In mid-May my wife and I took a drive from Austin, Texas, to the Lyndon B. Johnson ranch. Since picking up Robert Caro’s momentous biography of the man, I’ve been absolutely obsessed with the 36th president, whose excesses and accomplishments strike me as quintessentially American. Visiting his homestead in the Texas hill country was the culmination of that obsession, and to celebrate I played a short audiobook by Caro about how he came to profile President Johnson and, before that, New York power broker Robert Moses. (My wife graciously endures my obsession.)
As we listened, one section about Moses struck a chord with me. Robert Moses was the man behind most major public building projects in New York City and state in the 20th century — a man with nearly unlimited power despite being an unelected bureaucrat. How he acquired the power to decide which neighborhoods lived and died, which parks were built or destroyed, stumped Caro:
I’m no Caro, but I did wonder: Who is the Robert Moses of asset management?
Who is the unelected power behind the industry, behind where assets flow and which firms thrive? Caro wrote of Moses: Bridges didn’t get built over New York’s East River because some scientific study found the location to be optimal, they got built because Robert Moses wanted them built there. Who has such power here?
The possibilities are vast — and are wanting.
Stephen Schwarzman? The Blackstone titan is arguably the most well-connected man in private markets (perhaps with the exception of Carlyle Group’s indefatigable David Rubenstein). Henry Kravis may have essentially founded the private equity business when he and two partners abandoned Bear Stearns in the 1970s, but Schwarzman’s firm is now the largest. He chaired the president’s Strategic and Policy Forum, until it was disbanded following the Charlottesville violence. Schwarzman, the deal maker’s deal maker, had the ear of the president and the ability to place billions with a signature. Is he Robert Moses?
Ray Dalio? Ray got rich and powerful the way most go broke: slowly, and then all at once. The Bridgewater founder amassed assets and an unbelievable return record before 2008, but his performance during and after the financial crisis made his firm the largest hedge fund in the world, and Dalio the primus inter pares of hedge fund titans. But Dalio, as he recently told me, is “apolitical,” more interested in promoting meditation and radical management techniques than in the role of all-powerful insider.
Steve Mnuchin or Gary Cohn? President Donald Trump’s Treasury secretary and National Economic Council director, respectively, are the leading voices for an overhaul of the American tax system. One proposal reportedly on the table is ending the tax-favorable status of the 401(k) — a move that could decimate the market for retirement asset management, and retirements as a whole. Yet if recent history is any indication, big plans will beget big failures. Their status as potential power brokers will diminish accordingly.
Jim Vos or John Claisse? Respective leaders of hedge fund consulting firms Aksia and Albourne Partners, Vos and Claisse control the two most important gatekeepers for the flow of alternative assets. Hundreds of billions, if not trillions, of allocation decisions are effectively made by the people these men employ. Yet in the current comparison, Vos and Claisse seem more Moses men (advisers, of which he had many) than Moses himself.
The world’s massive sovereign wealth funds and public pension systems? As much as I respect our columnist Ashby Monk and his work with allocator “giants,” I find it hard to make any argument that these pools of capital have the willingness to move this industry as Moses did New York. Yes, some funds have thrown their weight around — I think of the Kuwait Investment Authority demanding huge concessions from State Street after some of the bank’s employees were accused of overcharging transition management clients — but that hardly counts as Moses-level power.
Others come to mind. Janet Yellen? Too theoretical. Renaissance Technologies’ Robert Mercer? Too dogmatic (I wrote “cynical” at first, but that’s too mean). Two Sigma’s John Overdeck and David Siegel? Too focused, and too early. Janus Henderson’s Bill Gross? Too late.
And thus the search continues. Moses long hid his power behind the Triborough Bridge Authority, his seat of quiet power. (If every piece of pavement in the state is viewed as an approach road to a massive New York bridge, he argued, everything fell within his domain.)
Yet I am convinced the Moses of asset management exists — and finding him or her is now my stated goal.
Your suggestions are welcomed with unabashed enthusiasm — kip.mcdaniel@institutionalinvestor.com.
Kip McDaniel is the Editorial Director and Chief Content Officer of Institutional Investor.
