This content is from: Corner Office
The Four Types of Networking Mavens You Meet in Asset Management
In the broader industry — and in hedge funds specifically — stellar Rolodexes typically belong to four kinds of characters.
Deep subject matter knowledge plus high EQ equals broad professional networks. You’re already familiar with one of this type: AQR’s Jeremy Getson. An Expert possesses a body of knowledge that takes years to develop and constant studying to maintain. But unlike other kinds of asset management social stars, an Expert also needs luck. If and when his specialty is in vogue, so is he. When it’s not, a would-be Expert toils in obscurity.
In 2006, for example, Jonathan Bock was an associate analyst at a small retail firm in St. Louis. He began covering an esoteric lending vehicle (BDCs), made it his specialty, and went to Wells Fargo Securities, where he remains. By 2016 direct lending was the hottest sector around. Lloyd Blankfein and Stephen Schwarzman attended his conference, and investors eyeing the space knew Bock as “The Guy” and his quarterly BDC scorecard as “The Bible.”
“It all happened pretty fast,” Bock remembers. “Now it’s not a matter of being excited for the growth. Sometimes slower growth can be good — particularly when we’re outlining that investors need to be very careful who they invest with. I don’t really care about being hot or not. I care about the sector being built better. We all go through cycles — careers are just like that.” Still, Bock delighted in putting Darius Rucker — Hootie of Hootie and the Blowfish — onstage with TPG Capital founder David Bonderman at Wells Fargo’s last credit event. “How great was that?” A geek’s dream.
Like Getson, Bock recognizes that his professional relationships are also transactional. “People don’t work with you just because you’re a nice guy,” he says. “The greatest social offense in finance is to waste someone’s time.”
A powerful sprinter can run the 100-meter dash, play wide receiver, or push a bobsled with relatively little sport-specific training. Likewise for these networking all-stars. Drop them into any industry — industrial plastics, yachting, hedge funds — and they’ll have a full bonus coming within a year or two. They will never forget your name, or your spouse’s, or your drink.
“I just think it’s in my DNA. I’m blessed with a great memory,” says Athlete James Kelly, Citigroup’s Americas head of capital introduction. “Of course, I have a Rolodex, and I keep notes on things that are important.” He moved into cap intro — connecting hedge funds with institutional allocators — from transition management only in 2011. One public fund allocator nicknamed Kelly “ ‘The Mayor’ because he seems to know everybody and is about as genial a person as you’ll ever meet.” In Kelly’s experience, “relationships happen organically. It takes time to establish trust.” Looking out for contacts’ interests helps, too. “I remember reading a book by a legendary marketer, Zig Ziglar, who said that if you help people get what they want in life, then eventually you’ll also get what you want.”
Other Athletes include Bridgewater president David McCormick, Reuters hedge fund reporter Lawrence Delevingne, and Citadel distribution and client group chief Edward O’Reilly. One CIO says of O’Reilly, “I’m pretty sure Ed knows just about every major allocator in the U.S.”
Many of the mavens mentioned here — Elliott Management’s Jaime Hobbeheydar, for example — avoid personal notoriety at all costs. For these fame seekers, the opposite is true. They aim to become their own brands — because when everyone knows of you, it’s easy to know almost anyone you want.
Take Stephen Schwarzman. He’s the co-founder and CEO of the Blackstone Group, but is also the namesake of the New York Public Library’s main branch and patron of the Rhodes-like Schwarzman Scholars program, and was chairman of President Donald Trump’s CEO advisory group. The council disbanded following Trump’s “both sides” remarks about violence in Charlottesville, Virginia, last summer. “It was too much for CEOs of public companies to have so many constituents attacking you,” Schwarzman said at the Delivering Alpha conference in September. “I was accused by people of being a Nazi.” But bad press is the price of fame, and of a relationship with the sitting U.S. president. Schwarzman has apparently opted to pay it: In early March he reportedly dined with Trump and Rudy Giuliani at Mar-a-Lago.
His fellow asset management Celebrities include Carlyle Group co-founder David Rubenstein and Bill Ackman of Pershing Square. But the epitome of this archetype is — who else? — Anthony Scaramucci.
People are the assets under management of these industry connectors. During every initial meeting, they’ll mentally flip through their own Rolodexes: Who should this person know? Who do I know that wants to know this person? And then they make the introduction.
Matchmakers are generous with their networks. If you need a job, they’re the ones to call. It’s no coincidence that the industry’s powerhouse recruiters tend to end up in this category. David Barrett and Russell Reynolds Associates’ Deb Brown specialize in placing institutional allocators, which means they know everyone with assets to invest. These two matchmake for a (substantial) fee, yes, but also pro bono. Call it community service — it’s in their nature.
So it is for David Holmgren, CIO of Hartford HealthCare. He’s among the best-known allocators in the business, particularly when controlling for fund size, and has an uncanny ability to “put a word in” when and where a contact needs it most. Another in this vein is Jane Buchan, the CEO of hedge-fund-of-funds and seeding firm PAAMCO. “She has a huge Rolodex,” remarks another networking ace. Buchan leads a business dedicated to connecting promising young hedge fund managers with grown-up capital — a model that’s withered and died around her. But PAAMCO remains healthy, and Buchan’s relationships have surely helped.
Everyone named here came recommended by industry insiders, including consultants, asset managers, recruiters, journalists, and, most of all, institutional allocators. Objective reporting dictated who made it and who didn’t, however awkward. “I guess you’ll be profiling Kip McDaniel,” a prominent allocator replied when told of the project, echoing others. (McDaniel is the chief content officer and editorial director of Institutional Investor, and this author’s boss.) “I’m not even really kidding — he would certainly be at or near the top of my short list. But I’m guessing that you have no intention of giving him that satisfaction.” Correct.