. There was a BBC show called Line of Duty which we liked. I loved the movie Death of Stalin, which I thought was so so well done. So there's quite a bit uh in the streaming world that I

do and we do find time to see today. I give credits that the content makers. There's a lot out there. Tell us about your early mentors who helped shape your early career. There are two that I would highlight here. One is uh a guy named Jerry Kenny who was a senior executive at Meryl for decades and then he went and worked for black Rock for about a decade and sadly uh died uh last year. He's been He was a mentor to me and was part of my

life for decades. He was an incredibly decent, high integrity man, thoughtful. Uh. He was on the Meryl board, he ran many of the businesses there. Uh. He was a scholarship athlete at Yale in the nineteen sixties. Um. And I had several brothers go there as well. They all played football at Yale. Just a tremendous man. He was a bit of a mentor to my kids too. I have a couple of children who one who graduated, one who's at Yale. Uh.

And Jerry did things a certain way. Uh. He worked very hard it to win, but he functioned a certain way and that had a big impact on me from the earliest time I knew him, which was in the nine A second person who's been a mentor to me over many years is Larry Fink. I've known Larry since the mid nineties. Um. I've known him since black Rock was uh, you know, a company worth a billion dollars when we took a public in the late nineties, and frankly, it was worth less than than that when I first

started working with him in the mid nineties. Uh. He's been there for me in many critical moments. When I left Mary Lynch after he'd been sold to Bank of America. He was somebody I went to and and talked it all through with. So he's been a mentor of mine and he's a He and Jerry are both about, you know, a click ahead of me in terms of generation. Jerry was twenty years older than me and Larry's a little more than ten. Uh. And Larry has had a big

impact on me as well. He's tenacious, he worked so hard. He's the famous Jerry. He's going to do things a certain way, but he is uh, frankly obsessive about doing it well. He cares so much about Black Rock. He's treated it like it's his firm. For you know, it's been public for over twenty years, and you know he still treats it as if it's it's all his money. So these are two terrific human beings who have had a big impact on me. Quite quite fascinating. Let's talk

about everybody's favorite question. Tell us about what books you're reading, either currently or some of your favorites. Yeah, I'll give you some of my favorites, longtime favorites, Barry. Uh. They're the traditional ones. Uh. The fountain Head probably very high on the list. Pride and Prejudice. Uh is definitely my wife's favorite book, and it's up there for me. Uh. So, I I do read a lot. I always have, all five of us do. I have three children and my wife.

My father read The ton still at the age of eighty seven. Um. I like uh nonfiction a lot so Uh. You know, A Team of Rivals by Doris Kern's Goodwin was one of my favorites. Lincoln was just incredible and the ability to still treat people a certain way even if they were challenging or difficult to him. I read her biography. This was published twenty five years ago. Uh, but I just read recently the book on the Roosevelt. It was really focused on Franklin, but there was a

lot about Eleanor in there that I didn't know. And she was frankly tremendous first lady and the first one really actively involved in her own space, which was not surprisingly controversial in the thirties and forties. I read a fair amount of suspense as well. UM. A book that I finished not so long ago was called I'll Be Gone in the Dark by Michelle McNamara, which actually helped authorities capture the Golden State Killer. Uh and and he's

he's in jail and serving life sentences now. And this woman wrote this book which was both um, you know, made you uneasy, and she really researched it and sadly she died just as she was finishing it. Uh. Read recently a book on endurance called Endurance Earnest Shackleton that stories incredible stories. So lots out there in the space. I'm not surprised it's a favorite question for people. It

definitely is. We We actually had a client who gave everybody in the office a copy of the Shackleton book. And it's amazing some of these nonfiction books they read like thrillers. It is amazing. Barrier, I mean, that's his life too. And he has this quotation that I love where he said true moral courage is optimism and I I repeat that, and I talked to people about that. You know, leadership, at least for me, and I think for the best leaders, like Lincoln, is is positive motivation.

You have to be the one who's still, you know, standing there and saying this can get done. And that's really a lot of leadership, and Shackleton captured it so well. So it is it's a page turner, that book and his life was he had to say the least. Uh. Let's talk about recent college graduates. What sort of advice would you give them, especially if they were thinking about a career in finance. You know, I would tell them two things on a broader basis, um uh. And I

do give a lot of advice, some of it. Uh. I told you. I'm raising three children are in their twenties, so from they get more than an even like um. But one of the things I say to young people all over the places worked for great people. And then when you get in a position to do this, hire great people. It sounds easy, and it hardly happened. People want to make sure they're the most impressive in a room.

They want to make sure that they're in control. H I've been able to do so much in my career because I've hired people that are better than me, and so many things and so many examples along the way higher great people, motivate them and watch them flourish. And when you're young and find great people. There's a great Mark Twain quote that I love that I repeat all the time, and my three children could could repeat it. Readily for you. Twain said, keep away from people who

try to blitterally your ambition. Small people always do that, but the group really great make you feel that you too can become great. So that's one piece of advice I give to young people. And then the second thing I say is, uh, it's a long run. You know. I hear people say to young people, now, you're so disadvantaged, such difficult time. You know, there's so much unemployment, COVID.

All of that's true. But people in their twenties, if they take care of themselves and they exercise and they eat well, can live for seven or eighty years, have careers for six decades or more. People work into their seventies and eighties. Now, you know, when I at law school, I was a second year law suit and there was a stock market crash like seven, and I remember somebody saying to me, and I thought they were right, it's a terrible time for us to be coming out. That

was a blip. Look at we talked about it, we started, and we're asking me about the nineties. I may have come out into the best decade to come out in the last five or six or since World War Two, And yet we were fussing about the stock market crash in seven. So it's a long run. Uh, there's going to be a lot that's going to happen that you won't see, couldn't possibly see one step leading to another.

So UH play it that way. Just get up every day and go after it, because it's sixty seventy years is a long time and there's a lot that's going to happen. Huh. Quite quite interesting. And our final question, what do you know about the world of finance, investment management, investment banking that you wish you knew thirty years or so ago when you were first getting started. That's a great question, Barry. Uh. What I would say is the following. Uh.

I didn't think this through then. I certainly didn't act with it. But now I realized that markets, like everything, are driven by people, and therefore they're not always in

the near term uh accurate or right they overshoot. Um. You know, I was with uh in I had a client named uh Sanford Burdeny, which was run at the time by Loose Sanders who was the CEO, who was a great investor, and it was uh still learning an investment organization today and they were value investors, and uh, I remember saying to Lou Now I was thirty six at the time, and he was, you know, he'd been

around much longer. But I was saying, you know, why don't you sprinkle in some some value internet companies or something, you know, just mix it up a little bit, because they were getting crushed on a relatives And Luc said to me, Greg, it's a bubble and it's going to pop,

and he wasn't going to deviate, and ultimately he was right. So, UH, markets are also tied to human beings who get emotional, who get caught up in trends, and therefore, um, you know, they're not always going to be necessarily where a pragmatic analysis would say they should be. And if you're looking for that, you're making a mistake. You need to understand these are organic too, and I've learned that probably the hard way. Over many years we have been speaking with

Greg Fleming. He is the founding CEO of rockefelleror Capital Management. If you enjoy this conversation, we'll be sure and check out all of the nearly four hundred previous interviews we've conducted over the past almost seven years. You can find that at iTunes, Spotify, a cast, Stitcher, wherever your favorite podcasts are found. We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. Be sure and check out my Daily reads at Ridholtz

dot com. Look at my daily column each week at Bloomberg dot com slash Opinion. Follow me on Twitter at Rid Halts. I would be remiss if I did not thank the crack staff that helps us put these conversations together each week. Reggie Brazil is my audio engineer, Michael Boyle is my producer. Atika val Bron is our project manager. Michael Batnick is my head of research. I'm Barry Rihults. You've been listening to Masters in Business on Bloomberg Radio.