The transcript from this week’s MiB: Zach Buchwald, Russell Investments CEO and Chairman, is below.
You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.
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Bloomberg Audio Studios, podcasts, radio News. This is Masters in business with Barry Ritholtz on Bloomberg Radio.
Barry Ritholtz: This week on the podcast, I have yet another extra special guest. Zach Buckwald is Chairman and Chief Executive Officer at Russell Investments. They run about $370 billion. I found this to be a fascinating conversation. Russell has been at the forefront of a number of really interesting innovations, indexing and outsource, CIO and smart beta. They were way ahead of the rest of the investment world. Now they’re putting together really interesting active portfolios, including private investments. They work with both wealth clients as well as institutions. You may not know Zach’s name, but he’s got an absolutely fascinating background at BlackRock, Morgan Stanley and Lehman Brothers. I thought this conversation was fascinating, and I think you will also, with no further ado, my conversation with Russell Investments. Zach Buckwald. Zach Buchwald, welcome to Bloomberg.
Zach Buchwald: Delighted to be here, Barry. Thanks for having me.
Barry Ritholtz: Thank you so much for joining us. I spoke to your predecessor about three years ago, right after the pandemic, but let’s start talking a little bit about your background. Undergraduate bachelor’s degree at Harvard. What were you studying there?
Zach Buchwald: I Studied English, so this was not on the, on the docket that I was gonna have a career in finance.
Barry Ritholtz: Not, not the plan, huh? So, so you come outta school in 96. What was your first gig?
Zach Buchwald: So outta school, I applied to law, law school, not sort of knowing where I was going. And I, and I decided to have a little break before I, before I went back to school. And I got recruited by, by Lehman Brothers. So I spent two years working in structured finance at, at Lehman Brothers, and it became apparent to me right away, I didn’t wanna become a, a corporate lawyer ’cause I worked with lawyers. And that was, that was not the job for me, but I had a knack for it. I enjoyed it. I always liked math, even though I was an English major. And, you know, you can find other ways to put your writing and your reading acumen to, to work as well.
Barry Ritholtz: And I’m gonna say late 1990s, nobody had any clue what was coming a decade later.
Zach Buchwald: Not at all. No. Lehman Brothers was a great place to, to start my career, but after two years, I went to Morgan Stanley and that, that’s how I think at the beginning of my career. ’cause I spent 10 years at Morgan Stanley, I was very invested in the firm, and the firm was, was invested in me. I learned about, you know, the capital markets top to bottom. And I, I had a, a career there that took me from, you know, from a starting associate role to running a business that became the CLO business, which now is like a real, you know, really important part of capital markets. What,
Barry Ritholtz: What were your titles there? What’d you do there?
Zach Buchwald: Yeah, well I started as an associate within, within fixed income. I, you know, I was in sales, I was in trading, I was in structuring. I always worked within the credit derivative space. And then ultimately credit derivatives started getting wrapped up in different ways. And I, and I worked on the CLO platform and Morgan Stanley had a leading CLO platform that by the end of my my time there, i, I ran. And that was about, you know, I think about the role that CLOs play in the, you know, in the, in the markets today. It’s a, an enormous origination function that helps, you know, finance a lot of corporate America.
Barry Ritholtz: John Mack was CEO at the time, is that right?
Zach Buchwald: I was there for Phil Purcell and I was there for John Mack.
Barry Ritholtz: Wow. Those are two legends in, in the industry. What inspired you to head over to BlackRock?
Zach Buchwald: I went to BlackRock with the guy that I was working for at Morgan Stanley. And we created a business that was essentially an advisory practice. This was 2008. And BlackRock was hired to work on a lot of these situations that were, you know, at the, at the start of the crisis. So we worked with the Federal Reserve, we worked with the treasury, a lot of the big financial institutions that had, you know, problematic portfolios. And BlackRock was very well positioned as a buy-side firm, as a company that sort of had an underwritten a lot of like the problematic derivative products.
Barry Ritholtz: I mean, did they, they, did they even have an investing banking division back then?
Zach Buchwald: No, we, I mean, we called it advisory, but essentially it was like an investment banking function. I mean, it was really consultative providing advice, running portfolio analytics, thinking about, you know, if you can separate like the liquidity crisis from the actual credit risk and, and, and the, you know, sort of the expected cash flows on these securities, what could you expect to get back? And we, you know, we created a roadmap for, for the government on how to invest in these securities that they took away. You know, that they essentially backstopped from these big organizations and tried to create a roadmap to bring them back to par to repay all the taxpayers with interest. And, and in almost every respect over, over time, the government was successful in doing that. And BlackRock really played a very special role in, in creating those roadmaps. And, you know, it wasn’t what I would think of as like a highly profitable business, but in terms of like the aura that was created around BlackRock as being like a solutions provider, you know, sort of a force for good in the world. That’s, that’s what we did. And it was a, it was a, it was a great role for me.
Barry Ritholtz: I recall that era that BlackRock essentially had become the street’s bond desk. Like every brokerage firm used to have a fairly substantial bond desk. And it seemed like BlackRock has just sucked up all that paper and, and all those traders.
Zach Buchwald: Well, that sounds like an HR strategy and I don’t, I don’t know that I had any, anything, any part of that, but, but there was a lot of talent for, for sure. And there continues to be a lot of talent. You know, some of those, you know, some of the folks that worked on those, you know, on those assignments are, are essentially running BlackRock now. And it was, you know, it was the consultative nature of thinking about, you know, thinking about the challenges, how we can create solutions to those challenges, thinking about the aspirations and the ambitions and, you know, that doesn’t just apply to workout situations. That applies to all, you know, kind of all the clients. And it’s something that I’ve tried to import, you know, into my current role at, at Russell.
Barry Ritholtz: So you’re there for 15 years, eventually you become head of their institutional business. Yep. That’s, that’s a $2 trillion silo. And you also helped establish BlackRock Retirement Solutions. Explain what these groups do. Yeah,
Zach Buchwald: Barry Ritholtz: So after, after the consulting practice, I, I went on to run the insurance business at BlackRock. That was a $200 billion business at the time. A little sleepy, not, you know, what I would say is like a growth center. And, and it was housed with the, the business itself was housed with true insurance experts, asset liability experts, people who really understood like the nuts and bolts of, of insurance companies. And I, I did not have an insurance background and, you know, for the first year, I had an insurance guy sort of stapled to me every time I went to a client, make sure I didn’t get out over my skis. But, you know, but you know, this, being an outsider sometimes can actually really, you know, help you think, think externally about some of the things that might be impacting the, the, the, the clients, the industry, the sector, the business itself.
And early on when I was in that role, we ran an analysis of the whole US insurance industry. Every company that was bigger than a billion dollars of general account assets. And we asked ourselves the question, what are some of the external factors that could impact these companies that they might not be expecting or prepared for? And, and where could BlackRock play a role in helping them deal with those kinds of challenges? And we came up with seven situations, Barry, that we thought were gonna have like seismic type impacts on the companies. And four of them happened. And in three of those cases, BlackRock went on to, to play a really big role and, and run the general accounts. And that was more than a hundred billion dollars of assets. And we put on another a hundred billion dollars along the way. So that was the case where the business started growing like very meaningfully. And I think BlackRock sort of paid a lot of attention to that and realized, gee, we could play a bigger role with these insurance companies. They’re gonna do a lot more interesting things than just invest in, you know, sort of high quality fixed income over time. You also had some interesting stuff happening with Apollo and Athene. They were kind of remaking the model a little bit. And, and BlackRock, you know, pays a lot of attention to what’s going on in the, in the outside world. And we, we, we grew the business
Barry Ritholtz: To say the very least, what are they, 12, $13 trillion now in assets.
Zach Buchwald: It’s a good business. Yeah.
Barry Ritholtz: So 10 years at Morgan Stanley, 15 years at BlackRock, what lessons did you take from those experiences to Russell Investments? Yeah,
Zach Buchwald: Well, first and foremost, it’s all about the client. And if you lose sight of that understanding the, what the client is dealing with, their challenges, their ambitions, their aspirations, being a consultative provider, if you start from a push out, like, here are the products that I have, here are the things that I’ve done before, it almost never works. And it also, that’s not the, the age that we’re living in today. The age that we’re living in is how can I, how can I help you achieve the outcomes that you’re trying to get to? How can I anticipate some of the challenges that you’re gonna experience? How can I help you learn from some of the things that I’ve, you know, I’ve seen in the sector or the industry? And you start from there and it builds a foundation with the client that is just ir sort of irreplaceable. So that’s, I mean, that was one really important learning. Now, I, I, I came into Russell because Russell had like, first of all, it’s a 90 year legacy. Thank you for starting with that 1936.
Barry Ritholtz: that’s a, that’s a, you’re coming up on a century soon.
Zach Buchwald: Yeah, exactly. I’m really proud to, to run, I’m the eighth CEOO by the way of, of in 90 years of Russell Investments. I mean, that’s, so for a US asset manager that’s old. And I think about the things that Russell has done in that time, Barry, I mean, it’s been a real innovator and category creator. Everybody knows the Russell indexes, which were, you know, sort of cultivated and innovated in all sorts of cool ways. And we all have it in our pensions and our 4 0 1 Ks. You know, Russell was the original pension investment consultant. We created that category. Rus Russell was the original OCIO and we’re still a, a leader in, in OCIO. These are, these are really, you know, sort of important categories that have a big impact on, on the investment ecosystem. And what was, what was special to me about Russell, and the reason I wanted to join is Russell’s approach to doing all of these solutions is it’s entirely open architecture.
So the view is we build and implement portfolios at Russell, which is, you know, something I worked on at BlackRock and to some extent in Morgan Stanley too. But the idea is we use best of breed managers and strategies from around the whole investment universe. So if I put together an OCIO portfolio at Russell, I’m building, you know, fixed income manager, you know, the best quality fixed income managers, the best private assets managers, the best cash and, and so on, and best index products. You know, we can kind of, it’s, it’s, we can kind of go everywhere within the ecosystem. And that was a model that I was very excited about because it became more about, like, thinking through the lens of what the client is looking to achieve and how can I use all of the tools and the ingredients available as opposed to sort of a set, you know, set of tools that I, that I had at, at hand from the company that I worked for.
Barry Ritholtz: We’re gonna talk about pensions. OCI we’re gonna talk about a little later. I didn’t realize this till I started doing my homework. Russell is effectively credited with inventing smart beta. I mean, who, who knew that? I think of a, a couple of other firms as taking the leadership in that recently. But 40 years ago you guys were on the, on the cutting edge of that. What is it like running a firm that has a near century long legacy? How does that affect how you think about risks and opportunities?
Zach Buchwald: Yeah, it, I mean, the legacy is a, is a wonderful thing. But you know, you can’t rest. Like we all know we can’t rest on our laurels. It’s, you know, the, the, the job for me is to make sure that I’m taking sort of the best parts of the history and the legacy, the innovative spirit, all these cool things that we’ve done, and then evolving them for the world that we’re in today, our, our, our mainline business, we have, we have sort of two central businesses. It’s OCIO and it’s model portfolios that we do on the retail side, which is essentially same kind of ideas of the institutional business, building great portfolios and implementing them. 90% of our business is those, is falls into those two categories. What I need to do today is make sure that I’m using all of the tools available. So as the market moves from, you know, active products to passive products, as the market starts integrating private assets with public assets, all of that is part of our portfolio today. And, and so the goal, you know, as the leader is to make sure that the strategy is incorporating, we’re open architecture. It’s, it’s truly incorporating the entire ecosystem into the, into what we build for our clients.
Barry Ritholtz: I want to get your feedback on a quote of yours. I found in my, in my homework quote, financial security is a central challenge for this industry. How did your experiences at BlackRock, at Morgan Stanley and way back when at Lehman Brothers, how did it affect your, your concept of financial security,
Zach Buchwald: Financial security and retirement security especially? Took me a little bit of time to hone in on Barry. I mean, I think back to my years at Morgan Stanley, and, you know, the job there was very much about sort of like finding the arbitrage and the markets. It’s where can we make money on as a sales and trading function? And we help clients along the way, you know, by delivering the products and services that they want. But first and foremost, it was about the investment bank. And, and that changed for me. I had a, I had a review with my boss at the time, and she said to me something that she meant as a compliment. She said to me, Zach, you can really smell the money. And I went away. And that was not the legacy that I wanted from my career. And, you know, I moved to BlackRock shortly after that where I was helping, you know, the, the government, the taxpayers deal with like, really critical issues, like really big thorny problems that were gonna have an impact on, you know, on the quality of life of the people in this, in this country.
And it, it was a complete reset of my perspective. You know, now we build portfolios at Russell, but you know, if I’m working for a pension or a 401k or an insurance company, at the end of the day, I’m serving individuals. I’m helping them. And we don’t lose sight of that. I’m helping them have a secure retirement. Now, by the way, they have to do their part too, because it’s also about, you know, saving, early, contributing, making sure that you’re, you know, learning about the, the plan and making the right decisions. But the role that we play within the industry is a make or break in terms of whether they’re able to, whether they’re able to achieve that. Now you also have something going on in the background that’s, that’s gonna have a very big impact in the next couple of decades with retirees in America. And, and that is that really the risk has shifted. Now, the retirement security risk has shifted from, you know, organizations like the companies and the government
Barry Ritholtz: Companies in defined benefits, correct. To defined contributions to defined contribution.
Zach Buchwald: So the standard model, the standard pension model is shifting to the 401k and today still about half of retirees have access to a pension. And that plus, plus social security, more or less gets the job done. But in another decade it’s gonna be less than a third. And in another two decades it’s gonna be very little at all. So that means that now the 401k is the staple that’s gonna, you know, result in a, a secure comfortable retirement or, or not. And you know, the, the, the big challenge with a 401k is that the risk of saving, investing and also decumulation, taking that pot of money and knowing how long, you know, the longevity risk, knowing how, thinking about how long you’re gonna live and how to allotted over time, all of that risk will now be borne by the individual. And we have not fully processed that in the, you know, within, within the country that this is a crisis that’s coming, that people aren’t prepared to, to own that responsibility. And the system today isn’t set up in such a way that sort of, the decisions are very easy to, you know, to make at the, the onus is really still on the individual.
Barry Ritholtz: So that’s really fascinating. H how does that affect what you see within your role as CEO at Russell Investments? Yeah,
Zach Buchwald: Well thanks Barry. Our whole mission is built around helping people achieve financial security. And we do that on the institutional side by partnering with corporate sponsors and helping to, you know, ensure that the plans that they’re, you know, putting in place and the role that they play through matching through, you know, providing lifetime income, whatever the set of benefits are is gonna be, is gonna serve the participants in the way that we think is gonna help them have, you know, retire with confidence and with with security. But as the, you know, as the machine shifts and it moves more toward a, a 401k and then, you know, a lot of folks end up with a nest egg that they have to manage on their own. The goal is to make sure that on the wealth side, we also have sort of the right kinds of products and services and solutions that help them, you know, understand the income, help them understand decumulation, help them get the right diversification, help them get fair fees. I mean, the goal is to make sure that we’re, we’re really delivering sort of a set of products and services that’s gonna allow them to live the kind of retirement that they all they’ll hope for.
00:16:12 [Speaker Changed] Hmm, really, really interesting. So whenever I talk to people about Russell, everybody knows the Russell 2000. The question is, what does Russell do? How do they make money on they, they must do something more than the Russell 2000. Tell us a little bit about the different business lines at, at Russell Investments. Sure.
00:16:31 [Speaker Changed] So the index business is now owned by London Stock Exchange, and they, they do a magnificent job with it. And we still have a little bit of the, you know, the aura. Every time I’m in the elevator I see the advertisements for Russell and I think I didn’t have to pay for that ad. We get, we get the benefit. The business is predominantly an a, it’s an active asset management business. And, and we really have one main function, Barry. It’s about building and implementing great portfolios. And we do it for institutional clients and we do it for retail clients. So building the portfolios is really about sort of, you know, it’s portfolio construction, it’s strategies and managers. For 90 years we’ve done manager research at, at Russell we have, you know, a huge team of people. Now it’s augmented by AI and technology helping us look at 16,000 different managers and figuring out, we invest with about 225 of them, you know, figuring out which managers and strategies we think make sense in the different portfolios we create. And then the implementation is one of the coolest parts. ’cause that’s, we actually do the investing on behalf of the managers. They, they typically give us model portfolios and, and then all the things around the portfolio that can, you know, be very incremental. It’s the, the transitions, it’s the, the hedging completion exercise, completion mandates, overlays, and, you know, those things can be alpha generative, they can be very important for risk management. You can add a values overlay for for clients. And so it’s a, it’s a full portfolio delivery at the end of the day.
00:17:54 [Speaker Changed] Coming up, we continue our conversation with Zach Buckwald, chairman and CEO of Russell Investments discussing exactly what Russell Investments does for its clients. I’m Barry Ritholtz, you’re listening to Masters in Business on Bloomberg Radio. I’m Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Zach Buckwald, he’s chairman and chief executive officer of Russell Investments. The firm was founded in 1936 and runs about $370 billion. Zach joined Russell in 2023 coming from his previous career at BlackRock. So you mentioned you’re researching 16,000 different managers and internally you’re generating just a fire hose of data. How do you analyze that? What value is that data to the firm?
00:18:59 [Speaker Changed] Yeah, I mean, the data is everything and we, we have, we do have a, you know, historical trove of, of data, but it changes quickly. You think about how quickly the, you know, the investment ecosystem e evolves and, you know, managers have strategies that make sense on one day and then things change and, and those strategies don’t make sense. So it’s, it really has to stay current even though we, you know, we certainly value the, the historical data and, and performance and use it. We start with 16,000 and the first layer is largely technology driven. So it’s, you know, we have huge feeds that take into, you know, that, that take in and analyze all of the available information that’s provided to us by managers directly. And also that we can find out there in the, in the public domain.
00:19:44 [Speaker Changed] When you say managers, are these mutual fund managers, ETF managers, private managers, or all the above?
00:19:50 [Speaker Changed] It’s, it’s all of the above. I mean, typically because of our size and scale, we don’t, we don’t invest in a ton of direct like shared products. We do much more sep sort of separate accounts and, but we do invest in mutual funds. We do invest in ETFs or index products where, where that makes sense and that can help, you know, drive down cost or, you know, help with the diversification. But, but the managers is for the act, the active strategies and active represents, I’m gonna guess probably 85% of the assets in that that we manage overall. Remember we’re using different active strategies as the building blocks to create these portfolios. So predominantly it’s not Russell managed, although, you know, we can talk about the smart beta that you, you, you brought up predominantly. These are externally managed strategies that we bring together and then we collapse the whole thing together in one portfolio. And we look enterprise wide because you might have, you know, three active equity managers and they’re not paying attention to what the other ones are doing. And so you can end up with outsized positions or underweights, you can end up with, you know, people on opposite sides of trades and we look to, you know, to correct or make adjustments where it makes sense.
00:20:57 [Speaker Changed] So you guys were very innovative and helped create the concept of outsource chief investment Officer o CIOs. Tell us a little bit about that business line. Who are the clients and, and h how much assets are, does that run?
00:21:13 [Speaker Changed] Yeah, so OCIO represents the lion’s share of the 370 billion that that we manage. And it’s a fast growing segment, not just at Russell, but it’s growing because a lot of companies are, are outsourcing their pensions or their 4 0 1 ks to, you know, folks that live and breathe the markets and that think about retirement security like we do all, all day long. So, you know, a typical day at Bloomberg might have one top story about a big corp, you know, big US corporate that’s chosen to outsource their retirement portfolio. Now we work with a lot of in-house teams as well. We help by bringing in, you know, any of those implementation services like transitions and hedging. We do that for a lot of, a lot of companies that have internal teams. But sometimes sponsors decide to, you know, to hire retirement experts to, to run their, to run their retirement portfolio and that’s when they would bring in an outsourced chief investment officer. We’re a top five provider and it’s some of the big, you know, the other big asset managers that, that also provide that we’re the ones who do it with an open architecture framework. So the goal is not to, you know, have Russell run the whole portfolio. It’s to bring in best of breed managers and to bring those together.
00:22:16 [Speaker Changed] Huh, really, really kind of interesting. When you talk about hedging, are you hedging equity, hedging fixed income? What, what is the hedging business like?
00:22:25 [Speaker Changed] Yeah, it can be all of the above. Also a foreign, you know, foreign currency, you know, it can be hedging individual sectors. You might have a sponsor that’s in the technology sector and they feel like they already have enough exposure to technology. And so you can, you know, make some adjustments to the portfolio. That way you can also build in a values orientation for, you know, organizations that have a particular, you know, view of the world that they wanna express in their investment portfolios.
00:22:50 [Speaker Changed] So let’s talk a little bit about smart beta, which Russell helped pioneer in 1985 way before your time or my time for that matter. Is this still something that’s a key part of what you’re doing?
00:23:03 [Speaker Changed] So we still have a strong footprint within systematic Barry and you know, Russell manages on average between 10 and 20% of the portfolios that, that we look after. And systematic typically is within that, that 10 to 20% we use it not to make, you know, credit decisions or stock picking decisions. Like that’s not, that’s not our game. That’s why we hire external managers who are, you know, true experts in that we use it to like round out the portfolio to make adjustments to make sure that the portfolio is complying with why the client hired us or whatever their investment, you know, their stated investment strategy says. But smart beta is, you know, one of the many places where Russell was an innovator and you know, these things can sort of take on a, a life of their own as the, as the industry adopts those practices.
00:23:46 [Speaker Changed] We mentioned artificial intelligence earlier. Tell us how you’re using AI and either risk management portfolio construction or just data analytics.
00:23:55 [Speaker Changed] So Barry, we have a list this long of sort of, you know, desired use cases that we’re working on for, for ai. And I, I think we’re still in, in early innings here, but the kinds of things that we use AI for today very effectively are more task oriented. You know, we have it fill out our RFPs, we have it build pitch decks. We have actually, we use AI to, you know, read 500 page filings, you know, which we used to have a human being do back in the day. And it’s very effective at that. The real goal for, you know, for this company is that I want AI to actually help us with investment insights, with manager research insights that’s gonna actually drive performance at the end of the day. And I think we still have a fair amount of, we’re making progress, but I think we still have a fair amount of work before, before that happens. But, you know, that’s the view where having, you know, having a, a portfolio where we look after 16,000 different strategies and, and managers, we’re starting from a place where we, like, as you said, we have troves of, of information, of historical information that we’re relying on and that we’re using AI to sort of help build out that framework.
00:24:59 [Speaker Changed] So I’m, I’m always fascinated by, you know, the old joke is no one’s ever seen a bad back test and AI and those sort of things are o only capable of looking at what’s already occurred and built into all, all of those back tests and to some, some degree built in to AI is that the future is gonna resemble the past. How do you navigate around that? Because sometimes the future doesn’t resemble the past, just look at AI and how it’s changing so many aspects of, of various businesses. Yeah,
00:25:34 [Speaker Changed] Well that’s a place where, you know, I’m still pretty optimistic that there’s an enormous amount of value creation to come Barry, because the, you know, what we’ve seen from AI so far, at least how it’s, how it’s shown up in terms of, you know, in the, in the market performance has been almost entirely Harvard in the technology sector. It’s where, you know, sort of where ai, EEE exists. What we haven’t seen yet is all of the other sectors that we know are gonna be sort of enormously impacted by the proper use of ai, the creative and innovative use of ai. So, you know, you see a little bit of it in like healthcare and life sciences, but you know, logistics and shipping and consumer goods and in investments, asset management, they’re all gonna get transformed by AI because it’s changing things. And you know, this is where I’m, I’m really optimistic that we have a lot more room to run in, in, in the markets today is because you’re still not seeing like all the, you know, the potential and the benefits of, of AI showing up in some of these, you know, what we think of as sectors that are peripheral to technology.
00:26:37 But you know, in truth technology is like critical to how we, you know, how we all exist.
00:26:42 [Speaker Changed] Hmm. Makes makes a lot of sense. Let’s talk about private markets. How can Russell Investments help their clients access private markets between AI and privates? Those are probably the two hottest topics we’ve been talking about this year.
00:26:57 [Speaker Changed] So privates represents about 7% of the portfolios that we manage. It’s heavier in, in the institutional portfolios. It’s lighter right now within wealth portfolios. There’s a lot more growth that’s, that’s gonna happen, especially in wealth. I think the average wealth client has something like one or 2% of their portfolio outside of their real estate holdings about one or 2% in private. And that number is going to grow and, and should grow, right? Because this is a really important source of, you know, re return and risk diversification. And if you rely on the historical precedence, it’s been an enormous outperformer writ large. And so, you know, kind of delivering, you know, access is a, it’s a very important, you know, function that we do at Russell, but also that we work with our financial advisor partners to, to figure out the best ways. ’cause it’s, you know, how you deliver privates to to, to institutional investors is, is different, right?
00:27:48 There’s tax considerations and reporting considerations, liquidity considerations that all need to be considered with, with individuals. So we’re trying to do this, you know, really judiciously within wealth portfolios, wealthy people, wealthy families, there’s a lot of room to run here. You know, I’m being extra cautious when I think about, you know, sort of 4 0 1 ks or you know, 401k graduates, you know, middle class people nest eggs. ’cause that’s where, you know, I think about are these appropriate investments? Do they help with financial security? Can you get your money back when you need it? Are the fees, you know, fair and appropriate? And, and so I think you need to be extra careful with, with, you know, sort of true working people, working families and their, their retirement nest eggs. But wealth at large, there’s a, there’s a ton of room for, for private markets.
00:28:36 [Speaker Changed] So, so you mentioned 7%. Where could this possibly go? Is this 10%, 15%, 20%? I, I’ve heard people say 60 40 is out, it’s now 50, 30, 20 or whatever the numbers add up to.
00:28:52 [Speaker Changed] I don’t know where it gets to. It’s certainly gonna be north of, of 7%. You know, I think it’s, I think you have to think not only about what’s appropriate for the portfolios. Listen, if you do a backward looking analysis of private equity and private credit, you know, which I, outside of, you know, specific real estate investments that people choose themselves. Those are like the two biggest food groups. If you run an analysis of what those investments looked like over the last 20 years, Barry, it’s gonna be different than what you’re gonna get in the next 20 years for a lot of reasons. But, you know, I’ll tell you from my personal perspective right now, you know, in the last two years my vet’s office has been bought by private equity. Wow. My landscaper, my garbage collection, my dentist, they’re all owned by private equity now.
00:29:36 And you know, they’re doing these rollups and there’s lots of efficiencies to be created on bringing these, you know, these practices together. But, you know, that’s a pretty different investment than buying a company, right? And making a company better and selling that company, which historically is, you know, where, where private equity made its name and its reputation and the, and the return stream that we’ve seen. So, you know, another thing I think about is how am I gonna make sure that the, you know, risk and return profiles I’m putting into these portfolios that we can, you know, reasonably predict what they’re gonna look like and that we can manage them, you know, sort of appropriately given that the asset pools might look a little different than what we were, you know, what we were investing in 10 years ago.
00:30:16 [Speaker Changed] Hmm. Really, really interesting. So let’s talk a little bit about some of the things that are going on in the market today. Fee compression has been a giant factor really since the financial crisis. You recently decided to reduce some of the fees on your flagship fixed income products. Tell us a little bit about what drove your decision and what are you thinking about in terms of fees generally?
00:30:44 [Speaker Changed] I mean, the governing precept Barry is always to make sure we’re providing value to the clients. And, you know, we do that by charging a fair and appropriate fee for what it is we’re doing. If, if I’m gonna focus on anything, it’s less about what’s the fee that I can charge and more about making sure that I’m invaluable to these clients and that we’re really, you know, helping them achieve their goals. When you, the truth is, when you do a great job for the client, the fee almost becomes not an issue. Now having said that, we have some businesses that are scaled businesses and that I compete with, you know, with other good providers and I have to make sure that we’re staying competitive. So we’re not in any way immune to fee compression. But, you know, but if you can provide a really good value proposition, it’s not such a big deal.
00:31:28 [Speaker Changed] So this has been an ongoing factor in, in the industry, particularly for active managers. And, and Russell is primarily an active manager. Are you seeing any changes in this trend globally? I mean it started very much in the United States with, with entities like BlackRock and, and especially Vanguard, your global firm. What does this look like overseas?
00:31:53 [Speaker Changed] Yeah, fee compression in our space is, you know, it is, comes through in different ways globally. O-O-C-I-O is the place where we’ve been sort of most susceptible to, you know, to fee compression Barry. And, you know, if I think about who we compete against, the landscape has changed for us over the last 10 years. You know, 10 years ago I competed largely against like the consult the traditional consultants. And we had a very different offering. We actually implemented the portfolio. We weren’t just doing manager research sort of on paper. We were actually trading the portfolio and, you know, doing the risk management and the overlays and the completions things that were a very big value add. And we were unique in that respect. And then along came the really big asset managers that saw OCIO in, in part as sort of a distribution function. You know, if I can deliver the entire portfolio, I can put a lot of my own underlying products into that portfolio. And by the way, that can be a great business for you if you have. But
00:32:45 [Speaker Changed] That, that’s a closed architecture. You guys run a very open architecture.
00:32:48 [Speaker Changed] We run a completely open architecture and we’re unique in that it’s true open architecture, 80 plus percent and sometimes a hundred percent of the assets come from third party managers. But we still have to compete against organizations that are running their own version, which might be closed or semi, semi closed. And you know, if you have a whole lot of underlying products you’re putting into the portfolio, it gives you a lot of leeway to change the fee or to compress the fee at the OCIO level because you’re making money in all sorts of other ways. Russell doesn’t do that. So it does mean that we were susceptible to some of the fee compression and our fees have narrowed. But the way I see the solution here is just to make sure that the value proposition that we’re offering, the way we go about building an OCIO, the costs that it, you know, it takes the, the, the, the human capital that’s required. You know, we put over a hundred million dollars into our technology system that allows us to build these open architecture portfolios. When clients understand what it is that they get from us. Paying a slightly higher fee doesn’t seem to be a big deal.
00:33:47 [Speaker Changed] What about the private markets that we’re looking at? We were talking about private equity, private credit. Yep. First, is it possible that those sort of things can be indexed and then second, they’ve always been pricier than public markets? Are we started to see any fee compression along those lines?
00:34:06 [Speaker Changed] Yeah, so we haven’t seen a ton of fee compression. I mean, those are cases where I think the value proposition is crystal clear and, you know, the high performing managers can charge higher fees or, you know, substantial fees because they’ve really delivered. And you know, in general, they continue to deliver. I think if they stop delivering and the, or, you know, and, and we start seeing what look more like public markets performance or even weak public markets performance, it’s gonna be much harder for them to charge those, those fees. But that hasn’t happened yet. You know, especially within private credit and, and private equity. There’s been, you know, real outperformance, especially at the top of the heap versus the public markets. So it becomes easier to, to justify those fees.
00:34:47 [Speaker Changed] Makes a lot of sense. So let’s, let’s venture into the world of public policy a little bit. You’ve proposed national account programs to help young people start investing early. The most recent big bill that passed in this administration has these accounts for babies e every kid that’s gonna be born is gonna get, what is it, 1500 or $3,000? I don’t know what number?
00:35:11 [Speaker Changed] Thousand
00:35:11 [Speaker Changed] Dollars. A thousand dollars. All right. Better than nothing. But where do you see these sort of programs going? And if you start investing at age one day, what potential compounding can we see 50, 75, a hundred years later?
00:35:28 [Speaker Changed] Now you’re really talking my language. When Trump was elected, I wrote a piece that we put into Barron’s that Barron’s published saying that we should give a thousand dollars to every kid in America and open an investment account and let them actually learn about the power of compounding. Because it’s different when you actually own the assets. And you know, when, when you give people an investment account, you can find lots of ways to create some education, you know, investment education that goes along with it. And
00:35:51 [Speaker Changed] Lemme just interrupt you ’cause it sounds like a lot of money. There are 3 million kids born a year. It’s $3 billion. Yeah. Which to a $31 trillion economy and a six or $7 trillion government spend is, is a rounding error.
00:36:07 [Speaker Changed] It it, it’s nothing in the grand scheme of things. And you know, the, you know, you’re onto something because it got actually got criticized by both the right and the left and the right said, oh, this is another entitlement program. Oh. Anyway, we put this thing into Barron’s and to my surprise and delight, it ended up in, in the big beautiful bill. And it actually got, it actually passed. It
00:36:24 [Speaker Changed] Became passed and funded, right?
00:36:26 [Speaker Changed] It became legislation and, you know, treasury is working hard now thinking through, you know, the implementation and we’re, we’re helping along the way. It’s, it’s an awesome program because fundamentally what it does is it makes investing universal. You know, all of these families in the United States that think that investing is not for them or they never had any exposure to it. And that’s, by the way, most of America right now, to the extent they have a a, you know, have a kid, they’re going to have an investment account that that’s, you know, there is a, there is a thousand dollars to, to kick kickstart it from the government. But there’s gonna be lots of avenues for families to make continued contributions for employers to make contributions for philanthropies to make contributions over time on, on hopefully a tax advantaged basis. And folks are gonna see the way compounding really works.
00:37:17 So it’s not the $1,000 contribution, which as you said is kind of a drop in the bucket, at least as a, you know, as a, as a burden on, on society. It’s the, it’s, you know, what can you pull together from all of the different constituents that are gonna wanna contribute to a program like this. So we’re, we’re really excited. And you know, I think that ultimately, I hope this will dovetail with retirement security. You know, you, you said it when, when you asked what can happen in 50 or 75 years, I think initially, you know, the thought is these might help fund college education. And by the way, with a little bit of contributions on an ongoing basis, it will fund a college education with, with the compounding. But over time there’s six or seven of these programs and eventually, you know, maybe we can pull them all together and create a, a national program that actually funds people’s retirement
00:38:06 [Speaker Changed] Coming up. We continue our conversation with Zach Buckwald, he’s chairman and chief executive officer of Russell Investments discussing the state of markets today. I’m Barry Riol, you’re listening to Masters in Business on Bloomberg Radio.
00:38:35 I am Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Zach Buckwald, he’s chairman and chief executive officer of Russell Investments. The firm was founded in 1936 and runs about $370 billion. Zach joined Russell in 2023 coming from his previous career at BlackRock. I, I’m a fan of using milestones as an excuse to give some sort of a gift. You can see sweet sixteens or kid turns 13 or whatever it is. Yep. Grandma and grandpa write a check and put it right into their account. Here’s some Eli Lilly or here’s some whatever s and p 500. Knock yourself out. And that’s gonna just appreciate over the next, you know, x number of decades. It, it could really make a substantial difference in, in the retirement of environment people who have yet to even be born.
00:39:33 [Speaker Changed] It’s absolutely true. And, and by the way, it’s investing in, in the US stock market, right? And
00:39:38 [Speaker Changed] Yes, so I’m assuming the s and p 500 would count and any of the Microsoft or Lilly or whatever, apple, Amazon, whatever big tech company you’re enthusiastic about, I would recommend a broader, more diversified approach than a single stock. Right? I mentioned Lily ’cause I just know a friend just put a bunch of Lily stock in his nephew’s account and I’m like, oh, what are you doing that for? He is like just doing a transfer. It’s tax free and I don’t have to worry about it.
00:40:06 [Speaker Changed] Well, I’m, I’m not a stock picker, but, but Lilly’s a great company. Having diversified exposure in these, in these accounts is, is, is is the way to go. And, you know, listen, a, a generation ago Barry, the version of that was not so much Lilly stock, it was very typically a, a US treasury bond. Right? That’s what you got when you turned 13 or 16 or had that milestone birthday and a treasury bond in the long term. You know, you, you, you’d rather be in the stock market, you get,
00:40:32 [Speaker Changed] You don’t want two, two and a half percent ahead of a above inflation That doesn’t excite you.
00:40:37 [Speaker Changed] I’d rather, I’d rather have the long-term return of the, the s and p for sure.
00:40:41 [Speaker Changed] Especially if it’s a newborn or even a teenager. Their investment window is 60, 70 years.
00:40:48 [Speaker Changed] That’s, that’s exactly right. And and the trick here is you have to get people to actually understand because that 16-year-old, when they’re 22, they’re gonna get a job that’s gonna have a 401k and they have to understand why am I taking 6% out of my, you know, out of my paycheck when, you know, my starting salary might not even be enough to get, you know, to pay my rent and my other bills. Why would I wanna do that? And and they really, if they understand the power of compounding and the long-term implications of that, they’re gonna, they’re gonna buy into it.
00:41:17 [Speaker Changed] I I really didn’t think about my 401k until I was in my thirties. Right. But if I actually had money put in account when I was born, by the time you’re 25, you’re gonna see some impact from compounding.
00:41:31 [Speaker Changed] A hundred percent. Well, I, I’m not too worried about you Barry.
00:41:34 [Speaker Changed] I, I’ll, I’ll be all right. You’ll
00:41:35 [Speaker Changed] Be, you’ll be all right. But you know, but think about all those folks that don’t, you know, the average income in America is still $70,000. Right. All those folks that don’t have access to, to in investments and they’re not thinking about am I gonna be able to make my contribution at age 22? Right. ’cause they’re thinking about can I, can I pay my rent, afford to pay my rent? Right.
00:41:54 [Speaker Changed] That’s right. The bottom half of the economic strata in this country, and we’re having this conversation on election day right. In New York where it looks like at least the leader up until up until today has been someone who describes themselves as a socialist and has made affordability their, their key campaign theme. This is gonna be an ongoing issue, especially for the bottom half of, of earners and savers.
00:42:19 [Speaker Changed] That’s right. We’re, we’re not a political organization at Russell, but I do concur affordability is the issue. And I think it’s not a left issue. I think it’s an issue for, for everybody, almost everybody in this country. And we’re gonna be hearing a lot about it from, from all sides. You know, I wrote a piece after, after the, the, the baby accounts, which they call the Trump accounts, by the way, after that became part of the legislation, I wrote a piece that the Washington Post published that essentially described what these accounts are and the impact that it can have in terms of helping to educate our population about the power of investing and compounding. And it was very interesting to see the commentary, you know, when you publish something in the journal or the post, sure. You get a lot of, you get a lot of comments and by and large, the, the, the vast majority of the comments said, why wouldn’t you just write us a refund check? Which is what we got during COVID, by the way. Right? Like stimulus type checks. Right. And it was the opposite of the point that I was trying to make.
00:43:15 [Speaker Changed] Right? Right. We don’t want you to spend this. Correct. We want you to save this. That’s
00:43:17 [Speaker Changed] The want you to save it and to understand what the difference is from a savings account or a treasury bond and versus investing it into the markets and getting to see long-term, long-term compounding. So it, it, it was honestly, it was a little bit of a, a refresher for me that we have a lot of work to do to help people understand why a program like this can actually help them.
00:43:35 [Speaker Changed] So as someone who’s been writing in public for nearly 30 years, my best advice to you is, is simply never read the comments. There, there was a golden era of blogs in like the early to mid two thousands where the comments were these like fantastic communities. All of that is kind of migrated to Reddit. If you wanna see lightly moderated intelligent debates with some nonsense thrown in along the way, that’s, that’s what’s left of that sort of issue. I, I think even YouTube used to do a better job at moderating the comments, the, the spam and the bots still slip in every now and then. It
00:44:17 [Speaker Changed] Does give you a perspective on what’s on people’s minds though, even though some of the comments are like unhinged, right? You can tell like the what’s coming through, what, what are people’s, you know, fears and worries and concerns. If you can, if you can read it through the, you know, the craziness Yeah.
00:44:31 [Speaker Changed] You have to, you have to fight your way through it. It’s kind of fascinating because I’m gonna just digress for a moment. We all are subject to these cognitive errors and these behavioral biases and, and it very much shows up in, in people’s portfolios and the decisions they, they make. I, I wake up on a day like today where Nasdaq is down 1.5%, I know I’m gonna see a bunch of emails, ah, you told us to stay long and look, we’re down one point a half percent today. I know I should have gotten out of the market. What are you talking about? We’re up 17% for the year and the NASDAQ’s up 23%. This is the price of admission. That’s right. Have to deal with some volatility.
00:45:15 [Speaker Changed] I mean, this is a place, by the way, where technology has not actually served people in their retirement portfolios. Because if you can pull up your phone and in three seconds, you know, you, you work as a teacher or a nurse or, or whatever, and you pull up your phone and in three seconds you see your portfolio is down 1.5% and, and at some level it flips a switch and you think my portfolio is, is, is is in trouble or I should sell. Like, that’s how you get to really bad decisions because we all, you know, we all know long term, like if you’re man, if you’re, do
00:45:42 [Speaker Changed] We all know that? ’cause I’m not sure everybody does. And that’s right, there’s such an inherent bias towards action. Don’t just sit there, do something, right? That, that just seems to be human nature.
00:45:55 [Speaker Changed] It’s anathema to how you’re supposed to manage a retirement portfolio though. You, you, you by the way, you can make adjustments over, over time, but the goal is not to pull out when you think the market is gonna be down. We all know that the bounce backs, by the way, happen faster and stronger than ever. I mean, you’ve, you, you think about like what the bounce back looked like during the financial crisis or during the.com bus, it took years to bounce back. And then you think about COVID or, or
00:46:19 [Speaker Changed] Even April Liberation
00:46:21 [Speaker Changed] Day, right? The bounce back happens. It’s a weak Yeah. Almost instantly and stronger than before. So, you know, this is a case where the phone really does not help you, right? If you’re gonna make a decision to pull out, because you see something going on in the markets on, on an off, on an off day. And, you know, as we’re, as we’re thinking through how to implement new programs like the, the Trump accounts, you know, my goal is you wanna have like lots of transparency, but you don’t wanna make it easy for people to make bad decisions. You have to help them make good long-term decisions.
00:46:47 [Speaker Changed] A a a little bit of choice architecture that prevents those sort of things. Last question before I get to the standard questions. We ask all of our guests, what do you think investors are not talking about, but perhaps should be? What, what are the important overlooked topics, assets, geography, policy, whatever, that, that should be getting a little more following? Yeah.
00:47:08 [Speaker Changed] Well, Barry, I’m still really positive on, on AI and how much more room to run we have, you know, there’s been so much to talk about, about how we haven’t seen a broadening in the markets. You know, most of the value capture has happened within the, the technology industry. But, you know, but I think every sector is gonna be transformed. Almost every sector transformed by AI as much as it was by, by the internet. And we just haven’t seen that come through yet. But I can tell you every company that we invest in is thinking about this and working on it behind the scenes, even if it’s not showing up yet in their, in their quarterly earnings reports. But it’s all happening and you’re gonna start seeing, by the way, you’ll see winners and losers, both, you know, sort of specific companies and sectors, but there’s gonna be enormous amounts of efficiency gains and enormous amounts of, you know, sort of value creation that happens as a result of that. Now, I don’t think it’s gonna be a straight line, but I do think it’s coming shorter term rather than, rather than just longer term.
00:48:04 [Speaker Changed] Back in 2019, I interviewed Joe Davis, who’s the chief economist at Vanguard. Yep. And they had this fascinating research report. Eventually it became a book that all technological innovations take place in two phases. The first phase is kind of what we’re experiencing right now in ai, which is wild prices. Couple of hand, everybody knows a handful of companies, very boom, boom. Like some people have been too many, a lot of people have been calling it a bubble. The second phase is where the value creation spreads out. That’s right. To the rest of, rest of, rest of the market, rest of the industry, rest of the economy. I see it the same way you do. Right? This is just gonna make all of us more efficient, more productive, more profitable.
00:48:50 [Speaker Changed] Right. That’s exactly how I see this playing out. And you still have to pay attention because, you know, we all remember during the, the first, the first.com phase before every company started incorporating, you know, the internet into its business strategy and, and its operations. There were winners and they were losers and, and the winners are still around and they’re, you know, they essentially, you know, run global commerce today and, and the losers went away. We’re gonna see some of that across sectors and you know, that’s something that investors need to pay close attention to. But, you know, writ large, I see a lot of value creation, huh?
00:49:20 [Speaker Changed] I I, I’m, I’m always like to hear that sort of stuff. So let’s jump into our favorite questions that we ask all of our guests, starting with, tell us about your mentors who helped shape your career.
00:49:32 [Speaker Changed] Sure. I had a great mentor at BlackRock, a guy called Mark McComb, who’s a, a vice chairman of the company. And he put me into a, a couple of jobs and he nurtured me and supported me, but he also, he encouraged me to, you know, think like the outsider that I am, you know, when he put me into the insurance job without having an insurance background, he sort of said, bring, you know, bring all the capabilities and the perspective that you have from all the other things that you’ve done, and that, you know, really helped us, you know, think like an external provider and, and, and grow that business. By the way, I’m a, I’m, I’m a, a gay guy in finance, so I, I, I come at it from a, from an outsider’s point of view, kinda looking in and, and that has informed just about everything that I do at, you know, at Russell. And, and, and before that is thinking about what’s working, what isn’t working, what do I think we might be able to do better, what have we not, you know, the question that you asked, what are people not talking about? What have we not asked about? And that’s, you know, often my, my starting point. And I think if I had come in with the insider status, it would’ve been harder for me to take that perspective.
00:50:36 [Speaker Changed] Huh. That’s really interesting. It, it’s affected your perspective. You, you see the world both as a participant but also an outsider. Yeah,
00:50:45 [Speaker Changed] That’s right. And, you know, this is the first time I’ve been to Bloomberg in a, in a couple of years, but when I, when I took the job at, at Russell, even before I’d started Bloomberg invited me to come speak at a conference, and I was, you know, flattered and, and excited. And then I learned it was their diversity conference, and I, I was the, the KCEO and, and I said, invite me back five times to talk about investing in retirement. And on the sixth time, I’ll come talk about diversity.
00:51:08 [Speaker Changed] Huh. That’s interesting. You know, in all the research we we do that did not come up in anything. It’s not, it’s not anything that bubbles up to the top of search. Although the old joke is, if you, if you wanna hide something, disclose it at the end of an hour long podcast, no one will hear it. But you know what it’s like with all the YouTube, there’s a, there’s a drop off, but I always find that, that amusing. Let’s talk about books. What are some of your favorites? What are you reading right now? Yeah,
00:51:37 [Speaker Changed] So I read a lot of fiction, like, you know, Cormack McCarthy and Tyler. I’m reading a book called The Inheritance right now, which is like a family drama. It’s a escapist for me to get away from. I don’t read a lot of finance books.
00:51:50 [Speaker Changed] I’m the same way every now and then, something will, you know, come across that I have to read that’s finance related. I have a big stack of fiction waiting to go on vacation with me next month. Let’s talk about streaming. What are you watching or listening to you? What’s keeping you entertained? It’s either on Netflix or Amazon or whatever. Yeah,
00:52:09 [Speaker Changed] It’s all toddler fair right now. I’ve got two, three year olds in the house. So we’ve got twins. Twins, yeah. It’s, you know, all full-time. Moana and Frozen and Right. Daniel Tiger Bubble Guppies, that sort of stuff.
00:52:21 [Speaker Changed] Huh. So, so a lot of Moana. That’s, that’s my idea of a nightmare. Just
00:52:27 [Speaker Changed] Moana’s pretty awesome actually
00:52:28 [Speaker Changed] The first three times you see it, the
00:52:30 [Speaker Changed] First three times and frozen about twice
00:52:33 [Speaker Changed] Our So our final two questions. What sort of advice would you give to a recent college grad interest in a career in either finance or investing? What would you tell them?
00:52:45 [Speaker Changed] Yeah. First, like, you know, be yourself. Like, we look for people at Russell from all different kinds of backgrounds, not just economics or finance backgrounds. Study what you wanna study, do well, and, you know, be committed. But, you know, if you come at it from an outsider’s, you know, station or point of view, em, embrace that. That’s, you know, this is a, a world where we, we want folks that have different kinds of backgrounds and, and approaches. You know, I studied English Barry, and one advantage that that actually gave me early on in my career was that I knew how to write. And, you know, you think about how much of our, of our business is done through writing, through email and, and, and other ways. Everything you write, this is the advice now. Everything you write is a reflection of you. And it can come up in, you know, something you put down on paper can come up again and again in all sorts of different ways. We all know that when, when you put something on the internet, it lives forever, truly. And you know, your careers are long. You wanna make sure that you’re, you’re, that you’re properly reflecting the image that you want to create. Hmm.
00:53:43 [Speaker Changed] Good advice. And our final question, by the way, that advice applies not only to writing. Yes. But my wife is a recently retired teacher, and she used to always warn the kids all the stuff you’re putting on Facebook and Instagram and TikTok, be aware the colleges you’re applying to are looking at that and the jobs you’re gonna apply to, they’re gonna find that. That’s right. Especially as you work your way up the, up the corporate ladder, that stuff never goes away.
00:54:12 [Speaker Changed] That’s right. And now I’ll give you a counterpoint. You know, we, we do 360 reviews at, at Russell, and sometimes, you know, people that are relatively new in their careers, 25 or 28-year-old will write a review on somebody that they work for, or a couple levels up that I, that I read. And when I read a review that somebody has put a lot of thought into, and there’s some, you know, praise and constructive criticism, how to make things better, I say to myself, this person would make a good manager. And I, and I think about how can we use them in other places in the company. So it’s not just about like, when you’re writing about avoiding the things that you don’t want out there in the world that can harm you. It’s also making sure that you’re putting the time and the effort into writing things that are really gonna help you.
00:54:51 [Speaker Changed] Hmm. Really, really interesting observation and, and, and good advice for people just entering the workforce. Final question. What do you know about the world of investing today that would’ve been useful 30 years ago when you were first getting started?
00:55:07 [Speaker Changed] I wish that 30 years ago I had the confidence to know that, you know, that as an outsider, as a gay person, as an English major, someone coming at it from a different background that, that I could make it in, in, in this business that I didn’t have to constantly think about how am I gonna prove myself, but just by being a good productive contributor by raising my hand, you know, and, and, and, and showing a little bit of ambition by finding ways to help that, that can be enough. And sometimes that being an outsider can actually be a good thing. You know, that it can help you re-underwrite situations and come at it from a different angle. And if you know that and you’re confident in it and you use it to your advantage, it can really help you in your career. I figured that out along the way. It would’ve been helpful to know when I first started. Huh.
00:55:56 [Speaker Changed] Really, really fascinating stuff. Thank you, Zach, for being so generous with your time. We have been speaking with Zach Buckwald, he’s chairman and Chief Executive officer of Russell Investments. If you enjoy this conversation, check out any of the 589 we’ve done over the previous 11 years. You can find those at iTunes, Spotify, YouTube, Bloomberg, wherever you find your favorite podcasts. And be sure and check out my new book, how Not to Invest the ideas, numbers, and behaviors that destroy wealth and how to avoid them at your favorite bookstore. I would be remiss if I did not thank the crack team that helps put these conversations together each week. Alexis Noriega is my video producer. Sean Russo is my researcher. Anna Luke is my producer. I’m Barry Riol. You’ve been listening to Masters in Business on Bloomberg Radio.
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