The transcript from this week’s, MiB: Jose Minaya, BNY Global Head of Investments and Wealth, 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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This is Masters in business with Barry Ritholtz on Bloomberg Radio
Barry Ritholtz: On the latest Masters in Business podcast. Wow. Jose Manaya runs wealth management services at BNY Bank of New York. Incredible Bank, incredible history. They’re literally the first bank. BNY is the first bank in America, the first publicly listed stock on the New York Stock Exchange. Not only do they have 2.2 trillion in assets, but they touch about one out of every $5 in assets globally. They touch, you know, 60, $70 trillion worth of assets, whether it’s through their clearing, their infrastructure, their custodianship. They’re just a massive bank. The oldest bank in America, the first bank in America, formed by Alexander Hamilton. Jose, has a fascinating background and a fascinating career. As both a chief investment officer and CEO few people are better positioned to talk about not only what’s happening in the state of wealth management in the US and globally, but what’s coming next, what, what digital technology and tokenization means for asset managers, as well as the impact of AI on how we’re all gonna deal with our, our dollars. I thought this co conversation was absolutely fascinating, and I think you will also, with no further ado, my Master’s in Business interview of B Y’s, Jose Manaya.
So let’s start out talking about your background. Bachelor’s in finance from Manhattan College, an MBA from Tuck Business School at Dartmouth. What was the career plan?
Jose Minaya: You know, I, I, my career plan was always a work in progress. I, I, I always say I almost had like, a little bit of a Forest Gump approach to, to starting my career. I first, I’m a first generation American, so, you know, I grew up in Washington Heights to a Dominican, in a Dominican family, Dominican parents. So baseball was big, my life. And for a while there I thought I was gonna be a pro baseball player up. What’d you play? I was, I was a pitcher. Did pretty well, did pretty well up until the point that I didn’t.
Barry Ritholtz: High School or college?
Jose Minaya: High school and college. Yeah.
Barry Ritholtz: I pitched in high school, no curve ball. That’s the end of your pitching career.
Jose Minaya: Yeah. I, my whole thing is if I threw strikes, I did pretty well. Right. If I didn’t, I was gonna get in trouble. So
Barry Ritholtz: You a little control issue, is that the problem? Yeah,
Jose Minaya: A little control issues. Yeah. It’s
Barry Ritholtz: Hard to throw both hard and accurately.
Jose Minaya: Yes, it is. Yes, it is. It’s like, like everything else, it’s about trying to find the balance. Right.
Barry Ritholtz: So that’s right. So you mentioned you’re a first generation American. How did that affect you? What, what, what does that do to your worldview, your work ethic? How, how does it affect your outlook and, and career progress?
Jose Minaya: Look, I, I think being a first gen and, and just kind of my, you know, the neighborhood I grew up, which I often described to people, you know, if you’ve been to Chinatown, well, Washington Heights, when I grew up there was the Dominican version of, of Chinatown. But look, I mean, I grew up around strong family values. I had a great home life, very privileged that way. Strong work ethic coming in. But I, but I did, but I did grow up in a bubble, right? So one end, what I took with me when I exited or left that bubble was work, work, work ethic, was kind of really understanding relationships and, and, and that, but then when I left that bubble, it was more defined by, okay, I was in different audiences. I was in, in situations where then more acclimating was kind of more my, my focus and my goal for early part, early part of my career.
Barry Ritholtz: Really, really interesting. You come out of Tuck, you end up being an analyst. Tell us about the early days post, post grad school.
Jose Minaya: Yeah, I think post grad school, I, I was still trying to figure out what I, what I really wanted to do. Because, you know, if I even go pre, you know, coming outta undergrad, you know, I, I had a finance degree, I was good at math and, you know, I asked people, what are you supposed to do with this? And people mentioned Wall Street and firms like JP Morgan and Goldman Sachs. And I was fortunate enough to get a job at JP Morgan. I went, everyone was taking a gmat. I had no idea what a GMAT was, but I figured I’m supposed to take it as well. And I went to grad school and then coming outta grad school, I went back to Wall Street. I not, not necessarily thinking that’s what I wanted my career to be, but I didn’t really have a plan for anything else.
I think as I started really searching around what I wanted to do and, and, and instead of advising people kind of doing things that were gonna be there for the long term, build something, you know, I found my way into the buy side. Right? And then my first job kind of in investing, working at a IG Global in investment group. I think today it’s called PineBridge. But that was my first real, like, investing job. And, and even there, finding my way, I started out in equities and I was like, okay, I like this. But I felt like, you know, the other side, as I ran into people on the bond side and, and, and, and private credit, I, I felt that that was more kind of cashflow based versus I used to get anointed where my model, I felt like my models were right, but the market’s never cooperated with.
So it didn’t matter that I was right. I felt more at home in that environment where it was more around, okay, how, how do I judge the downside? How do I kind of really analyze cash flows? And, and then I found myself on the buy side and I found myself as a private credit manager. I think from there, interestingly enough, I said, Hey, this, I found my thing. I love doing this. And I always found myself in situations where I did what I did really well, and somebody always asked me to do a little more. And in that little more, it was always kind of like extending myself and say, okay, am I still the SME or am I now gathering and, and doing different things. And then ultimately, especially when I was at TIA, it was this idea of like, oh, you know, should we go into agriculture? Should we go into commodities? And I was like, well, here, I’m a kid from New York City. I don’t really know anything about agriculture and commodities. But you know what, I, I kind of dived in and said, this is interesting. This was the other thing that took me to another place in my career that, that I’d say I took another people viewed as a big risk. ’cause at that point, you know, I was managing about a $15 billion private credit portfolio back then. That was a, that was a pretty major thing.
Barry Ritholtz: It felt like a lot of money
Jose Minaya: And it was and is, and I, I kind of made a decision from doing these kind of nights and weekends on this project of going into farmland. I made a decision to say, you know what? I’m gonna leave all this behind. I wanna go try to build this. And even my chief, the CIO at the time said, are you sure you want to do this? Because, you know, maybe I’ll tell you what, what don’t you, why don’t you give this a run? But you know what, we, we will, we’ll keep your job warm for you here. I think he figured he’ll come running back in six months, give
Barry Ritholtz: This a run, meaning the CIO position?
Jose Minaya: Meaning running a farmland fund. Oh, okay. Yeah. And, and you know, I, I, so I, I went out and said, oh, I wanna do this. We ended up becoming the largest farmland fund institutional manager for farmland assets globally at, at the time. And, you know, one of the things that my philosophy in doing these things is, you know, taking the confidence to always kind of try things that get me excited and, and that I feel passionate about. But I think throughout my investing life, you know, one mantra I’ve always had is, you know, you gotta be really good at knowing what you don’t know. And that, that comes with being more humble. That comes with kind of asking a lot of questions, not being intimidated by bringing people around you that are smarter than you. ’cause I was like, Hey, I could understand people, I can understand math now.
How do I fill in these blanks? How do I get people around me? They’re gonna give me kind of the knowledge that I know I don’t have. And that, that career permission was from farmland. They said, Hey, wow, you did an amazing job. Can you take real estate? Can you take natural resources? Can you take all of private markets? And then ultimately, can you be the chief investment officer? And then growing that into a asset management firm. And what I realized was that what I thought my passion was, was in investing, but the real passion that I really found was, was in building, building things, you know, managing teams and bringing teams together.
Barry Ritholtz: So, so I wanna circle back to building what you did at Nuveen. How do you go from JP Morgan to a IG to Merrill? What ultimately leads you to Nuveen?
Jose Minaya: You know, what leads me to Nuveen is just, it, I always say like, picking up the breadcrumbs, right? I was, I was on a journey of really kind of, of searching again, what’s my passion? What do I want to do? I was very fortunate, you know, here I am, I’m sitting on at a job on Wall Street at JP Morgan. Very fortunate to have it, but I couldn’t see myself doing that job for 20 years. Then I’m like, oh, I’m fortunate to get a job. I’m the buy side. And I’m like, okay, this is great. I’m at a IG, you know, it’s a terrific opportunity, terrific firm. Yet there’s still that thing that I’m kind of still trying to find that feels like, Hey, what’s really getting my juices going? And, you know, it was always that search for, for that thing that kind of made me get up early in the morning. And when I ultimately landed at Nuveen, which is part of TIA, that was that role. And I ended up being there 20 years. And then, and I, and I will tell you the large, the the longest role I’ve ever had in my life, in my entire career was my five years or so. As, as my role as CEO there, 20,
Barry Ritholtz: Even 20 years is a long time in the modern world to be at any one firm. It seems people don’t do that anymore. What was it that kept you there? It sounds like they kept piling on new challenges and really keeping you engaged.
Jose Minaya: Yeah, that’s exactly right. Meaning I like the longest role I’ve had in my career is the five years I was the CEO part of that, every three, four years, someone was giving me something else to build. I always say I, I get itchy. I maybe I’m not the best steward in the world, but what does get me excited is, is building things, kind of building new teams, you know, the challenge of kind of like growing a capability. And I got to do that. Over the course of 20 years, I’ve been extremely blessed. And same thing in moving to my role now, it’s, it’s a tremendous opportunity. And, you know, I could still say that 20 plus years, I, I still get excited every morning to kind of go to work. When,
Barry Ritholtz: When you say building new teams, give us an example of some of the sort of teams you helped build that kept you occupied for 20 years.
Jose Minaya: Sure. I mean, one, I I, I mentioned the farmland example. That was a complete startup from, from scratch, from $0
To kind of go in and building a team, you know, I’m very proud of what we did in private credit. You know, we, we started the Churchill group with, you know, again, that was finding the right people, finding Ken Kinsel, who was a tremendous leader and had a team with ’em. And we started with Zero. Today, that broader platform at Nuveen is almost, you know, call it just short of a hundred billion in, in private credit. So there’s multiple examples like that where the, basically the blueprint was either we were doing an acquisition or we were finding a team, and we’re saying, okay, we’ve got the right makings here of a team. How do we give this team the right tools and go out and try to grow, grow a platform?
Barry Ritholtz: So you’re no stranger to alternatives. We, we’ve talked about farmland, real estate, private credit, private debt, natural resources. What is your view today on alts? What do you think about, what kind of feels a little bit like a land rush? What, what’s going on in the world of Alts today?
Jose Minaya: Yeah, and you know, it feels like a land rush. But I, I will tell you that this has been building for some time. And, and, and the interesting thing is, you know, if I go back 10, 15 years ago, my pitch talking to clients around alternatives was one that was largely academic, right? It was this idea of diversification.
Hey, by the way, I know you haven’t seen inflation in 20 years, but it may show up. And if it does, are you protected for it by the way? You may be going to a market where there’s a lot more volatility. Have you thought about that? And then also, hey, have you thought about yield? You know, you know, there’s ways to kind of think about principle protection in your portfolio, and then yield and alternatives. I would say it’s just a way of bringing in the right correlations into your portfolio. And the, and, and some of the biggest alpha in alternatives is the lack of access,
Barry Ritholtz: Meaning the illiquidity, you can’t sell in a panic because the market’s off 8%. Yeah.
Jose Minaya: And in many ways, you know, you’re, you’re going to kind of structure and get a return. You’re looking for, because the, there, there, you need to have a specific skill or access point to get those assets so that maybe the markets are a little bit less efficient. You know, the interesting thing is today that academic conversation has turned into urgency, right? So now, while markets have obviously continued to be at all time highs, I think individual investors have felt what volatility feels like, whether that was coming out of the global financial crisis, whether that was at a COVID and the, in the, in the pandemic. We have felt and seen a lot of significant volatility.
Barry Ritholtz: 2022, first time in 40 years, stocks and bonds, both down double digits. Like people seem to think volatility gets conquered every few years. And whenever there’s any sort of complacency, the market says, now’s the time to teach people. Volatility never goes away.
Jose Minaya: And, and throughout that, throughout that time period, you’ve also have seen the growth of index funds, right? So also on top of that is this idea of like, you know, I always say the world’s become more commoditized. When I entered the industry, you differentiated yourself by picking better securities in the next person and driving returns. Then all of a sudden there was a focus on cost, believe it or not, once upon a time, you know, fees, nobody paid attention. Nobody paid attention to fees. I think then it was, well, no, you’re gonna compete on fees as well. And then it became the race to zero. Today, you know, investment performance is obviously extremely important, but it’s table stakes costs, were all, we’re, we’re all kind of basically at the bottom end of that curve for cost. So now it’s, it’s more around what are the outcomes you’re gonna deliver to someone.
Technology is a, it’s a big component. It is the flexibility that you offer, you offer clients, but it is ultimately about what is the outcomes you’re gonna get to clients. And that 70 30 portfolio, that passive fund that said, Hey, you’re in a target date fund, you don’t have to do anything. Just sit back and it all adjusts and drives kind of the returns you need. Well, in those moments where correlations go to one, it didn’t feel so good. That’s right. It didn’t feel so good. And I think now it’s, there’s more sophistication in terms of how you package, you know, solutions. More sophistication now on the need to get alternatives to to, to clients. I think these things all now, I think again, what was an academic conversation today is, is an, is an urgency.
Barry Ritholtz: So the phrase I’ve heard from a number of people over the past year or so has been 70/30, 60/40. That’s the old way, the new way is 50/30/20. Are you in that camp?
Jose Minaya: Yeah. Look, I think 50, 30, 21. 30, 30. Look at the end of the day, I, I always say it’s not really about whether you should be in the 50, the 30. Ultimately it starts with a conversation around what are the outcomes you’re looking for? What are your needs, right? These, these markets that when you think about alternatives, by the way, these are not get rich quick right? Schemes. These are not like, oh my God, we need alternatives. ’cause there’s like this outsized return. In many cases I’ve mentioned to you farmland that was a four to 6% return market, but extremely consistent and
Barry Ritholtz: longtime lockups, right? ?
Jose Minaya: Yeah. And, but it gave you a certain correlation. So yes, fit like all these different mechanisms. At the end of the day though, what it’s really all about is what are the outcomes you’re trying to drive for your clients? And, and, and what is the sophistication we have and the ability to construct those portfolios. And the most important thing in constructing those portfolios is do you have access to a broad array of capabilities? Because the more access you have to different types of assets, the better the outcome is Portfolio theory 1 0 1.
Barry Ritholtz: You led the company through a big expansion through the COVID Pandemic, and then you helped expand the entire digital engagement. Tell us a little bit about what you put together at Nuveen.
Jose Minaya: Well, I think I get at Nuveen if, if I, you know, was quite a 20 year journey. ’cause I joined when it was basically just the investment team for TIA.
Barry Ritholtz: That was right after the dotcom implosion ?
Jose Minaya: That was around oh four actually. Yeah, I really started in oh five. And really I was just an, it was just an investment team. Like I said, I joined as a, as a fixed income portfolio manager at the time. We’re managing money for about a $200 billion general account where everything was based in New York City.
Barry Ritholtz: When you say general account, you’re managing it on behalf of Nuveen, not specific clients.
Jose Minaya: I was managing on behalf of the, the balance sheet of tia, which is an insurance, right? Which is an insurance company. So it largely just, that was really the structure. We nuveen we had not acquired Nuveen yet at that, at that time. But from that 200 billion you fast forward to today and what I was there to help build and it became a trillion dollar wow. Asset manager one where it still managed approximately $200 billion balance sheet, but then it raised another 800 plus billion in just outside capital. And these are sovereign wealth funds, wealth platforms, retail. And it grew to, you know, about almost two, two and 250 billion in alternatives as well. So pretty diversified diversified shop, which now you’re seeing a lot of firms trying to kind of capture that same, not just scale, but diversity in, in their business. Let’s
Barry Ritholtz: Talk a little bit about real assets that you’ve had a lot of background in. Tell us about real estate, agriculture, timber infrastructure. Tell us how you built those areas previously at Nuveen, now at BNY.
Jose Minaya: Sure. And I think, look, I think first, if you think about those different asset classes I go back to, these are not typically, you know, strategies that you’re trying to get outsized returns. If they, sometimes they come and they’re very much welcomed. They’re typically pretty, pretty structured transactions, right? Whether it’s buildings with rents, farmland with, with leases infrastructure with kind of 20, 30 year contracts. Often there is a hedge against inflation, whether that is contractual or just by the nature of the commodity. So
Barry Ritholtz: Right, prices go up, land goes up, that follows it…
Jose Minaya: Yeah. So the simple kind of math on these things are, I’m clipping a coupon. So there’s a yield component and it’s a pretty steady one. I I I, I have a gold like protection because if you think about what do I own, I own farmland in, in a particular case, well that produces a, a a need for society in perpetuity. So there’s a certain kind of protection in your principle in owning that. Or, you know, wind farms, just, again, there’s intrinsic value. I have a yield, but it’s usually tied to a commodity. And because of that, there’s also an inflation hedge component to it. And it brings down my volatility because it’s, again, it’s, it’s more of that consistent return profile. So it plays that part in portfolios that it gives a yield, it gives it in a way that should be pretty kind of high sharp ratio, low, lower volatility.
Now today, that market is start it, it’s, it is trying to get into more mainstream. Now if I fast forward to my opportunity going to B and y, now look, I, I had that journey in my previous life. What I saw in BNY is where the industry is going, right? BNY obviously is two times the size of where, where I came from, but it’s also part of BNY, the bank and BNY the bank touches about a fifth, a fifth of the world’s investible assets. So there’s almost 60. That’s amazing. Yeah. There’s almost $60 trillion, call it fifty five, fifty 6 trillion to be exact that the bank is touching. And it’s either managing these assets, it’s either custodying these assets or it’s helping move kind of the financial, the global financial markets around. That is tremendous kind of access points to someone like me sitting as an asset manager, because I’m working at, I’m working at a firm that is one of the largest asset servicers in the world.
It also is one of the largest servicers to wealth platforms. I registered investment advisors. Well, I have a wealth platform. I manage, I manage an investment platform. How do I get advantage of the fact that there’s tremendous technology being invested to, to help serve asset managers. And if I go back to a comment that we, that we talked about previously, which is if the world’s becoming more commoditized, we performance in cost, then what is the difference? The difference in what is the tip of the spear is technology. You hear about tokenized assets, which of which b and y is on the forefront, that’s just about helping clients move money quicker.
Barry Ritholtz: Do define what tokenized assets mean when we’re talking about stocks or bonds.
Jose Minaya: I think we, the, the simplest way that I think about tokenized assets is it’s an ability to, again, be more liquid. Meaning if you were in a t plus one scenario, do you have the ability to be in a T+5 minutes scenario?
Barry Ritholtz: So for, for the lay person, T+1 means you sell something today, it clears tomorrow the cash is in your account. One day later, t plus zero as some people call it, means you sell it and you instantly get the cash. Is that what tokenization does for, for people?
Jose Minaya: That’s, that’s a big component. So that’s creating that liquidity where if you had to wait 24 hours, now you can wait a lot less than 24 hours. The other thing that it helps do is also kind of Dr you’re able to earn a yield on,
Barry Ritholtz: ’cause you’re getting the cash now for most people one day doesn’t matter. But scale that up to an institution, scale that up to a bank and insurer that day times thousands and thousands of accounts and transactions really adds up, doesn’t it?
Jose Minaya: I mean, scale that to, again, BNY is kind of touching and helping move $55 trillion.
Barry Ritholtz: So T+0 or T+5 minutes, that’s much better than t plus one.
Jose Minaya: That, and it’s a big difference. And your ability, again, to potentially earn a yield in that process also, right? In that, in that whole t plus one, in that 24 hours, in many cases, you’re not able to earn a yield while that money is clearing. So
Barry Ritholtz: Back in the bad old days when it was T plus three, we were always told, Hey, it takes three days to just make sure there’s no fraud. The right stock is going to the right buyer, the money goes to the right account. And when they got shrunk down to one day, well, technology has allowed us to do this, but we still need a day just to verify everything. What is it that allows us to go to t plus zero? Is it just technology? Tell us how, how that works.
Jose Minaya: Yeah, look, I think techno obviously the blockchain technology is one component. The other component is the fact that, you know, one of the reasons BNY can lead in this area is that it, it, it custodies around 80 plus percent of the digital assets,
Barry Ritholtz: The world digital assets meaning in the world, Ethereum, Bitcoin, any other sort of things like that.
Jose Minaya: And, and it’s one of the largest custodian in the world in general. So clearing something becomes a lot easier when it’s all sitting in inside. I mean, think about a warehouse. If I don’t have to move it from where one warehouse to the other, that makes life a lot easier. So that’s
Jose Minaya: Goes from one, you’re not even moving it from one road to another. You’re just changing the label. Here’s who owns this. Yeah.
Jose Minaya: Now, and again, I’ll tell you, for me it’s, I was having a conversation with our CEO about this the other day where I’m like, one of the other things I love about my career right now, look, it, it’s been a long time since I’ve walked into rooms and I’m learning something. ’cause typically, you know, you be, I was a subject matter or expert. And typically most rooms that I walked into, I, I felt like I I was the expert in that, in that category. I’m not an expert on tokenization. I’m not an expert on, on, on, on custody. I work at a firm that that is, that has experts and, you know, you’re quickly, quickly learning and what’s important there, I go back to, hey, but what I do understand, even though I know what I don’t know, is this matters to my clients. So all of a sudden, if I, if I am trying to think about, hey, how am I pitching my services to clients in Asia and, and around the globe, and I, and I have a differentiating factor, meaning I can help you go to t plus zero, that is a differentiator from a relationship perspective.
00:26:12 And this is what I mean by where today it’s, it’s, there’s so much more consolidation in the asset management industry because scale is important. And why is scale important? Because you then need to be able to service and invest in these technologies to service your client. AI is is a big topic today. And I would, I would, I would argue and say, well, if it’s no longer debatable that AI is here and it’s gonna be disruptive, it’s gonna make a difference. So if you believe that, you also have to believe that the firms who can invest in it are gonna be the winners for tomorrow. Now I, you know, being able to invest hundreds of millions of dollars in, in ai, that takes significant scale, that takes kind of diversified businesses, being able to hire engineers, right? So when I was sitting usually in the role of running an asset management shop, it’s very hard for me to even say, how am I even gonna attract engineers from Silicon Valley? How am I gonna be able to pay them? Well, BNY is a massive tech stack, right? Like they can attract a lot of engineers, they can attract a lot of investment in ai. I just happen to be in that realm, part of that universe, and I’m gonna be able to benefit from, from that technology.
00:27:23 [Speaker Changed] So let me step back a second, because we’re all guilty of using acronyms and even something like BNY, you and I understand it, but perhaps the listener needs to learn a little more. BNY is Bank of New York. It’s been around for how long?
00:27:40 [Speaker Changed] 240 plus years. I think I wear 2 41, 2 41 9.
00:27:44 [Speaker Changed] So, so more than almost two and a half centuries. More than two centuries.
00:27:48 [Speaker Changed] Well, I gotta add to the, ’cause I’m always fa I I will tell you, even as I joined BNY, there were things I did not know, you know, obviously it’s, it’s the first bank in the United States. It was the first bank to issue, the first loan or warrant
00:28:00 [Speaker Changed] Begun by
00:28:01 [Speaker Changed] Alexander Hamilton. It’s the first company traded on the New York Stock Exchange. Amazing. It was the first first public company, right. You know, our first clients of the, of the bank where George Washington and Eliza Hamilton and, you know, so it’s, it’s just got incredible, incredible history,
00:28:18 [Speaker Changed] Unbelievable history. In addition to all that history, BNY is also affiliated through ownership with a lot of really well-known names within finance. Tell us about some of the other divisions that maybe people will, will be more familiar with those names.
00:28:35 [Speaker Changed] Yeah, and I’ll tell you, I think this has a lot to do with kind of the recent performance you’re seeing about the firm because it’s unlocking what we would describe. As, you know, BNY is a platform operating PLA has a, has a platform operating model, meaning it has multiple platforms, you know, of course it has an asset manager and it has a wealth business, as we said. It’s got a two, $2 trillion asset manager. It’s got about a $350 billion private bank wealth platform, by the way. It also owns Pershing and
00:29:04 [Speaker Changed] Pershing Giant Clearing Shop. And,
00:29:06 [Speaker Changed] And that captures around almost 3 trillion in, in advisors, advisors capital that it’s servicing through a technology and a service and a service platform. It, it’s has an asset servicing arm. And that asset servicing is serving both asset managers and asset owners doing things like custody fund accounting. It, it, it, it has a treasury component as well. You know, the other interesting thing about BNY is it clears all the treasuries of the United States. So, you know, it’s a gsib it’s a, it’s a significant bank and plays an important part in our financial, in our financial system.
00:29:45 [Speaker Changed] Hmm. Really, really interesting. So tell me the story of how you move from Nuveen to your role as global head of BNY investments. You’re doubling the size of the assets, you’re responsible. Have you approached this change? What, what sort of challenges did you face?
00:30:03 [Speaker Changed] You know, I, I think every challenge that’s kind of a, that’s really attracted me, including what, you know, what kept me in my previous role and, and the different roles I was in, it was the opportunity for growth, right? And I think looking at, at BNY and, and seeing where I believe the industry is going, just saw a tremendous opportunity of what is a $2 trillion shop, you know, should, should easily be a $4 trillion shop, right? Wow. And you think about the ecosystem that, that we play in within BNY, right? As I mentioned, you, you know, we, we manage money for other people. As an asset manager, we manage money also as a wealth platform for, for families and individuals. Yet we also s have, we also service other wealth advisors through purging, but they’re also are the clients of the firm. I’m an asset manager.
00:30:56 A lot of my competitors are clients of BNY as well. So, and then you think about the technology that it takes to do all that and, and, and grow that technology stack. I I feel like a kid on a candy store for two reasons. One that’s sets a tremendous amount of infrastructure and capabilities that are there that I should have a home field advantage to. The other thing is that has become a lot easier in my job is, you know, when you touch a fifth of the world’s assets, most most people are your clients. So getting, getting, having a conversation with potential clients is very easy to do. A lot of what you’ve seen, the, the, the recent success of BNY, and I think you said this earlier, is a collection of a lot of different things that were either acquired or, or built is that, but it was also a very siloed organization for a while. The ability of having that cross connection. If I look at a world that AI is gonna be important, you know, being able to touch your clients in multiple ways and have broader technology, I am sitting in that, in, in a spot where in those, all those platform operating models, I’m two of those, but I’m, I’m fitting in pretty well. I’m trying to take the advantage of the other five or six that are around me. A great example of that, of what that I is Archer. Archer is, is
00:32:14 [Speaker Changed] That’s a digital platform.
00:32:16 [Speaker Changed] It’s a technology platform for SMAs, right? So IE your ability to clients want to be able to, we talked about solutions, your ability to go to an archer. And by the way, my previous job, Archer, I was, was a, I was a client of Archer
00:32:30 [Speaker Changed] And smma stand for separately managed accounts or
00:32:33 [Speaker Changed] Separately managed accounts. Again, now you go back to technology, meaning you may be able to manage bonds and equities and alternatives or even tax managed solutions. Believe it or not, bringing that together in a package for individuals takes technology. Of course, asset managers, traditionally they’re, they’re stock pickers or investors. They’re not technology people. So you go to that platform and do that. Now, when I joined BNY, I’m like, okay, this is great. They’ve acquired Archer. I know that they have a great capability for doing this and this is a growing market. And already our, our wealth platform is a client of Archer. Before it was even acquired, the asset management arm of BNY was already a client was acquired. Now Archer is also free to grow because it services a broader cap, broader capability. So if you’re
00:33:19 [Speaker Changed] BY it services BNY and BNY clients.
00:33:22 [Speaker Changed] Yeah. And that’s important because again, if you think about this, the model of tomorrow and what scale matters is one, you can, you it’s its own business and just kind of providing what Archer does to the broader, to the broader like community. We get an inside, we, we get an inside view and a home field advantage in getting it ourselves. Typically if I build my own SMA platform, I have to now worry about how do I feed it to grow it. Other people are feeding it to grow it. And I get the benefit of kind of being attached to it. And I think that connectivity around, hey, everything I do in my, in on the asset management side, you know, all those clients at purging, they buy that as well. Should we not be engaging with our clients to do more for them? It’s like, sure, we’re doing clearing for you in custody and offering you technology. We also have asset management, all of them obviously by asset management as well. So having those connective dots I think is, I think is a tremendous competitive advantage.
00:34:20 [Speaker Changed] So I wanna talk a little bit about your role. I wanna define it better. At Nuveen, you were CIO and then you were CE O2 distinct positions. Your title is Head global, head of BNY, investments and Wealth Sounds like a little bit of each. You, you are building, but you’re also helping to direct the investing. Tell us a little bit about your roles and responsibilities in this new position at BNY.
00:34:46 [Speaker Changed] Yeah, I think I look at one end of the spectrum is very similar to my previous role, which is BNY investments is an asset manager. You know, obviously it’s a much bigger one than, than, than than the firm I came from. But it’s an asset manager. And there, you know, I’m, I’m the chief executive for that particular platform. We also have a wealth platform and, and, and, and very different from asset management. It’s more dealing with individuals and advice, but there’s also synergies in the business, right? Meaning if you’re a wealth advisor, you’re talking about how do you create investment products, how do you source ’em? Well, we have investment products and how do we, how do we make sure those two groups are talking to each other? What’s the products that we are creating? If you’re an asset manager, a big part of who our clients are are wealth advisors.
00:35:32 So having a good understanding of kind of what wealth advisors need, it really helps to have a, a wealth advisor in house. Sure. So I’m managing a larger platform, but at the end of the day, my job is still very similar. It’s about picking the right teams and people you, you know, we talk about $2 trillion and I would tell you 2 trillion should go to 4 trillion. We don’t own any of that money. At the end of the day, our biggest value set of what we do and have is our people. And obviously the technology that we can, we can offer those folks, but people is kind of really our business. And I’ve kind of see my job today really as the chief Chief people officer for how we kind of build teams around this
00:36:10 [Speaker Changed] Coming up, we continue our conversation with Jose Manaya, global head of B Y’s Investment and Wealth, discussing his experiences at Nuveen, TIAA. I’m Barry Riol, you’re listening to Masters in Business on Bloomberg Radio.
00:36:40 I am Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio. My special guest this week is Jose Manaya. He is the global head of BNY Investments and Wealth, helping to manage over $2.2 trillion in client assets. So, so let’s talk about who the clients are at BNY. You mentioned RIAs and advisors, my day job, but you also work with institutions, you work with high net worth and family offices as well as other players in the investing world who are also clients. Sounds like you guys are a little bit of everything to a lot of different people. How do you keep all that running smoothly? How do you keep all those balls in the
00:37:29 [Speaker Changed] Air? Yeah, well look, I think BNY is often described as the bank of banks, right? Because again, it’s kind of that broader provider and in goes the opportunity set, right? Like again, you look at the, the firm, I don’t know the last high look, the stock was about 1 0 6, you know, that’s in, in less than a three year span of thereabouts from $40. It makes it one of the best performing kind of financial stunts
00:37:52 [Speaker Changed] And financials have been kinda lagging the tech sector for a couple of years. They’re starting to play a little bit of catch up,
00:37:58 [Speaker Changed] They’re playing a little catch up, they’re doing better. But I think few are doing better, if any, are doing better than than b and y. Some of it goes back to that question you just asked me. Yeah. That there’s a lot of these, the, the way it would, the way typically these conglomerates or these platforms were typically managed, were very siloed. You know, the ability to bring in the, the technology and the leadership to say, how do we have better connectivity across all our platforms is where the value proposition is. And the market is seeing that, and the market is rewarding that.
00:38:32 [Speaker Changed] So it’s funny, earlier we talked about how commoditized so much of the world has become. You are basically saying we need to be an integrated solutions provider and not just have these commoditized silos, which is what exists outside of a mega bank of banks like VNY.
00:38:51 [Speaker Changed] Yeah, so much. We used to talk about the, you know, concept of selling watches. You know, I think that, you know, the, the, the world doesn’t really, it’s, it’s hard to sell watches now. People, people are looking for, they need, you know, our clients are getting more efficient. They need to scale their operations as well. And it’s the idea of like, do I wanna work with 150 managers or am I better off working with 20, 30 or 40? And if I’m going to go from 150 different types of managers, you know, to 20 or 30, how do I pick those 20 or 30? What’s gonna differentiate that? So I think a lot of that is, is what’s driving the need for scale. It’s what’s driving the need for consolidation and it’s also driving a lot of in innovation.
00:39:35 [Speaker Changed] So you, you’ve mentioned technology a couple of times. We’ve talked about tokenization and a little bit about ai. What are the big technological trends that we can look for over the next couple of years? Where are you thinking about how technology’s gonna have the biggest impact on asset managers and on investors?
00:39:57 [Speaker Changed] Yeah, it’s interesting and, and honestly, I often, I, my, my narrative has changed. I used to say, look, AI is gonna be very disruptive, but I have no idea if it’s five years from now or 20 years from now. And by the way, that makes it very difficult to invest in it, right? Because it’s, when are you gonna get the returns for it, you know, clearly. Now that’s come into a lot more clarity because where, you know, AI has begun to already yield returns for firms. And BNY is no different, is on the productivity side, right? You know, I think BNY is one of the first firms to have digital employees, so digital employees that can work on real problems. And that’s driving productivity increases. And that’s kind of been a large part of the narrative with, with ai. Now the new narrative is it can also provide value add.
00:40:47 So again, as an in, as a, as an investor, do you have the capability of, instead of the, the old way of, we’re gonna look at satellite pictures and see how many cars are in the, are in the, on the driveway. Well now AI can actually track devices, right? And kind of see where things are coming. AI is able to go through a lot more information and, and disseminate that information. So, you know, I I still say that human beings with AI will be better than human beings without ai, IE you’re still gonna need the component for, for human beings in, in the mix. But so much of the future is unknown. And, and, and by the way, I think that’s also the uneasy part that we are today in our markets. ’cause if you, if you speak to individuals on one end, I can kind of picture and say the economy is doing great earnings, earnings are strong consumer household balance sheets are strong, wages are still relatively, you know, strong as well.
00:41:49 And there’s a, there’s a strong kind of like very constructive view to putting your money in the markets today, even at these valuations. Hmm. The other side of that story is, okay, but then are we losing the independence of the Fed? Are there geopolitical issues and wars out there that can also, you know, cause massive disruptions in, in, in the global economy, policy issues, you know, and fiscal issues coming to the forefront. That could just be mistakes that happen. So at the same time, there’s so many things then that, that can go wrong, right? If I always say we’re probably at a all time high of things that can go wrong, yet where you sit today should feel pretty good in terms of, you know, the, the economics and, and the economy. And I think technology is the same thing. It’s like, wow, AI is gonna be disruptive. Where what we think AI can do is literally changing every week, every month. And again, that in many ways is exciting. In many ways. It’s also extremely unsettling,
00:42:53 [Speaker Changed] To say the very least since, since you brought up the current state of the world, profits are all time highs, but it seems like risks are all time highs. I wanna throw two of your own quotes back at you and, and get your thoughts on it. In the beginning of this year, you said risk assets are going higher. What led you to that conclusion? And has the year played out as you expected?
00:43:19 [Speaker Changed] Clearly? Look, I, I, I think, and I think there was a little bit, I, I think I was challenged a little bit on that comment. And remember I said it right after liberation day. So the markets were obviously falling off. There was a tremendous amount of concern with the tariffs and what would come, you know, I I had two thoughts there. One, understanding that I thought the current administration that we have was going to about the carrot and the stick, and we started out the year with the stick, but you know, what, the carrot was gonna show up at some point. And then two, this other view of, you know, most of us don’t have a choice to be risk off, right? The, the idea that like, you know, being risk off through these different cycles hasn’t really paid off. So the one thing we should do is like, go back and look at the fundamentals.
00:44:04 But yes, if you’re saying I’m gonna just take a correlation of one or just take broad market exposure, it’s more than, again, the academic conversation being more of an urgency. If you think about the, the actual conversation around I’m structured for solutions for outcomes in my portfolio, then why should you be risk off? You’ve, you already planned for this, right? I, I maybe plan to have part of my principle protected, maybe plan to have certain amounts of yield or uncorrelated assets in my portfolio. So my view put is again, one, the fundamentals are there to not say exit the market, but two, this should not always be around should I buy this stock or that stock or should I go bonds or equities
00:44:44 [Speaker Changed] Has to be broader. It has
00:44:45 [Speaker Changed] To be, it has to be broader because, you know, we’re not a hedge fund and a lot of what we do is not about that. It is about driving long-term outcomes.
00:44:55 [Speaker Changed] So another quote of yours that caught my attention was noise is at all time highs. I totally agree, but explain your point of view.
00:45:05 [Speaker Changed] Yeah. And I’ll explain it, I’ll explain it both in terms of kind of the, where we are in our markets and then also like, it’s also like a personal philosophy. One, this is what I mean by things look very calm, things look very constructive. Yet we can, I think my team at the time, and this was back in January, I think there were like 26 or 30 different like press releases or things that happened that kind of really jolted the markets in some way or caused concern. So the list of the things going on, whether it’s inflation, whether it’s political, you know, the fed policy changes, wars,
00:45:48 [Speaker Changed] The list.
00:45:49 [Speaker Changed] It’s endless. It’s endless. So there’s that I think is at an all time high of the things that, okay, what’s the list of what can go wrong? But then, you know, the other thing with noise, and I, I say this to my kids, I try to, I I’m still trying to master this, is that in most cases, 80% of what you hear is just noise, right?
00:46:06 [Speaker Changed] And already in stock prices
00:46:08 [Speaker Changed] Yeah, it’s there. It’s like 20% actually matters, right? You know, I, I said to be a good investor, you have to be good at knowing what you don’t know. But I also think you also have to be good at taking emotion off the table. You could see a lot, obviously we’re pretty divided country politically. I always say like, don’t bring that to your investing, right? So it’s more like, take the emotion out, don’t let the noise suck you in. Go back and it’s about the fundamentals. It’s about what’s in front of you. It’s about your outcomes.
00:46:36 [Speaker Changed] I love the concept of knowing what you don’t know. Let’s address that. What are investors not talking about? Not thinking about, but should what topics, assets, geography, policy, data points, whatever. What what is not at the forefront of many investors’ minds, but maybe is getting overlooked.
00:46:59 [Speaker Changed] You know, and again, I, this is gonna sound very simple and it’s been talked about since the beginning of our markets. You know, it’s true diversification. And again, it, it, it, it sounds simple, but it’s not because, you know, the old diversification is that 70, 30, 60 40 stocks, bonds, the, the markets are a lot more complex and sophisticated. That idea of having that conversation now around, let’s talk about what I’m trying to accomplish. Not, hey, I think large caps are hot now, so I’m gonna put you in them. Hey, you know, you see technology stocks, I think technology is gonna do really good. That to me is what’s really being overlooked is again, where I know a lot of people sit down with their advisors and they’re getting that academic, you know, dissertation on you should be diversified. This is why, this is how. But often the conversation falls right back to, is it large cap small caps, is it tech stocks, is it banks? Is it financials? Like that’s not the right conversation even is it alter Publix? It’s, it’s everything. It’s all of that. And it’s using technology and solutions and packages to create the right construct for individuals. Ma
00:48:13 [Speaker Changed] Makes a lot of sense to me. I only have you for a couple of more minutes, so let’s jump to our speed round. Our favorite questions we ask all our guests, starting with who were your mentors who helped shape your career?
00:48:26 [Speaker Changed] You know, I’ve, I’ve had so many, and I, and I’ll tell you, you know, they, they, they started with family members. I’ve had professors, I’ve had, you know, the dean of the business school at Manhattan College, I felt like was a mentor to me. I, I have my pre previous bosses I, that I still stay in touch with and try to have lunch and dinner with. So I have many people that I can, that I can kind of think,
00:48:51 [Speaker Changed] Huh, that’s very nice. Let’s talk about books. What are some of your favorites? What are you reading right now?
00:48:57 [Speaker Changed] You know, I, there’s a, I’m not a, I’m not a fiction guy, so most of what I read is nonfiction. I love all the,
00:49:02 [Speaker Changed] I’m, I’m the same way.
00:49:03 [Speaker Changed] I love all the, I love all the Michael Lewis’s books. Recently read The Boys in the Boat. So I, I just love the story about people and I love, I love reading about books that, you know, you see perseverance in human beings Right now. It’s, I I’ll tell you, I’m not reading anything right now. I’m getting ready to read something and I, and I’m wondering if it’s gonna stick, but I’ve been hearing a lot about the Meditations by Marcus Aurelius. Oh, sure. And I, I made the comment around 80% of the things you hear is noise. My understanding is that book has a lot about that in there of like, what you should really spend your time thinking about. So I was, I was, that’s synopsis and I’ve heard two people now mention it. So I say I’m, I’m getting ready to read that.
00:49:47 [Speaker Changed] Let me bastardize that for you. Okay. And say to what I took from that was recognize the what’s in your control and that’s what you focus on. What the Fed’s gonna do. We can’t control. Yeah. Don’t lose sleep over it. Yeah. Accept it. It’s gonna be what it’s gonna be, but focus on the things you can control. You can change really. It, it has absolutely stood the test of time. Yeah. And if you’re a Michael Lewis fan, I’m gonna, I’m gonna self-promote his most recent book that just came out, who is government. Yeah. We did a live Masters in business in April. And I wanna say the ratio of me speaking to him was probably 3% to 97% for 90 minutes. He just regaled the audience with stories and had people in stitches, absolutely hilarious stories about Billy Bean and, and Brad Pitt tears down people’s face. I’m,
00:50:42 [Speaker Changed] I’m gonna go listen to that. I find that to, I’m listening that to I’m gonna listen. Yeah, absolutely. I
00:50:46 [Speaker Changed] I, he, if you’re a Michael Lewis fan, I, I think I’ve interviewed him 10, 12 times. That’s my favorite interview. I I heard stories I never heard before. He was
00:50:55 [Speaker Changed] Great. His books, his books ruined all the movies that have come out off the, off of his books. ’cause they, they, none of them come close, in my opinion, to the actual books.
00:51:03 [Speaker Changed] So I’m, I agree with you. The one that’s closest is Moneyball is at least listen The Big Short, I love the book. The movie wasn’t bad, the Blind Side, the movie wasn’t bad, but Moneyball really captured the moment of the,
00:51:20 [Speaker Changed] I agree that Moneyball was probably the closest you got to the book. Yeah,
00:51:24 [Speaker Changed] Yeah. No, no doubt about that. What about streaming? What are you watching on Netflix or Amazon Prime, or what podcasts are you listening to?
00:51:32 [Speaker Changed] Yeah, you know, it’s, it is very similar to kind of the whole nonfiction thing. I, I’m a big fan of documentaries on, on Netflix. There’s two things that I’ll kind of do on streaming. It’s like, it is watching the men who Built America really, which is a great documentary. It just, again, it has, you know, the JP Morgans of the world, the car, the the car, the, the, the Carnegies of the world, Rockefellers and Vanderbilts. But what it shows you is that tremendous amount of risk that these individuals took and, and what was a very different time in America. But I love, I love the documentaries and then, and then shows what’ll happen is I don’t watch a lot of tv. I I’ll, I will watch sports, but I’ll hear things like Breaking Bad. Everyone talked about it. I was like, all of a sudden, I, you know, I’m watching it 10, 15 years after the fact. And then that led me to say, Hey, there’s this show, better Call Saul. So I just went through the whole, not just went, but you know, I’ve, I’ve been going through the, I went through Breaking Bad and then like, better Call Saul. And so the only way I watch shows now is, well, they came out five, seven years ago and now I’ll go in and be like, okay, I’ll, I’ll dig in.
00:52:37 [Speaker Changed] We, so I have two things for you. We saw Mad Men during the Pandemic. I never saw a single episode when it was on tv. I’m like, wow, this is amazing TV And if you are a documentary fan, the Billy Joel documentary, HBO saw Yeah. We’re, we’re like three quarters of the way through. It’s, it’s just amazing.
00:52:55 [Speaker Changed] And I’m a, I’m a big Billy Joel fan, and yeah, I thought it was, and again, I, it’s, to me it’s just it history and people, right. You just kind of just lear love learning about people. And then especially for me, it’s, I’m in awe of folk of people who could do things I can’t. Right. Like I’m in awe of a Billy Joel. When you hear about his process and what he does and you’re like, it’s, it’s amazing. It’s hard not to get inspired by that.
00:53:16 [Speaker Changed] No, abso a hundred percent. Our final two questions. What sort of advice would you give to a recent college grad interested in a career in investing?
00:53:27 [Speaker Changed] You know, the, the advice I give everybody coming outta school and, you know, I, I think they’re waiting to hear for some kind of special nugget on how they’re gonna get ahead doing models or what deals. And I’m like, do do the easy things really well. Like I did this intuitively not knowing how important it was, which was, Hey, I came into Wall Street, you know, they’re not gonna give, I was fresh outta school. They weren’t gonna gimme a big client. They weren’t gonna gimme a big mile. But you know what, if someone said, I need copies, I ran and did copies because, you know, I could do that, that I can do, Hey, book, book a restaurant for a client dinner. Hey, don’t worry about it. I got it. So to me it’s like, early life is never gonna be that easy in your career than when you’re first outta school. Don’t come in day one thinking about, how do I get on, how do I start traveling and meet clients and work the big deals? It’s like, do the little things really, really well. That is how they’re gonna be able to judge you early on.
00:54:22 [Speaker Changed] Hmm. Good advice. And our final question, what do you know about the world of investing today? You wish you knew 35 or so years ago when you were first starting out?
00:54:33 [Speaker Changed] Yeah, I think it goes back to the, when I start, I first started learning those lessons of don’t pay attention to the noise. Pay attention to what really matters. So, you know, earlier on, it’s hard not to get emotional about investing. Sometimes it’s a hard, even not to get completely kind of, you know, you p and i, and I watch for this in rps, like PMs can fall in love sometimes even with companies stocks and even management teams. Sure. That ability to now say, Hey, in all these cases, be objective. Tell, remind yourself, be good at knowing what you don’t know. Take emotion off, focus on what really should matter. Not all the noise that’s surrounding it. Huh.
00:55:12 [Speaker Changed] So, so interesting. Jose, thank you for being so generous with your time. We have been speaking with Jose Manaya. He’s global head of BNY investments and Wealth managing $2.2 trillion. If you enjoy this conversation, well be sure, check out any of the 550 we’ve done over the past 11 years. You can find those at Bloomberg, iTunes, Spotify, YouTube, or wherever you get your podcast from. Be sure to check out my new book, how Not to invest the ideas, numbers, and behaviors that destroy wealth and how to avoid them. How not to invest at your favorite bookseller. I would be remiss if I did not thank the crack team that helps put these conversations together each week. And I really mean this. Alexis Noriega and Anna Luke are my producers. Sean Russo is my researcher. Sage Bauman is the head of podcasts at Bloomberg. I’m Barry Riol. You’ve been listening to Masters in Business on Bloomberg Radio.
~~~
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