Brian Murphy

and within 30 days, every client moved to Blackstone. And so all of a sudden I find myself as the senior-most person on the team. >> How does someone get to a point in their career and build up the network or the ability and the experience and even the trust [music] to be able to raise $22 billion in 44 different funds? >> [music] >> Welcome back to the Startup Ignition podcast. Thank you so much for tuning in. We are so excited for today's episode. Um we were talking pre-podcast with Brian and I am so excited to dive in. We have Brian Murphy on the podcast today. Thank you so much for coming, Brian. >> Lucky are we. Thanks for coming, Brian. >> Yeah, Brian. >> All the way down from Midway. Is that what it is? That's That's where it is. It's not Heber, it's Midway. >> It is Midway. It's not Connecticut where you used to come from. >> Yeah, it's not Connecticut where you used to come from. >> Yeah, it's not Connecticut. >> Moved to Utah, which is awesome. >> We have Brian back in the flesh in Utah. We're We're happy to have him back. But yeah, Brian is an amazing guy and he is uh affiliated with our fund. He sits on our our LP advisory um committee. Uh Brian also is um near and dear to my dad. You guys have been friends for I don't know how many years now. 20 years? 20 years? Wow, okay. That's more than I even thought it was. And >> very nice wife. She's the sweetest of sweets. >> And I I just meet I just recently met you probably about the time that we were getting our fund set up and running. I think I was kind of formally introduced to Brian via you. >> met his son. >> And then we now we know your son. Um and also I go to his donut shop very frequently, probably more than I should, just like probably your diet Coke problem. That's my donut problem. Um he is one of the owners and franchisees of Parlor Donuts, which just came to Utah, which is really cool. Great, too. Um but I have a bio for Brian. So, Brian, before we get into anything with the podcast, you can correct this bio on the fly. So, hopefully it's 100% right. If not, I'm going to blame Jack Chat GPT for that. >> Uh-oh. >> Yeah. So, here we go. So, Brian Murphy, so everybody knows who Brian Murphy is, is the founder and former managing partner and member of Portfolio Advisors, a private markets firm he held build into a major institutional platform. Over the course of its growth, Portfolio Advisors raised roughly $25 billion across 44 funds. Is that an accurate number? >> So, we raised that much for funds, but we also had an advisory business and across the 30 years we invested about $90 million. >> 90 billion in advisory side. Okay. >> Total. >> Total. Oh, total on top of the 25 billion. So, and more than 2,500 limited partners. Is that correct, too? >> That's correct. >> That's an astronomical number, by the way. That's crazy. Later managing more than $38 billion in assets become before combining with FS Investments in 2023. I'm assuming that's around the time you exited or >> I exited the day of the merger. >> I think that was the day. And I'm sure that was very much so talked about throughout that whole deal to help form the 73 billion plus alternatives platform that now FS Investments is today with the combination of Portfolio Advisors. So, Brian has spent decades building across private equity, private credit, private real estate, and what makes his story super interesting is that he didn't just build something successful. He did it himself. He was a founder of the firm that you created. >> I was a co-founder. >> A co-founder. >> I had some excellent partners that helped me found the firm. >> Yes, but a founding member nonetheless, and I can't wait to get into what is one of the most important company you know, advisory and investment firms of its type in the country. It's really an amazing story. And this is also something I just like to point out about Utah. And now he's back. He's in Utah. You know, you you you were in Utah as a kid, right? I think. >> I was born here. >> Your dad was at the U getting his PhD with moved to New Jersey when I was three. Exactly. And my dad worked for Johnson & Johnson. He was on the team, the research and development team that invented the disposable diaper. >> Disposable diaper. Yeah, that's really an interesting story. And so, what's interesting is that just the I kind of kind of the Mecca effect. People that come to Utah with this type of pedigree, there's just so many in Utah that comes in and Brian's just another great one. I mean, of all the places with the incredible career you built on the East Coast in Connecticut and you chose to come back here to Utah. >> No, it was an easy decision. >> Why? I want to Why? >> What What If I didn't move to Utah, I would never see my wife. >> Okay, there you go. >> She's a professional grandma. She introduces herself, I'm a professional grandma and a part-time philanthropist. >> Okay, there you go. >> So, three of my four kids live in Utah. 12 of my 16 grandkids live in Utah. It's the only place we can live. >> So, Louise really kind of generated this. >> It we you know, because of my career, I had lots of clients out here. Because of BYU affiliations, U of U affiliations, we have lots of you know, professional friends and other friends. It was a very comfortable place. >> Well, all I can say though is the ecosystem is very big beneficiary that you chose to come here and make your next phase of your life in Utah. So, thanks for coming. It's been great to see you more often, too. And maybe maybe that's another part of the bio that we need to introduce you as cuz I know you do. You mentioned philanthropy with your wife and everything that you're doing. You're a huge steward of a lot of charities and a lot of things that you're doing and I know I I've watched a couple of your other podcasts and other public words that you've said and you try to actively give back pretty pretty heavily in your life compared to a lot of people. So, that's a huge thing as well. And also your roots to BYU and Utah and your long-term service and mentoring and everything you're doing with charity. So, we got to introduce you. We got to put that into your bio, too, cuz that's a huge part of who you are as well. So, >> enough. >> All right. So, thank you, Brian. So, hopefully the viewer and the listeners who are watching, tuning in, you get to know Brian a little bit more over this episode, but hopefully that sets the table for what's to come here. So, Brian is a big deal, but before Brian we dive into that big deal, I told you pre-podcast, we always do an icebreaker to kind of set the tone of the podcast and I'm going to play a game with you and my dad. And we're going to and the icebreaker game's name is where were you when, okay? And I want you to think back. I'm going to give you some pretty big events over the decades. >> I can tell you the answer. I was on an airplane. >> [laughter] >> So, we're going to blanket statement, he was on an airplane, but maybe he has to tell us the exact flight number and what airlines he was on. Uh no, but it's some pretty big events over the decades cuz you guys both and I'm not trying to date you guys at all, but you've had quite the seasoned career, okay? And you guys have been doing a lot of business and finance and and investing and everything since the '80s, okay? And so, I'm going to do it decade by decade. I'm going to give you an event in every decade, '80s, '90s, 2000s, 2010s, and 2020s and you tell me what you best remember where you were, okay? Okay, and I want to hear from both of you, okay? So, here we go. Uh the very first one, we're going all the way back to the '80s and it is Black Monday, okay? 1987. I'm sure you guys both remember. And then for the viewers and listeners, this was October 19th, 1987, the stock market crash that shocked Wall Street and reset how people thought about market risk. >> the percentage drop? Was it 25%? >> close to 30. >> 30%? >> Yeah, I mean, it was dubbed the >> In one day? In one day? >> know specifically. >> Okay, that's >> [laughter] >> why I That's why I included it, Brian. >> I was work I was uh so, I went to Columbia Business School in New York City. I had finished my first year. My dream was to have an investment banking job. I was fortunate to secure that. Many of my peers also secured them. And I think out of the 860 that were going to graduate the next year, there were probably four or 500 investment banking job offers that had been given. Black Monday hits, and that week almost every bank canceled its analyst program and their associate programs and rescinded all offers but like four. And I was one of the four people who didn't have his offer rescinded, not because of who I was, but because of the organization I agreed to join. They just didn't have anyone to cut. We it was a brand new startup, and so they needed everybody that they had made offers to. And so, I got to be an investment banker when I graduated. And but yet it was massively disruptive to most of my class. >> Wow. So, you were in school? >> I was in business school. >> Yeah, I I mean, and by the way, I was born >> lose anything on my portfolio cuz all my money was invested in tuition. >> And there you go. >> And it went up by a thousand bucks this semester. >> [laughter] >> Where were you? >> I had just completed my uh I In my early career, I was in the yellow page industry. And I had completed my largest acquisition of a competitor. And so, um that was really interesting. And so, I remember just completing that deal, and a couple days later, I'm in the office of the new the place that I had acquired. They were called Great Northwest Directories. I was uh different up in the Seattle area. And I they were almost the same size as my company. So, I acquired a company about the same size. And uh I was just sitting there going, "Hmm, interesting." A few days after this acquisition, this happens. And so, I remember that distinctly. All of us sitting around talking about that. But obviously, as an entrepreneur and with a very recession-proof type business, which is what Yellow Pages was, was very recession-proof. I didn't get hit financially that bad cuz I wasn't doing a lot of stock trading. I was an entrepreneur building my first business. Um that didn't financially, but it impacted, you know, advertisers and their advertising decisions. But that first day, that shock of that 25 to 30% drop in one day, that was big news and a big event. >> Yeah. >> That was that I and I I in my mind's eye, I can remember who was there and the color of the walls in the office cuz that's how big of an impression that day was. >> That's the point That's the point of this game. These are very memorable days. >> I was I was a young buck. You must have really been a young buck then, still in school. >> Yeah. Again, I was born a month later, so I was born in November of 1987. >> Yeah. >> [laughter] >> Okay. So, 1990s, next decade. And this one's not a a specific date or day, but where were you when you first used email on the internet? When you can remember having an email address and sending your first email? In the 1990s internet era, when digital communication started changing how business moved, connected, and scaled, where were you? >> our guest a moment to think so first. >> Okay, you go first. >> specifically because I used for the tech nerds out there, so we had Digital Equipment Corporation mini-computer in our company and we used Wyse dumb terminals. And one guy walked into my office one day and again, in the Yellow Pages industry, and walked in and said, "You're going to be out of business in 2 years." What do you mean? Well, there's this thing, the internet, coming and email was just commercialized. What do you mean, email was commercialized? Well, an attorney sent out a bunch of emails saying he's a personal injury attorney and if anybody needs a personal injury attorney, contact him. And he got a call immediately and made a great settlement and now people are saying, "You going to advertise on this thing?" And so, I got an account. I can't remember it wasn't AOL cuz I don't know if it existed yet, but something and I said I got to check this out and I got on and sent an email to somebody. >> Yeah. When was that? >> That was probably 1994-ish. >> How about you, Brian? >> So, realize that when I started my investment banking career, they gave me a 1-800 number so I could call in and get my messages. There were no cell phones. We didn't have them. Um they did issue me a pager. I remember when FedEx finally kind of hit and I thought, "Oh, this is going to put the post office out of business." So, I distinctly remember when email hit and I thought, "Man, if this doesn't put the post office [laughter] out of business, what's going on?" And I kind of think it has, but Um so, I was [clears throat] working. I was I had just started my own business and it became a great way to send documents and get signatures and do so many things that I was real game-changer. >> That's awesome. >> Yeah, so next one, 2000 there. Are you ready? Where were you when the whole financial crisis actually went down with the housing crisis when Lehman Brothers uh collapsed like in September of 2008? Do you remember getting that news? And for the views viewers and listeners on September 15, 2008, it was official, the day the financial crisis turned from anxiety into full-blown panic mode and Lehman Brothers had collapsed. Do you guys remember where you were in 2008 on those days? >> What was the other big firm? Not Smith Barney, it was What was it? >> Solomon Smith Barney. >> They Solomon down a bunch of ones. So, yeah. Go ahead. You you you were in the probably in the mix of it. >> that because being a the finance guy and being back in the New York area, um it was a big deal. >> Yeah. >> Um >> [clears throat] >> in our congregational area, we had 263 people lose their jobs. >> Oh, wow. >> And our little town, which only had about 25,000 people, made the front page of the Wall Street Journal because 73% of the people that lived in that town were affiliated with financial services, either as bankers, investment bankers, lawyers, accountants, whatever. And so, it was a big deal. >> Yeah. >> It was very painful. Um I had friends that had all of their money in Bear Stearns or something. >> That's the one I was thinking. Bear Stearns went down, too. >> Or all these different groups that had just been in turmoil. And you know, like called one friend and said, "Are you okay?" He said, "I've worked for free for the last 13 years because all of my bonus I put in the deferred comp program. And now I'm an unsecured creditor in this bankruptcy. I will not see a dime." >> Mhm. >> Right? And so, there was just a tremendous amount of pain and suffering. Um but it also was an opportunity. >> Right. >> In chaos, opportunity presents itself. We had just raised a secondary fund, which is buying used partnerships, private equity partnerships from distressed sellers. >> Mhm. >> We found a lot of distressed sellers. And so, we were able to raise over a billion dollars to buy these assets. And that launched a really critical vertical for our company. >> Yeah, I'm sure you got into a very nice entry point on some of those distressed things. >> Well, we I mean, we had people that say, "Look, I'll give you my capital account if you'll just take over the unfunded commitments." >> Yeah. >> And so, we've got major stakes in great funds and at really attractive prices. But you know, what was hard for my wife and I was that we would look around and we just saw massive carnage. And you really start to feel guilty that you're having your best year ever. >> Yeah. >> And that you're making more money than you've ever made before and yet you know, you don't deserve it. It's just right place, right time, right product, that kind of a thing. And so, my wife and I made a very important life decision. We said, let's give away 100% of our salary this year. Let's give it to charity. Let's just ding-dong-ditch and put thousands of dollars on people's kind of porches because we knew they couldn't pay their utility or they're going to lose their house. And we did as a family and it was so fun. >> Yeah. >> I mean, we knew that we were making a difference. And we said, that felt so good. Let's do that for the rest of our career. And so starting then, we never collected any more salary. We never >> Because of the Because of the personal pain you saw from that financial crisis. Yeah, you saw it on a personal level. >> I'm not that smart. So, the fact that I was winning seemed like it was unfair and it was just kind of a gift of God that I didn't deserve and it was a great way to rebalance the scale. >> Right. Right. How How about you? Do you remember where you were when that all happened? >> September 2 Well, here in Utah it actually hit August of 2007, a year earlier for the real estate people in real estate. It was kind of a funny experience. That That recession, Utah is very real estate orientated. And so, the real estate started crumbling in about August 2007 and got worse and worse for two straight years. It was bad. And I had a lot of friends who thought in 2005, 2006 when things were going to go flying so high in real estate that they were set for the rest of their life. And starting in August 2007, it just went off a cliff and got worse every month. Every month I had friends in the real estate industry that some got suicidal. >> Mhm. >> And it was that serious. >> everything. >> Lost It was disasterville for two years. It's so bad. And um I was a tech guy and you know, I had already made my money and I was a tech guy and so I didn't feel it as bad, but everybody here in Utah I There were people here that went down 80 plus percent in net worth or lost it all and barely saved themselves. It's kind of funny, but the chaos created massive opportunity. The smart people that took their ingenuity afterwards came back and did better than ever, right? But there were some that just made some bad decisions. But, it was in September when um I remember um uh I I was at BYU teaching, and a mentee of mine who had gone to Solomon Brothers, or no, excuse me, Lehman Brothers, and he about spring of 2008 came to me and said, "Man, it's so dark and gray at my office when I walk in in New York." It's right before, like months before the collapse. He goes, "First of all, they had me working one weekend, then it was two weekends, then it was three weekends, then it was all four weekends. I'm just working 7 days a week, and there's just such a dark cloud when we're in the office right now." And he goes, "I I was just wondering if I should come back to Utah and get an entrepreneurship." That's what he was saying, right? Cuz [snorts] he said that, and that was like about May or June of 2008. Little did I know a few months later that whole thing would collapse. I mean, it was bad, right? It was That in our lifetimes that was the worst financial >> Yeah, that was Yeah, that was about it. Sorry, I didn't mean >> to make it so doom and gloom there. >> Well, but but the funny thing is is it's >> 89-90 if you're in the tech business was pretty >> Yes. >> So, okay, let's move to I'm going to do one more cuz this because we're we have such great stories, and I want you guys to do it, but I'm going to do one more. >> Okay. >> So, we're going to go to the 2000s era now of 2010s ish, okay? Where were you when you first saw an iPhone? Uh you know, when the phones kind of switched, not just cellular phones from like the flip or even the T9 or the very first ones, or even the Palm Pilot, but when you first saw, you know, the smartphone, the screen, and the picture, and like the zooming in of like taking a photo on your phone. Where were you, and when did you see it? >> about the 2007-2008, wasn't it? >> Is that Yeah, is that when you saw them? >> Yeah, the first one. Yeah, because I the Palm Pilot was a big part of this cuz we I love Palm Pilot and our we had Palm Pilot. I love the Palm Pilot and it was going but then when the iPhone came out and the concept of apps and App Store, that kind of changed that. >> think the App Store was even built after the iPhone. That was like 2008 or 9, but yeah, the iPhone officially came out in 2007. Did you get one right away? >> Yeah, my my memory is that the big change of iPhone was the App Store. The ability cuz it was an entrepreneurial frenzy. I'm going to build an app. I'm going to you know, make my money by being an app builder and put apps in the App Store and that was huge. >> Yeah. >> Did you get an iPhone when they came out, Brian? >> I didn't. >> You didn't? >> I was too cheap to buy one. Our company didn't issue them because they kind of viewed them like Macs. They were toys. >> When did you make the switch? >> for business and a Palm was for business or a BlackBerry was for business. >> Yeah, BlackBerry was big. >> It probably was several years and my wife probably got one before I did. Really? >> That's hilarious. Yeah, I just remember seeing when the first one I remember being really impacted by it. I >> I super cool. >> Yeah. >> But it it finally the light bulb went off and I said for all these years when these VCs I'd go to an annual meeting they were talking about how everyone's going to live their life on a screen. You're going to watch your movies on your phone. And I'm like, this screen was this big. It's like, there's no way people are going to watch a movie on this screen. And then all of a sudden you see this phone it's like, okay. >> [laughter] >> I get it. >> Yeah. Yeah. So, okay, thank you for playing my decade game there. That was interesting. Yeah, and I again, I didn't mean to make it such a, you know, bad memory or happy >> Well, you brought up the '87 crash and you brought up the 2008 recession. Okay, what are you going to do? >> I mean, there's not Those are rememberable. But there's I mean, is there specific days in the financial >> You're talking to two guys in the, you know, private equity and venture business. We're going to be impacted. >> But are there days that are like really specific around the highs of the markets? There's not really high days that are memorable, right? >> there are. >> Are there? >> Oh, yeah, I like '99 and two early 2000. I like the >> Pretty rocking. 2020 and 2021 as being on the selling side. >> we I guess we could have done 2020 and 2021. Those were some crazy times, too. But >> Yeah. Yeah. >> Yeah. Okay. >> Yeah. So much. >> Thank you for playing, Brian. That was awesome. Good to get to know you a little bit better, too. Um but I as I was saying before the icebreaker, I'm excited to go into where you were before you did all of the portfolio advisors because that's obviously a huge mark on your career, but I think it's going to be really interesting for our audience and for everybody that's tuning into this podcast to understand how does someone get to a point in their career and build up the network or the ability and experience and even the trust to be able to raise $22 billion in 44 different funds, right? Like that's not just something you wake up and pop off your bed and say, "Hey, I think I'm going to be a fund manager today," right? It's a huge momentum build. It's a huge process that takes time and experience. And so I want to go >> As far back as you want to go, honestly. >> born in Utah, but your dad moved you to the East Coast. >> Raised in New Jersey. >> And your dad was one of the inventors of >> Yeah. So when when my dad was getting very old and he was going to pass away, I told him, "I'm a little worried about your eternal salvation." He said, "Why?" I said, "Because you're like personally responsible for filling the world's landfills." >> I'm pretty sure God's an environmentalist. >> [laughter] >> And he's like, "I think if he lets the women vote, I'm in." >> So do you want to know what our first similarity as I got to know your background better than I ever have is my father worked for Johnson & Johnson. >> Really? >> Yeah. Yeah. Yeah. He was many years at Johnson & Johnson. Matter of fact, I was born in Bristol, Pennsylvania, just outside Philadelphia, even though I'm a total Seattle boy, because the five months he got reassigned by Johnson & Johnson out to the East Coast, that's when I was born. >> you lived. Wow. >> So >> That's crazy. >> Yeah. So growing up in New Jersey, my dad was very entrepreneurial. He had patents and and you know, he he always had lots of ideas. >> So, he was like an inventor type. >> Yeah, kind of. And and he worked in the the new consulting business for Johnson & Johnson. So, they're always out solving their problems and other companies' problems. And so, whenever I said, "I'm going to go get a job. I want to make some money." he'd say, "Why don't you start a business?" So, you know, I did the paper route and I expanded it and I I you know, I hired kids to help me deliver them. And then I did a landscaping company expand. I started a painting company and you know, painted my way through college. But you know, I used to bank a thousand bucks a week back in you know, early '80s and that was a lot. >> Yeah. >> So, so you know, there was always something kind of entrepreneurial that was kind of there. So, in the back of my mind I knew at some point I'd like to have my own business, but I was intrigued by investment banking, by asset management, even management consulting. And so, when I went to BYU, I studied business and I wanted to be prepared for all of that stuff. Um I had seen successful people from being in the New York metro area in those careers. So, I kind of had a little bit of that vision of what that could be like. >> Did you have a little thought of medical dental though? >> Well, you know, >> Because cuz I thought I read that. And what's interesting is I was accepted medical school and turned it down. >> Well, it's interesting you say that because because you know, the question is, well, how do you get one of those jobs? That's not in the family. That's not in your blood. >> Yeah. >> A sure thing would be to be you know, an orthodontal surgeon. >> Yeah. >> I could I could do it. So, when I got to BYU, even though I always had business interests, I went ahead and took pre-med, pre-dent and I was going to be a surgeon. And and and everyone was like, "Why do you want to do that?" And I said, "Cuz I used to go to one and he drove a Mercedes and had a big house and he had a really great life." And it's like, seemed like a good way to go. >> So, you did microbiology before that. Do you know I did that too? I I I switched to chemistry though to cuz I said, "There's not a lot of options >> [laughter] >> if you stay with microbiology." >> Well, I got went on my mission and people quickly said, "Are you out of your mind? I mean, you you have a personality to be a businessman. Don't be a dentist." >> Yeah. >> And so I changed when I got back. Um that was fascinating. I teach a class at BYU. I teach one of their uh private equity classes uh once a semester. I'm not the teacher. And I used to tell all the students, "Look, you know, when I was you, when I was a senior, I had two really key weaknesses. One, I was pretty shy and I had no interest in sales. And I thought I'd be a horrible salesman." Second, I couldn't get on an airplane without throwing up. I would just get tremendously airsick. And I went and took the the career assessment up at the thing and they gave me my results and it suggested I become a mortician. >> [laughter] >> I'm like, "Man, I have no interest in being a mortician." And so I thought, "Okay, if I'm going to do these business careers that I want, they all require tremendous amount of travel. They all require a tremendous amount of presentations. I got to just change." And so I kind of ground it out to figure out, "How do I become a master salesman? How do I fly around the world and not throw up on everyone around me?" And I didn't eat or drink or talk to anyone for the first 2 years of my career on an airplane cuz I would get sick. >> Wow. >> And so I would ride backwards on the train to help get over it. I would sit in the back of the car and try to read a book while my wife was driving to try to get over it. And it took a lot of effort, but I've now been on 3,500 airplanes. I fly around the world 260 times, been to 103 countries. I think John's probably been to more countries than me. >> But you've done over like 6 million plus miles or something like that probably. Like you're a 10 million miler or something. >> No, 6 million. >> Okay, right. And but you know how much that is, people? That's That's a lot. The airlines treat you very well. >> Yeah, [laughter] the other night I landed and I was getting out of the plane. I was tired in Salt Lake and ladies that got a little card with my name on it. And I said, "This is I'm going home. This is my home airport. I'm not doing a transfer." And she said, "No, come out the side door here." Took me down to the tarmac, put me in a Porsche Cayenne, and drove me to my car in the parking lot. >> Are you serious? >> I thought, >> [laughter] >> all right, that's cool. >> That's a nice little spiff. >> [laughter] >> I got to get myself to 6 million miles here. Um, so basically, you grew up in Connecticut. You got into school. You held your job when the financial crisis of 1987 went through. That job was for where? >> Is that where you first got your >> first job? Like the place I did my internship was a company called Chemical Bank. They were the fourth largest bank in the city. >> And that was at So, you went undergraduate BYU was what major? >> Yep. >> What major? >> Business. >> Okay, you did switch to business from microbiology. And then you went to Columbia for an MBA. >> Yep. >> And that's your >> I always taking emphasis in international business and in accounting just to make sure I had >> But your goal was investment banker. And you you got an MBA at Columbia, okay. >> Got it. And I did my internship at Chemical. They offered me a full-time job, so I've only interviewed technically for one job my whole career. >> Yeah. That's Chemical Bank is the name of that? I've heard of it. >> They ended up merging with Manufacturers Hanover, which then merged with um with Jay Chase Bank, and then they merged with JP Morgan. So, they're like 300 banks that all merged together over the years to create JP Morgan. So, my friends are now retiring from JP Morgan. >> Yeah. >> So, it was great. So, so I had I I won a really cool assignment. So, one of the interesting things was we do a rotational program to kind of see all these different areas of the bank. And my last rotation was in a restructuring and reorganization advisory group. And they were basically providing advice to creditor committees for broken LBOs. >> Mhm. >> It kind of was my introduction to private equity and what happens when it doesn't work. >> Yeah. >> And and I loved my boss, who was a great team. He was the number one revenue producer uh at the bank. He'd come, you know, very highly regarded guy from Wall Street. And everything's perfect. I I got the best job. We, you know, we were just killing it. You know, this is a group that we had maybe 15 contracts, were paid 150,000 a month for this advice. No capital was needed to be invested. There were success bonuses. And, you know, there were only 10 of us. So, it was a very profitable group. And one day he announced, "Hey, uh great news. I'm going to Blackstone." I said, "What?" He said, "Yeah, this little merchant bank just started up. They offered me to be their fifth >> The beginning of Blackstone? >> So, he was one of the original guys getting into Blackstone. They said they wanted to do a distressed group. He said, "I'm going to take and all of you are with me." I'm like, "Great." Blackstone wasn't what it was today. So, it [clears throat] was a little startup. And so, he comes back a week later, he goes, "Bad news. The bank said if I take the whole team, then we're going to have a litigation, and they are they are a lender to Blackstone, so I I told them I would take half the people." And he said, "So, I'm taking all the MDs, all the SVPs, and all the VPs. I'm leaving all the associates and the analysts behind." Don't think that's exactly what Blackstone expected. [laughter] And there were 30-day termination agreements in all these contracts, and within 30 days every client moved to Blackstone. And so, all of a sudden I find myself as the senior most person on the team, as a senior >> At Chemical Bank? >> As as a senior, so I was it. At the bank, and we had zero revenue, and we were a cost center. And you thought, "This is not safe from a job's perspective." So, we had 30 days to find a new gig. And in that 30 >> What year was that? Was that in the middle of the recession? >> So, that would have been in 1989. >> Oh, okay. >> And so, I hadn't been there long. And so, it was one of those things where during that month, there was a really interesting distressed turnaround of a private equity portfolio assignment that came up. And I, you know, 29 years old, it's like I have to go pitch the governor of the state of Kansas. I'm like, "That's not going to work." So, I went and grabbed an MD that I had worked on an M&A deal with, and I said, "How would you like to be on my team and help me pitch the governor so I have some gray hair?" He goes, "Yeah, do it." And we won. And so, we took over a $395 million broken private equity portfolio. They had investments in about 69 companies in mostly in Kansas and that surrounding area. And so, I got to I told him the deal was, "You be the cover, I'm going to be the portfolio manager." And so, I just for years I was drinking through a fire hose. We had Chapter 7s and Chapter 11s. We did IPOs and we had to do restructurings and mergers and we just had to work this portfolio out. And it was a wonderful learning experience. Um, and that client became so key to my to my career. One, it saved me at the bank, but second, um, when the bank was going through all these mergers, there was a little bit of a power struggle. And some of the managing directors wanted my deal cuz it was pretty sexy. I had no managing director to defend me and I had no managing director to negotiate my bonus. So, we watched the pay kind of fall off a cliff and watch everybody trying to steal it and I thought me and all of the other people working on this deal are all going to lose our jobs. So, I called the runner-up from the beauty contest and said, "You still interested in this deal?" And I said, "Absolutely." I said, "If I could bring the deal and my team, can we start a new investment management firm and I can run it?" And I said, "Yeah." And so, that client voted to move this big contract from one of these huge banks over to a startup run by a 30-year-old. >> Wow. >> And that was really big deal. >> What do you What do you What do you attribute that deal to in that first meeting and getting that kind of size of client and, you know, how how how did you win that over? >> helped that we were with such a big bank. >> Yeah. >> I mean, to give you an example, there was a crazy thing that happened. Because there was a huge write-down in the portfolio and that's why we got hired, there were all of these uh depositions. All these people wanted to ride this problem into office. And so, they had a um the guy who was in charge, he was the general counsel for the state. He wanted to be the governor. And so he put out tons of subpoenas and he wanted to have all these legislative hearings. And so they got all the legislators involved. And in one of the meetings, one of the legislators finally said, "Hey, I have a solution to this problem. You know, we've got $200 million of write-offs. This is silly. Let's make all of our asset managers have insurance to cover any losses ever in their portfolio. And that way we make all the upside but we have no downside. We always have our money back." And I was thinking, "Nah, that's a bad idea." And so I get back to New York and the guy asked me the executive director calls me and says, "So hey, do you have this insurance?" And I called our insurance group and they said, "We're one of four institutions in all of New York that actually has this insurance. It's really hard to get, super expensive." And I said, "Well, what would it cost if we had to cover a $195 million portfolio?" And they came back and said, "$23 million would be the annual insurance cost." So I told the client, I said, "You're currently paying me two. We're going to have to add the cost of the insurance. And so this is what's going to cost you to keep our services." And he just starts to laugh and he said, "Well, first of all, I called 17 managers and you're the only one that has this insurance." He said, "So they went through their next legislative session and they were sent it the law." But they did no homework on it. They didn't think anything about it. I thought, "Is this how laws are made in America?" >> Yeah, apparently it is. >> It was kind of nuts. And so so that client was capable um and they had a big problem. And so when five years later I said, "I picked the wrong partners. In my haste to leave the bank and to protect myself, I went to the wrong firm. They just weren't interested in building a business. They were really a turnaround consulting firm. I'm going to find better partners." And so I found another partner and I went back to them and said, "I know I'm asking a lot, but would you switch the contract again and move it to Portfolio Advisors? And you know, we'll you'll know, be the lead on your account. We've now worked together for 7 years. And, they did that. >> Yeah. >> And, they also gave us a billion dollars of fresh capital to invest because we had done such a good job. We turned their portfolio from a minus 15% compounded return to a positive 15% compounded return. And, they just trusted the people. They didn't care about the institution as much. >> Yeah, it was you and the group of people leading out the whole deal from from day one. >> closely with them. We just made sure we were fully transparent. They could see the good that we were doing. And, and they stepped up. It was a big deal. >> Yeah, that that was a pivotal moment. >> It was. I mean, to get a billion dollars of fresh capital what allows you to build the track record so you can then start to get other really big clients. >> Yeah. So, was that kind of that was the seed deal that really gave birth to Portfolio Advisors? >> Yeah, it was So, I brought a deal when I started Portfolio Advisors, and my partner brought General Reinsurance. So, one of the great things was we managed Gen Re's portfolio, but then they got acquired by a fairly well-known guy named Warren Buffett. And, Warren said, "Well, I don't want to have you invest in private stuff. I'm kind of the investor. So, manage out this portfolio, but we're going to keep you around because you're doing a great job. We like our returns." So, for decade and a half, we got to tell people that we worked for Warren Buffett. And, out of all the assets of this insurance company, we were the only asset he kept. He sold everything else so he could manage it in-house. And, so that was that was a nice play to. >> Wow. >> Wow. So, okay. So, Portfolio Advisors, we kind of did we skip anything there? That that cuz you kind of brushed over like from going from Chemical Bank all the way up to Portfolio Advisors, but >> Well, the the the the interim business, you know, was small. There were only seven of us. >> Yeah. >> Um, it only had one contract. That was the state of Kansas. And, we were just grinding restructuring that portfolio. And, so we didn't need to put any capital in. So, we had zero capital invested in our business because the day we started it, we had a contract that paid us, you know, $100 25,000 dollars a month or something like that. And so, it was it was a great way to start. It was a great way to learn and it kind of locked in my desire to be in the asset management space. >> Was that your first like actual contracted deal that you landed? Like that that that state of Kansas deal. >> That was the first deal we walked out the door? >> Yeah. How did That's what I'm saying. I just think that's pretty shock- shocking, isn't it? That you Was it you and then you asked another guy to come out that was a little bit more seasoned? >> He didn't come with us when we when we started the firm. >> He didn't go with you either? >> win the business. We did it for a year and then they transferred the contract. >> Oh, wow. Yeah, there's just a lot of trust there, right? That was like between you and >> Exactly. You don't have to be old to be capable. Sometimes we we assume that young people can't do anything, but you know, we got a lot done. We had a bunch of 28 to 32-year-olds and we we made it happen. >> Yeah. And you were hungry. >> Yeah. >> Ambitious. Can you for our viewers and listeners maybe explain kind of a typical prototypical deal in the like the first five years of Portfolio Advisors, what's like a typical deal you did? What like just prototypical. You don't have to give details or names if you don't want to, but just like an example of what you actually do. >> So, in the beginning we were an advisor with the aspirations to become a fund manager. But as in the beginning as an advisor, you would be hired like GenRe had a contract with us and state of Kansas did. And our goal was to build a world-class global alternative investment portfolio. Private equity, private real estate, private credit. They didn't even have private credit back then. It was all wrapped into private equity. And so, our job was to scour the world, identify who the very best managers were, get access to those managers for our client, and then build this portfolio. And so, if you put it in a fund structure, it would be called a fund of funds. If it's in a separate account, then it was just a portfolio. And so, we had built a really nice portfolio for GenRay and it included real estate and private equity and venture capital and Kansas wanted the same thing. And so, it was basically 60% buyout and 20% what we call special situations private credit and 20% venture. So, I was going to Silicon Valley all the time looking for access to okay, how do I get into Accel? How do I get into Battery? How do I get into these really big top brands? And it was a lot of fun. There's a lot of networking, but it was a lot of travel. As you started investing in these things, then you're invited to annual meetings because we could write decent size checks. Many times we were invited to be on the advisory boards and so, those are a couple times a year back then. They didn't have Zoom and so, you pretty much went live to all of those meetings. So, I mean, I've probably been to San Francisco 250 times in my career just to kind of cover those kind of things. >> So, you were helping people with significant assets or companies, entities, organizations put to build a portfolio that got superior returns. >> Right. And when you when you're a younger firm, >> Yeah. >> people don't want to delegate full discretion. Yes. So, most of our contracts were really on what you call non-discretionary. So, we would bring a full investment write-up and present it to their board or their >> just say, this is what we're recommending. >> Right. This is a deal we really believe in and this is why it fits the portfolio construct we've agreed to and then do you agree or disagree? And almost every time they would agree. Occasionally, they would say, well, let's do 15 instead of 20. Yeah. You know, sometimes people want to add value. >> Um and so, you were doing advisory, which means you were just telling them what to do and their own people deployed. >> So, we would typically for these clients fill out all the legal documents. We would get it done and then we would oversee the whole thing. We just had to get their blessing to put it in their portfolio. >> But when you then you start creating funds. >> Right. So, we were about 5 years old when we said, okay. So, one of the interesting things is that you would get an RFP for a public pension plan and that RFP would say, "If you haven't been in this business for 5 years, don't answer any of these questions. Don't submit any of them." And so, you kind of had to go through a 5-year window where we had our our early clients to build the track record so that we can actually hit that condition precedent. >> Right, right, right. >> And so, we went and said, "All right. Well, one of the problems in this asset class is nobody really knows well how their portfolio is doing." I mean, Excel and Lotus were pretty new tools at that time. And so, you know, we had one state pension plan we went and talked to and they said, "Yeah, we have 3 billion invested in private markets. What's your return?" They said, "We don't know." I said, "What do you mean you don't know?" I said, "It's too hard to keep track of." And they said, "Well, we" I said, "Well, what do you report in your annual report?" They said, "We ask the general partner, what's your return? We add them all up and divide by 57. And that's how many funds we have. And that's the return." I said, "Yeah, IRR math doesn't quite work that >> [laughter] >> What in the world? >> And so, so, you know, there was a huge systems deficit. And so, we partnered with a secondary firm that we had worked with. And we said, "Look, you guys have been custom building systems. Can we kick in financially and really get this thing cranked up? And then you'll use it and we'll use it. We'll each have licenses to it." And so, we started a private equity monitoring and reporting business. And we ended up getting huge names. I mean, Bell Atlantic, Nine Ex, GTE, State >> Subscribing to it? >> Yeah, saying and we would do all the loading for them. >> Oh. >> So, it was a service. So, here's all our software. We're going to load it all in and you're going to get a really customized report that's going to tell you everything. What's your return per fund? What's your return for buyout versus venture versus this? What's your return per vintage year so you could do benchmarking? What's your total relationship return for Blackstone? All these things. And things that they had no idea. So, it would it would help them as they were thinking what they wanted their thing to be. And we ended up getting, you know, like 25 billion dollars of assets that we were administering through that. But the best part was it gave us great systems and it gave us these huge logos. So, when we wanted to grow our advisory business, people say, "Oh, IBM's acquired a year's. I know this guy. I'm going to call him this out. They're great. You should hire him." kind of thing. And so, we we quickly picked up multiple really great advisory clients, and that allowed us to continue the momentum and keep building the firm. >> Wow. So, but that was all just because of the systems you had built, and everybody wanted those same systems for reporting and analytics and understanding their investments and >> It was It was the right solution at the right time in the market cuz there was nothing like that out there. >> Yeah, what year What years were these were you were picking up clients like that left and right because of those systems you did build? >> 91, like that. >> Yeah, that's early. That's really early. Yeah. So, and so, just so I understand, you were doing fund of funds, so you were having these pension funds, large organizations where you all these assets say, "This is a good fund to go into. This is a good fund to go into cuz these money managers have a good track record, and we recommend this." Did you do direct investments >> too, like in So, when when kind of Nirvana for us was, "Wouldn't it be great if we can raise our own fund?" And part of the reason was the fees were higher. Yes. The second, these are 15-year non-cancelable contracts. Unless you commit fraud, you've locked in this long-term management stream. >> Yeah. >> And so, we said, "That's where we need to get to." Because asset management for advisory was all over the map. It was all over the place. >> to 1.5%? >> biggest client paid us eight basis points. >> Yeah. >> Oh, because we were deploying two to five billion a year for them. We had some that smaller accounts that were more customized that would pay us up to 100 basis >> But you could do a fund on a normal two and 20 or something? >> No, no, not for a fund of funds. We could do a fund of funds at kind of 75 to 100 basis points. No carry. >> No carry. >> That's right. But so, so, so for us, it was like, "Okay, how do you march up the value chain? How do we start doing co-investments? How do we invest directly in deals alongside our buyout managers? How do we do late stage growth deals alongside our venture managers? How do we lend into these deals? And so, over time, you know, we got into the secondary business. We got into the equity co-investment business. We bought the DLJ Investment Partners business from Credit Suisse. We started a senior lending business. And we just started to scale. We opened our office in Europe. And so, we were not only investing in Europe, but we were raising capital. We opened an office in in Hong Kong and Singapore. And we were raising capital there and investing capital there. So, So, by the time we sold, we had, you know, pri- primaries, secondaries, co-investments, direct lending. We did new funds. We did uh secondaries, use partnerships. We did direct lending, direct co-investing. And so, that's one of the reasons why there were so many offerings. And it got up to 40. >> Is the measurement assets under management? Is that kind of one we measured? So, like year one or day one, whatever, what did you start with your first client that >> So, our that first pivotal client told us about you got a billion dollars assets under management. >> we were investing in about 80 to 100 million dollars a year. >> Okay. >> State of Kansas, when they gave us that new mandate, we were investing 200 million a year for them. So, that that kind of got us to 350, 400 million dollars. >> this is about a 30-year career? Is that about right? Yeah, so, 30 years later, when you sell it, what was the AUM? >> So, we had 44 billion of AUM. Uh half of it effectively was under funds under management, and half of it was the advisory stuff. But, when you launched your co-invest fund, you could charge one and 10. So, now all of a sudden, we start to get carried. And when we launched our secondary business, we could charge one or one and a quarter and 10. When we bought the junior lending business, we got one and a half and 20. And so, we just kind of kept taking the track record, building the capacity, the capability, >> Building out the offerings and >> bigger bigger and bigger funds, better and better fees. And ultimately, we we raised the fund that was a 40 Act fund. And it was a private equity 40 Act fund that did 50% in secondaries and like 30% in co-investment. >> What is a 40 Act fund? >> So, that's a mutual fund. >> Okay. >> And so, we basically had a interval fund that was non-traded, uh and you would sell it through wirehouses and broker-dealers and things like that cuz our view was there's a lot of growth opportunity on the retail side. And that was really what got FS's attention. They really liked our institutional business, but that was their business. They were one of the largest fundraisers for the 40 Act, and and so, they said, "Man, we could really scale that fund." And so, you know, we launched it with 300 million. By the time we merged, we had 600. We're approaching 2 billion now. And so, it's just it it's a machine cuz it's organic, it's evergreen, and as long as people aren't redeeming out aggressively, it just keeps growing. >> Yeah. Are you totally out now, or do you still have partnership interest? Uh is that You don't have to answer. You know what? We can cut this. >> We did a merger. >> It was pretty much stock for stock. >> Okay. >> There was a little teeny piece of cash, not much. Um but we really believed in the asset class. We really believed in the growth trajectory and the combined firm. The combined firm now has almost 90 billion dollars of assets, um and it it it's truly capable firm. I joined the board, and so, I but I did tell my wife, I said, "If I drop dead of a stroke, you need to put on the back of my tombstone. You can decorate the front however you want, but on the back you need to put a {quote} unquote, 'I'm too rich to feel this poor.'" >> [laughter] >> Because I own I own a lot of stock in a private company. So, we're waiting for the eventual IPO or sale, which will happen in the next 3 to 5 years. >> Wow. You had a great career. How How do you value firms like that? Like when FS came to you and said, "Hey, oh, you know, we want to wrap this up and merge and bring this together." Like what's what's the valuation or multiple >> There were some comps that were publicly traded in the marketplace. And in that time frame, people were typically selling for 18 to 20 times EBITDA because it's really stable EBITDA. It's all contractual. It doesn't fluctuate. Um but ours really didn't matter because we were doing stock for stock. So, all we did was say, "Okay, well, if your EBITDA is five times more than us, then you'll own five times more of the company when >> Right. Yeah. So, um I want to get to some personal side a little bit in in where you've come and some things you can teach us, but I do want to ask did you ever do real estate or like REITs or anything? >> did a couple billion dollars of real estate. Yeah, so we we did real estate primary funds, new funds. So, we were big investor in Blackstone and some of those finance guys, but we also did secondaries and we did co-investments in real estate. >> So, until we and before we get to the personal stuff that we I'd love to dig into just a little bit, be fun. I do you know, just family beliefs and where you you know, good advice you have for our viewers and listeners. What about economic right now? What's your feeling on where the economy's at right now? Where do you feel like like if you were a young person and what should they get into? If you were somebody in the middle of their career and they had a million or two in their 401k or you know, that kind of stuff. Where do you think things are headed? Where cuz I mean, you obviously had to be on top of where the macroeconomic situations were and the industry and sectors. You probably tracked a lot. I'm you probably since you've been retired for a year or two, you probably haven't tracked it quite as much, but you're probably astute beyond anything we could share. We'd love to tap into that. Just give a little diatribe on where you see the macro right now and where things are headed. >> So, one of the things I've learned throughout my career was that that finding the right talent in the right space with the right product is what drives most of returns. Like you said, you can have great companies come out of a deep recession. You can have great companies that are founded and do well at the peak of the market. But there's a lot of noise in between. And so, one of the great things I loved about my business was that I had exposure to some of the world's best companies. But I had 20,000 companies in my portfolio across all of those different funds cuz if you buy a used partnership, it might have 20 or 30 companies in it. In my secondary fund, we will buy 100 partnerships. So So, it was kind of like you were buying a top quartile index. So, how will the asset class be affected by global changes? How will it ultimately perform? But the top kind of always generated kind of a 10 to 20. And [snorts] And so, for for me, I had the stability of massive diversification on a global basis and by industry and the stuff. So, I didn't have to be quite so micro. I usually get in trouble when I jump in because I said, "This is exactly what's going to happen." Because the market tends to be irrational longer than you have the ability to hold on. So, like when COVID happened, I was talking to my buyout managers and I They were just telling me of all this horrible stuff that was happening to their companies. So, I went ahead and did a triple short of the S&P. And I thought, "I'm going to make a million dollars easy on this And then they did all the stimulus and I lost a million dollars. And so, it was like, "Okay. I was exactly right on what was going to happen to the companies, but I didn't know all of the factors." >> That's the government would print a lot of money and do this, right? >> And so, you know, my wife's like, >> [laughter] >> Yeah. >> I mean, a million dollars is a lot of money even now. So So, So, for me, I you know, the market feels frothy. >> Yeah. >> I have a lot I probably have 50 AI investments. I don't know how many of them are going to ultimately become 10 or 50 X and get liquid because, you know, in the '89-'90 time frame, I went to a client and I said, "Look, you have a young portfolio. Your IRR is 200% compounded. Um venture market's been straight up. I just can tell you, while I told you that, your your return went down because time changes returns. It drops." And, you know, a year later, I got to go and tell him, "Well, your portfolio is now marked at 0.5." So, it went from 4X to 0.5 in a year because the market crashed. And so, so, for me, it's like, "Okay. save, have discipline, invest in the right assets, hold them long term. >> principles will always be true, and there's cycles. >> There are always cycles. Now, you do get lucky every once in a while. I did. I had a friend convince me to be a seed investor in Figure AI. And so, I put money in. By the end of this year, I'll be at 230 X 238 X in 4 years. Right? That's, you know, you can't plan those things. But, I'm sure happy with the outcome. Now, let's just get it public or get it liquid. So, so it's one of those things where I'm a believer in mutual funds. So, most of my family, it's like, look, invest in something that will generate 10% return with not a tremendous amount of risk. And so, I built products for them that have don't have equity risk and make about 10% a year. And it's like clockwork. And so, it's like, hey, money doubles every 7 years. So, so if you're playing in the market, it's so easy to get sucked in and think everything's going up. And that's usually when you have a bad outcome. >> I feel the need to I always like to stop and educate our viewers and listeners a little bit on some things that might be that they might not be exposed to. So, this concept of secondaries. I just want to make sure people understand this. So, basically, what you're saying is if there was an existing venture fund, private equity fund, hedge fund, whatever fund it was, you might buy that from that partnership because it's distressed or struggling or something or or they just need >> Or they they they need liquidity, I was about to say. >> a great example. A very prestigious university in the northeast called me and said, "Hey, um we are dying in this global financial crisis. We live on our income from our endowment. We have no income. We're losing money like crazy. So, we don't we don't we have to sell assets to pay our professors. We have to we shut down every one of our construction projects. At the board meeting today, they chewed me out because I'm making capital calls. And I keep telling them those are legal obligations. I have to fund within 10 days. Otherwise, they're going to take half of my money. And and they said >> confiscation, right? >> Right. Or they can charge 18% interest, whatever they want. It's all in the contract. And they said, "Would you be willing to buy our $40 million uh uh portfolio?" And I said, "Well, what's in it?" And they sent texted it to me or I guess back then it was probably emailed it to me. And I looked at it and said, "Yeah, we're we're in all of these funds. So, it would be easy for us to put a bid together." >> do that at a discount. >> Yeah, well, he goes, he says to me, he said, "Would you pay me 20 cents on the dollar?" >> You got an 80% discount. >> Got an 80% discount. And I said, "Would that help you?" He goes, "If you can sign a contract in 2 days, I will sell for 20 cents on the dollar." And this portfolio was 80 90% funded, so it was mostly buying existing assets. Great partnerships, by the way. So, we did our analysis. We said, "You know, we can make 20% return if we pay 60." So, my wife said, "So, you called him up and offered him 60?" I said, "No, I agreed to his 20." And we bought it. >> [laughter] >> SHE GOES, "THAT'S NOT NICE." I SAID, "HONEY, I solved his problem. And my clients are happy. It's a win-win." >> [laughter] >> So. >> So, so in other words, there and I saw that a lot after each of the cycles I've been through is where there's people that go buy the secondaries and do really well. You know, you but you have to know what you're doing. You have to be able to assess the portfolio. >> the value of the underlying asset. So, you know, we have about a $10 billion secondary program. I think our compounded return over time is 17 or 18%. >> Yeah, and just for our views and listeners, there are a lot of early stage entrepreneurs, secondaries is in the early stage venture world. I mean, a startup starts up. Investors put money into it. The company takes longer than it's thought. People other people like what's happening in that company, and these people need liquidity. So, I own a million dollars in paper on a company, but somebody might pay me half a million dollars of cash today for that million dollars of value in paper money right now because they like the company. That's a secondary. >> Right. So and you do that at a bigger fund level partnership level so the whole partnership or you could do it on the individual security. That's a newer phenomenon but yeah, this figure AI company they just closed at a $39 billion dollar valuation and all these people all of a sudden are worth 10, 20, 30 million dollars. They were happy to sell for 25 to 50% discount part of their holdings cuz it was magic and they got to buy a new house. >> One of the most successful angel investors in history of Utah and you know who you would know who it is. His career has been built on he gets in on a company, gets preferred stock, gets first right of refusal on sec you know. So existing shareholder goes to sell their stock and he buys them up. He buys them up and he's getting good pricing all along the way. And that's a great way to invest if the company turns out great. >> I I do want to point out and you know bring some attention Brian your whole career is it seems like you've kind of been in a spot to be able to seize these opportunities, right? People are are coming to you when they're in hardship or when they're in a little bit of a you know dire straight, right? Where they're like oh I need to liquidate this or I need to get cash now or and you're it seems to that you always have a bank account behind you. >> frequently if the general partner when they say I can't make my capital call then they'll say well call A, B, or C. And because we tend to be very large investors in these funds and we tell them we have a big secondary business we're frequently you know one of the two. >> No and and but I'm saying yeah so we have a really great overarching view and so we you know having offices all over the world and seeing what's going on you kind of see where relative value is and you know where you should be. I think with that also what you're saying is they have they started set a fund set up just to do this. >> I know I know but what I'm saying is it seems like you've been able to kind of pull together the trust and capital backers that are giving you this kind of bank rolls to be able to take you know seize these opportunities when they come by. Is that kind of what you would say is >> the magic secret sauce? >> secret sauce is to in these kind of down economies >> of it. One, you have to have something that people want, but you got to you they have to trust you. You sign into a partnership and you're locking up your money for a decade plus. >> Yeah. >> That takes a lot of trust because there are an awful lot of people who say, "I'd rather just buy the S&P. I can sell at any second that I want." Yeah, here I'm locking up my money. So, you got to convince them you can outperform the S&P >> Yeah. >> and that you're going to give them something different and new in their portfolio and that it's worth taking that illiquidity. >> Yeah. >> And that's, you know, a big part of it. Very well put. >> So, >> I hope >> go listen to the last 30 seconds statement there because that's a very important statement for people to learn. >> Another question is it seems like you're actually relatively conservative. Like you you aren't a massive like risk-taker. It's almost like you're you're risk-averse throughout your career. Like do you have any But then again, you're also seizing these awesome opportunities that you know, a lot of people don't get access to and you're kind of the first call of these distressed assets and have you Do you have any regrets around not taking risk or not doing something more or jumping on an opportunity? Because I just feel like again, you're very you're very calculated. You're very conservative. And >> I am pretty conservative. And not coming from money, I didn't have a safety net. >> Yeah. >> And so, you know, I made a promise to my wife when we got married that I would take care of her. And you know, one day I said, "Man, I'm stressing 24 hours a day about our financial situation. Do you see what's going on in the world?" And she's like, "I don't worry about it at all." I said, "Why?" She said, "Because I have 100% confidence. You'd work 22 hours a day if you had to to take care of our family." >> Right. >> don't want to break that trust. And so, it was very funny when we raised our first fund, our fund of funds, I put my entire retirement account in there. Everything I had made at Chemical Bank and and I rolled it all in and and she's like, "So, what happens if the market crashes?" And I said, "Well, if the market crashes, we're going to be living in a trailer park in Mississ- >> Okay, that >> [laughter] >> That That's pretty reasonable. >> And she said, "Why? I can see we would have no money, but you still have a job." And I said, "Eh, if the market crashes and I lose everyone's money, then I won't have a job." But, I said, "So, you'll be in a trailer park cuz we'll be broke and we'll be starting again." I said, "You'll be in Mississ- Mississippi because we got all of our family and friends in here and we're going to be hiding." And she's like, "Oh, well, you better not lose any money." >> [laughter] >> So, so we only have a few minutes left, I think, at times cuz I want to get to So, I'm going to shift a little bit. So, Brian, you and I know each other for a lot of years and we hung out in a very, you know, giving environment. We met through BYU and and you just are great individual, but I also know you sacrifice. You had to. I did it first and I had to, you know, also adjust my things along the way like when you're working so hard 60, 80 hours a week and all that, tell tell give some tips on on balance, life, work, family, how you make it all work cuz I mean, 6 million miles, all the flight you had to fly around to meet with LPs all the time to Were you also scouting for deals? So, you were doing both sides? >> I was mostly doing investor relations and new fundraising. >> Yeah, so you were And that's hard work. So, LP getting limited partners for your partnerships and funds and all around the world going around, you were probably not home a lot at some points of your career. So, how did you make it all work, you know, you have a great family, your wife, everything? Just give some tips to everybody on how you made it all work. >> I have I have a I have a rockstar wife. Yes, that's the first thing. She carried a tremendous amount of load while we were building it. So, so I feel like the family built it because my I wasn't there for everything, but it was interesting. I have fretted about that cuz I have not had balance in my life until recently. And you wonder how do your kids view your career? You know, I mean, you weren't there for everything. And and my son happened to marry a friend's daughter. And he called me up and he goes, "I had a great morning." I said, "Yeah?" He said, "I interviewed your son for a couple hours." I said, "Did he ask to marry your your daughter?" He said, "He did this morning." I said, "Great." He said, "I just wanted to tell you, other than some of the first questions I asked him, my one question was, 'I know your dad, and I don't know anybody who works harder than your dad, and he's travels constantly. Is that the life you have planned for my daughter?'" I thought, man, that's really a brutal question. >> [laughter] >> What did he say? And he said, "You know, my dad did travel. He worked hard." He said, "I learned to work hard watching my dad and working with my dad." He said, "But he was the only male face in the room when I had my 32nd kindergarten presentation." He said, "There were many times that he was there and none of the other dads were there, and they many of them worked local. They just didn't see it as being worth their time." He said, "When he could be there, he was there. He flew I flew over a year in my life on red-eye flights just to get back for family activities. I flew back from Tokyo to watch my son wrestle in the state the county wrestling tournament. And after it was over, I flew back to Tokyo cuz I wasn't done. And so, you don't know the timing of some of these things, so you try to have to pivot what you can, but my son, the most important thing that he said was, "Even though he wasn't there physically, we knew he was there in spirit because he wanted to be there. We knew we were his first priority, but he had a lot of things on his plate, and he he took his job seriously, and he wanted his employees to win. And so, um balanced it the best that I could. I'm sure I screwed it up many many many times, but my wife held all the pieces together, and we're now able to kind of experience some of the benefits of that." That's awesome. Very cool. >> So, I take away from that, you can do it. You can be a little imbalanced while you're building and growing your career, and then work out with your partnership with your spouse, and you can kind of make it work, and you show up when you can. You like those red-eye flights is a really key thing. Like, you know, you sacrifice a little bit by having to jump on a red-eye flight from Japan to come back for a wrestling match. Not all people will do that, right? And that's So, you're a hard worker, but you're also hard at keeping the family burning. >> Mhm. >> Yeah, so that that goes hand in hand. >> still talk to me. >> Yeah, that's good. >> That's a good start. >> That's good. >> Yeah, and so, uh you know, and this is not about me, but I'm just sharing I have the same type of wife. You know her, and I think they're We we couldn't accomplish what we've accomplished >> bottom. >> And and and halfway through my career, my wife sat me down and taught me a few principles that I adjusted on, and went great from that. >> So, so in closing then, Brian, we always ask our guests like the final question here, and I don't mean to preemptively close this up, but we are getting to over an hour of talking. Time goes really fast, but what is one piece of advice or one takeaway you would leave with the listeners and viewers, uh whether that be startup oriented, business oriented, family oriented, uh emerging manager oriented, whatever it may be, what's the one thing that you would want them to hear? Like, how could you wrap this all up, and what's the one piece of advice? >> So, I'll give two different audiences. When I talk to young people that are in school or just graduating, I always tell them, "Don't focus on how much money you make until you turn 40. Focus on building the network, getting the credentials, whether you need a master's degree or other certifications, whatever you need in your quiver, so that you can go to war and win. Do it at and and till you turn 40. When you turn 40, you should have identified the industry, potentially the company, what exactly you're great at, and what gives you passion, and what you're going to do. And almost all the money you make in your career is after you're 40. Now, you know, if you work as an engineer and you get 3% pay raises a year, then that might not be true. But in most careers where you're paid on performance, it's pretty linear and you make most of the money after that. And so, you know, if you think you're the winner cuz you went to Goldman Sachs straight out of school and you gave up a job where you can learn five times more and build that skill set, you probably made a bad decision because you wanted to brag at the parties that you went to work for Goldman Sachs. So, be careful about that. On the career side, um I probably should have been more aggressive in expanding the firm earlier. Um I should have added more partners earlier so that we had the manpower to build the firm at a faster pace. We were pretty early in a lot of things. Right now, growing, you know, like a secondary business is hard cuz there are a lot of great secondary firms. We were one of the early ones. And so, you know, we always wanted to be profitable. I always wanted to have the biggest bonus pool that we've ever had. Reinvesting part of that money into the business, bringing in more talent, we probably could have been two or three times bigger. And a great example of that is Freddy Gantner and his partners at Partners Group. Freddy's built an amazing company, many times bigger than my company, because he was much more aggressive and and brought in the talent earlier and they were willing to make those sacrifices to really create a world-class company. >> So, what's the what's the advice there? To just like go all in sooner? >> Yeah. Yeah. I mean, we It was interesting. We had people that we paid them bonuses that were 100, 200, 300% of their salary if they were senior person. Um we were very employee-owned. I pushed equity out to many people. And so, the problem is when you do that, it becomes more of a democracy and it becomes harder to make some of those decisions. And so we would say to people, "Hey, can we cut the bonus pool by 20% and launch this new business line?" You're never going to get unanimity when you got people with all different world, you know, or, you know, life consequences going on. And so, you know, probably should have kept it a little tight more tightly held in the beginning and then give them people the opportunity. >> that a benevolent dictatorship a little bit. Yes. >> I used to tell people, "Even though you own stock and you get to vote, it is not a democracy. We got to run a company." So, but it does it does slow you down a little bit. Um, but but yet for me, one of the great outcomes, one of the great legacies was of my 130 employees, 85 of them were multimillionaires when we sold the company. So, we created wealth not just for two or three people, but it was everybody wins and people did. And so we passed out carry. I, you know, I only got 4% carry in our last fund because I had spread 100% out to 85 different people. >> Why? >> Some. >> Yeah. No, it's it's not about building a firm or just making money. It's really about, you know, what compounds over time, trust and discipline and stewardship. It's really >> alignment and incentives and and we had we had tremendous people that built a great firm. It was not me building it. I was supported by massive cast. And so everyone deserved to win. >> Yeah. >> Cool. >> Well, we have sat at the feet of somebody that's just brings so much to our local community here in Utah and just they've he's been a good friend and he teaches our senior most limited partner advisory member in the fund industry and we've you've guided us and helped us. Thank you. >> Thank you. So, thank you Brian for coming on. Thank you for spending the time and thank you guys for tuning in. This is going to be an awesome episode and like, subscribe, comment, reach out to Brian. He's a really great guy. But also follow him on whatever he's on. I'm sure you have a LinkedIn, I'm sure you have all the other things. >> Contemplating turning off my LinkedIn. Yeah, >> [laughter] >> now that I'm retired. >> You might you might >> Cuz everything now is an ad. >> Yeah, yeah. That which is getting quite annoying. But yes, thank you so much for coming on Brian and we are out.