The Exchanges

Q So in addition to access to the right places, what have you learned from Becca about hospitality?

A Well, I've learned that every single thing matters in the environment and that being welcoming, I mean, hospitality is being welcoming, having that welcoming feeling and procuring an environment that just puts a rocket booster on whatever the goal is, is really impactful. So I'll bring up a friend of yours and a friend of mine, Greg Fleming, who runs Rockefeller Capital. If you go to visit Greg Fleming, You will walk into Rockefeller Center and someone will greet you before you even get to the security desk and say, Ted Seides, are you coming to meet Greg Fleming? Yes. Oh, they will whisk you through security. They will take your coat. They will take your order. You will sit down with whatever your favorite latte is. It is such a great experience. That's a wealth management firm. It makes sense. But ask me, Does anyone else in wealth management do that? The answer is no. And I asked about it the first time I ever went there. I'm like, this is amazing. Who does it? And it was really well thought out. So there's a client who understood the power of hospitality. That impression could be the reason someone chooses Rockefeller Capital. It's so well done.

AI assessment note: “I've learned that every single thing matters in the environment and that being welcoming”

Q The examples you use, you tend to have, uh, in a Bogle and even a Larry Fink, you have a spokesman, AQR, probably a great example of Cliff Assis, right? Is it one person saying the message over and over, or is there a different way of doing it so that it's about the firm and not just one person's ability to speak?

A Well, let me tell you, you create as much of a problem as you solve by having a brand grow up around one person, and we are hired, especially in private equity and hedge funds, many times because the The brand has grown up around one person, and they create a succession issue, basically. So we do a lot of work with those kinds of firms, what I call building the bench strategy, making sure that there's a bench of talent that is showcased across the firm versus one person. So it is incredibly important if you have one strong founder or one strong spokesperson, which can be an amazing silver bullet, To be also having what I call a corporate program. And I feel like the AQRs and the Bridgewaters and the Blackstones have all been relatively successful having strong founders. Yes, there's a Steve Schwartzman brand, and he definitely built the Blackstone brand using that. But I think no one would say that Blackstone would not move on as an institution. So I always say, I think they pulled it off from a brand perspective. And you can argue some of the others, have they really pulled it off yet, but I think they're on their way. I think the AQRs and the Bridgewaters, Bridgewater as a client, have done a very good job showcasing the institution as well, and that's a journey for all of these institutions. I think they have to be very careful about how they build their brands.

AI assessment note: “making sure that there's a bench of talent that is showcased across the firm”

Q I'd love to hear of those things that are changing. Why are the reasons that people are hiring ProSec partners today?

A And that rubric of talent deals and capital raising money is a huge driver. It won't surprise you. It's a very treacherous money raising environment. People want every advantage that they can get. Now, if you asked an LP, do you care about the GP's brand? They'll say no, but when you unpack it, do you care that they have a great culture? Do you care that they have distinct advantages? Do you care that so-and-so wrote this amazing op-ed piece that you took seriously and sent around to your investment committee? They'll say yes, yes, yes. So it depends the way you define it. But the reality is I call it, are you having the first meeting or the second meeting on the fundraising? Meaning if you rock up to a new LP and they don't know you, you spend a lot of time educating. If you rock up to a new LP and they're like, oh, I know all about your firm. Let's get down to business. You're having the second meeting, not the first. And I think that that efficiency is Is what a lot of our clients are attracted to. We're creating brand preference. Why do I pick this credit manager over these 30 other ones? That's kind of what we're trying to do. And then there's just the sheer advice and navigation. We've spent a lot of time in the Middle East because three years ago, everyone was on a plane to the Middle East navigating. How do I go about brand building and money raising in the Middle East?…

AI assessment note: “raising money is a huge driver. It won't surprise you.”

Q So I'd love to dive in to how you do that. So let's start with how do you talk to a firm about nailing their narrative?

A Well, the nice thing about being so focused on this space is we've heard it all. So when someone says we're really unique because we know if that's true or not true. So I would think if you were a large consumer packaged goods company, you would do a lot of market research to see what does the world think of me? Most of my clients don't want to spend the money for the market research. The lucky thing is we are market research because we've been doing this for 20 years. So we probe a number of people, leadership in the company, to hear with our ears what is the story and what is unique. And there have been many times when we've had to tell a client, this is not unique, but this is. Say it this way. It's also the packaging of the story. I could say, for instance, I have a very unique culture that has a lot of hustle and this and that, or I could say we're an army of entrepreneurs.

AI assessment note: “we probe a number of people, leadership in the company, to hear”

Q When you're working on that seven years ahead and you have an organization with you that you have to keep pushing in that way, how have you gone about motivating all the people on your team and keeping them energized when something takes that long to come to fruition?

A I always ask myself, actually, if I got hit by a bus, what does ProSec lose? One thing is the chief motivation officer. One of the things that I obsess about is making sure people know what we stand for, where we're going, and how they fit into it. So you would never ask anyone at ProSec, where are you guys trying to go and what are you trying to be? Everyone knows. And that's why they're here. Don't join the firm if you don't want to be on that mission. So there's like a mission that's very clear. I think the other thing that motivates people is that we've created a beautiful cultural bubble that is a beautiful community. So even if the world is really horrible, it's really nice in here. And people are motivated by that. I think they're also motivated by we are a firm of celebrations and thank you. If you're doing great stuff, you're going to hear from me. That's great. I mean, I sent a note. To the guy who cleans our terrace the other day, because he was here on Juneteenth on the day off cleaning the terrace because he cared about it. And I'm like, Jose, that's freaking amazing that you cleaned the terrace on a day off. You didn't have to do that, but it shows how invested you are in the place. So when people notice that you've done something well, that is so motivating. I think too many people in business don't understand the power of thank you. And I think that that's motiv…

AI assessment note: “making sure people know what we stand for, where we're going”

Q So when you go from the capital side to the investment side, you mentioned credit as being something that's obviously exploded, AI. I'm really curious, how do you get up to speed as an organization to help serve those types of trends?

A Typically speaking, we will have had a few clients in a space that give us all the indication we need to make a big move. I don't know how many years ago, five, six years ago, the majority of our large private equity firms were like, hey, we should launch a private credit division. So it just started to pop up in that way. We had a couple of legacy private credit firms who have been around for 20 years. It just started to come up In almost every conversation we were having with anyone, should we launch private credit? We're very lucky that we have a portfolio that is so big and wide that we see these things bubbling up early. And I forget what book it was, but there was some sort of philosophy like shoot bullets and then throw a cannonball at it. You see enough bullets that you know one's going to be a cannonball and you go for it. So we've been lucky enough to work with Eldridge for a long time. So we've understood Sports investing for a long time. And then we're lucky enough to work with Arctos, who's really the pioneer in GP stakes in sports investing. So once we had those guys under the hood a couple of years ago, it was obvious to us, we should have a sports means finance practice, which we hired a guy named John Schwartz, who was at the NFL. He was head of comms, but he had a banking background, perfect hire for us. We're not going to be a sports firm. We're going to be a…

AI assessment note: “we will have had a few clients in a space that give us all the indication”

Q How have you found this whole notion of business development virtually playing out?

A I would say, especially in the beginning of lockdown, it was everyone's number one vulnerability. Like, will I be able to meet anybody and will I be able to Generate a new relationship over Zoom or in this video world, and it's definitely been more challenging. I mean, think about how we all operate. We go to the Milken Conference. We go to Super Return. We go to raise money. We go to, for brand visibility. We go to add people to our network, and all of that stops overnight, so there was definitely fear and paralysis, but very quickly, the most entrepreneurial, successful people pivoted, and you had to pivot quickly into BD in a virtual world, and I actually wrote a whole piece called BD in a virtual world with a lot of different recommendations. So for instance, one of the things I counsel my clients is business development now is about giving gifts, giving to receive the gift of knowledge, the gift of an insight, the gift of a peer network. So if you invite people to a convening session to hear a speaker or to hear from you on an insight, you gotta be gifting an insight, a peer network value, And that returns, you know, I always talk about the law of reciprocity. If you give a gift to someone, whether it is the gift of knowledge, the gift of insight, the gift of whatever, sometimes you get an opportunity back. And that's sometimes the best way to build any relationship, but c…

AI assessment note: “in the beginning of lockdown, it was everyone's number one vulnerability”

Q And does it have to be something unique?

A No, I think it has to be uniquely packaged. So I'll give you an example. If you asked us about the culture of our firm, I would tell you we're an army of entrepreneurs. And in 2011, we published a book called The Army of Entrepreneurs. And I could use a lot of different language to say that. I could say, we have a lot of entrepreneurial people at the firm, but instead I say, we have an army of entrepreneurs, and here's how we create more entrepreneurial people at work, and here's how pro-sex behaviors are more entrepreneurial, and here's how it actually benefits the client. You got to close that loop. And that intrigues people. They're like, tell me about the army of entrepreneurs. I totally want to hear about that. I think if I just said pro-sex an entrepreneurial place, yeah, you know, that's interesting. That's not a book. That's not a speech. That's not a talk. That's not someone I care to get to know. So I do think for many, many things, even outside the financial world, think about why you buy a certain shampoo versus another. Is it really the ingredients? No, it's like the way you feel about you when you associate with that brand. I always said back in the day when we founded the firm and no one believed financial services firms would care about brand. I was like, why? What's the difference? And I think now people understand

AI assessment note: “No, I think it has to be uniquely packaged.”

Q What are some of the other things you learned about how business development functions effectively in this virtual world?

A Well, we learned, for instance, and Ted, you're living the dream, audio has been really popular. If you look at the trends in podcasting, I don't need to tell you that People are consuming so much more audio, so one of the things we have done is develop some audio product where you can tell your story on audio, and instead of just sending a deck along, you can send your story on audio, which is much more interesting to listen to when you think about it. Would I rather look at your deck, or would I rather hear from a founder about the way they started their firm, their strategy, what's been successful? So we've found that audio work really well. We've also found that video works really well, and that people are happy to consume a video with a PM versus have a meeting with them, right? So all these things are not just critical for doing business, but I think are now going to be preferential when we go back to the physical world. So there will be permanent changes that are good, that save time, and are more efficient.

AI assessment note: “we've found that audio work really well. We've also found that video works really well”

Q What did you find out about internal communication and what kept your team together and maybe some of the things that happened that risked pulling it apart?

A We learned, and I don't know, 10 years ago when we started to have more explosive growth, we had to take another floor in a building. That's a death knell. I'll tell any CEO founder, like once you go to two floors, you got to work so hard on keeping a cohesive culture. Like that physicality is huge. So I was trying to fix it. And I decided to launch a newsletter called the J lowdown every Sunday. It's sort of like, what's going on in this firm? What did we win? What did we lose? Who are we hiring? It wasn't a newsletter to celebrate birthdays. It was like, what's going on in Jen's office? And it's like, you want to know something about this firm? You read the J lowdown. It comes out on Sunday. And I have done the J lowdown every Sunday for like whatever the 10 years. And what I learned in that experience, in addition to a lot of other things, is it brought everybody together and transparency and communication and making people feel like they know. I always say at ProSec, you can know anything about anything outside of someone else's salary. That's it. Everything. And that feeling that I'm in the know, I'm in the know, I know exactly what's going on was so powerful. So we are ready communicators, but we also have a communication culture that taught us a lot. And so I knew that the J low down was a great example of constant, repetitive, transparent communication. So in the crisis…

AI assessment note: “once you go to two floors, you got to work so hard on keeping a cohesive culture.”

Q Okay, so, take me through the last 10 years. It's now ProSec Partners, it's your firm, 20 people. What was the core business at the time?

A The original idea for the business is still the original, like, the mission for today. So we thought even way back in the day when we were tiny that one day financial institutions would wake up and smell the marketing. That most financial institutions, especially on the institutional side, were very much on the back foot in terms of reputation, brand, marketing, etc. But that one day that would shift. But that idea was a little before its time. So I would say in the last 10 years, especially in the last five, I call financial firms, especially those in private equity hedge funds and asset management, the emerging market of marketing. It's literally an emerging market. So we focus on two types of clients, either a large financial global institution like a Goldman, which I'm lucky enough to call a client, or a privately held company on the private equity hedge fund asset management side. And on the private side, that's the emerging market. Those are the sort of financial institutions that are just starting to market in a sophisticated manner for the first time, and that is an emerging market. So we are mining this emerging market while we're also working on the mature market, and luckily a lot of elite firms in our space never focused on what I would call the brand building side. They always focused on issues and crisis management. So we're one of the only firms that really does …

AI assessment note: “The original idea for the business is still the original, like, the mission for today.”

Q Walk me through, say, pick a client, could be man group, could be somebody else, that you feel like has very successfully worked with you to consistently deliver a message and had progress from it. And what did that look like from when they first came in the door to when you got to a point where you said, hey, this is working?

A Well, it's really interesting. We have a lot of large, well-known financial institutions, but my favorite small client story, and I think you know this from very well, there was a woman who walked in the door one day, a sole proprietor, like very small business in the recruiting space, and her business was all about recruiting in the hedge fund capital fundraising area. And she walked in, and I figured, you know, this woman, she's like a tiny little business, right? So I met with her, And, you know, I said, look, I think you're too small for us. You should probably go and hire a freelancer or something. But, you know, here are five or six things I think you should do. And one of those things was the data that you're sitting on about people in capital fundraising is really interesting to reporters. Like, you know who's going where at all times. You have mapped the entire universe. That is like candy to reporters. You should put out a report, a recorder about Capital fundraising moves. The media will love it. You will be a spokesperson. She also happened to be a very dynamic female spokesperson who used to be a journalist, so she understood how this worked. So I gave her some free tips, and I figured I'd never see her again. Well, she came in six months later, and she said, I did everything you told me to do. I packaged up my data. I put it out to the media. I'm talking to the me…

AI assessment note: “my favorite small client story, and I think you know this from very well”

Q What was the tipping point where you went from outbound trying to encourage people that this was important to them calling you?

A Yes, I think it was the perfect storm of things, but one certainly is, we've talked a lot about brand building, but there's also brand protection, reputation management, so the financial crisis created this real wake-up call that your reputation matters, and that, especially like in the hedge fund community, you are now on the radar screen, and it's not just on the radar screen with your investors. All publics. Now people get what a hedge fund is, and it has a sort of negative connotation, so what do we do about that? I think waking up to that reputation matters, that started in the financial crisis. I think increased competition is another thing. I think all of a sudden people looked at firms like BlackRock and said, oh my gosh, BlackRock, they're amazing. Everyone wants to go to BlackRock. Everyone's talking about BlackRock. Well, why? BlackRock was probably one of the pioneers in sophisticated marketing in the asset management space. They didn't become BlackRock overnight. They've been marketing for 35, 40 years, and Larry Fink's been a thought leader for, what, 25 years. So I think people think they turned on the marketing spigot overnight, but they were early, right? If you look at any of the early adopters in true marketing and thought leadership, a lot of them are the successful firms of today. The Vanguards, I mean, look at what Bogle did for Vanguard. He was a thought …

AI assessment note: “the financial crisis created this real wake-up call that your reputation matters”

Q What's the competitive environment like for your business?

A It's very competitive, especially on the mature side. If a large global financial institution is going to hire a firm to manage its reputation, they are going to take that super seriously, and they are probably going to see upwards of 10 players in the beginning, and it's the usual process. Go from 10 down to four, down to two finalists, but yes, it's a process. I would say on the other side of the fence, it's still a process, but it's not as competitive because those folks make decisions faster. And they talk to their friends, and they just decide if you're good enough for so-and-so, you're good enough for me. And, but think about it, though. On the large financial institution side, no offense to them, but they're spending other people's money, and it's a different, there's a CEO and a CMO and a CCO, and they're all, on the other side, it's a founder. And founders are, to some degree, going to go with relationship, gut, and who my friends use.

AI assessment note: “It's very competitive, especially on the mature side.”

Q So if you look at those two big pools, say the sovereigns, the Middle East, and then democratization of alts, very different in terms of how you would approach the Middle East or a private wealth manager in the US. So let's start with the Middle East. What have you learned about what's successful for people trying to raise capital in the Middle East?

A First of all, a lot of our managers are making five or six trips to the Middle East on a regular basis during the season. It comes down to building relationships. And the Middle East is very relationship oriented. So it's not very different than any other LP in the sense that you need to go and prove that you are a trusted relationship before you're going to get a check. And I think too many people think it's going to be easy and it's not. And one thing that has definitely changed a lot is the math is all that counted in the past. Meaning if you were performing, you didn't even have to really talk to your LPs. They were writing checks. Now I interview LPs on panels and I ask them for the GPs in the audience, what does it take? And every time they said years of relationship building before they write a check years, And I do think that in a world that is getting less and less trusted, especially with the technology we're facing, truth and trust is the North star. How do you build trust to the extent that someone's going to trust you with their capital? So I think the reason it's become hard and you have to take so many trips in the Middle East is you've got to prove this is going to be a relationship. So that relationship orientation is everything. It's not very different from anywhere else. I just think there's a perception of easy money that's not actually true. And then the Mi…

AI assessment note: “It comes down to building relationships. And the Middle East is very relationship oriented.”

Q What are the most impactful two or three lessons that you've learned from your clients?

A I have learned to be fiscally smart. I have learned to be a great investor. As you know, I have a GP stakes business. Where do you think that came from? So I am really good at knowing somebody's doing something really good and copying it in my own way. I would say I've also learned in the world of founder entrepreneurs, we're all obsessive creatures. We're happy to work 24 seven. I've also got to observe how that can destroy your life. And I do think about the human part of that, too. So I get to sort of watch the business and personal experiment of life. Also, you know, I'm in the crisis communications business, so I deal with people at their lowest moments when they share their deepest, darkest secrets, and I take that super seriously. But of course, as a human being, I learn from that, too.

AI assessment note: “I have learned to be fiscally smart. I have learned to be a great investor.”

Q How difficult is it to get a consistent message?

A The thing about the difference between advertising and public relations or earned media is that in advertising, you just create the advertisement, you buy the space and boom, there it goes. And that's pretty consistent because you buy it and place it the way it's done. In our world, we're very much relying on the expertise of our client. We're bringing the spokesperson to the media or to the podcast or to the whatever to deliver that message. So it's a little bit tougher to be consistent. Because there's human error involved potentially. But it is actually not difficult if a company takes it seriously to form a narrative or message and to make sure everyone is on that message and to deliver that message. That's what we do.

AI assessment note: “So it's a little bit tougher to be consistent. Because there's human error”

Q From my experience, there are a lot of people in the investment world that succeed in part because they're black and white thinkers. How do you work with that type of client?

A Well, there's a lot of those people, right? The nice thing is, in my world, in the world of reputation and communication, there's almost never one answer. So I think it's getting your client to respect this world is different than your world. Because you're right. Math, there's one problem. There's one answer. And I think people who are in this industry, they grow up on math. I love this story. So when I went to Columbia Business School, the first semester was statistics, accounting, finance, and human behavior. Of course, I'm freaking out about the first three. All my colleagues were freaking out about the human behavior class. I was like, What is up? I'm like, alright, my brain is wired completely differently. And it's not like they thought it was a stupid class. They were literally, like, afraid of it. So I'm like, alright, wiring is different. So I think it's just getting your client to appreciate that they're in their business for a reason, and I'm in mine for a reason. And the way they see the world isn't always the way you need to see the world to be successful on my side of the fence.

AI assessment note: “getting your client to respect this world is different than your world”

Q Really curious about the chicken and an egg from your perspective. You talk about the Middle East, you say, well, everyone's going to the Middle East, so we're going to go to the Middle East. How do you get a sense of where capital is likely to flow?

A Oh, that's a great question. The cool thing about having the portfolio of clients that we do is at any one time, there's something interesting going on with one of them that's signaling us about the way the market's going to move. I always say I am blessed to work with the smartest investors in the world, full stop. So I am traveling the hallways of hundreds of these firms, and I'm just picking up the signals. It's an amazing job to have. We're seeing trends as they're developing. So at any one of these macro themes, we saw like, ooh, that's coming. It's sort of like if you're not obsessing right now about how AI is going to destroy your business, you're crazy. You've seen enough of it at this early stage to make some guesses about where this is going and hopefully get in front of some of it.

AI assessment note: “having the portfolio of clients that we do is at any one time, there's something”

Q I'm really curious about this notion of length because sitting on the other side, I've seen it for years before a virtual world where someone could just not be paying attention to when that their audience has lost them. And sometimes it seems like that's actually harder to pick up on in video. How do you coach people to understand when they're droning on for too long?

A That's a great question. Well, first of all, people use slides as crutches. So I always say, Unless you are a unbelievable presenter that's so rock solid, you should minimize the slides, because what happens typically is people want to hang on to their slides, meaning like, if I have 10 slides, I'm going through all 10 slides. They're not reading the room to see that guy's falling asleep. Speed up to the most important slide. So I would say that, again, I cannot emphasize enough, like, skinnying down the presentation deck is enormously important. You want to engage the person in a two-way conversation. So I wouldn't want to drone on to anyone for more than 15 minutes before I engage them. So, you know, maybe 15 minutes, and then you say, what do you think about that? You've got to bring people in. And actually, I don't really understand this. I can tell when someone's zoning out even more on Zoom. Their eyeballs are going in different places. They're clearly checking their texts. If it's a room of a hundred people, it's hard to do that. But if it's a small conversation, if you are with a prospect and you're trying to build a relationship, be in the meeting. It takes a genius to be multitasking on a Zoom and not be noticed for it. And there's nothing more insulting, I think, than I'm doing other things while I'm speaking to you. So we always say to our people, Zoom meetings are …

AI assessment note: “I wouldn't want to drone on to anyone for more than 15 minutes before I engage them.”

Q What are some of those new experiments that you're thinking about today?

A Well, interestingly, if you asked me, have I been focused at all on being a female in business? I would say zero. I never even thought about it. I've never had any issues that are large about being a female entrepreneur. It's been all good. So I empathize with a lot of gals who have not had it that way, but I've had it really good. And in fact, I've loved being uniquely in a business sometimes that there aren't a lot of women Having said that, if you asked me five years ago, how many female CEOs do you have in the portfolio? I'd be like five, six. I have 40 now. 40. Women are getting elected into the top seat in a big way in this business, and I have gone out of my way to help the special ones build their profiles because I know it's going to get them ahead, whether it's getting the board seat they want, getting the top job. So I have a whole program called Take the Stage, which I do with females and diverse executives. But where am I getting to where the business opportunity is? This is the working title. It's a little silly. I can't use it, but there's a girl boss advisory firm right in front of me. And the reason is, if you look at the unbelievable women I work with, Jean Hines at Wellington, Jenny Johnson at Franklin Templeton, Robin Grew at Man Group, and the list goes on. I was one of the first people to take them on stage. These women don't want to go on stage often. The…

AI assessment note: “there's a girl boss advisory firm right in front of me”

Q What are you most excited about for the next couple of years?

A Oh my god, so many things. I'm excited about dominating the financial services space and continuing to. I have a joke that my strategy is called proopoly. I want a proopoly. I want it, and it excites me. It excites me that I get to work with the smartest people in the world. I mean, I do. They're tough and rigorous and sometimes not always kind, but the reality is I am motivated by their ideas. I mean, also, like, if you look at my career, I can't really take credit for the fact that I have a really great financial personal plan. I have long-term care insurance. I have everything. And I had it early because of my clients. I get to learn every day. And I always say, shame on me. If I run a crappy business or a business with bad margins, shoot me because I get to learn from all these unbelievable people. So I will always be motivated by that. I'm a growth freak. I'm a progress freak. I have to move forward. I'm like a shark. I can't swim back. So I'm motivated that the next five years, I think are going to be really exciting for our business. I think the emerging market of marketing has maybe 10 years left, so that's a growthy 10 years, and that's exciting. I have another half of my business, by the way, which is just big corporates, and I love them too, but since we're on capital allocators, we'll talk about the private markets.

AI assessment note: “I'm excited about dominating the financial services space and continuing to.”