Acquired
00:27:11 · Ben Gilbert, David Rosenthal
[00:27:11] S0: Yep. The pitch of I can outperform all this dumb money in the market, probably right, and probably justifies significant fees. [00:27:19] S1: Yep. Yep. Now as graduation approaches, Jack has a goal. He wants to go to work in this new fund management industry. And he manages to get his A grade senior thesis in front of another prestigious Princeton alum in Philadelphia named Walter Morgan, who had founded and was running another early open ended public investment company in Philadelphia called Wellington Management. Walter Morgan hires Jack as his assistant right out of school, really takes a shine to him. Jack becomes sort of like a surrogate son to him. You know, Jack didn't really have a dad, and Walter didn't have kids. They become really, really close. Now, Wellington and its Wellington Fund was a super conservative and very highly regarded early mutual fund that pioneered the style that came to be known as balanced investing, I e, a balance between stocks and bonds all within a single fund. So the sort of marketing slogan that Walter Morgan had used for the firm and the fund was, quote, a complete investment program in one security. You can see how this would be attractive. Sounds great. And the Wellington Fund, this point here when Jack joins out of school, has attracted a $150,000,000 in assets. So they are smaller than the Massachusetts Fund, which was the largest fund in the world at that point in time with just under 500,000,000 in assets. But Wellington is still, like, among the top 10 funds in the industry and super well respected.
00:27:19 · David Rosenthal, Ben Gilbert
[00:27:19] S1: Yep. Yep. Now as graduation approaches, Jack has a goal. He wants to go to work in this new fund management industry. And he manages to get his A grade senior thesis in front of another prestigious Princeton alum in Philadelphia named Walter Morgan, who had founded and was running another early open ended public investment company in Philadelphia called Wellington Management. Walter Morgan hires Jack as his assistant right out of school, really takes a shine to him. Jack becomes sort of like a surrogate son to him. You know, Jack didn't really have a dad, and Walter didn't have kids. They become really, really close. Now, Wellington and its Wellington Fund was a super conservative and very highly regarded early mutual fund that pioneered the style that came to be known as balanced investing, I e, a balance between stocks and bonds all within a single fund. So the sort of marketing slogan that Walter Morgan had used for the firm and the fund was, quote, a complete investment program in one security. You can see how this would be attractive. Sounds great. And the Wellington Fund, this point here when Jack joins out of school, has attracted a $150,000,000 in assets. So they are smaller than the Massachusetts Fund, which was the largest fund in the world at that point in time with just under 500,000,000 in assets. But Wellington is still, like, among the top 10 funds in the industry and super well respected. [00:29:03] S0: This is what? Mid fifties?
00:29:03 · Ben Gilbert, David Rosenthal
[00:29:03] S0: This is what? Mid fifties? [00:29:04] S1: Early fifties. 1951. K. So, again, we talked about the economics for the management company. Like, I think Morgan and everybody at Wellington and Jack absolutely did have their customers and the fund holders in mind and wanted to do a great job for them, but they are making a lot of money. [00:29:23] S0: It's market. It's industry standard. [00:29:25] S1: Yeah. Based on the fees and that fund size, call it, like, two to three million dollars a year flowing into a reasonably low headcount, high margin business here in, you know, 1951. Yeah. Everybody's doing great. So Jack takes to Wellington and to mister Morgan like a pig in mud. He loves it. He rises through the ranks from Morgan's assistant to basically doing, like, every job in the company. And after a pretty short number of years, he emerges as the clear heir apparent to take over Wellington when Morgan retires. Morgan was thirty years older than Jack. And then, ultimately, in 1965, Morgan retires, steps back, and names Jack president of the firm at 35 years old. He's made it. Yeah. Here's Jack. He's come up in the world. He's gone from family ruin, essentially an orphan, to president of a highly profitable and respected enterprise at age 35. He's got it made. [00:30:29] S0: And importantly, a successful and pretty conservative mutual fund organization here with Wellington at this point in time.
00:30:29 · Ben Gilbert, David Rosenthal
[00:30:29] S0: And importantly, a successful and pretty conservative mutual fund organization here with Wellington at this point in time. [00:30:36] S1: Yep. Yep. Absolutely. But, unfortunately, that conservative, mindset and pedigree was exactly the wrong thing for this moment here in the mid nineteen sixties for Wellington and its young hotshot new president because Wall Street and the investing world is undergoing a sea change from the hyper conservative mode that emerged after the depression to what would come to be known as the go go years, pioneered by a small investment firm in Boston called Fidelity. Yes. But before we tell that story, now is a great time to thank our presenting partner, JP Morgan. [00:31:21] S0: Yes. And today, listeners, we are gonna talk about something that we mentioned last season on the Trader Joe's episode, supply chain finance. [00:31:29] S1: Yes. Think about when a buyer gets an invoice from their supplier. They're expected to pay quickly, but often can't or don't wanna tie up that cash. Wouldn't it be great if you could have a financing partner come in and fund that gap so the supplier isn't waiting up to thirty, sixty, or even ninety days to get paid? Well, that's exactly what a bank can do to bridge that time gap. The buyer gets to hold on to their cash longer, and suppliers get paid faster. True win win.
00:31:29 · David Rosenthal, Ben Gilbert
[00:31:29] S1: Yes. Think about when a buyer gets an invoice from their supplier. They're expected to pay quickly, but often can't or don't wanna tie up that cash. Wouldn't it be great if you could have a financing partner come in and fund that gap so the supplier isn't waiting up to thirty, sixty, or even ninety days to get paid? Well, that's exactly what a bank can do to bridge that time gap. The buyer gets to hold on to their cash longer, and suppliers get paid faster. True win win. [00:31:55] S0: Yep. And JPMorgan specifically has been doing this kind of work for decades at the world's largest companies. So supply chain finance, receivables financing, dynamic discounting, All of this is built on top of the trillions in daily payment processing moving through the system. [00:32:11] S1: But the tooling and the teams around it have historically been fragmented. You've got treasury teams trying to maximize liquidity. You've got procurement wanting everything in one place, and IT stuck integrating all of it. Not to mention the different portals, static reports, and all the manual setup. [00:32:27] S0: So this is where JPMorgan payments working capital accelerator platform comes in. You've got one login and one unified view across payables and receivables financing near real time data, and it plugs into the ERPs that your team is already running.
00:32:27 · Ben Gilbert, David Rosenthal
[00:32:27] S0: So this is where JPMorgan payments working capital accelerator platform comes in. You've got one login and one unified view across payables and receivables financing near real time data, and it plugs into the ERPs that your team is already running. [00:32:42] S1: And when teams can see their full working capital position in real time, working capital stops being a cash management headache and starts becoming a lever that you can pull as a business. The best business is treated as part of their operating system, and this is the kind of platform that makes it easy. [00:32:56] S0: So listeners, if you wanna learn more about this new working capital accelerator platform, go to jpmorgan.com/acquired or contact your JP Morgan rep and tell them that Ben and David sent you. And if you wanna join us for some live interviews, we will be on the main stage with JP Morgan at the We Are Developers World Congress in San Jose this September. Click the link in the show notes to learn more. Alright. So, David, the entrance of Fidelity into our story.