The Exchanges

Q Roz, how do you think about going directly onto the committee compared to leaving a year gap before coming back onto the committee?

A First of all, I wasn't given a choice, but second of all, I think ideally that would be the best way to do it because it gives the successor the opportunity to get his or her sea legs under them without necessarily the scrutiny of sitting there in front of your boss. One of the things I was concerned about is that the team would be reticent to bring forward a recommendation that they think I personally wouldn't like. And I had to come to grips with the fact that I wasn't the CIO anymore. My job wasn't to approve or disapprove. My job was to ensure that all the policies and the procedures that Helmsley had were adhered to, test conviction, and ensure that due diligence was appropriately undertaken. The team is compensated through an incentive comp pan, and they had to live or die By their own decision making, and I had to respect that. So we all had to be disciplined in our new roles, and that's what it meant.

AI assessment note: “ideally that would be the best way to do it because it gives the successor”

Q And what were the characteristics compared to so many other smaller venture firms that aren't on the coast that you could have selected at the time?

A There were a couple of things. First of all, there weren't that many venture capital firms that had been founded and nurtured and grown by women. Number two, she came at it, not from a financial standpoint, but from the technical standpoint. She was a, uh, uh, biomedical engineer and, uh, To be a biomedical engineer at the time that she selected that as a major was pretty unique, and it was something with which I could identify. But more importantly, she was looking at deals that were different from the source for venture capital firms on either coast. They were looking at coastal entrepreneurs. She was looking at entrepreneurs in the Midwest. We knew we were going to get differentiation of deals as a result, and that was a significant characteristic that hewed us to her organization.

AI assessment note: “differentiation of deals as a result, and that was a significant characteristic”

Q And then do you have percentages that you ascribe to each of those buckets?

A Yes, we do. And what are those percentages? The safe assets category is at 20%. The semi-liquid is at 22%. The illiquid category is at 25%, and the balance is in the liquid category. We put the plan together. We presented it to our investment committee. They approved it. We paired it with a committed standby line of credit, and the committed standby line of credit can actually fund the grant making so that we can fund the investment side, because one of the things that happened to Ford, Carnegie Mellon, Hewlett, Packard, is that in 2007, all of their private capital managers managed, raised big funds, and then when the market sold off, they started hitting them for capital calls.

AI assessment note: “The safe assets category is at 20%. The semi-liquid is at 22%.”

Q When you add it all up, where does your risk profile look compared to Pierce?

A We're not radically different from our peers because all other foundations have the same objective we have, which is earn back five percent plus inflation to last into perpetuity. Where we differ from our peers is that we're a lot chunkier because we're more concentrated as a portfolio, but our returns and our risk profile are not radically different as a result. And we're a little barbelled, so we're higher in the safe assets category compared to our peers. Robert Wood Johnson, Hewlett Packard, if you look at what their allocations are for the equivalent of our safe assets category, it's more in the 10 to 12% range. We're higher, but we've been far more selective in the private capital range and more concentrated, and that's actually worked for us.

AI assessment note: “our returns and our risk profile are not radically different as a result”

Q So, Roz, we're going to talk a bunch about this transition that you two went through together, and maybe the way to start is in your 13 year tenure at Helmsley, at what point in time did you start thinking about that you would no longer be the CIO?

A It actually started with the simple question, which was, what happens if I got hit by a bus? The concern was, who would take over if that was the case to make sure that the department ran smoothly? The way that I was staffed is that we had four directors of investments, each with their area of expertise, but all of whom were senior investment professionals, and I decided that any one of the four of them should be able to step in, in the event that something happened to me. So the way that I managed the department was to be quite open with the team about the things that I did that were not necessarily Investment related, but were related to my responsibilities as the department head and the CIO, most of which had nothing to do with investments, didn't necessarily affect them, but clearly if they needed to step in for me, it was important that they understood these things. Also during my tenure at Helmsley, I reported to four different people in those nearly 14 years. So there was a lot of turnover over me, and it was important to maintain stability below me. I always thought in terms of making sure the team was aware of everything that was going on. As time went on, I had always known my retirement date. I'd picked it actually in the beginning of my career in a group meeting of new employees at my first job out of business school at Kraft General Foods, where the HR director who…

AI assessment note: “About five years before I actually retired, I began thinking”

Q When you got within that 18 month period and you had announced your pending retirement, how did you sequence the conversations that you wanted to have both internally with the team and with the governance board?

A Well, what happened is that the matter, in effect, was taken out of my hands. 18 months before I retired, I was in a trustees meeting giving them an investment update, and the news was not good because the markets weren't good. Inflation had finally taken hold, interest rates had started rising, and the market started rolling over. In the middle of my presentation, one of the trustees just stopped me and looked at me and said, you can't retire. Are you going to retire? When are you going to retire? And I thought to myself, okay, I have a decision to make here on the fly. I could either play this off, or I could tell him straight out that I actually had a retirement date. And so I decided to be honest with them, and I said, well, I am going to retire in December of 2023. So when I told them that I actually had a retirement date, even though it was 18 months in advance, They were shocked. And I said to them, look, I was going to tell you in January. I said, so what I want everybody to do is to just absorb the information and think about it. I also want to talk to my staff. And I said, I have a transition plan in place. And of course, they immediately wanted to know what it was. And I said, well, I haven't talked to anybody about it yet. Would you please give me a day? And so they gave me a day and I left the meeting and I go running into Josh's office and I sat down and I looked …

AI assessment note: “what happened is that the matter, in effect, was taken out of my hands.”

Q Having been through the successful transition of both of you, what advice you give to managers in your portfolio that you see either have mapped out or have not yet mapped out what you think is a viable transition plan?

A Yeah, it's interesting that you asked that question because we had a situation where one of Helmsley's managers lost its managing partner very suddenly, bike accident, and the question was, who'd take over? In that case, the situation was well managed because there was a deep bench behind the managing and founding partner, so there was somebody who could step in, the CIO. And he could do so seamlessly. He'd work closely with the managing partner, and there was unanimous consent behind that within the money management firm itself in the face of such a shock. So piece of advice number one is ask the question before it happens, because it can happen. So everybody should ask the question and formulate a well thought out answer. Step number two is it's never too late to start thinking about a transition. People should actively be managing a transition. That doesn't mean you have to announce it or telegraph it or brag about it or whatever. You could do it the way that I did it very quietly while you're working on determining who would be the best successor. I truly believe that promotions from within are the least disruptive, and that to me was the most important characteristic about the transition that was important to manage, especially seeing what had happened at some of the foundations and endowments in New York where there was disruption caused by the CIO leaving. In fact, Helms…

AI assessment note: “piece of advice number one is ask the question before it happens”

Q So, Roz, we're going to talk a bunch about this transition that you two went through together, and maybe the way to start is in your 13 year tenure at Helmsley, at what point in time did you start thinking about that you would no longer be the CIO?

A It actually started with the simple question, which was, what happens if I got hit by a bus? The concern was, who would take over if that was the case to make sure that the department ran smoothly? The way that I was staffed is that we had four directors of investments, each with their area of expertise, but all of whom were senior investment professionals, and I decided that any one of the four of them should be able to step in, in the event that something happened to me. So the way that I managed the department was to be quite open with the team about the things that I did that were not necessarily Investment related, but were related to my responsibilities as the department head and the CIO, most of which had nothing to do with investments, didn't necessarily affect them, but clearly if they needed to step in for me, it was important that they understood these things. Also during my tenure at Helmsley, I reported to four different people in those nearly 14 years. So there was a lot of turnover over me, and it was important to maintain stability below me. I always thought in terms of making sure the team was aware of everything that was going on. As time went on, I had always known my retirement date. I'd picked it actually in the beginning of my career in a group meeting of new employees at my first job out of business school at Kraft General Foods, where the HR director who…

AI assessment note: “About five years before I actually retired, I began thinking”

Q When you got within that 18 month period and you had announced your pending retirement, how did you sequence the conversations that you wanted to have both internally with the team and with the governance board?

A Well, what happened is that the matter, in effect, was taken out of my hands. 18 months before I retired, I was in a trustees meeting giving them an investment update, and the news was not good because the markets weren't good. Inflation had finally taken hold, interest rates had started rising, and the market started rolling over. In the middle of my presentation, one of the trustees just stopped me and looked at me and said, you can't retire. Are you going to retire? When are you going to retire? And I thought to myself, okay, I have a decision to make here on the fly. I could either play this off, or I could tell him straight out that I actually had a retirement date. And so I decided to be honest with them, and I said, well, I am going to retire in December of 2023. So when I told them that I actually had a retirement date, even though it was 18 months in advance, They were shocked. And I said to them, look, I was going to tell you in January. I said, so what I want everybody to do is to just absorb the information and think about it. I also want to talk to my staff. And I said, I have a transition plan in place. And of course, they immediately wanted to know what it was. And I said, well, I haven't talked to anybody about it yet. Would you please give me a day? And so they gave me a day and I left the meeting and I go running into Josh's office and I sat down and I looked …

AI assessment note: “what happened is that the matter, in effect, was taken out of my hands.”

Q So you've had all these experiences at this point. You've worked for active managers, you've worked at DFA, you've worked at Wilshire. Now you have a single pool of capital, so you can put forward an investment strategy. What were the key tenets of what you believed worked for a pool of capital? Like this.

A Number one, no boxes. The Frank Russell company was famous for coming up with boxes, growth, value, large cap growth, mid cap growth, small cap growth, boxes for everything. And I recognize right away that the box approach to investing was a disaster. It forced you to fill a box because you had one, and then you had to pass on an investment if you didn't have a box for it. So one of the things that became clear is that opportunistic investing has a place and should be celebrated. So the way that we manage money at Helmsley is that the biggest risk we have to manage for a foundation is liquidity risk, because we have to pay out five percent of our assets every year. And we have no say in that. The IRS requires us to do that. Otherwise, we lose our tax qualified status. And I might remind you, What happened to our beneficiary? So, needless to say, we at Helmsley are quite sensitive to the desires of the IRS.

AI assessment note: “Number one, no boxes... opportunistic investing has a place and should be celebrated.”

Q And then do you have percentages that you ascribe to each of those buckets?

A Yes, we do. And what are those percentages? The safe assets category is at 20%. The semi-liquid is at 22%. The illiquid category is at 25%, and the balance is in the liquid category. We put the plan together. We presented it to our investment committee. They approved it. We paired it with a committed standby line of credit, and the committed standby line of credit can actually fund the grant making so that we can fund the investment side, because one of the things that happened to Ford, Carnegie Mellon, Hewlett, Packard, is that in 2007, all of their private capital managers managed, raised big funds, and then when the market sold off, they started hitting them for capital calls.

AI assessment note: “The safe assets category is at 20%. The semi-liquid is at 22%.”

Q And how do you think about that process?

A We have a co-investment policy. There are a couple of key criteria. First and foremost, we have to be able to comply with the excess business holdings rule that is visited upon foundations by the IRS, and that says that you cannot own any more than 20% of an operating entity, a for-profit operating entity. That's number one. Number two, we make sure that the investment is in the manager's wheelhouse, that it's not A fishing expedition on the part of managers. They all have their fishing expeditions. We recognize that not every investment fits neatly within exactly what they said they were going to do. They all have their little wild hair. It's what keeps them occupied. So we have to make sure it's in their wheelhouse. Third thing we look for is that they're putting money in alongside us in the co-investment. Once those three criteria are met, we look at, well, if we add this to the portfolio, what is the incremental risk? Because it's typically inside the fund as well. And do we have more like it somewhere else? So there's the overall portfolio analysis that's done. And then we do look at income and cash flow statements because it has to be cash flow positive. So we need to make sure of that, but we're not re-underwriting the investment the way some of our peers have. We don't feel we can bring anything to that party. We underwrote the manager, and that's where our due diligenc…

AI assessment note: “We have a co-investment policy. There are a couple of key criteria.”

Q What led you to move from there to your next stop?

A So again, I was rated away. In the course of my work at Pepsi, I had recognized that diversifying away from what had been traditionally the nifty 50, the 50 largest companies in the United States, which dominated everybody's investment portfolios, that exposure to small company stocks could have an impact. And I worked to recommend to Pepsi's board to hire dimensional fund advisors. And it's my understanding that today that manager's still in Pepsi's portfolio some 30 some odd years later. So I had worked with the dimensional people, and it was very early days for them. They didn't even have five hundred million dollars under management. That's how many years ago this was. And they were looking to expand, and they offered me a job to join them on the West Coast when they moved out to To California, to Santa Monica, so I went with them, and that's how I got to Santa Monica, and I worked with them for about 18 months, and in the course of my working with them, I worked with Wilshire Associates in order to land the California State Teachers Retirement Fund account for Dimensional Fund Advisors, so I was on the DFA side of that equation, And a gentleman by the name of Alan Emkin, who was an investment consultant at Wilshire at the time, was the investment consultant to what we affectionately refer to as CalSTRS. And he and I worked together, and he was looking to expand his staff. …

AI assessment note: “they were looking to expand, and they offered me a job”

Q What led you to move from there to your next stop?

A So again, I was rated away. In the course of my work at Pepsi, I had recognized that diversifying away from what had been traditionally the nifty 50, the 50 largest companies in the United States, which dominated everybody's investment portfolios, that exposure to small company stocks could have an impact. And I worked to recommend to Pepsi's board to hire dimensional fund advisors. And it's my understanding that today that manager's still in Pepsi's portfolio some 30 some odd years later. So I had worked with the dimensional people, and it was very early days for them. They didn't even have five hundred million dollars under management. That's how many years ago this was. And they were looking to expand, and they offered me a job to join them on the West Coast when they moved out to To California, to Santa Monica, so I went with them, and that's how I got to Santa Monica, and I worked with them for about 18 months, and in the course of my working with them, I worked with Wilshire Associates in order to land the California State Teachers Retirement Fund account for Dimensional Fund Advisors, so I was on the DFA side of that equation, And a gentleman by the name of Alan Emkin, who was an investment consultant at Wilshire at the time, was the investment consultant to what we affectionately refer to as CalSTRS. And he and I worked together, and he was looking to expand his staff. …

AI assessment note: “they offered me a job to join them on the West Coast”

Q And how do you think about that process?

A We have a co-investment policy. There are a couple of key criteria. First and foremost, we have to be able to comply with the excess business holdings rule that is visited upon foundations by the IRS, and that says that you cannot own any more than 20% of an operating entity, a for-profit operating entity. That's number one. Number two, we make sure that the investment is in the manager's wheelhouse, that it's not A fishing expedition on the part of managers. They all have their fishing expeditions. We recognize that not every investment fits neatly within exactly what they said they were going to do. They all have their little wild hair. It's what keeps them occupied. So we have to make sure it's in their wheelhouse. Third thing we look for is that they're putting money in alongside us in the co-investment. Once those three criteria are met, we look at, well, if we add this to the portfolio, what is the incremental risk? Because it's typically inside the fund as well. And do we have more like it somewhere else? So there's the overall portfolio analysis that's done. And then we do look at income and cash flow statements because it has to be cash flow positive. So we need to make sure of that, but we're not re-underwriting the investment the way some of our peers have. We don't feel we can bring anything to that party. We underwrote the manager, and that's where our due diligenc…

AI assessment note: “We have a co-investment policy. There are a couple of key criteria.”

Q Ross, as you started thinking about dripping these different leadership and management responsibilities onto Joshua and the other senior people, the goal is continuity, and that's worked out. How did you manage four different potential successors when ultimately there's only going to be one seat?

A I had a very good understanding of each of the four directors, and any one of the four could have succeeded me in taking over. I spent a lot of time going into their offices, sitting down and talking with them about All kinds of things, not just work-related. Sometimes there were things outside of the office. I was looking at temperament. I was looking at their interests. I was looking at how they think about problems. I was thinking about the fact that we had younger members of the team who are very, very different from each other. Who could be the most malleable in their management style to deal with each of those Different people and what they needed. Those were some of the things that I was considering and doing it in a way that I was trying not to let on to anybody what I was doing. I mean, that was the part that was most important, but I think it's also important to know that when the rubber needed to meet the road, I did sit down with everybody on the team, including people who would not be my successor, and I had a heart-to-heart talk with everybody about that I was going to step down, what I wanted to propose to the trustees, and how they felt about it, and I gave them a lot of time to think about it. I informed Helmsley 18 months in advance of my leaving, and that gave Plenty of time for people to get used to the idea and used to the transition. It was the communicati…

AI assessment note: “I had a heart-to-heart talk with everybody about that I was going to step down”

Q And so what were those early experiences like for you?

A First of all, I was a woman entering a man's field, so I was the only woman in my department, and then a couple of months later, they finally hired a second woman, and the two of us, her name was Rhonda, the two of us became fast friends because we were the only ones. The only other women in the department were the administrative assistants. So it was the late seventies. We're getting our start. We're trying to make our way in the world. And we had to deal with everything from we weren't part of the club. To in the extreme sexual harassment and overtures. I mean, that was par for the course. None of the laws that exist today even existed back then. And we had to make our way in the world. So that's what it was like. And my view was, look, I entered this field. I knew it wasn't going to be easy, but I love the intellectual challenge. I love being able to work with the numbers and out of that create A new brand, a new product, a new strategy, a new something, and that was exciting to me.

AI assessment note: “First of all, I was a woman entering a man's field”

Q When that came to the advice that you gave as consultants for different clients, how do you grow into sort of a set of beliefs about investing?

A I'm a student of the efficient market hypothesis. I'm also a student of due diligence is the most important thing that you can do. I'm also a student of the importance of the trade-off between risk and return, and if you can hold true to those three principles, you can get a lot done. So if you start out with, well, I'll never do an energy investment because fossil fuel is bad, well, guess what? It's a pretty significant portion of our overall economy. So I How can you make it a good investment? Number one. And number two, how do you make sure you have a seat at the table so that your concerns about the environment are well voiced? So I never adopted this all or nothing attitude toward anything because invariably life isn't that black or white or cut and dried. And usually if you keep your eye on what the bigger picture is, You can figure out a way to get there with virtually any investment. So it's important to hue to those three broad principles that are sufficiently broad that you can accommodate in a consulting arrangement, for example, the client's desires and wishes.

AI assessment note: “if you can hold true to those three principles, you can get a lot done.”

Q Does that lend more private equity than venture?

A No, we're actually pretty evenly split between them. That's something that we do look at and we do watch. We're sort of a little heavier on venture capital right now. We want to build up our buyout portfolio a little bit more. So we look at that vis-a-vis how quickly the money's drawn down, how quickly we get the money back. One of the things that's happening to a lot of our peers that we've been able to watch is that they haven't been getting the money back from their venture capital managers as fast as they thought they were. So those tails are much longer. We monitor, and we built a model internally to help us forecast out what we think the allocation of private capital will be. We model drawdowns and return of capital, and we can see how the allocations, if we did nothing, just freeze the portfolio here, the way it would play out in terms of our allocations, and that helps us determine what we need to focus on more.

AI assessment note: “No, we're actually pretty evenly split between them.”

Q What happens in time compressed situations? So whether it's capacity constrained funds or short time horizon closings, how do you handle those situations?

A The big key is not having forty million managers. So a lot of our peers have two to 300 managers, which, and staffs about the same size, which means that a substantial portion of their resources are dedicated to monitoring existing managers, which means how much time can you spend looking at new managers? So because we don't have that constraint, I can take people and put them on a problem, a project, or a time constraint situation and get the work done. So by managing that 50 manager relationship maximum, it really allows us to use resources very effectively. The other tool I have in my toolkit is that our director of risk and operations also has a very strong systems background. And he's been able to leverage our time by making sure that we've had the right systems in place to do things as efficiently as possible.

AI assessment note: “I can take people and put them on a problem, a project, or a time constraint situation”

Q So let's start diving into the investment process, and we'll just start at the top and work down. How do you think about sourcing managers?

A I allow the staff to follow their natural curiosity. So we have a meeting every Monday morning. In that meeting, we talk about the things that we're working on, the issues that we have, where we're focusing on. So let's go back to my China example. We all agreed with our investment committee, China's an interesting place to have more exposure. I never said to them, long only, hedge funds, whatever. I just said, well, think about this. And I allowed them to go out and find the best managers they could. And then after they came back with a team of managers that were all over the place, now they could see, ah, we need to organize this a little bit better.

AI assessment note: “I allow the staff to follow their natural curiosity.”

Q And how about situations where it's less character-based and more some of the subtle things that you're seeing in execution?

A Well, is it style related? Is it this? Is it that? And so one of the things that we do, and this is an analysis that I do with, so let's do a public equity because, um, or hedge funds. We look at the top holdings. We all have Bloomberg's. We look at, are the companies making their earnings estimates? Or are they missing? And if they're missing, we actually look at, well, what is the stock reaction To the earnings miss. And we actually sit down with the manager and show them that. We're basically like, uh, what are you doing here? So that has helped us calibrate when there's a real problem or whether we should ride this horse a little bit longer. And that's been extremely helpful to us. So by going down to the company level and using all the tools that we have available to us, We can have a more engaged discussion with the manager, and then it's the judgment call about are you being BS or is, or is he seeing it the way you're seeing it?

AI assessment note: “We look at, are the companies making their earnings estimates? Or are they missing?”

Q What happens in time compressed situations? So whether it's capacity constrained funds or short time horizon closings, how do you handle those situations?

A The big key is not having forty million managers. So a lot of our peers have two to 300 managers, which, and staffs about the same size, which means that a substantial portion of their resources are dedicated to monitoring existing managers, which means how much time can you spend looking at new managers? So because we don't have that constraint, I can take people and put them on a problem, a project, or a time constraint situation and get the work done. So by managing that 50 manager relationship maximum, it really allows us to use resources very effectively. The other tool I have in my toolkit is that our director of risk and operations also has a very strong systems background. And he's been able to leverage our time by making sure that we've had the right systems in place to do things as efficiently as possible.

AI assessment note: “I can take people and put them on a problem, a project, or a time constraint”

Q Were there early mentors that helped you navigate those very difficult environments?

A My very first boss at General Foods was a fantastic guy. He and I got along famously. He was hysterically funny, and he taught me how to bring humor to the party. He saw the funny in everything, and that helped a lot. He was also highly regarded and highly respected, so there was a bit of a halo effect. Because I was working for him, that helped a lot. Whereas my friend Rhonda was working for someone else who wasn't quite as well regarded and as well respected, and she had a more difficult time. So he was a tremendous mentor in getting me going. He taught me the most important rule of management, which is, you're a teacher first, and I could relate to that. The first thing he taught me about management is that when I did something wrong, the first question he asked me is, well, what didn't I do for you in terms of either direction or instruction, or were you not ready to handle this, or The focus was on what could he have done better as a manager, and that was a lesson I took from him for the rest of my career. So when something goes wrong in the office, my first reaction is, okay, well, how could I have done this differently for my team?

AI assessment note: “So he was a tremendous mentor in getting me going.”

Q Why don't you tell that story just in case people don't know?

A Leona and Harry Helmsley were prosecuted by both the state of New York and the federal government for income tax evasion, and specifically for having paid personal expenses from business accounts, deducting that from income, and then paying Tax on, on the difference. So Leona Helmsley went to jail on the, um, federal charges, but she was acquitted on the New York state charges with a different legal team, and Alan Dershowitz represented her on the New York state charges. So anyway, needless to say, we're very sensitive to that here, and her grandsons are our trustees, Great guys. Can't say enough great things about Mrs. Helmsley's grandsons. They're young guys, well, relative to me, but I would follow them into hell. I mean, I have a great deal of respect for them. So, when I got to Helmsley, it became clear that liquidity was an issue in managing the five percent, and the benefit that we had is that the money came out of Mrs. Helmsley's estate and After the financial crisis was over. So we had the value of her estate that had not been marred by the financial crisis. That gave me an opportunity to talk to all of my peers to understand their lessons learned having come through the financial crisis, and out of that came opportunistic investing. If I was convinced of it before, I was really convinced of it now. And number two, that managing liquidity was critical. So we have four …

AI assessment note: “Leona and Harry Helmsley were prosecuted by both the state of New York and”

Q Alright, let's turn to some closing questions. What was your favorite extracurricular achievement?

A I am very fortunate to have gone to SUNY Oneonta undergrad. It's a New York State school, and the year that I applied to Oneonta, it was harder to get in there than it was to Harvard, and it was the height of the Vietnam War, and everybody was going to college, and somehow or another, they accepted me. I was eternally grateful to them for accepting me, and I had a great four years there, And I turned around, and with my success, helped other students. And I was able to financially support 20 other students in pursuit of their bachelor's degree. And last year, Oneonta awarded me, well, the State University of New York, not Oneonta, but the State University of New York awarded me a Doctor of Humane Letters.

AI assessment note: “I was able to financially support 20 other students in pursuit of their bachelor's degree.”

Q Why don't you tell that story just in case people don't know?

A Leona and Harry Helmsley were prosecuted by both the state of New York and the federal government for income tax evasion, and specifically for having paid personal expenses from business accounts, deducting that from income, and then paying Tax on, on the difference. So Leona Helmsley went to jail on the, um, federal charges, but she was acquitted on the New York state charges with a different legal team, and Alan Dershowitz represented her on the New York state charges. So anyway, needless to say, we're very sensitive to that here, and her grandsons are our trustees, Great guys. Can't say enough great things about Mrs. Helmsley's grandsons. They're young guys, well, relative to me, but I would follow them into hell. I mean, I have a great deal of respect for them. So, when I got to Helmsley, it became clear that liquidity was an issue in managing the five percent, and the benefit that we had is that the money came out of Mrs. Helmsley's estate and After the financial crisis was over. So we had the value of her estate that had not been marred by the financial crisis. That gave me an opportunity to talk to all of my peers to understand their lessons learned having come through the financial crisis, and out of that came opportunistic investing. If I was convinced of it before, I was really convinced of it now. And number two, that managing liquidity was critical. So we have four …

AI assessment note: “Leona and Harry Helmsley were prosecuted by both the state of New York and the federal government”

Q At what point in time will you get involved in imparting some of your judgment on the process?

A I try not to impose too much of my direction because I really want to see their creativity. But my biggest role is to make sure that policy is adhered to, and we have a due diligence policy. I want to make sure that they've addressed the issues thoroughly. I want to make sure that there have been a sufficient number of meetings, that those meetings are robust. I will go on site with them at a later stage, and when I go on site, I'm watching them, not the managers. I'm watching what kind of questions are they asking, What kind of prep did they do before we walk into the meeting? And my focus is not on them, not on the manager. And they recognize that the pressure's on them to do the work on the manager. Now, if I honestly think they were going to make a big mistake, then I would step in. But there are too many eyes on the manager, and we staff every manager who's undergoing a deep dive for due diligence with a sponsor, a skeptic, and a director. That's above and beyond me. So with three sets of eyes on a manager, chances are you're not going to make a mistake. That said, we have gotten surprised. It still happens. I'll give you an example where we made an investment where we missed something and we did not make an investment. Abraj was a rapidly growing venture capital firm focused on the emerging markets. And its founder was a very flamboyant guy, and we were very interested in…

AI assessment note: “I will go on site with them at a later stage”

Q What were some of your favorite examples of one of those?

A I had four bosses, so I would share with the team things that were going on as a result of the turnover of the bosses, the CEOs, what some of the pressure points were, what I was getting involved with, how I was part of the interview process for the successor, making sure that they understood that we were looking for somebody who could manage the entire organization, Some of that turnover was not as smooth as we would have liked to have been, and so therefore, sharing with the team the pressure points about that and how I was handling it, I felt would be instructive for them. They would listen very carefully and very patiently, and I felt it was important for them to understand not only what was happening, But sometimes I'd come back from a meeting, and I didn't exactly have a smile on my face, and I felt it was important for them to understand why.

AI assessment note: “I had four bosses, so I would share with the team things that were going on”

Q At what point in time will you get involved in imparting some of your judgment on the process?

A I try not to impose too much of my direction because I really want to see their creativity. But my biggest role is to make sure that policy is adhered to, and we have a due diligence policy. I want to make sure that they've addressed the issues thoroughly. I want to make sure that there have been a sufficient number of meetings, that those meetings are robust. I will go on site with them at a later stage, and when I go on site, I'm watching them, not the managers. I'm watching what kind of questions are they asking, What kind of prep did they do before we walk into the meeting? And my focus is not on them, not on the manager. And they recognize that the pressure's on them to do the work on the manager. Now, if I honestly think they were going to make a big mistake, then I would step in. But there are too many eyes on the manager, and we staff every manager who's undergoing a deep dive for due diligence with a sponsor, a skeptic, and a director. That's above and beyond me. So with three sets of eyes on a manager, chances are you're not going to make a mistake. That said, we have gotten surprised. It still happens. I'll give you an example where we made an investment where we missed something and we did not make an investment. Abraj was a rapidly growing venture capital firm focused on the emerging markets. And its founder was a very flamboyant guy, and we were very interested in…

AI assessment note: “I will go on site with them at a later stage”