Mohamed El-Erian's $100m Dilemma
Quitting the biggest job in finance...
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Good morning, everyone.
I met Matthew McFadyen last week in London. At the end of our convo, like the utter fanboy I am, I asked for a selfie: “Sorry - no, I don’t do them, but thank you very much for asking.” Gutted. I felt like the real life Cousin Greg.
This week’s newsletter includes: Mohamed El-Erian’s family dilemma, David Solomon’s AI prediction & the preferred football team of Blackrock Portfolio Manager’s.
Why PIMCO’s CEO Walked Away
In 2014, Mohamed El-Erian quit one of the most prestigious, well paid jobs in global finance as CEO of PIMCO...
At only 56, Mohamed was still a young buck, especially considering his seniority and status in the global finance community.
With a salary that reportedly breached $100 million a year, a loving family and a enormous mansion in Laguna Beach - people looked at Mohamed as someone who had it all.
But, all was not as it seemed.
In 2013, Mohamed’s daughter presented him with a hand written list that illustrated how he had missed 22 separate school events, including soccer games and parents evening.
Not 22 events he missed during her life, 22 events he had missed that year.
As part of the discussion, his daughter included her Year Book, which featured a photo of a class exhibition where Mohamed was visible in the background…writing emails on his Blackberry.
His daughter said: “Dad, even when you’re there, you’re not actually there”.
Mohamed was stunned.
The next morning Mohamed approached Bill Gross, Founder of PIMCO and legendary bond investor:
“Bill, in the next 12 months I’m going to step down. It’s up to you if that’s tomorrow or a years’ time, but I have to step down.”
After Mohamed shared the story of his daughter’s list with Bill, Bill replied:
“That’s bulls**t. You’re going to go and work for a competitor aren’t you?”
Mohamed: “I’m a New York Mets supporter, I’m a New York Jet’s supporter. Loyalty is something I believe in. Otherwise I would have found better teams, believe me!”
Bill: “Then you’re ill. Have you got cancer?”
Mohamed: “No”
Bill: “Mohamed, no one walks away from money.”
Mohamed: “Bill, I don’t know my daughter...”
Mohamed left PIMCO in March 2014 and pursued a portfolio career of part-time positions. This allowed him more power over his schedule, and more time with his family.
Reflecting on that moment years later, he said: “When I look at my relationship with my daughter today - even though it came at some cost - I really think I made the right decision.”
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Finance Culture
Like a finance version of Forrest Gump - Jon Gray at Blackstone just keeps on running. I see him on my insta, my Linkedin - everywhere. He’s running by himself, he’s running with key note speakers and now he’s running with clients. Some may cringe, but you can bet the amount of new business and opportunities his running content brings through the door is unbelievable.
Goldman CEO David Soloman aka DJ D-Sol published an OpEd in the NY Times this week about how AI isn’t actually going to create a job apocalypse. Essentially, his argument is that 25% of grunt work will be outsourced to AI, leaving analysts and associates with more time for client meetings. Goldman seem to be doubling down on relationship based roles. As does everyone else.
You already know SpaceX is going public. What you might not know is that one of the earliest investors was the Scottish Mortgage Investment Trust, who first invested $200m in the late 2010’s. That $200m is now worth…$4 Billion. Plaudits to Tom Slater & the team.
Former US Treasury Secretary Steve Mnuchin is selling his family home - an Upper East Side Townhouse. Yours, for $35 million.
Janan at the FT says Arsenal is the preferred club of Blackrock Portfolio Managers. From personal experience, this might actually be true. Everyone at Blackrock seems to support Arsenal. In the C-suite of finance, Manny Roman (PIMCO CEO), Blair Jacobson (Ares Co-President) and Aliko Dangote are all fans, Aliko talked about how he tried to buy the club in this interview. As a life-long West Ham fan, let’s not talk about football for a while…
Want me to write about something from finance in particular? Just hit reply. I read every message.
Recommendation’s
Check out my new video below on the story of Paul Singers investment into Argentina in 2001, leading to one of the craziest scenario’s in financial history.
Awesome long-form interview with Mohamed El-Erian where he recounts the above story and many more.
Paul Singer Annexed An Argentinian Warship
Paul Singer lent Argentina money, but the country immediately collapsed. So he took one of their warships hostage to get his money back…
Joseph Cass