· Kurt MacAlpine, David Senra
[00:00:00] S1: Yeah, and I think that, to me, I always tell people, oftentimes people get comfort when things aren't changing. That's when you should be the most uncomfortable. Look at the business you're in, right? It's just everything is changing around us at all times. And so, I'm the most nervous when things aren't changing. And ideally, the change is happening. So then the question is, are you leading the change, are you participating in the change, or are you disrupting the change? And I think you're always better to be the one pushing the change forward on behalf of the firm or the industry. [00:00:00] S0: Before we get into how you go from CI to Corient, you seem wildly ambitious. Every time I talk to you, you say, like, you want to be the best in the world at what you do. [00:00:00] S1: Yep. [00:00:00] S0: You had never been a CEO up until 39, right? [00:00:00] S1: Right. [00:00:00] S0: Did that ambition come later in life? Were you like that younger? [00:00:00] S1: No, I've always- [00:00:00] S0: That's very unusual to be like, "Hey, I've had two decades of professional experience, and I'm going to jump in and like Genghis Khan try to take over this industry."
· David Senra, Kurt MacAlpine
[00:00:00] S0: That's very unusual to be like, "Hey, I've had two decades of professional experience, and I'm going to jump in and like Genghis Khan try to take over this industry." [00:00:00] S1: No, I've always been personally ambitious. I'm also a huge proponent of doing things you're genuinely passionate about. I love the wealth management industry. I love human capital businesses. Again, I thought there was a tremendous opportunity for disruption. So, my whole thing is, as you mentioned on change, is one, you should feel uncomfortable if you're not changing, if you're not constantly pushing yourself. The other firm belief that I have is people really benefit from deep specialized expertise. I think in that, just think of all the folks that you're interviewing and having conversations with. They have positioned themselves to be deeper and better at something, whatever that ultimately is, and that typically leads to outsized returns and outcomes for them. [00:00:00] S0: Incredibly. [00:00:00] S1: I think in many instances, human nature guides people towards optionality, right? So, people get a little more comfort in optionality. "I want to be able to do this, this, this, and then this." And you can be fine at a bunch of those things, but it's very, very hard to be world-class ultimately at something. So, really, the focus was how do we push ourselves to build the best business for clients in ultra-high-net-worth management globally? And that's been the aspiration for the business since we started.
· Kurt MacAlpine, David Senra
[00:00:00] S1: I think in many instances, human nature guides people towards optionality, right? So, people get a little more comfort in optionality. "I want to be able to do this, this, this, and then this." And you can be fine at a bunch of those things, but it's very, very hard to be world-class ultimately at something. So, really, the focus was how do we push ourselves to build the best business for clients in ultra-high-net-worth management globally? And that's been the aspiration for the business since we started. [00:00:00] S0: Okay, so you become CEO of this company. You have this plan. You've clearly thought about all the, like, what you want to do, which you just laid out for us. [00:00:00] S1: Yeah. [00:00:00] S0: What are the assets that you have? You have a couple hundred million in cash flow- [00:00:00] S1: Yep [00:00:00] S0: ... that you can deploy, and then your idea is like, "We're going to essentially empty the tank. We're going to take all that money and lever up." Day one on the job, what are you doing?
· David Senra, Kurt MacAlpine
[00:00:00] S0: ... that you can deploy, and then your idea is like, "We're going to essentially empty the tank. We're going to take all that money and lever up." Day one on the job, what are you doing? [00:00:00] S1: There's a couple things that I guess you're doing. So, as it relates to building the Corient business, so I had this point of view around both the opportunity set in ultra-high-net-worth wealth management, and then call it the disruptive structure that we wanted to put in place from an industry perspective. So, really, the first thing, I guess like any idea or business that you're trying to get off the ground is- ... is what you're proposing going to resonate? Does this structure... It is fundamentally different how we operate the business from other wealth managers. Is this going to resonate with great entrepreneurs in wealth management who see and align with this vision? So really kind of the first objective is, is this really filling a void in the marketplace, both for clients and wealth advisory professionals, that is going to resonate where this business is ultimately going to generate success? And then, on the back of that, as the concept starts to take off, then you start to think about capital prioritization trade-offs and things like that. [00:00:00] S0: Actually, you know what? Let's talk about the way your business is structured around, and then we'll talk about how you did it. [00:00:00] S1: Sure. [00:00:00] S0: Because this is what I was like, "Well, why..." You were explaining- [00:00:00] S1: Yeah
· Kurt MacAlpine, David Senra
[00:00:00] S1: Yeah [00:00:00] S0: ... all these little, the barbell strategy to me before, and I was like, "Well, why are all these..." Because you're growing by acquisition. It's like, "Why would they sell anyways?" [00:00:00] S1: Right. [00:00:00] S0: And you were explaining the benefits and then- [00:00:00] S1: Yeah [00:00:00] S0: ... what you do. So if you just want to lay out, like, you had a disruptive idea. What is that disruptive idea? [00:00:00] S1: Yeah. [00:00:00] S0: And you can explain that.
· Kurt MacAlpine
[00:00:00] S1: Yeah. So again, I thought there was a tremendous opportunity for somebody to come in and disrupt the ultra-high-net-worth wealth management industry. And the way that we sought out to achieve that was, effectively, we wanted to get the structure right. Again, I've said, I felt like the industry was built on a fundamentally flawed structure that does not facilitate the best outcomes for clients, nor does it facilitate collaboration internally. So I felt like if you could get the structure right, then you could actually start to optimize the business in a way that starts to make sense for clients and ultimately employees. The way that we want to position ourselves to be the best is we want to be the most comprehensive provider of wealth management services to ultra-high-net-worth families globally. So, shortly after launching the business, as we were kind of trying to prove out the structure and the concept around the partnership model relative to the industry norm, we were thinking about, what does this business look like as we ultimately start to scale? And, you set a high bar for yourself around, we want to be able to do more. And anyone who's joining Corient, I have this conversation with them. By you joining, you should make us better, we should make you better, and we should collectively be able to do more for clients than both of us running on our independent paths. So the way that we kind of set out to build that was we wanted to build this more comprehensive service offering for ultra-high-net-worth families. And so, just very quickly what we've ultimately built out. So we have a wealth advisory component, or function, which is the individuals that oversee and manage the client relationships, so think of those as the relationship quarterbacks. They are supported by the following capabilities. We have global financial planning capabilities. Think about planning for everything associated with your lifetime. We have a global wealth transfer capability, so think of that as everything that extends beyond your natural life. We have 175 people in our investment team, split about 70% on traditional investments, 30% on alternative investments. We own and operate several trust companies. We use South Dakota here in the US, but lots of different jurisdictions around the world. We have a tax practice.