Sharon French Discusses Smart Beta ETFs

and black Rock, amongst others. She has been an instrumental person in the development and growth of the E t F sector as well as a very active participant in the E s G, Environmental, Social and Governance UH sector of investing. She is consistently named one of the most influential people in finance. Most recently Cranes had their list of forty women, but find a list of a hundred most influential women in markets, investing, finance, and Sharon is

invariably on that list. You will find this to be an absolutely fascinating conversation. So, with no further ado, my conversation with Sharon French of Oppenheimer Funds. This is Masters in Business with Barry Ridholts on Bloomberg Radio. I'm Barry Ridholts. You're listening to Masters in Business on Bloomberg Radio. My

special guest this week is Sharon French. She is the head of Beta Solutions at Oppenheimer Funds, where she also implements the firm's E s G efforts, as well as overseas a number of UH Smart Beta et F products and solutions. She has previously worked at such storied firms as Black Rock Alliance, Bernstein Chase, JP Morrigan Chase. She's a graduate of Wharton School of Business and serves on the board of Women in ETFs. Sharon French, Welcome to Bloomberg.

Thank you, Barry. I'm glad to be here. We've been talking about doing this now for a long time. I'm glad we finally got you in the studios to have this conversation. Let's talk a little bit about your career. You began back at JP Morgan Chase when they were really a much smaller shop. Weren't they, Yes, Yes, down on Water Street, one Water Street, right across in the Staten Island Ferry. What was yeah? What were they like then and what was your role with them? Sure? So

I graduated with a management degree concentration and finance. I went into a sort of global training program with them. Certainly, you know much smaller at the time, you know, still very regionally based. Um. You know, the the project that I was working on is really how to define profitability for their different product lines. Um. But I got a chance very early in my career to travel abroad too.

I lived in Paris, I lived in London, and lived in Milan, Madrid, Frankfurt, doing cost studies with country managers and then making a recommendation to you know, either d market a product or or you know, sort of focus in a particular area. And so I was definitely over my skis. Looking back, I don't know that I knew really what I was doing, but I certainly learned a lot. Well, this is was just right out of grad school. They start sending you this was right out of undergrad. Yes,

right out of undergrad So I was young. Yeah, yeah, but you have to work really hard the first year and then you know sort of um, you know, compete to go overseas. So thankfully, you know, I've never been showed a hard work and so they you know, gave me the opportunity and I jumped at it. So you go from Chase to Wharton, where do you go? So my undergrads from University of Delaware Wharton is my um my certified Investment Management Analyst designation, that's right. And so

where did you go from from upen? Uh so? So then I just went straight into Chase, right, So I started my career in global banking, then moved into brokerage, then sset manager. Yeah so alright, so then you go from how how do you end up in black Rock right in the middle of the entire build out of ice Share. Yeah, yeah, that was fun. That was right after Larry Fink bought b G. I so right, I

think that deal closed December two thousand nine. And look, you know, I certainly have an appreciation, a broad appreciation for financial services in general, because my journey and career progression was, like I said, global banking, wealth management, brokerage platforms.

Really sure, some Leman brothers up through what is now called Morgan Stanley UM, and then I went into asset management, always on the active or fundamental active side, right, which is what people like you and I grew up with the mutual fund. But what really drove me crazy at

Alliance Bernstein was that we would go into an institutional presentation. Right, so you've got the committee there, you've got the chief investment officer and would be trying to sell whatever strategy, and invariably, probably fifty percent of the time, we would lose to b G I Northern Trust State Street because

of a passive mandate. And you know what I was trying to articulate to the chief investment officer is that the real prudent way to run the pension fund, as an example, is to figure out how to combine intelligent alpha with efficient beta so that there's really room for both of us. So what again, intellectually stuck in my brain is I cannot really as a practitioner talk about the indexed enhanced index or beta side of the business.

And so I got a call from a recruiter, James Beck, wonderful recruiter here in New York City, and they had a position at I Shares And I loved Alliance Bernstein Loos Andrews, especially as a leader. Was was just a legend. They had such a fabulous research group, especially in the nineties right into the tie absolutely and Bernstein plus Alliance was sort of like boom right. It was just a

fabulous combination. So I never thought I would leave, but this I had this nagging thing in my brain intellectually as a professional that I needed to satisfy. I needed to be able to talk about both sides of the investment management industry again as as a professional. So that's really why I went, and I gotta tell you, And of course I got you know, I got grilled, and everybody said to me, oh, you're going to the dark side, And I guess I suppose I did, But I did it,

you know, deliberately. Well, by dark side you mean more efficient and lower cost or dark side just the company dark side anything passive right from fundamental active into the dark side of indexing. If you were, you were dead right when you say they're not mutually exclusive, they're complementary.

And I don't understand why people, I guess when you're losing business and we've seen the flows have just been when you started at I Shares, did you ever imagine Vanguard would be five trillion, black Rock would be six trillion, and a decade of flows would shift from active to passes the way we've seen. No, I really didn't, And and look, you and I both know that. I think two thousand and eight really propelled that forward dramatically. But but when I joined I shares Vanguard and State three.

We're certainly a of I shares in terms of the league tables, but I shows came on strong. And one of the big strategic moves that I Share has made, and this is right when Mark Weedman took over in two thousand and eleven, maybe nine months after, is they you know, they were losing the core positions to Vanguard, right they were, they were being relegated to the satellites, and so they came out with the core series right sort of replicating Vanguard's core products at a lower phase,

and that was a big game change. I mean, certainly us m V, which rivalist SPLV and had a better construction, took a lot of assets in low vall. So they you know, they really made a lot of good strategic moves. I'm fascinated by Larry Fink in two thousand and nine, when everybody is still stinging from the g f C from the financial crisis, says, no, No, now is the time when we're going to make a giant purchase and totally reformulate the firm. That is one of the great

all time pivots in history. And if you recall the time everyone thought, oh, my gosh, he's totally overpaying b everybody's laughing. He's laughing all his way to the bank. And now they are literally the biggest shop in the world. So, so you were there at a time when the growth was really rampant. What was that experience like? So here's how I described in many of us who have been at I Shares and have since left and gone on to really wonderful things. It's like going to boot camp

for the Special Forces. I knew you were going to use that metaphor because I've attended a number of conferences where you and I have both spoken, and that crew of E T F people all seem to have gone through the same baptism of fire. It's absolutely fair. Again, if you have anybody else in your show who's who was there for a period of time and left, we

all say wonderfully positive things about the experience. And I mean that so genuinely, because every single day you are walking into battle, the bar is set so high for everything that you have to achieve, and Refin's expectations are real. They they they are quite lofty for everybody, and so you know, you really sharpen your skill set that when you get out. You get out like you are a Green Beret or a Navy seal or recall it what

you will, right, So therefore you are very hirable. People love to take people from black Rock now difficult culture because of that. Um. But you know, I absolutely look back at that time in my life as a wonderful experience. That's shaped a lot of who I am today. And the proof is how successful they've become. Whatever they're doing, it seems to be working. Yeah, I'm very hults. You're listening to Master's in Business on Bloomberg Radio. My special

guest today is Sharon French. She is the head of Beta Solutions at Oppenheimer Funds, where she oversees smart beta products as well as E s G efforts. Um, before we move on to what you're currently doing in Oppenheimer, I have one last black Rock quest Shin. So you were head of private Clients and Institutions at Black Rock. What did that work entail on a day to day basis? What were you basically in branding and marketing or were you front line dealing with c I O S and

investment committee front line? Good question? Um? Uh yeah, so it so institutional, which was also a responsibility of mine

out of lines Bernstein so institutional and private banks. So you know, we certainly dealt with JP Morgan private bank quite a bit, and a lot of the others Wills, Fargo, etcetera, you know them well, UM and so it was it was really a strong product development client fit role at that time that the the I shares you know, product lineup if you will, was growing pretty dramatically, but it

was very closely connected and linked to certain channels. So the channel that I fail exactly now they're they're pure beta you know index stuff, you know, the um some institutional kinds for using as trading vehicles, but they certainly were looking to get away from that specifically within smart beta first trust was coming up very fast in the in the sort of rear view mirror at the time UM, so we had to sort of pivot and balance between our our pure beta market cap strategies, which is really

where they started into how do we tilt a particular product more fundamentally, and a lot of the feedback that we were getting for that product development was driven exactly from some of the private banks that we worked with in some of the larger institutions quite interesting. So let's talk about beta solutions, which is kind of a mouthful to instead of just saying beta. So let me just start with the obvious question, what's the difference between Beta

solutions and basic index? And yeah, well so, and there's a reason why it's called that. So, yeah, right when I was hired to Oppenheimer Funds, it was a very deliberate decision Artstime as the CEO, to really, you know, commit and go full force into the E T F business utilizing smart Beta, taking a pass on market cap because there's certainly big players who you know, corner that market. Hard hard to add value there if you're smaller or even a mid sized player, that right, That's right, And

so he sort of wanted to call the unit. So it's a this is a sort of a a independently run, if you will, operating unit within Oppenheimer Funds, which gives us the space and the focus and the commitment to sort of build our business alongside of our active business.

But he wanted to call it smart Beta, and I said, you know, is that really what we're trying to do, aren't we Aren't we trying to take a beta concept and wrap it in whatever it makes sense to wrap it in, whether it's an et F fund, a separate account and use it. So shouldn't this be called beta solutions? Because if we are pigeonholing ourselves just into smart beta. And you know, for the longest time people really know

what smart data was. It had all kinds of names, strategic, beta, alternative, veta, de menal, indexing exactly, probably the most descriptive. Are you on the side of the fence that thinks the phrase smart data is a marketing term? I am on that side of the film. You're you're not a fan of that. I know a lot of people just cringe every time here because if you think about it, if beta is just what the market's giving you, what is how you

modifying that with smart? I like alternatively weighted right, because I think of I think of buying the market right, which is market cap and certainly favors certain stocks or sectors, which you know, there's always been concentration risk in that approach. Some people still want it, which is fine, but there's better ways and different choices on how to drive that risk return profile through alternatively waiting the index. And I

really do believe that I remember way back when. I think it was Guggenheim who had the equal weighted that's and that was suddenly like, wow, so you don't have the market cap weighted. It was never giants, although it certainly has grown, but it was always home. You mean, there's a different way to do this. It's kind of surprising that the smart beta move hadn't begun earlier because people were clearly thinking about ways to look at indexing

that wasn't just cap weight That's right. And what I'm really encouraged by Barry is that if you look at flows in teen versus eighteen, smart beta, of the total pie of et F flows was about twelve pen it was. That's giant. It seems to have plateaus somewhat now, right or is it still growing? It's still growing. Yeah, it's still growing some of the well, you know, I mean this year, I mean, I haven't seen April numbers yet, but it's it's haund pretty healthy growth this year, you

know that. And I know that it's over whether it will double. I mean, it's it doubled. From whether it will double, that's that's a bit of a stretch. But the point of the matter is we knew we would get smart beta market share from three places. The first is underperforming active and you know sort of morning star one and two star rated funds. We certainly saw it there. Um, the just the sheer growth of smart Beta trying to get our unfair share of that. And that's the growth

I'm talking about from eighteen doubling and then passive. So as people got more educated about the merits of alternatively weighted some of the you know, uh, sort of traditional passive buyers started to move towards and understand what they were getting by paying in some cases twenty basis points more to get a smart beta product. They started to move parts of their portfolio to smart beta from having

it be all passive. So there were three pillars by which we gathered market share, and we're about five billion today and from our our start with it's about so we're pretty happy with. So let's since you brought that up, let's talk about what Oppenheimer's portfolio options look like. So you have the alternative way thing you're saying billion, what are the other et F offerings they have in either the beta or the non beta opportunities? Sure? Sure, So

we have twenty equity strategies. UM starting out with revenue weighted revenue weighted, so that's a traditional smart beta fundamental. It is absolutely yeah, and that is due to a small acquisition we made back at the end of of revenue shares. UM really kept five of those products and then built that suite out and then we started to move into factors and we've got a really nice partnership with Fitsie Russell. We introduced Dynamic multi factor, which we're

super proud of. We were one of the first us in PIMCO. So this is an active no, it's it well interesting we have it's sort of an active overlay. So it's a macro signal coming from our global multi Asset group which takes UM sort of leading economic indicators as well as the sort of the momentum signals from the market and tells us monthly whether we're either in

a recovery, an expansion, a contraction or a slowdown. And then we take the five factors and we wait them depending upon which market regime we're in, and so based on that you will alter within the e t F the waiting of the So it is rules based, but it is informed by this active signal and it has done phenomenal. We launched it in November. It's at the

top of the category. So this is kind of an interesting space because people have been talking about making its ironic how beta has driven so much of e t f s, but we're talking about making e t fs more dynamic and more active based on a variety of other inputs. So this one is rules based, driven by a series of economic inputs. Any other dynamic or active ETFs current or on the rise well, interestingly, so we did file with the SEC for a senior loan product.

We've got a very very well recognized and successful senior loan FRANX fixed income right, so so we were making our foray into the fixed income marketplace. We also filed for short duration uh e t F some liquidity enhanced ETFs and all these are not to a specific index. The role dynamic and can change. Well, these are actually active. So what we're doing is filing active fixed income ETFs

with some of our key teams and Oppenhammer funds. And had we not been bought by Investco, because those products are just sitting on the shelf, those approvals by the SECO sitting on the shelf, we would have launched fixed income active UM just sort of you know, build out the asset allocation sure and all the academic research says that while active may not necessarily create a lot of value in the equity side, it really can create value

unfixed income. It does absolutely, and I think you know, firms who are thinking about that should really look at sort of what are some of their core competencies on the fixed income side. Certainly we've seen you know, Gunlock and Gross do well with the products when they came out, and they're sort of leading the fixed don't come active ETF space, But we really believe that that there's something in that for investors. I think the jury is still

out on the equity side. I mean we saw the big you know, Presidian approval that was a big development a couple of weeks ago. I'm not familiar with that ETF. What was the um. The company is Prosidian, and they have been working with the SEC to try to get an approval for a non transparent solution. Quite quite interesting. I'm very ritults. You're listening to Masters in Business on Bloomberg Radio. My special guest today is Sharon French. She

is the head of Beta Solutions, for Oppenheimer Funds. She also covers environmental, social and governance efforts at the firm. She is a graduate of the Wharton School of Business and sits on the board of Women in ETFs. So, so let's talk about what's going on, um with women in the E t F space. Tell us a little bit about Women in E t F the board that you're on, uh, and what is that group about and what are they looking to accomplish. Yeah, I would love

to talk about that. Thank you for the question. So I'm co president with Jillian del Signore JP Morgan of Women in E t F. So I have been a global governance committee and board members since the beginning. Um, how long has this been around? For just over five years? We just hit our five year anniversary in January. That's decent, you know these days, five years just for something to survive and grow is not a bit. And I have

to tell you we are growing so fast. We're global. Um. So we're in a May as well as Asia, pack and Canada. Um, We've got ten chapters, were just about to hit five thousand members globally. That's fantastic. And this Verry, this hit at the heart of what I really think is needed within the e t F industry. There are

women of Wall Street, there are women in hedge funds. UM. But this was really something that we heard a lot, as we believe, but within financial services there are a lot of women gravitate to the e t F ecosystem, whether you're an AUTHORIIC participant. We have really drilled down with some theories on this, but we would love to get a research partner to prove it. Well, let me man explain this to you, okay please, But UM, we think it's innovation. We think women are very drawn to

innovation and UM evolution. Um, there's a lot of women in supporting the e t F industry on the legal side. There's a lot on the trading side, especially authorized participants and market makers. You and I know many of them. Um. There are a lot of women leading e t F businesses. Uh. There are a lot of women in e t F distribution. Again like my co president Jillian del Signore over at JP Morgan. UM, there are also you know heads of products. I mean, uh, they're the head of uh the e

t F business at JP Morgan. Also used to be the head of product both at I Shares and and JP Morgan. So so there is just a huge concentration of women within the E T F industry that we felt a need to get connected. So our mission is to connect, support and inspire UM. So it's really having some of the more senior executives within ETFs mentor and sponsor and connect the women who are joining us who are just starting out in the industry UM. And we have events all over the world and by the way,

we do encourage men. Uh they're a well over ten percent of our membership as men. We're hoping to get it up to because we are trying to continue to push forward the agenda of gender equality and the diversity of thought. And so one of our big things that we do every International Women's Day is ring the bell at every stock exchange around the world with the Sustainable Stock Exchange in the u N And that's a fabulous, fabulous, high profile way to promote gender equality within the ecosystem.

And it's our five year anniversaries, so we're gonna be doing events both in UH Hong Kong, San Francisco, Chicago, New York, and Toronto. So it's funny you mentioned five years. July will be five years that this show has been around, And when I was first beginning and was able to wrestle up a female guest, one of the questions was always something corny, like, so what's it like being a gallon of man's industry? And I'm being a little sarcastic, and I'm thrilled that I get to ask a question.

So tell us about how you're driving the growth of E t F. You can see just over the past five years how much things have have changed. It's really so different. And I'm curious. Do you think it's the fact that the E t F space was so new you did not have that sclerotic old boys network cemented in place. It was easier to um breakthrough into that space without the usual obstacle. I think that's very valid.

I think that's a very big part of it. I mean, look, I you know, I've been around for over thirty years, so I did grow up in the environment exactly um, and you know you sort of because of of that, you know, for me personally, I've sort of become teflon coded because you needed to be. But you you know, now it's much more supportive. I mean, the industry has changed. I do have to say glacially it is better today, but I would have preferred it to be in leaps

and strides. But um, but but whether it's you know, women on Wall Street, the Financial Women's Association, hundred women's in Hedge Funds, women in ETFs, I mean there's now organizations that have a genuine interest in continuing to promote women. UM, give them the tools and resources in order to to

advocate for themselves, negotiate for a job or a better raise. Um. We have a speakers Bureau, So we have a lot of people in media like you tell us about the speakers because um, I introduced them to one of the women who worked for me who actually speaks all around the world then is highly sought after speaker, Blair Ducasney. She started working with the Speakers Group who put together Yes Yes, so thank you and look, we're we're sort of spoon feeding the media who are are are having

a hard time finding female speakers. So Elizabeth Kashner at fact Set and Linda Jang with she has her own firm, Purview, we talked a lot about it and that's what we do women as we just get it done. So they came together and they reached out to everybody, and you have to you have to apply, and you have to be qualified in certain topics and media trained in order

to be part of our speakers. Beer, I think we're up to Linda last set on our Lastkoll, I think we're up to forty, you know, professionals who are you know, very well experienced in certain key segments of the market. So we're taking this list and we're giving it to people like you. We're giving it to inside ets, We're giving it to Tom i'd a e t of trends. We're giving it to whoever needs female speakers to try to get a more diversity of thought and equal representation

in the media. I won't I won't mention the group, but there was an article not too long ago about a conference and the photo is the panel on diversity and it's six white dudes, and it's pretty Hey, listen, you guys, really you gotta make a little bit more of an effort. Then, look, I found six white guys. Let's let's have a that that one I know exactly which one you're talking about. That won't happen again, But again, we did you guys tag them and say, oh, absolutely idiots,

absolutely didn't. It's kind of embarrassing. It is. It's embarrassing on diversity. I might be exaggerating slightly, but the photo I saw it was like, what, Yes, No, that's gotta be the you know, how to raise money for a hedge fund or something else, male dominated type of a panel. That was pretty hilarious. Yeah, and so sometimes you just need to take action. That's what we did. We have the list of forty women and growing, so depending upon the topic, we certainly will have three to five women

to choose from. That. That makes a whole lot of sense. I'm Barry Hults. You're listening to Master's in Business on Bloomberg Radio. My extra special guest this week is Sharon French. She runs the Beta Solutions group at Oppenheimer Funds. Let's talk a little bit about environmental, social, and governance investing. What I keep hearing is we're on the leading edge of a thirty plus trillion dollar generational wealth transfer um.

Millennials and women are the people most interested in investing in the environment and social based clauses, and yet the pickup has been so slow. What do you make of that? Yeah, and if you look at the numbers in retail in the US, right, so you always have to peel the onion. Uh, the adoption has been slow within what I call the sustainable investing universe to really understand why that is. And by the way, this is the first really trend if you want to call it a trend um where the

growth outside the US is really driving it. So it's typically there's big pension funds within the Nordics, within Europe or a MIA um so institutionally in Amia driving a lot of the adoption. There is a very high expectation in some cases of mandate that you have to have a very well thought out E s G process within

your portfolio management structure. Is it a specific percentage or is it just it's it's most of the market institutional outside the U S. Yes, of the eight trillion or so that's in that market today, most of his institutional outside the U S. So, as you know, most of the growth is driven by the US, and the adoption happens usually in a Midia first and Asian Europe, Middle

East and UM Africa. So Europe pension funds specifically driving deeper in the Nordics is what's driving the overall global growth of stainable investing in the US, there has been a legacy understanding that we're trying to unwind with s RI I. So SRI I socially responsible in exactly, but it's been sort of the days of Calvert where it is exclusionary investing, the broad index, they screen out whatever it happens, that's exactly right, and therefore they when you

carve out big segments of the market, in many cases, not all, but many cases, it impacts performance. So it has sort of has this negative um inertia attached to it that has really evolved. So that's one end of the spectrum, that's right. The middle part is E s G investing or e s G integration, and what that is is looking at the environmental, social, and governance factors that impacts a corporation using that within a portfolio manage

management process. So they really called the intangibles, typically look at the tangible balance sheet right financial metrics. Adding to that, the intangibles really tells you and gives you a full picture of how the firm is run. Um also exposes you to some potential areas of vulnerability or risk. So E s G integration within a portfolio management process is

a great risk management tool. I've heard a number of people, in fact, that some of the events we both attended together talk about E s g as being misunderstood, that it's really a fundamental screening method to look for risk and control for it for And the perfect example was a lot of companies that have no diversity, no women on their boards, very little women management. Oh and they managed to get caught in the me too UM debacle

self self inflicted wounds. What a coincidental correlation or apparently not right? That that's a fundamental screen isn't it? That is absolutely right? The other sort of common ones are you know, the Volkswagen example with its emissions issues scandal that absolutely could have been uncovered if you start to really dig deeper into some of their governance practices. Um in some cases with some of the oil companies that

have been notable to oil spills. So you know that really all of them though, can you screen for preventing oils? You can screen for practices, right, so some have more robust practices than others. Right, So would would you exclude a company from your portfolio or would you overweight another that you feel is more robust and and more tightly controlled, so you know, the and then the the further on

the spectrum is impact investing. So impact investing is taking a particular cause that you believe in rainforest in Sudan, carbon emissions, very sort of narrowly focused, and and waiting the portfolio towards that or buying just that. So you know, a lot of private equity money is directed towards impact investing. So so again if you look at the spectrum, you have s R I and exclusionary on one side, which

again has been sort of fallen out of favor. Is that well, I mean, I think there's just a better understanding that people believe that there's a better way to do it right. So and then there's the s G integration, which was where a lot of the people in US retail are focused, including us. And then there's impact investing, which we actually have a company that we bought that does custom municipal portfolios and we allow them to do an impact overlay on that custom income fixed income. Really yes,

so you can actually get green bonds. You can quite quite intriguing. So so what do you think is going to be required for e s G to take off or or we contextualizing it's the wrong way and it's just going to be something that's implemented into the risk screening approach. Yeah, I actually think it's both, So let's take the latter first. I believe that the asset management industry will just become E s G. Just just integrate it, like you're no longer an Internet company everybody uses. Then yes,

there will. There will no longer be E s G or non e s G because millennials and women demographically are driving the desire and the requirement to incorporate E s G screening within their portfolios is a big, big driver. The other is data democratization. Most companies now well there's a variety of different data providers that now collect that information from companies. So now most of the sp are reporting to data providers on those three measures. Their environmental practices,

there's social practices, and their governance practices. So we now have access to all kinds of data to be able to screen on those dimensions. Now, don't you run into the same sort of issue we get with hedge funds reporting performance? Well, if it's good your report and if it's not so good, Oh, we're not going to make that filing this quae. Well, so here's the issue this is this is going to impede the group. So again I think to your latter question, we're gonna asset management.

I can't say exactly when. I think it will be somewhere between five to ten years from now. And then you think that's a gradual Just one day we'll turn around and say, oh we're all s G. Yes, I do, I do. And there's a variety of people who agree with that premise. The issues today are there's no uniformity, right, there's a variety of different approaches. Even the data provider, they go at collecting the data and reporting the data in a variety of different ways to lack of uniformity

and data. The second is benchmarking, right, we always want to try to especially on the active management side, we always want to find a benchmark. So people are struggling with how to benchmark E s G strategies and you know, uh, consulting organizations like a mercer who does due diligence on these strategies, they're they're struggling to answer that question, which is sort of a traditional method of you know, rating a particular strategy. So I think it's those two things

that are slowing down the growth. But once we you know, come closer to solving those two, I think the growth will start to be you know, sort of more profound in US retail. So so that's the second part of the question, which is will there still be E s G focus funds and and who are going to be the purchases of these? Yeah, I think there will be. Well.

First of all, institutions within the US certainly are following Europe and so look, I mean I have to say, just looking at the last six months to a year, most of the r fps we get request for information into a new strategy for institutional clients. They all have E s G questions in there, and the portfolio management has to be able to describe specifically their E s

G process. And uh so institutions are moving first within the the US, and you know retail will follow closer behind once we figure out these issues that I talked about, which is uniformity and benchmarking. What do you think about the dedicated E s G E T F that have come out? Paul Jones has one full Just what are the ones that you guys so we have s g L and s GF and that's where we're taking our revenue weated strategy L and F. What's the difference. That's

some foreign and domestic local local, that's right. I think D was taken when we went to look for a ticker. So my by the way, my theory is you you not only need a good investment idea, but a good ticker is just crucial. Absolutely right. It seems like that makes a giant difference. It does make a giant difference. It cuts through all the clutter. Look and a lot

of this is coming through the clutter. There's a lot of players who have gotten so E s c F is foreign s g L and they're they're broad based. There's a lot out there that are more narrowly based, again specifically as we talked about before, based upon you know, climate change, um, climate risk, carbon emissions, things of that nature. We want to be more broad based. So this is revenue weighted s G strategies. But there are many and

there are many mutual funds. We have a mutual fund where we partner with pick t A and it's a Geo environmental h an E s G shop in Europe. Is very their subadvisor to us and we like them a lot actually. Um. And so there are strategies that are coming out in separate account, mutual fund any TF fashion that I think are a good start. Um. You know. Again, the institutional clients are looking for more of the separate account, in some cases mutual funds. M. They're not buying the

E s G E T f s quite yet. There are people like the UN partnering with firms and developing some of their E s G strategies. And there's big pensions like CalPERS who partnered with State Street on she they seated she to the tune of Calipers or Calisters it was Kelpers. So who did Calists? M sure I kind of remember them being involved our counts now I know Calipers seated two d and fifty billion. Yeah, it was.

It was a big chunk of whatever it was. It is a big jump of change um or million, excuse me, it was. It was definitely a which is still not ann So so our mutual friend Dave Nodding is a huge fan of direct index. I'm slowly warming up to the concept and where I see it having so much potential is exactly what you just described the s M as for individuals that want to have an overlay of this. How do you see that space development? Yeah? Yeah, so

I I actually agree with Dave. Um, you know, getting instead of buying the index, sort of buying the the you know, underlying holdings of the index. That creates a great opportunity for tax efficiency, tax harvesting, customization. Uh. There are some firms out there, they are very good at it.

Parametric has been around for a while, Imperio, Uh, there are others um and so you know, look, people are looking for more of those things UM, and you have more flexibility in getting access to that through direct indexation. It is a little bit more uh efficient from a cost perspective, You're not because you're not paying an index

provider three to five basis points. So the the index landscape is changing as well as fees are getting driven down there as well, people are doing self indexing, their self indexing providers out there who are calculation agents, and so the world of indexation as it existed ten years ago is also changing because of self indexing and direct indexation. I agree with Dave. I think it's going to grow

quite quite fascinating. So before we began we were talking about music because you happen to see my picture, tweeted of Eagles guitarist Don Felder. I have to tell you that was a ridiculous amount of fun. I'm sure it was. I'm jealous is my thing. Everyone who knows me knows that music is my thing. Me too. I don't know how far apart in age we are. We'll talk about that later. You're deceptively um, You're like, you're hard to pin an age on. Okay, like thirty nine is safe.

I'll take it. Um, I said you start, well that would You said you've been in the business thirty years, and I said you started it at age nine. So that's how I came to that. Um. But I'm a class I listened to a lot of stuff from jazz to classical but really uh and a lot of punk and reggae. But I'm really a classic rock guy. What what's your musical over classic rock? Okay, you know classic

rewind or classic tracks on? On? Yeah, exactly. So you're not a coffeehouse sort of No, Actually, it depends on the mood. I like coffee house as well. Thank you for bringing that up. Well, if you're a jack Johnson fan. That's a great sort of a great sort of channel. Um, so I've had I don't know how this has worked out. It's been a dumb accident. But I've had a series of guitarists. So it's been Don Felder and Steve Miller. Steve Miller is, Lawrence Juber and John Pizzarelli. So those

are the four guitarists I've had. And I should reach out to Jack Johnson because I love his ry. He's a great Uh, so these things come up. Trucks, can we talk about derren so your southern sort of roots? So look, I mean I also love southern rock. But my two so, I think Derek Trucks is one of the most gifted guitarist and you know he's so that's your pick for greatest guitarists? No, he actually he's not.

He's he's sort of next generation. My pick, but my two picks, which I can't decide on, is uh, Carlos Santana. I love Santana. He's technically a brilliant guitarist and a very good songwriter. I don't know if many people would put him up as in the top five because it's usually the hyper technical guys like Joe Satriani or go down to Montrose or and of course you know we could talk about Clapton or June. Well, so that's my second.

So my second is Clapton. I would probably to your point, I'd probably edge Clapton over cent Town a little bit. But I gotta tell you, Derek Trucks is you know, he's he's gonna think gonna arrival everybody. He's just a little bit younger. I asked, Um, By the way, if you like that sort of swampy southern are you familiar with UM? J. J. Gray and the Mofro No? Oh, so that's it. Then you have to check out. It's swampy,

bluesy southern roots rocking. They have a number of great albums, but you can never go wrong with that first album is J. J. Gray in the mo They're just um sort of like a Southern version of Remember the album Thick Freakness by Um. I'm ding a blank on the band's name, but that Um Black Keys guy, that's the first album. And I and I so, I asked Henley, let me we can talk about music for hours, but let me wrap this up. I asked Henley, who do you think, um, what sort of guitarists do you like?

Who do you really appreciate? And he said, I love the Triple Threats. I love people who are great songwriters, ken sing and a really good performers. And I knew exactly where he was going to go with that. I thought he was going to say clapped in, but um, he kind of surprised me and said, well, this generation, it's John Mayer is that Triple Threat? And I said that's because that's he's this generation the class. So who else do you again? So I don't forget I put

Derek right up there. Yeah, but you know, and again I'm a big Alllin Brothers fan, you know, I mean that story, you know, has been a bit of a sad story. But of course Dwayne Allman taught Don Felder to play slide guitar house and they're all from the music scene from Gainesville. Was crazy, was him, and I think it was Stephen Stills and Tom Petty and it was just like a like, wait, why are all those people coming from Gainesville, Florida? And then Dwayne Alman on

top of that. So then of course, you know, Greg just died, which was a very sad day for me. But so you know, Ada Peach was my favorite Almon Brothers album. I remember that was giant when I was in high school. Giant. That was who else you listen to today? Give me a newer you know today? I have to tell you I'm sort of evolving a little bit too, you know, sort of this newer country such as so you know Dirk Spentley, Um, Zack Brown, Zack Brown.

I know Dirk Spentley. I don't know that. Yeah, yeah, a lot of those guys got a little more of an edge than tradition shoes radio. I mean, Kenny Chesney obviously is terrific. Um, so you know. I so I'm really pushing myself to appreciate other genres. And I didn't like the old twangy country Chad Atkins sort of well he was a brilliant guitarist. But the I know exactly, I love My dog died, my my wife left me that so there's a really do you ever we were

talking about X some satellite before. Do you have a play with Pandora? Pandora that's my actually music of choice. I have so knows in my home, so do I and I go to Pandora. So what I love about Pandora is if you want to discover something new, Yeah, like you take those three newer country, create a channel, call it whatever you want new country, and seed it with five songs that you like. And it's really great for music discovery. I'm always hearing things. Wow, what's that?

I haven't heard that? So it's a fun thing to play with. Yeah, all right, back to back to ets. Sorry, sorry to drag you back to you said I could talk music all day long. Same here. It's it's just fascinating. I um anything aside from country rock and classic rock. You listen to jazz, you listen to reggae. I do. I listened to both, but I have to say my my world is really dominated by the too today. Um. But I I used to listen to a lot more classical um than I do today. I've always listened to jazz.

Miles Davis is my hero. Really, Miles Davis is my hero, for he's not. I always warn people who are like your your jazz head, what what should I listen to? Should I listen to? Miles Davis? Not the most accessible? Like I always say, start, start, slow, walk before you run, because who is your walk slow person. Jerry Mulligan. Um, like Coltrane, I I build a little further out halfway between even thelonious monk um Um Paul Desmonds. Uh, you can't.

That's really totally accessible, very easy for most people. If you if you listen to like Time Out or so there, there's a way to to ease into jazz. But if you start with bitches Brew or you know, that's a tough It's like it's the equivalent of starting out in rock music by listening to Frank's Appa. It's like Jethro Tull. Yeah, that's call is. You know, you could listen you know, aqualong or locomotive breath. Yeah, that's straightforward rock and roll.

But it's hard to find outside of Joe's garage. It's hard to find a Zappa song that you could just slide right into and say, I'm interested in rock music. Play something for me because um, although since you mentioned some of your favorite guitarists, if you ever have a chance, get the Zappa album, shut up and play your guitar. Y e er guitar. It's just three discs of him doing leads and he's amazing. People don't realize what a

spectacular technical musician. You know, I didn't. And if I could just make one plug for for a female the modern day Bonnie Rate is Derek Truck's wife, Susan Twadski a band two Trucks, you would not know the difference. I think she's got more soul. Bonni Rate is a ton of soul. But if if you can believe Susan Tudeski even has more soul than body, right, so I would I need to make my female plug before we move on? All right? Last female guitarist um reference, Go

to YouTube. I can't remember the girl's name, and I say girl because she's like eleven. There is this girl on YouTube who just shreds. It's unbelievable. There's probably multiple people in that age group who are just spectacular guitarists and it's mind blowing you. Just I'll send you some links. Some of them are just like what. Alright? So so now now back to eat got drag herself away from music? Well,

because you know this is a conversation over a beer. Um. The one question I forgot to ask you during the broadcast portion that I meant to ask is you began your career in nine seven, Right, what was stock market crash? Yeah? What was that like? And by the way, there are a few people who I know of David Rosenberg is one, and I'm trying to remember who the other person was who literally begin their career that fall and bang right into I started and I think at the end of

May or June. But it was that fall. Um, you certainly look, I mean it was. It was a great learning experience for me, right, I mean, I am I right. It was a five points, it was you know, percentage wise, it was big and something like that. I think it was six hundred and something points. It's easy enough. I don't know why five hundred six in my mind, but um, which we call today a Tuesday, Yeah, right, exactly exactly.

That's why that's why I brought it up. It's it's sort of interesting to look back, and you know, it's a blip in today's world. But but look, so I wasn't really tied to the market at that time. Remember as a Chase Manhattan Bank, and I was doing all these cost studies. I still was domestic at this time. I wasn't yet in Europe. By the way, you have correct five eight points, Thank you. I I don't know why that's stuck in my head, but you know I

was there, so you know these things are important. Um. And so it was a great learning experience for me. I was still learning about the market, right and so uh me and Chase Manhattan Bank, you know too, I had some exposures. So they obviously took a hit but recovered. I think Don Boudreau was the the CEO or president

at the time. Um. But so you know, there was a lot to learn in terms of the you know, how the market factors into sort of the you know, the capital markets and what a driver they are and why that happened and how to avoid it and how to put you know, stops in place by the New York Stock Exchange. And so I was young and you know what behind the ears as they say, And so I was just a great learning experience for me. Don Boudreau, why is that name familiar? Is he still around and published?

He's been retired, So you you looked at it as a learning experience I did. I didn't have any personal exposure. I had no money, so you know it didn't affect me. Are the best crash exactly? Now? The next one I was, by the way, I was in grad school and I watched it with such clinical, detached detachment. It was like, oh, that seems to be kind of interesting. Now. I was fascinated, you know, I thankfully was at a place where I

could learn more about it. And that was really my first like ouch when you when you when you um accidentally, you know, touch a burner on this story, it was sort of like a you know, learning about the capital markets by being stung by it. But thankfully it didn't affect yes, and so did two thousand. Obviously two thousand it was the worst, but that was the best one of all two left of market. Yeah, so two thousand

and eight was fabulous learning experience. Can we describe it as that because it was we'll take that off, Mike. I found that to be of all the market crashes I lived through, the one that was most fascinating. Yeah, No, it certainly was. There's millions of stories that have come out of that. When it's really shaped, it's shaped, you know, the whole generation. Absolutely. You alluded to this earlier. Let

me circle back to that. My pet theory is all of the scandals, the animal scandal, the IP, all those things kind of led mom and pop to say, you know, this Wall Street thing is, you know, I'm just gonna give the money to Vanguard and be done. I kind of felt like the cherry on that cake was the O eight oh nine crash. But you even took it further. You said, this really drove people into passive explain absolutely absolutely, Um, you know, part of it is they sort of didn't

want to deal with it anymore. Just let me, let me just give it to an index. Let me give my money to an index. They didn't trust the institutions that were running their money in a lot of cases, especially the ones that got bailed out, that had to imbat the thought process right exactly right, And so I

think it just shocked people. People woke up. I think previous that they dabbled in et f s a post two thousand and eight, two thou nine, when when we finally recovered, I think they made it a prominent part of their portfolio construction, and part of it I think was a risk mitigation, at least from what they understood to be more of a risk mitigation because of you know, let me look, at the time, I was at a lines Bernstein uh Bernstein that part of a line Spernstein's

deep value and um, you know the Bernstein managers specifically and Loose Sanders as an investor himself, the CEO at the time, they rode financial services down all the way to the bottom because they were looking for that. You know what they talk about the sustainability of earnings with growth companies, and they talk about the recoverability of earnings with with value companies, and so you know, fundamental active managers.

I think at the time, we're just riding the wave to see if they can pick up some assets at the cheap. And that was a very, very tough ride for a lot of investors. So I think part of it was trust. I think a lot of it was risk mitigation. Quite quite interesting. So again looking at the lack of faith in the institutions, is that something that eventually comes back or is that a permanent scar and

people change their behavior for a generation. Yeah, yeah, No, I think ten years later, I think it is bouncing back. And I think part of it is, you know, government lead because of everything they've put in place in terms of safeguards, meaning the regulatory environment or the federal reserve environment. I think the regulatory environment in terms of the requirements

that they have. So they forced some of it. And I think CEO s I mean, now, on the executive committees of organizations, whether it's a bank or asset managers, the chief risk officer reports to the CEO. And that wasn't a position that necessarily exists. It didn't didn't it didn't so and I agree with that, right, I mean, the general council reports the CEO. Why shouldn't the chief risk officers. It's we are stewards of our clients capitals,

we are fiduciaries. We need to take that particular function seriously. And so you know, whether it's it did the different government structures for running an etf business or fundamental active business. I think whether it was regulatory pushed or forced upon, or firms just taking this more seriously and it becoming a key role of the CEO. I think that certainly, Uh, those institutions are starting to earn back trust ten years later.

Do we do we run the risk when we elevate the chief risk officer to that c suite with the CEO's ear of stifling innovation or making companies risk averse? Sure no, And I think that's a great question, and I think it has to and we and we talk about this a lot at Oppenheimer Funds, and I think thankfully we've struck the balance because the portfolio management teams UM on the fundamental active side are you know, there's

a little bit of a push pole there, right. So our chief investment Officer, Christian MoManI Um, you know, he works very very closely with our chief risk officer on behalf of making sure that we don't do just that, that we give the prudent degree of freedom. Now, how

do you define prudent degree of freedom? No leverage? That's how I define it, Um, And you know, I mean, really, it's so much easier to get into trouble when you're running, for one, if you're putting out et fs that are more interesting in in the way they're assembled and built and they're not relying on a ton of leverage. There's really very modest risk there, right. The product works or it doesn't. It finds an audience or it doesn't. It

accumulates assets or it doesn't. But none of your e t f s are ever going to blow up Oppenheim or that we would never play. We would never I don't want to play that game, but that that wasn't our that was not our space, And I agree with you, it's tough. I don't think investors understand it. I don't think they understand the impact of the leverage you're taking on. It's easy. If you're fifty two one and you drop two per cent, you're gone, You're done, right, Like, wait,

two percent drop wipes me out? Oh, I don't want leverage. That's a bad thing. And I think everybody that was the one big takeaway. I thought everybody learned from from the financial crisis. But you're saying risk is now thought of a little more differently at financial institutions. Absolutely, and again part of it is because they knew they needed to to build back trust with clients. I mean again

back to our FPS. You know, in the very beginning of the RP, it asks about their risk management process, whether it's the firm overall from a centralized perspective, whether the portfolio management specifically, you've got to articulate your risk management process. And we have that and we're running our rules based strategies. We have that in there as well, right, and index providers have that as well. So it's an

important part of the story. You know, again, we are stewards of capital and we are fiduciaries and we need to take that role seriously, not to say the least. Um. The dominance in the E t F space by I almost want to say trilogy, but really it's Van Garden blocked. The Yeah, State Street is up there, but it the two big ones are really um, well, the muscle in the space. How is it that this sector has evolved where it's such a uneven distribution A winner take coal distribution.

I mean, look, you know those three firms got started way before everybody else, as you know, spise over years old, right, So I mean there there, there is, there is a a advantage absolutely, um. So part of it is that you know, they certainly won over the early adopters of E t F specifically UM, and they grew their passive business for the first decade, so they just had a giant head start and everybody else's playing catch up. I mean there's well and then the players that got in

the market after them. I have a belief set many of them that you know, we actually can evolve our fundamental active franchise. We can do enhanced index, we can

do active ETF. So they have sort of by passed the passive to go to alternatively rated or active, something more active, And so there's not a lot of unless you are putting out you know, these vehicles that are for free that you used to allocate internally within your organization, whether you're using them to build model portfolios and charging

an overlafy. People aren't jumping on the passive bandwagon, by which State Street vand guard Nice Year has got a very strong early start too, so and most of the pie of the flows every single year go to that. So there are people who are dabbling around the edges to UM try to offer a more sort of UM, you know, fully built out sweet to their clients, but nobody has the scale or can buy or build the scare in a short period of time where they can even make a dent in the market share that that

those three organizations have. And I do believe a lot of it was the head start that they got. It makes sense. Before I get to my favorite questions is one of the questions I wanted to ask you about. So you were at F squared UM when they ran into the little difficulties, What was your role and what

was your reaction when you've heard about what was happening elsewhere. Yeah, so, uh, that was a big segment of the market, as you recall at F strategis segment which is defined by you know, model portfolios where at least fifty or more has to be with an ETFs. It grew to over a hundred billion UM. Actually F Square was a big client of I Shares, so that's how I knew them. Um they probably gave I Shares directed six st eight billion a year.

That number might be slightly off, but anyway, so I they had outsourced everything and they wanted to build their own discretionary business internally. So as hired as the president of F Squared Capital, and I had to build our our trading system higher head trader. UH put in place a portfolio management system with the client service UM group assemble a client service group sales to talk to Wells Fargo's separate account platform business. So I built that lots

of moving parts. Was really fun. We grewed almost thirty billion. But the SEC came in in the summer of I hope I get this right summer to do a routine audit and had discovered that the track record we were marketing. This is really important. The tracker we were marketing was went back to two thousand one. The time period in question was two thousand and eight, back to two thousand

and one. In two thousand and eight, the CEO of F squared bought a signal from a firm and was told that the signal was run against live client money. Therefore was a live signal two thousand and eight forward. Uh, that was now in the in the domain of F squared and they ran that money at that signal against live client money and live client portfolios. It was Gibbs compliant. It was audited by a big accounting firm. So the SEC had no issue with the track record from two

thousand and eight forward. That was valid. It was all based on the purchase and what was represented. That's there was the crux of the matter. So you know that

was a disagreement. Yeah, so there was a disagreement. Certainly, the CEO of F squared continued to fight that that it was misrepresented, but the SEC just with the SEC did I mean, they get trade blotters and they get everything they need to do to subpoena people and get to the heart of the matter, even if it is represent if it's misrepresented to you and you go out

and represented, that's what they're going to hang their hat on. So, hey, you relied on someone who lied to you, your bed right, so you should have done deeper due diligence or whatever the theory is. So unfortunately, you know, we I still believe to this day that what we were doing in the way in which we were doing it, which was the alpha sector of products, was a prudent way to run a portfolio. Client certainly agreed with that as we

grew very quickly. However, um, once they slapped the fine on and they got rid of our CEO and sort of abandoned from the industry and one of the board members came off of the board to be the introm CEO, we really needed to kind of wind the firm down. There was too much damage done. I was going to say,

is that recoverable even if it's an innocent mistake? And I don't have any information whether it is or isn't, But when the SEC drops that sort of hammer, is there anything that can be done to done to save a company of that point or is it just all bets are off? Yeah? You know. Look, so to your point, Barry, all two employees approximate to employees were completely innocent. Thankfully, the industry recognized that and gave everybody a free option, and everybody has has gone on to be into really

great jobs at other firms. Um. But I think what happened is the trust was just eroded, but from the clients. So clients were starting to pull money. Um, and it was it was too difficult to save. And so we what we did is we hired a banker to do an asset pursage agreement and so sell the remaining assets off. And um, you know, we just it was it was

too difficult. So you know, look, I I what I learned through that process was I mean it was excruciating certainly, UM but um, you know, managing through crisis and trying to you know, keep everybody on the boat until such time that you've got to get everybody safely off the boat. UM, and just being really open and honest with clients. I mean clients would take me out to dinner and say what really happened? And I had to say that I actually have no idea. I mean I wasn't here I

joined in. Um. But again b B seek solace and knowing that two thousand and eight forward, since F square, it has been running your money. It's been it's been done in in a in a prudent way. So it was tough. But that's an amazing story. Yeah, it's it's certainly the most excruciating chapter of my career. It's for two is that everybody below the CEO managed to continue the career. Everybody's great without that being a black mark. No, no, everybody understands it now. It was sort of isolated to

the CEO. Amazing. So let's jump to our favorite questions. These are the things I asked all of our guests. Let's start out with, what was the first car you ever owned? Your making Model seventy four Volkswagen super Beetle. Really, I had a super Beetle. They were indestructible, are absolutely. I had three hundred thousand miles online. I had not a beat seven the four By then they had breakes and radios and air conditioning. I didn't have any of that.

Mine was light blue, which god, I had a light blue one. Also I had a white Bug and then a light blue super Beetle. The super Beetle for about six months I was broken, did not have a battery, and I would start parked on a hill and just drop the clutch and that's how I would start the car. It's um literally so so I had no heat, so that was tough. But they were pretty pretty indestructive, absolutely until the floorboards rusted out and became like a flint stone. Right.

I had one of those, absolutely, So tell us the most important thing people don't know about? Sharon French. It was funny what the word important? I mean, the most important thing in my life, for sure is that I'm a mom. And but I think most people know. Y, yes, I think most people know that. Um, what else is important? I mean some things people don't know. I don't know how important is I have a titanium hip, so a lot of people called me the bionic woman. When you

go through airport security, does that set stuff? Yes, it does. I have to. I have to do the walk through thing where you hold your arms machine. That is the only non invasive imaging technology that has not been f d A approved. And you'll notice when they set the button they kind of lean back, lean away from it because they know that stuff is going to kill them. So I'm I'm the beauty of t s A pre or even better clear is that you don't have to

do the naked machine, which does go. But because of my hip and I carry I carry a card to my and my wallet that shows the hip, I have a striker hip, and my doctor's name and everything I've an addressed. Um. But I actually just thinking about it, and this could set up a whole, This could set off a whole another series of questions. An important fact about me that nobody knows that I just found out,

and it's a little bit of a family controversy. Family of origin, my my five brothers and sisters or six of us is I did twenty three and me and my whole life. I thought I was a pure bread Irish woman. Apparently not I am Oshgnazi Jew. Really, yes,

that's fascinating, that's fascinating. So we had an unbelievable you know, family conversation over Thanksgiving and made my mother Unfortunately my dad has passed, but we made my mother take the test and she surprisingly is fifty percent, which means one of her parents has to be so you know, and which she doesn't. They're both deceased. But we think it's my grandfather. But you know, somebody went astray or this is post World War two or maybe not. So they

were born in uh the after the war. People stopped, some people stopped talking. They were born in nineteen oh. My grandparents were born in nineteen o five or six around there. So anyway, so that's an important fact that quite frankly, I didn't even know until recently. If you want to have some fun, google Oshkenazi Jewish nobel recipients. It's there's fastly disproportionate, and I don't know what that's about, but it's kind of it's I just went to the

Nobile Museum in Stockholm and the fall was it was fabulous. Second, yeah, I learned a lot um tell us about some of your early mentors who helped shape your career. Yes, yes, so, um Bob Shulman, Robert Shulman. So he was an executive at E. F. Hutton Shearson Lehman Brothers. I think he left before the Smith Barney acquisition to become president and CEO of Tremont Advisors. Um. But he was a very

very shrewd, tough boss. He had I had moved into a number of different positions throughout my decade at that organization and really really tough and ran a number of different business units, new product development. He actually was one of the early executives who ran the Smith Barney Consulting Group UM, which was ultimately sold off to I think Bank of New York m Ellen UM. And he was tough as nails and so the reason and we still meet for coffee and and uh lunch today he's retired, UM,

but he was. He was instrumental to me because he was so tough. I didn't need coddling. I needed to understand how to be better and do better and UM help. He gave me all kinds of runway. And so my reputation today is sort of somebody who can you know, fixer? Right, I was a question I didn't get to. Your reputation is something's messed up, Send share and she'll fix it. Yeah. Well, and it's and it's fixing and growing or doing the

diagnostic in order to remove the obstacle for growth. I mean, I I hope that at some point people see me as somebody who drives profitable growth. But that was Bob, and that was that is who gave me those early you know sort of runways and taught me how to go at the heart of the issue, um and keep harder, keep running stronger. I mean, I certainly he wasn't a

lot of people are afraid of him. UM So I wouldn't say that he was the mentor in my life who taught me how to socialize issues and how to get the right key stake overt holders involved and get their buy and that came later. Um. I had a female mentor, Alliance Bernstein. I had a male mentor also to Alliance Bernstein, and I think helped me along in that regard as well. UM So, I'm a big believer

in mentors. I'm a big believer in sponsorship. Um And I have mentored a ton of mostly women in my career, which I continue to do and I really believe in because at this stage of my career very to me,

it's all about paying it forward. I mean, I I still have a lot more to accomplish, but it's all about inspiring the next generation, which I started a a unit called University Outreach within Women and e t f S, which is actually going to universities at the undergraduate level and mentoring in them and raising their awareness around asset management and et F specifically because a lot of a lot of women who are going into business, I have nowhere to go from there, and business is hard for women.

Financial services is still pretty difficult. It's getting better, um, but I I really want to inspire the next generation at the undergraduate level and then mentor younger females who are incredibly smart and promising within this industry. What about investors who influenced the way you look at assets, markets and investment. When I was young, it was Bill Sharp and Harry mark o Witz right Modern Partio, Yes sixty two. So the only startup I did in my career was Empower.

That's when I left my wealth management brokerage experience in New York and moved to San Francisco right after AO went public in remember that that really started the whole Internet place. UM and so UM that startup experience was was really really strong, and we partnered with Harry Marko Witz. Our competition with financial engines who partnered with Bill Sharp. UM, I mean more recently, um over the that was probably

my second decade. My third decade was more FAMA and French at the University of Chicago and a lot of their factor work. I really do believe in the persistence of factors is a more uh precise way to get at the key drivers of return. Right, Eugene Fama at Chicago, I think Ken French at Dartmouth, Yes, exactly, a tough school and that's quite interesting. Um. Everybody's favorite question, what are some of your favorite books, be they fiction, non fiction,

investing related, or whatever. Yeah. So, I'm I really love to learn about people. So I love reading biographies. Um and so I the one I just read was I Love Capitalism by Ken Lango. It was fast. He's a really interesting I'll be a krusty guy. I mean he's sort of like a classic curmudgeon. Lely had the book read. He was scrappy, scrappy. That's the better work to get crusty, scrappy, scrappy. I mean, I could not put it down. I read

it three days home. Depot is just amazing. I mean he did so many other things deep absolutely, I mean he put capital together on Wall Street, That's what he did. He was scrappy, he was fearless. He was amazing. Um. So anyway, so, um, I just read Michelle Obama's book, which I thought was great becoming also read that one in three days. Um, Katherine Hepburn, Um, certainly Michael Bloomberg, I'm a giant Katherine Hepburn fane biography, biography, biography, who

wrote that? And UM, oh gosh, you're testing me. I just I just don't there's a dozen Katherine Hepburn biography. Yes, Um, I don't remember. Barry I'm sorry, I don't remember. Emailed me. I'll add it to the list. But even Anne Keller, I mean, you know, I mean, I you know, so I'm fascinated by people. So my my my favorite books are actually reading about you know, the bio biography channel

I love to listen to. I mean, I certainly have read a lot about the Grateful Dead, going back to music, you know, Jerry Goo see uh, Phil Collins, So I I typically read not, that's a weird that's a weird juxtaposition the dead into Phil. Not exactly. I've got an neglectic, you know, palette. Let's see, I go back to the established that of Genesis and Peter Gabriel, not that I not that I mind super tramp Genesis, that whole that was high school for me. That was my freshman year

in college. Breakfast alight. So you're older than me. A touch, just a touch, Um, So, what do you tell us about a time you failed and what you learned from the experience? Are there any other books before we jumped in down? That's that's good. I mean, certainly I read other things other than just biographies. But I think that's the thought I'd like to leave you with. Okay, So let's discuss the time you failed business or not and what you learned from the experience. Gosh, okay. So it's

sort of business and personal at the same time. So during that period of time where I was in San Francisco where I was working for Empower and we were we were growing fast us again. Harvard Business Case Study loved it. We ended up selling the business to morning Star ultimately in two thousand one. But um, I was running global sales. I was one of uh. I was you know, I was on the management team employed, you know,

fifth member of the management team. UM. And we had built our business domestically and I was starting to establish our business globally. So we I set up I was going back and forth from San Francisco to Tokyo and San Francisco to London. Put up joint ventures in London to grow that and build a subsidiary bricks and mortar in Um sorry, in Asia. We did joint ventures London.

We put up a subsidering we had We were a finalist for so Miszooho really came together in two thousand one of his iby J Industrial Bank of Japan, day Chicanga dk B and Fujibank. Those three individual banks came together to form ben zoo Hoo. While they were forming, they were looking for online investment advisory services. We were as one of many things on this platform they were building. We were a finalist. There was two of us at

that time. I was pregnant with my daughter, very pregnant, well, started out not so pregnant, but over the course of eight months, I and um I needed to and as if you understand the Japanese culture, they are very much into relationships, right, not that we are in the US, but even more so, much deeper. So when you start with them, you have to end with them or you might as well not compete. And so I was the one who had to hot fly to Tokyo to do

this finalist presentation. And I was eight months right, so ps forged the doctor's note. Bad idea. UM. I remember at the time my husband and my son was to saying, you know, if you go you don't get it, we will not be here when you get back. Do you understand that when you fly to New York or London or New York, you're flying over land, So if you go into labor, you have to land the plane and you can land them. I can't land the plane when

you're over the that's right, So stupid me I went. Thankfully, The story ends, well, we did win the business and I didn't quinto labor. But I went into labor prematurely two weeks after I got back, and my daughter was fine, she was six pounds. My husband and little boy was were still there, although he didn't talk to me for the following month. But the lesson learned and very I said that I mentor people and women, and many of the things I said them is look avoid the mistakes

I made. What was I thinking our number one priorities, ourselves, our healths in our family. That was the stupidest thing I ever did. I put my life at risk and my unborn child's life at risk. Wow, like stupid, that's that's that's pretty bad. That's a horrifying, horrifying story. Again, it worked out, but still, what do you do for fun? What do I do for fund? Listen to music? Um? Look, I'm very sporty, as you say so. I I used to run, but now I have a new hip, so

I can't do that anymore. But I do yoga, I do you know, stand up paddle boarding, I ski, um, I you know, snorkele, I, paraglide, I do anything. I don't say no to anything. I don't scuba dive. I've got to get my over my fear of scuba diving. But I'm very sporty, so you know, I'll be on a softball team or I'll you know, um, I'll always say yes if anybody wants my son just jump jumped out of a plane. I don't know if I'm going to do that, but yeah, that's the risk reward on

that one is not my my favorite. So our last questions because we have to wrap. Um, what sort of advice would you give any millennial who was thinking of going into a career in finance. Yeah, so, look, it's interesting millennials. You and I grew up with the mutual fund in the eighties. Millennials are growing up with et f s right, and they're growing up with digital advice.

Um So. One of the things I like about that is it's it's a lot of the burden of that falls on their shoulders in terms of how they learned to um you know, think about portfolio construction. Um So, I think data and I mean, look, we're sitting at Bloomberg. This is the epicenter of data and intelligence. I am big into how the financial world meets the technology world.

So I certainly my passion and my love deep down as asset management, but I love the intersection of finance and technology, So I certainly would um you know, advise them in that direction. And our final question, what is it that you know about the world of investing today that you wish you knew thirty years ago when you first started. I wish I understood risk a little bit more. You know, I sort of thought tree screwed to the sky back then, and you know, I think I was

a little bit idealistic at that time. So I'm I'm I've I've been sobered and I've been burned. I mean, I've been through three market corrections that are pretty significant eight seven, two thousand, two thousand one and two eight, as well as market timing scandals and all the things you mentioned. So you know, I'm I'm much more practical now, much more pragmatic, and uh, I wish I knew that back then. I think a lot of you, a younger

generation of special millennials, are super idealistic. But having been through what I've been through throughout my career, you know, I wish I learned more earlier on about you know, managing risk better. Really really interesting answer. We have been speaking with Sharon French. She is the head of Beta

Solutions at Oppenheimer Funds. If you enjoy this conversation, well, be sure and check out Apple iTunes, uh and look upward down an inch where you can see any of the other two hundred and fifty or so such conversations we've had previously. Uh. You can find that at iTunes, Stitcher, overcast, Bloomberg dot com. We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net.

I would be remiss if I did not thank the crack staff that helps put together these conversations each week. Medina Parwana is our audio engineer. Slash producer Atika val Brun is our project director. Uh Michael Boyle is our booker. Michael Batnick is our head of research. I'm Parry Retolts. You're listening to Masters in Business on Bloomberg Radio.