Joan Solotar on Private Equity Funds (Podcast)

name it. If you're interested in any sort of alternative investment, from private equity to real estate, to non traded rates to debt and credit, you're gonna find this to be absolutely fascinating. Joan has had really an amazing career from from research uh to she helped bring black Stone public. She's just got a tremendous background and is incredibly knowledgeable about the space. I only suggests listening to this twice because a lot of stuff goes by quickly with no

further ado. My conversation with Joan Solotar. This is Master's in Business with Very Renaults on Bloomberg Radio. My special guest this week is Joan Solotar. She is Blackstone's global head of Private Wealth Solutions. She has been named one of the hundred most Influential Women in Finance several years running. Black Stone is the world's largest alternative asset manager, with six four billion in assets. Jones Department, the Private Wealth

Solution manages over a hundred billion dollars in assets. Before joining black Stone in two thousand and seven, Miss Solotar was head of equity research at Bank America Securities and a highly ranked institutional investor All Star. Joan Solotar, Welcome to Bloomberg. Thank you, thanks for having me my pleasure. So, so let's talk a little bit about your career. You were at Credit Swiss and uh D l J as a highly ranked analyst. What what did you cover? What

was your space? I covered financial services pretty much anything non bank uh so started in insurance and then wound my way to you know, mortgage insurance companies. Eventually really focused on the brokerage industry and asset management. Very interesting. And then you end up at a Bank America Maryland Securities. You were head of research there, correct that I know lots and lots of folks from old Mother Meryl were either strategists or in the research department. How did you

leap from there to Blackstone? So? When I was at D l J, I worked on the firm's public offering. We were spun out of Equitable and Tony James was president of d LJ Very Senior credit Suites, and then he went over to become president of Blackstone and called me when they filed to go public to see if I would join to help them with that process and run sharehold relations and strategy, which is what I did initially. So, so how do you transition from shareholder relations to private

wealth solutions? So I I've held a few different roles at Blackstone. I'd say the common theme among them is that I've always worked across the entire firm and in private wealth. I was asked to move in and and really create a scale, global business, and so I took the skill set that I had around uh, being a strategic thinker and being able to manage teams of people, which I did at UM at b of A, and really applied that here the last six years. So you were there pre I p O, two weeks pre IPO. Okay,

so that counts a little bit a little. I was going to ask you what the difference was working at a private company versus a public company, but I don't know how much that would apply you've mostly been at public companies your whole career. Yes, well, d l J was subsidiary of Equitable, which was a subsidiary of Access, So until it yourself went public, didn't feel like that.

It felt very much UM in a lot of similar ways to Blackstone, like a partnership, and even Blackstone when I first joined, you know, fewer than a thousand employees, it was, it felt like a partnership, still small, and now it's considerably larger than than a thousand employees, isn't it correct? So probably not as big as many think, But we're about a little more than three thousand employees globally.

That's that's quite a chunk. So black Stone has made a very large bet on the individual, focusing on one to five million dollar clients through investment advisors. Tell us a little bit about the thinking behind that move, because I think when most people think of of black Stone, they think big institutions, not individuals. So you have to really go back in time, and I'll put my strategy

pat back on UM. During the financial crisis, we were thinking a lot about where money was coming from for our funds, and we were very heavily dependent upon us pension funds, who are still quite an important set of clients for the firm, And at that time we made the decision to expand internationally, both Europe and Asia, and then also start to think about how we would approach private wealth. Uh So we started distributing through the big

wire houses initially and really focused on qualified purchasers. Uh so those five million and above who could invest in the traditional private equity funds UM. But more and more we were getting inquiries, well, how do we give access to good products, good service to more people. And for that, uh we began creating bespoke funds to address that market. And these are accredited investors or not, and somewhat more

sophisticated than UM the average investor. When I was preparing for this, I came across a Business Insider column that described what you you said was your AHA moment that totally changed your career. Tell us what was that moment I believe you're referring to. When I was at d l J and one of the we call them principles like partners came into my office and said, Hey, you know, I'm going to this dinner tonight for Principles and and you really should be there, but you need to tell

people that becoming a principle is important to you. And that just never occurred to me. I just thought, like, you put your head down, you do a job, and someone's like, oh, let's make let's make her a principle. And I'm sure that often is the case, but it certainly isn't always the case. And so I went into the office of the head of research and just said, I think I deserved to be principal for the following reasons. It is something that's very important to me. And I

was named a principle that year. So let's talk a little bit about black Stone. They've created a tremendous amount of wealth with their limited partners and employees as well as their shareholders. What do you have to do to stay ahead of the pack? This is a hyper competitive space with billions and billions of dollars looking for an edge. What does Blacks don't have to do to keep its

leadership role. I think it's a great question. Uh. Steve Schwarzman often says that there's nothing patentable in finance, meaning everyone in the world can see what you're doing and

they're app to copy it. If it's successful, so you have to keep moving and for our firm, that means continuing to find new areas where we see great investment opportunities where others aren't as competitive, and that might mean you know, we are, for example, the biggest real estate investor in the world, so from a scale perspective, there are transactions we can do that no one else can do.

And building that kind of scale in life sciences, in direct lending, in private equity, which is a bit more competitive, but again not at the scale that we're at, that's been a huge advantage for us, especially in this environment. Huh So, so you're running the Global Private Wealth Group, tell us about that role and what your responsibilities include. So it's been just terrific to be involved in the

building of this business. So essentially we are running Private Wealth as an end to end business rather than a sales organization. And what does that mean. It means everything from product development on the front end, to providing education for advisors and marketing material, using data analytics to better focus our salespeople, and having a robust investors erviss team on the back end and doing that globally, so serving

your clients. Uh In Japan with folks who are on the ground speaking Japanese and having websites in native language, which may sound obvious, but takes a lot of people, a lot of effort, and we've been able to continue to vault ahead of the competition. So you mentioned investors and clients, who are the clients tell us about a typical PWS investor. So I'll divide the clients into really

three buckets. At the wealthiest end our family offices which are often run like institutions with the chief investment officer, cetera, but really want a single point of contact into all the Blackstone offers. The next tronche would be qualified purchasers, so folks also very wealthy individuals with five million dollars or more, and they really are by SEC standards allowed to invest in anything. A big part of the market.

It's what we call accredited in the US. It has different names all over the world, but essentially investors with one to five million dollars who want and historically have not had access to great product. And we also do serve investors who are below the million dollar level, but not with that many products that are suitable for them, and and so one to five five plus. I tend to think of family offices as fifty plus, but I know that number some people say, some people say hundred.

How do you look at family offices? Typically we really haven't defined it that way, but I think you're fifty million is probably a good place. So now an investor has five or ten million dollars in a total portfolio, and I'm just spit bowling here. They have a million immunis, they have another six seven million in traditional, active and passive funds, and they have a couple of million dollars lying around that. They're looking for a little more non correlated,

maybe a little alpha. How do you fill that gap for that client? Are you selling that through O I A S or you're selling it direct? Tell us a little bit about what that um slug in that portfolio looks like. So we are absolutely partnering with R A S and with advisers again around the world, whether they're

in global banks, private banks, big wire houses, or independence. Uh. And you know, to you to your question about where people are invested now and what they're looking for at the moment, historically you would say, oh, you know, our clients are are really looking at portfolio that's sixty forty something like that the traditional mix. And I would say today, given the search for yield, which is very hard to find everywhere in the world, the need for private credit

is greater. Uh, given where market valuations are, private investing is more attractive because you have more control over the asset, you're not subject to the whims, and we're not investing in the market per se. We're choosing the neighborhoods we want to be in. So you know, I'm fortunate in that the performance of Blackstone funds across all the alternative asset classes has been good over a long period of time, So we have a lot of material to work with,

and then we meet the individual needs. So it could be that your client, as an advisor, you know, want to put of her or his assets into alternatives and they want a diversified portfolio. We have a product that matches that. Or they're earning you know, x percent three on the municipal Bomb portfolio. And we have other funds in real estate and credit that can return much more that are also floating rate, which gives them better inflation protection.

So some of what you're doing is a non correlated substitute for traditional equity, Hey, equity prices are let's call it fully valued. Some people think it's gone beyond that um, although we seem to be having delightful earnings this quarter, so maybe this market can grow into its valuation. But that's one alternative. You reference yield and and what what

investors are looking for. If someone says, hey, I want a higher return, I'm willing to take a little more risk, but not I don't want to run into the same problem we run into with subprime What sort of products do you have for I'm gonna ap peel some of my forty off to to something that is going to do better than one point two percent that I'm getting on on my treasuries? What do those fixed income like products look like? Are they structured notes? Are they real estate?

Tell us a little bit about that, sure. Uh so. For example, one fund right now that has a lot of traction is our non traded read, which invests in high quality US real estate. Again, the same themes that we're investing in for the institutional fund and the same team. Importantly, so areas like multi family housing where there's a supply demand mismatch or logistics playing on a very long term theme around e commerce, which is only accelerated during COVID.

Tell us a little bit about the credit side you mentioned. So, there's a secular trend in private credit that really started in the financial crisis where banks no longer wanted to hold onto risk and we're syndicating out. And it also at that time became clear that they were less willing to lend to middle market companies. So originally what began as a middle market industry in private credit emerged, and

we were certainly one of the leaders in that. But I would say today, because of the scale that we have, we're actually able to lend to much larger companies. So it's an industry that has real secular tail winds in terms of the demand for private credit, and we're able to deal with you know, large companies, complex transactions, unitron to take the whole deal, uh, And we've been able to create funds around that for individuals that deliver good returns.

And importantly, we've been able to create structures that also work outside of the US. And so both of these areas, whether it's private real estate or private credit, have appeal right now in the US, in Europe, in Latin America in Asia. Uh. And you know we're able to service those folks because our businesses of scale on the private wealth side and also of scale in terms of how

much we can invest. That's quite quite intriguing. Let's talk a little bit about E. S. G. Blackstone has said, as the world's largest alternative asset manager, we are uniquely positioned to make a positive impact through our investments. Tell us a little bit about how you approach environmental, social, and governance impact investing. So we've really taken a holistic approach, both for our own company as well as the companies

that we own inside our various funds. And to start with the environmental even going back, you know, many years now, we looked at efficiency around energy and water, etcetera. So for example, if you own hotels, thinking about what kind of light bulbs, where do you set the temperature? Things of that nature. Flushers on toilet's probably a little less sexy, but actually important. And today we've made a commitment that for any property or a company that we control, we

will reduce emissions by at least fifteen percent um. You know, we we I don't know if you know, in one of the folios we actually own uh Sty Town here in New York, and we created the largest solar farm

on any multi family housing development in the US. There, that's one example, uh And I would say around the other areas when it comes to UM governance, and by that I assume you mean diversity on board director C we have likewise a commitment there for at least thirty percent representation by women underrepresented groups, and again for our own company as well as for our portfolio companies. So let's talk a little bit about PWS as it's called. Internally.

Your group runs over a hundred billion dollars. Tell us about some of the attractive places that you're deploying capital today. Sure, so we tend to be very thematic at Blackstones. A lot of research comes into play upfront. We figure out where we have the most conviction, and then we're not afraid to go all in. And importantly, if you think about investing as pattern recognition, and you think about everything we own real estate companies, all different types all over

the world. It's just a lot of information flow that comes into play. So today areas off of themes, like you know, the digitization of everything. So if you think about our investment in Bumble or Ancestry was on that in e commerce. This has been a long running theme through the firm over the last ten years. So that informs not just what you invest in, but what you avoid. So we we have not been investing in closed malls, but we have been buying up warehouse assets, especially first

mile those that are closest to clients. Again, everywhere around the world housing there's a housing shortage, uh really in a lot of different regions, and and what just meaning that there hasn't been enough supply. And when you think about all of the delays caused by shutdowns due to COVID, it's just exasperated those or exaggerated those trends even more so. And um, when you have supply demand and balances, that's

usually pretty good for appreciation. We coming through the financial crisis, had created the largest single family housing you know, owned to rent company, and we're continuing to invest in those types of assets. We really like life sciences. You mentioned uncorrelated. That's an area that is uncorrelated, and we partner with major pharmaceutical companies. We invest in their Phase three trials which have very good high percentage UH chance of success.

Cloud computing, and there's a lot of different neighborhoods that we like. And then I would say, also we like the industries that serve those. So once we find a theme something like life sciences, were also then interested in owning the real estate that's catering to life sciences companies. So the intellectual capital really moves through the firm, and we're able to whether it's growth equity, private equity, real estate,

life sciences credit, run that all the way through. And so you would find over the firm's history and continuing today, our various different businesses may invest in a different part of the capital structure. Uh, they may invest in different companies, but they're all focused on this idea of good neighborhoods. Huh. So that that's very intriguing. I always have a hard time drawing a bright line between what sounds a lot like private equity but looks a little bit like late

stage venture capital. I hear cloud and life sciences and bumble and ancestry dot com. How does that distinction make any difference to you, guys? Is it really just an academic distinction or clearly you're not doing seed investing. We understand that, but what is the difference between black Stone

private equity and very late stage venture investing. So, by and large, we have not been venture investors in the way that you're thinking about, in part because the outcomes are binary, and when we're making an investment, we always try to think about protecting on the downside, and that's

quite difficult to do in a venture deal. So I'm distinguishing that from growth equity because these are larger companies where the entrepreneur doesn't want to seed control but is attracted to what we can bring in helping her him really scale the business. So again I'll go back to UH company like you know, Bumble or where we made an investment in Totally and what is it we bring. We have this massive portfolio of companies and properties that

we can introduce them to. We have a data science team of more than thirty people that we then deploy right onto these companies. We have a suite of highly talented former CEOs executives who partner with UH. Those CEOs, who again are are often entrepreneurs who may have not usually have not taken their company and built it into some major global institutions. So I would distinguish it in a lot of Uh, those aspects were coming in much later.

We're not saying this technology works or doesn't. It's already proven, and then we're bringing something to much greater scale. Right. I like the concept of Hey, if it's truly binary, then that's much more like UM venture capital. If there's a range of potential outcomes with a very very low possibility that the whole thing goes to zero, that's more private equity that that. That's a really good framework for that UM. So let's let's stick with you mentioned the

intellectual capital that moves around the firm. UM. We're kind of sort of reopening people little nervous around delta UM. How did you guys operate during the pandemic. I assume everyone was working from home, and what are your plans going forward? How are you going to manage? Yeah, it

was certainly turbulent times. We acted very quickly. So one thing that UM launched literally the week that we shut down in the US is John Gray, our president and CEO, launched a global call for all employees, which still happens every single week. And during that meeting, we hear about macro government, what's happening in some of the portfolio companies,

new investments, and the basic trends. It was also just the best mechanism for everyone at the firm UH to know what was going on, talk about COVID and really around the world, and we do that on Zoom so that you're present. And again this has now been going on since mid March of with my own team, I made great efforts to stay connected. Again, we were all on Zoom, not telephone, so you can actually see people.

I personally added many more meetings than I had previously, regularly scheduled meetings with my sub teams, with the leaders of my business to make sure we were connected. And we also added in a lot of virtual events, you know, whether they were virtual cocktail hours or lunches or breakfast we did hold. I my my children make fun of me because I did the same cooking class like five different times, so I can now make an excellent you know,

pasta sauce um. But I think it was important not just to get the business done, to prosecute the business, of course, that's important, and serve your clients, but equally important was to keep the team together, have everyone with full information feel connected, even though we weren't physically in the same place, and then I didn't mention, but as importantly was staying connected with our clients, and so we immediately launched webinars conference calls about what we were seeing

from a macro level in our portfolio. Companies very transparent about what was happening in the funds and just providing advisors and clients with the most up to date information that we had, and I think they appreciated that. Huh. Quite quite interesting. So so within financial services, people like Jamie Diamond at JP Morgan Chase Morgan, Stanley Goldman, Sachs a roll calling staff back to work. Other places are

talking about a hybrid all going forward. You're in a couple of days a week, but it's not Monday to Friday nine to five. Have you, guys thought about what you want to do and have have you come out with any decision yet publicly? Yes, So we have. The investing teams have by and large been back full time now for several months. For my team, I said we would remain flexible through the summer and then we'll figure

out the cadence. But the vast majority of my team comes in and there were several employees not surprisingly who were quite nervous. But the firm invested a lot uh in terms of creating our own testing mandatory testing, distancing tracing app that we have to keep open at all times to make people feel safe in the environment that we were in. A number a number of big firms are mandating vaccines? Did you guys go that far? Also? It makes perfect sense to me, but I know you

can get pushed back from some quarters. So just this week we told employees that if they're not vaccinated, they shouldn't come to the office, and if you're not in the office, your career is probably not fast track. I hope that everyone will decide to take the vaccine just for their own health. We have not said you can't work at the firm um, but I think it's it's in the interim. You can certainly do whatever you're doing remotely,

but you just you lose the connectivity. And to me, what you know, one of the great parts of my job is actually being with the team, interacting, exchanging ideas. I think that's much harder to do when your box on someone's computer. So you referenced earlier the impact of low rates where clients were previously allocating money to the bond portion of a sixty forty portfolio. How are low rates impacting everything today and what is black Stone doing about it? So I think about the impact of low

interest rates from two perspectives. One is how does it affect an investor, an individual investor or an institutional investor, and how does it affect Blackstone investing in companies and properties. So on the former, it is much harder to reach your goals, whether their retirement or sending your kids to college, or even just saving for the next few years at home, whatever. If interest rates are very low, you're earning nothing on your bank account, You're earning very little from your simple

bond portfolio, etcetera. So how do you create more wealth? And for that, individuals institutions have been seeking yield in private credit, private real estate, as we mentioned, where you could just get better returns where you can apply a bit of leverage, but you don't have to extend all the way out on the risk curve. To do that, you don't have to be in highly levered funds, you don't have to be in the riskiest assets. And I'm

often asked like, do you like non traded reads? Do you like private credit, and I always say it's it's for me. It's really not the fund structure as much as it is who is the investor putting the assets in. I mean, there's certainly not all created equally. So you want to be with a very high quality GP like black Stone if you will, But you want to, you know, really think about who you're entrusting your wealth or your client's wealth with. As it relates to Blackstone. On the

investing side, I'll put credit aside for the moment. That means that you can borrow at much better rates um and you know that certainly helps the return. But I would say, really importantly, we always think about when we're underwriting, what will the next buyer have to borrow at to make it work. You don't want to get lulled into this false sense of complacency where you're like, oh, I

could borrow for nothing and therefore, wow, this looks really attractive. Uh. Kind of similar to what happened to people when you think about, you know, the housing crisis, where they were just taking on way too much debt. So you know, it's it's that toggle between yes, we can borrow at very attract to rates but that doesn't mean that we want to inflate the price of the assets that we're buying. So it's it's really quite a balance, so not the

greater fool approach to investing it. You're looking for a long time. So you mentioned equity richly valued and bond rates at long time uh lows. When we look at both asset classes, there each at all time highs. The one exception seems to be commercial real estate is in fact still at levels UM that are far below where we were during the pandemic. How attractive is commercial real estate? And we know Blackstone is a big investor in UM

individual homes, rent to own, etcetera. What about traditional commercial real estate? So there too, you have to divide it into sectors. So if you're talking about offices or example today you would say, wow, like how could you invest in offices Actually not a big part of our portfolio, but with a pandemic and people working from home, and I would say you have to distinguish where you're investing

and the type of offices. So on the lending side in real estate for us, you know we think about are these high end offices that are open plan that have a lot of amenities for tenants, those would be attractive. We look at office space for life sciences companies, UH, for production studios because one of the big themes for us is live streaming and how that's increasing. We look at where regionally we're investing. So if you use data and see you know where in which areas are the

greatest number of ads for were jobs? Where are young people going? You can get a feel for housing trends, office trends, and very importantly in real estate, because buildings don't just pop out of the ground, you know what supply is, and so you're always looking for supplied demand imbalance and UH, we typically don't invest in new construction, and so we want to buy at a discount to replacement value. And that's really the formula. It sounds simplistic,

but it's supplied demand discount to replacement value. That is the mantra that Blackstone has stuck to everywhere in the world since the early nineties. So I'm hearing two things. I'm hearing data matters, and what you pay for an investable asset is important. Yes, all right, that that makes a lot of sense to me. Uh, tell us what your clients are asking about today that you guys are not currently doing. What what's the next thing out there

that's interesting. We typically when we venture into a new area, Uh, it's because we see an interesting investment opportunity, So we never think about it in terms of how much money can we raise. It's always how much money can we deploy. But to your question, increasingly investors are asking us about E s G investing, and Uh, it started more so outside of the US, in Europe in particular, but I am increasingly asked about it in the US. And E s G is something that's infused in all of our

funds and investments. It's not something that to date we've really carved out as a product, but it's certainly something we're thinking about. So that's kind of interesting because the criticism has been E s G captures a huge amount of mind share, but only near as much capital as you would imagine. And when we do surveys of who's going to inherit the baby boomers money, it's invariably women and younger people, and they're both much more enthusiastic about

E s G than the average investor. Is this something that you're really seeing start to change or is that change still out there. So there are different elements to it. One is that people are mindful of E s G, but they don't want to sacrifice on returns. So when you talk to foundations and endowments for example, very mindful of E s G, but the responses usually that's why we want to generate the greatest returns on the portfolio, so that we can then distribute the money, you know,

to those causes. And when it comes to individuals, by and large, it's the same. They want to support these are topics that are important, but they don't want to really detract tremendously from returns. I don't imagine Blackstone will ever create a copycat or me too product Um. We spend quite a lot of time at the front end thinking about what we'll go into any of our funds. So I think when we do launch something, uh, it

will be unique in the market. Interesting. So some people are quite worried about valuations, not just in the public market, but there's so much capital slashing around and it's found its way into the private markets. How concerned are you about valuations and and what sort of advice do you have for investors about that? So I am a warrior by nature, and I worry when valuations are high. I

worry when they're low. And in my fourteen years at Blackstone, I don't think that I've really sat through a meeting where anyone thought the kind of investing we do is easy. There are always challenges, uh, and either you know, prices are low but no one's selling, or prices are too high. I think the key is not to buy a market and to focus on the sectors that you like, the

companies where you think you can affect change. And this is a key in private markets versus public So we sign non disclosure agreements, we get inside information if you will, we have six months or whatever the time period is to do full due diligence. We have our portfolio operations team all over the company figuring out where we can make improvements. And you know, when in the old days, when those were industrial companies, was more about cost cutting.

Today it's much more about leaning in on growth, connecting our portfolio companies to one another, making them more tech enable, etcetera. And that's really the of formula. You know, it's taking the company or the asset and applying either capital or talent to it. Rather than relying on on the market. If all you're doing is paying more than anyone else, that's a hard way to make money. To say the least.

You mentioned fourteen years at black Stone. I remember the Blackstone I p O and I'm the pandemic has completely ruined my sense of time, because I never would have guessed that was fourteen years, but that was two thousand and five. That's a long long It seems like a long time ago. Um. One of the things I wanted to ask that I didn't get to before was the

liquidly or illiquidly premium. When someone puts money in a black Stone funds, my assumption is they don't have access to that the way they would a regular publicly traded stock for an extended period of time. What's the typical lock up without penalty like for for your funds? And I'm also assume there's a wide range and there is

no one number. So for the typical private equity or private real estate fund, uh, those are only accessible to qualified purchasers or institutional investors, and you're locked up for the life of the fund very deliberately, which is seven years typically or so. It's usually a ten year fund varies a little bit, but you control the timing going in and you control the exit. So you never want to be in a position where you're forced to invest quickly or you're ever forced to sell. So there is

no early redemption. The redemption happens as you start selling down companies or assets in that portfolio. Makes a lot of sense. So I want to circle back to your You mentioned you're a warrior. Everybody I know who worked in equity research is a giant warrior. They're like, what did I miss? What's gonna ruin my investment thesis? How has the world of equity research changed from your perspective?

You got to see it from the public side, from the private side, and over a couple of decades of investing, tell us a little bit about how research has changed. Yeah, it really has evolved. So in my earliest days, it was, first of all, we didn't even have excel um and there was, you know, no way to reach clients other than meeting with them or or calling them or companies

for that matter. Um And but you were really an advisor, not just two investors, but also to the companies that you covered, and that endured, Uh, most of my tenure. It was what I enjoyed the most, getting to know the management teams, understanding their strategies, working on you know, I worked on dozens of I P those UH secondary offerings, M and A transactions and there was nothing nefarious about it. I worked closely with the investment bankers to really help

the companies figure out their strategy. That all changed, if you remember, UH Elliot Spitzer came in looked at research. This was during the tech bubble and found that there were conflicts of interest UH that maybe investors didn't know about, maybe they did, but really hived off equity research from every other part of the business. And in many ways, I think it diminished um the value of the equity analysts.

And you know, by and large, who's folks who had studied really probably knew these industries better than many of the management teams, if you will, working in them, because they had such a good feel for the competitive landscape as well. And at the same time, you had the proliferation of the hedge fund industry, so a lot of research analysts went to the buy side, left the cell side. You've had compression of commissions, etcetera, making cash equities a

less profitable business that it once was. And so, uh, while I still know very many talented research analysts, I think it's unfortunate that what they're doing has been so restricted. Makes a lot of sense. What about social media has that disrupted cell side research? That is a good question. I don't know that social media has disrupted as much as information comes generally much more quickly than it ever did,

and the expectation to have an immediate response. You know, when I go back in time where you really really had the time to think through and crunch numbers and you know, form of an opinion. Today it's much harder, and like you know, with social media, to to your point, everyone's out there with a view, with an opinion. It probably does make it much more challenging. So let me switch up gears on you a little bit. I want to ask you about uh black Stone Woman's Initiative, which

I know you're involved with. Tell us about that. So I was involved in the formation of it, and at the time that I joined black Stone, only about ten percent of the analysts, applications applicants were female, and about of the class was female, and so I was really interested in how we can improve that. Uh, there was a perception that somehow, how private Equity Alternatives is in a great career for women. Not true, and so um, you know, I was trying to figure out what what

we could do. So at the beginning, we really focused on educating young women, sophomores, juniors in college, inviting them in, teaching them you know what you need to know, uh, figuring out, you know, why they weren't applying, why we weren't hiring more, and going to those solutions. Today it's light years ahead of that. You know, between forty and

fifty percent of our classes female now. Yeah, so big improvement there, and a lot of focus on professional development and networking and really trying to find common derailers for women and addressing those. So there's a quote of yours that I very much like because it's a philosophy that could apply to a lot of different people. But I like quote, get comfortable being uncomfortable. Explain what that means. It means that many women, especially young women, are comfortable

doing the things that they know well. And unless you're willing to stretch, you're just never going to grow in your career. You don't have to know it all on day one, it's all learnable. You know, nothing that we're doing in at least in the roles that I've had, is rocket science. So if you apply yourself, if you ask questions, if you really want to learn it, you

can learn it. But you have to be willing to push yourself a little bit and know that the first time you do anything, whether it's you know, speaking in front of a large group or presenting to senior people at the firm, whatever it is, it's not going to be as good as the hundredth time you do it. And that's okay. Is that a gender specific difference? And my flavor of sexism is dudes are just reckless and

we are. They are not smart enough to think I don't know anything about this, so I'm just gonna plow ahead anyway. I get the sense that women tend to be a little more circumspect and thoughtful, or is that you know a stereotype and it's not accurate. So there have been studies showing that, for example, um, women will not raise their hands for the promotion unless they think they can tick off every single skill set, where as men may have very few of those skills, but they

raise their hands, say I could do it. So that's definitely a gender difference. Hold my beer, that's a that's a dude thing. So this leads me right into tell us about truth for our daughters. So my daughter, Lindsay at the time was a freshman in college. She was a math major, so very few women already, you know, breaking barriers exactly, and some of her classes, although I guess increasingly there are a lot of women majoring in

math now. And she had applied for leadership program and called me in tears and said, I just got called for the third round and I'm not qualified. And I said, you're a freshman in college. What qualifications do you think you need? Um? But it really made me sit back and think, here is this daughter of mine who is so capable, and she's showing all the insecurities that I, of course also had and that I've witnessed so many

other women had. So it it really caused me to put pen to paper sort of a if I knew then, you know what I know him now? And um, and it was she she loved it. So it was it was and some of this some of the bullet points, we're pretty straightforward and and not a big surprise, but some were giant surprises that when I when I read through this, be ready for anything. That's good advice for anybody in finance. Be confident. I see the gender specific

but um reasons for that. But but some of the suggestions, UM, speak twice as loudly as you think you need to. And I have a problem. I don't hear how loud I speak, so I speak too loud. Why is that advice necessary for women to tell them you have to speak loudly if you're a room full of people. So again, if you're generalizing, women tend to speak more softly and therefore don't come across having as much conviction in their

ideas even if they do. Uh. And it really harkened back to when I was in a room, uh filled it was a boardroom and I was presenting on something I actually knew a lot about, and so and said, oh, can you speak up. I couldn't hear you, know, I couldn't hear you, And it just set me back, and

I thought, this will never happen again. I also think there is sometimes a tendency when someone is speaking softly for someone else in the conference room to just come right over the top, and you know, interrupt and that doesn't happen when you're forceful. So it's one of the basic things I tell any mentee I have, any women that I'm meeting with, just speak loudly. Uh, make your voice heard. Uh. You don't need to know it all on day one. Very straightforward. You have no idea where

you career will lead. Very straightforward. Here's another one that leapt out at me that I never would have thought of. Draw lines in the sand. Tell us what that means. So for me as a parent once I had kids, it was figuring out what I wouldn't give up. I think there many women are conflicted. They feel awkward saying I'm leaving the office because I have to take my child to the doctor, etcetera. And there were certain things I just wouldn't give up. I never missed a school

performance or play. I never missed a parent teacher conference. But was I able to go to the gym? Was I able to make it home for dinner every night? No, So figure out where your lines in the sand are. Although I will tell you after a year of work. Um. My daughter was reflecting on those truths and she said, I get it, but as a for sere, I just have to put my head down work. I don't have lines in the sand. So well, it's different when you're

twenty four and single versus married with kids. Obviously the obligations are different. Well, well, I found it to be really interesting, and um, I'm glad we got to talk about a little bit. Let's I only have you for a limited amount of time. Let's jump to everybody's favorite questions, starting with so, tell us what you were watching during lockdown? What was your Amazon Prime or Netflix favorite shows? I

don't know what this says about my emotional state. So I've definitely evolved a little more, you know, high brow versus where I started, is what I'll say. Uh. So, at the beginning, I was watching shows like Love Is Blind. I don't know, uh And my version of that, by the way, was The Gilmore Girls. In the beginning of Lockdown, my wife and I streamed the whole Gilmore Girls, which I should be embarrassed us to admit, but I'm not.

And now it's evolved to something a little more sophisticated exactly. And then I enjoyed shows like ted Lasso and others. Right now I'm watching White Lotus on HBO literally teed up for tonight. I hear it's hilarious. Is it as funny as everybody says it's Is it as funny sardonic? Yes? Okay, is what I would say. You probably won't like anyone on the show, right, which is usually a bad sign, Like people love succession, I hate everybody on that show.

When I never got past this second episode, I think you'll find I hear similarities, okay, where as something like Ship's Creek in the beginning, everybody is totally contemptible, but they all become lovable characters over time. So it's funny you mentioned Ship's Creek. So so my two go twos when I need to just relax and laugh. Stressful day. Modern Family so good, so good. I could just watch

them over not right, and they're they're both. So I'm going to come back to Ship's Creek in a couple of years and rewatch it um because like the Nightcap is it has been these classic sitcoms like UM, thirty Rock, and Community. It's like a good way to um. Modern Family is terrific. And there's another one that you know. It only lasted four seasons, but it's so good called Life and Pieces tells the story of a family, an

extended family. In each episode is three vignettes, one about the parents, one about the kids, one about the grandparents, and they're all into related. If you like modern family, try that. It's like it's just a nice relaxing and all the actors and actresses are great in it. It's just it's just a sort of show. Um. And I was like the last two Ships Creek that my wife had a drag me kicking and screaming because the first episode, everybody is just so contemptible. But if you give it

a little breathing room, they grow out of it. Tell us about your early mentors who helped to shape your career. So I really had several. Unfortunately, I'm sure I'll be leaving people out here because I really do feel like it. It took a village. But my first mentor was David Cipher. He was an insurance analyist. He was the number one ranked equity research analysts at First Boston. That's where I started. Uh,

he was not my first boss. I was working for someone else and I was there one night at ten o'clock at night, David had hosted a dinner for a company I think it was Tokyo Marine and came back to the office. I was the only one still there, and so he said, I need you on my team. Literally. That was our connection, and UM goes to show you being in the office has as could have positive results. So another female thing here. You know, Historically I would

have said I was lucky. Now I just say I'm fortunate. There's no goiness there. So we connected and I followed him to d l J. But he really pushed me. He was the one who, when I didn't feel ready, had me go meet with portfolio managers and he used to say, like, you know all the numbers. You can

answer all their questions, you know. I So I credit my career really to him and uh Tom Letty, who ran the morning meeting at d l J. He's a wonderful person, but he was very tough and very tough on me, and I'm ever grateful to him for that. He would let me come in super early. I would tell him what I was thinking of saying, and he would just say, that's not what you want to say, you know, in a in a pretty harsh tone. Um, But it forced me to just get better and better

at it. So those were the two early but you know, I have to say, even my time at Blackstone, I've learned a lot from just watching Steve and Tony and John Byron ween Is on my team and um, you know, just the collective experience and different style. So uh, you know, from all of them, I would say, just thinking big about building your business, and you know, not incrementally. My team hears me say this at nausea. I did a hundred this year, so next year I'm going to do

a hundred of ten. No, I want to think about how big can this be and how do we get there quickly? So that combination of you know, thinking big, impatience, really focusing and just being a flex civil thinker and you know, an equity research you certainly go through different cycles. But at Blackstone I've really learned, uh to not say like, well, when a happens, you do be or etcetera. It's really, well a happened, But I don't know, maybe we should be thinking about X, Y and Z that no one

else has done. And so it's been expansive for me, very interesting. Uh, tell us about some of your favorite books and and what are you reading right now. So I just finished reading Hamnet, which I don't know if you've heard of it, but it's so it's fiction, but it's based on Shakespeare's son Hamnet. Notice connection to Hamlet, who died when he was eleven, and uh, and around

Shakespeare's wife. The story itself is fictional because there's just very little information on them, but it was beautifully written and fatacinating. Um. I often also am drawn to biographies, either autobiographies or or others. So uh, the Einstein biography and Steve Jobs. I loved Phil Knight's book Shoe Dog. Um. On audio, I listened to Ruth Bader Ginsburg Obama, and I just love hearing one about for none of them, you know, was any of this easy? They all had

repeated failures, but also Einstein in particular. It was this light bulb went on that here's the guy we all call a genius. He was and um, we refer to people who excelled in in all different subjects geniuses, but he really excelled in one. He was nniacally focused on one area. He didn't do well in chemistry. He needed language tutors. I just thought it was I never really thought about that in that was that Walter Isaacson's book, because I know he did the Steve Jobs book as well.

And then I'd say the final category for me is just something that's so beautifully written. So my favorite book of all time is Crossing to Safety and it's not a big story, it's sort of a quiet story, but the use of language is just wonderful. There's an autobiography I read last summer by David McCullough on the right Brothers that if if you're an autobiography fan, I have no interest in that particular genre of flying or it's

just so well done. And if you like autobio, if you like biographies, everything mccullo writes is coming away with great recommendations. Well thank you. You know. That's the beauty of where I sit is I get recommendations from some everybody each week, and you're getting the cherry picked versions of that um our. Last two questions, what sort of a vice would you give to a recent college grad who was interested in a career in either private equity

or investing or finance. So this is the advice that I've given my own adult children, and and I give to their friends and anyone I speak to um, which is when choosing not a job, think about the skill set that you want to acquire. Make sure you're going to a place where you could really learn, where you think it's a quality firm and you're gonna learn from quality people. But most importantly, just about how you act, how you present. You want to be the person that

everyone says, I want her on my team. And what does that mean. It means you're working hard, You're willing to put whatever it takes to get the job done. You're focused on the details, you're reviewing everything you know. What can your value be as a young person, and it's that you know no one's expecting you to have the judgment of the partner. But whatever you're doing, just make sure it's as excellent as it can possibly be.

Good good advice. Our final question, tell us what you know about the world of investing today that you wish you knew thirty years or so, or go thirty years ago or so when you were first getting started. So when I look back and I think about all of the market disruptions during my career, so starting in the summer of eighty six, when I began shortly after that you had the stock market correction when five points seemed like a day. That's can we call that a crash?

That's more than a correction. That's true. That's true, that's a crash. And then you know the SNL crisis, interest rate shock of nine for the tech bubble rise and then deflation, the global financial crisis, disruption from a pandemic.

I mean, it's like, wow, floods every couple of years, don't So in hindsight, it would have been wonderful to know that we get these floods and that you have to be nimble and flexible, uh in your thinking and anticipatory and understand that you have no idea what's coming your way. Uh So I think the other thing is, which maybe I did know but proved to be true.

Finance is in my mind one of the most fascinating industries because I mean, think about what I just mentioned and all of the the derivative impacts of that and inputs from that. I mean, you have to be thinking about not just an industry, but what is happening on the regulatory front, geo politically, secular trends. You know, we were talking about the Internet disrupting retail. You know in the nineties, the late nineties. Now it took a while to to really um disrupt. But for someone who is

intellectually curious, there is just so much going on. Huh. Quite fascinating. UM. Joan, thank you for being so generous with your time. We have been speaking with Joan Solitar. She is the global head of Private Wealth Solutions for Investing Giant black Stone. If you enjoyed this conversation, well check out all of our previous interviews. You can find them at iTunes, Spotify, wherever finer podcasts are sold. We love your comments, feedback and suggestions right to us at

m IB podcast at Blomberg dot net. Give us a review at Apple itunesh You can sign up for my daily reading list at rid Halts dot com. Check out my weekly column on Bloomberg dot com slash Opinion. Follow me on Twitter at rit Halts. I would be remiss if I did not thank the crack staff that helps put these conversations together each week. Paris Wald is my producer, Attica val Bron is my project manager. Tim Harrow is my audio engineer. Michael Batnick is my head of research.

I'm Barry Ridholts. You've been listening to Masters in Business on Bloomberg Radio