Michael Fisch

We're all influenced by our parents in ways which may seem obvious or not the two most important things for any job, any of the things we're taking. One, are you going to like the work? And are you going to like the people? We never had a document between us. We just had a handshake and I had sent him a picture of my kids and he says that will be your greatest achievement. Welcome back to formative figures. My guest on this episode is Michael Fish. Michael is the founder and CEO of American Securities, a $23 billion private equity firm that grew out of a family office. Michael and I talk about the early days of the firm but we spend most of our time getting into his origin story, growing up in Canada and ultimately finding his way to New York, where a breakfast on the upper east side changed everything. Here he is, Michael Fish. You seem like such a native New Yorker that I sometimes forget you grew up in Canada, in Montreal. Did your family have roots there or did your parents end up there for work? The latter. No roots unless it's possible that some of my mother's ancestors were in Canada when it wasn't yet Canada. It was still part of the US or the Dutch colonies or something else. They met at college in Massachusetts and then moved to New York after college and then my father was offered a job, a big promotion in Montreal. They went there and my mother in quick succession popped out three children and they got divorced. My siblings, I have two sisters are both in the US, so I'm probably part of a first and a last generation born in Canada. Although we were all, I like to say we're all born US citizens. We're born Americans because my mother was an American forever and when we were born, ran to the US consulate in Montreal and said American born abroad and so we had American citizenship since birth and we all matured it under the immigration naturalization rules into full American citizenship forever by spending the requisite think 24 months before your 21 and as all of my siblings and I went to college in the United States, we had that milestone with ease. So given that your parents weren't originally from there, what was the cultural mix in the fish household growing up? Was it like half Canadian, half American? My father was born in Europe and so he was not anything North American and my mother was born in Bangor, Maine and forever the whites and the walkers had been populating the region of Vermont and Maine. Montreal was a very interesting and great place to be in the 60s because Montreal then was the co-business capital of Canada with Toronto and it had a joy to fever of the French and it had the business acumen of the English and because of the French language, a lot of cultural and things which centralize in Paris and then jump to Montreal before coming to New York and the rest of the United States. So films, other things, cultural activities would believe they're not come through Montreal. Now of course that all changed in 1972-76 when a political party called the party Quebec was formed and tried to and did succeed in becoming the provincial governing party with a platform of unilingual French. They passed a law bill 22 and bill 101 and the result of those two laws in the '70s, late '70s was if you were doing business in Quebec every correspondence had to be in French and if it had to be in English because you only spoke English or you were sending it to someone who only spoke English or both, you still had to have a translated into French and the result of that was Montreal had 500 corporate headquarters leave, massive job loss. We used to say it's the real estate market that knows nothing but down and Quebec became really unilingual French. So believe it or not, a small factoid, there were four public school boards in Montreal in the '60s and early '70s, the Protestant school board and the Catholic school board and each one had a French and an English language totally separate group. So four school boards, Protestant school board, English, French, Protestant school board, same for the Catholics and so that is now all there are. You cannot be publicly educated in English in Quebec and you can't even be privately educated without a whole bunch of stuff. Your dad wasn't from there. How did he deal with this policy? Well, he was a consultant. He had been recruited to PS Ross and partners by Howard Ross who became my godfather, who merged Ross and partners with Deloitte and Tush. I was Deloitte, Tush and Ross and now it's just Deloitte, but that was the Canadian firm and he was recruited to the consulting side of that accounting firm partly because he spoke a ton of languages coming out of Europe. The French language thing was not an issue at all for him. He spoke a whole bunch of languages who was problematic for my mother who was an architect and only spoke English and in the laws of many associations. You could not practice architecture in Quebec. If you didn't pass the architectural exam and that was only in French and so she had two problems. One of the issues is now she didn't practicing in New York very successfully as an architect and she didn't speak French. So I think fortunately for me having children became higher on the totem pole than the white of otherwise been for her. Now you've spoken about how close you were with your mom and two sisters. Did you feel like you had to be the man of the house at a pretty young age or is that overstating it? Yeah, basically. It's a weird thing but I was the only male in the household. It had complicating dynamics but also maturing in the world of what doesn't show you. It makes you stronger kind of thing. And did your mom try to nudge you in any direction professionally or did she let you sort of find your own wings? Well, she was super brilliant, literally one of the smartest people I ever met. But no, professionally, she had no real role in any of my, I always worked, I worked every summer, both the office jobs, also like ushering for the expose at night as a second job. The Washington National Spaceball team used to be the Montreal Exposes. You will know but many others may not. She was focused on my, I mean, I think about the only male. It's always very focused on our family, had no safety net. And I presume that she was going to be a financial liability that I had to be ready to handle. And so again, working, defeating poverty was very much on my mind always, but she was not really concerned how the one time when she expressed some great reservation was after college, I was working for an investment bank here in New York, captivity, Goldman Sachs and loved it had a great time and worked really hard, but loved it. And when I went into private equity after business school, she was really worried that that didn't seem quite as intelligent a move as staying with a wonderful great firm as Goldman Sachs was then and still is. So I want to come back to Goldman, but you ended up going to Dartmouth. McGill is famously a great school that was in your backyard in Montreal, why Dartmouth? We're all influenced by our parents in ways which may seem obvious or not at the time, but are very clear later. So my parents had met at school in Massachusetts in their case, they both went to MIT. So it was just kind of assumed without ever being stated that we would all of course go to school in the United States. And in my particular case, Quebec also has an interesting educational system. Here, of course, we go to 12th grade and then go to college. In Quebec, they put in mandatory junior college in the early 70s and late 60s. And so you went to high school till grade 11 and then you did two year mandatory junior colleges. It's called Cejep. And then if you stayed and went to McGill, you do your BA typically in three years. So it would be the same total number of years, but it was organized in Quebec to be 11 plus 2 plus 3. By the way, Ontario went to grade 13 and then you went to a four-year college. So Canada, every province does their own thing a little bit differently. It's not uniform like the US. As I said, a financial situation in my family growing up had its challenges. It occurred to me that I'm graduating from high school after grade 11. Why could just apply to college in the US? Why not? People thought that was a little odd. Many people would then do one year of Cejep and then go to the US. But economically, to me, it made sense for my mother. And so I did it. And I was lucky enough to get in thanks to the athletic preference list. Certainly more so than my grades. Right. Athletics were a big part of your life from early on, right? Yeah, change my life. What was the first sport you got into? I guess I played a hockey first. And then basketball skiing, skating, and I like to say barbecue. The three things Canadians can do way better than Americans think they can do. And the first two are obvious in the second less so. But when you only have a six-week grilling barbecue season, you have to be very good at those six-weeks. So you grew up in Montreal. You're playing hockey. You land in New England. Was it culture shock? Oh, not at all. I had gone to camp from 10 to 14. So I spent two weeks in Vermont at a camp for those summers. And my mother's mother lived in Connecticut. For better or for worse, if you're in Montreal, you're almost in the US. I mean, drive time to Burlington, Vermont is like an hour and a half. Back then, there were five TV stations. That was TV land. I know younger listeners. won't realize this, but we had only 5 TV stations in Montreal, Black and White at first, CBC, Canadian Broadcasting Corporation, Canadian Course, CTV, Canadian Television, another one. And then the CBS, NBC, and ABC affiliates, and respectively, Platsburg, New York, Poland, Spring, Maine, and Burlington, Vermont. And so you got the culture of the United States all the time. Tell me about your freshman seminar with John Hennessy Jr. So you know, Dartmouth has a quarter system, you declare major at some point at the end of your first year, and they're a bunch of required electives, so you typically spend a lot of your early years. And so in the last term, the spring term, having done fall and winter, I was taking math and I was taking economics, and I needed another course. And as a freshman, it's hard to get into a lot of courses that made sense. And I saw a senior seminar in something called Policy Studies, which honestly, I wasn't quite sure what that was. And it kinda talked a little bit about business. And so I signed up for it, or I tried to sign up for it. And I was accepted, I was the only freshman in the seminar, I think it's no one else would even think about being able to. And it ended up being taught by Professor Hennessy John L. Hennessy Jr., who had turned out, had just retired as the dean of the Tuck School, which is a very well-known business school at Dartmouth College. And it was basically an organizational behavior course, so that's how I came to know Professor Hennessy as I called him down, he kindly took interest in me, and it changed my life. As that many other people who have been kind enough to mentor me and share their thoughts, just be kind to me when they didn't need to be. Didn't you toy with the idea of getting a law degree and maybe a CPA, and did he help you focus your priorities? Back to what my mother thought made sense, you know, is get a profession, get something employable, and so being an accountant where my father had been involved in accounting firm, although as a consultant and being a lawyer seemed like things where I could always get a job. And I thought, well, if I could do them both together, then you know, I got more chances to get a job. And when I expressed that notion to Professor Hennessy in one of the visits, he was kind enough to let me have with him in his office at the great Tuck School, or I'd be nervous walking down to see the great professor. He never told you the answer, but he asked questions which made it clear at least to me that he was questioning the direction I was going or he wouldn't be asking these questions. And the result of his quest into your vocution was that concept of business school was put clearly into my head by John. I didn't really know there was something called, I guess I might have known there was an MBA, but I didn't really, I thought about accounting because I knew that in law and I could be employed in those things. Do you think in a different life you would have been a good lawyer? I don't know, I never thought much about it. I'd be happy to be a judge. So you end up joining the analyst program at Goldman Sachs. I think it was tiny back then, 25 people, tiny. The whole firm was 3,000 total employees, 1,500 professionals. The Mighty Merged Department was a total of 33 people. And in the Mighty Merged Department, there were three analysts in the year ahead of me and for my year of the 33, so 7 to 33. And the whole firm had 25 analysts, or at least an investment bank. I don't think they were in sales and trading. Was there anyone at Goldman who really took you under their wing? Quite honestly. We were working all the time. We were trying to cover the world from New York, flying everywhere, clients everywhere. And the merger business was exploding. And honestly, Joshua, I think even today, even with the past at your time and sadly, the demise of some of the people in there, there's still half of the people that were there when I was there that I see and talk to. And some are really good friends of mine. Some are investors in American securities. I'm involved in some of their lives. I've been best man at weddings and likewise, like this was a group of people that I just really, really loved. They were amazing people. And I'm very proud to have been able to spend time with them and get that opportunity to do that. Yep. So after Goldman, you decided to go get your MBA at Stanford. So just to string it all together, you'd gone from Montreal to the east coast. Now you're out on the west coast. That's a lot of moving around for a young Michael fish. Did you think you might stay out in California or did you know it would be a temporary stay? I had no notion of staying in California. I've been to California before working in Goldman. I had been to California, but not San Francisco, only LA, a bunch of times for client business stuff when I was there. I'd never gone to Stanford, let alone even San Francisco, but it was new and different. And again, my parents had gone to MIT. I knew Boston pretty well. I had been fortunate enough to get into business school at Harvard. And I just thought it wouldn't be different enough. I played rugby in Cambridge in college. And California was new and just interesting. One thing that I think a lot of people should always do. Certainly I did. I looked at one of the people a few years ahead of me doing and of those people doing that do I think I'm like one of those people or like someone others. So if the people that I feel I'm kind of like or I look up to, where are they going? And in the couple of years ahead of me, there were a bunch of people I knew who went to Dartmouth and Stanford and also at Goldman and I felt a greater kinship. I mean, I got tons of part of business with friends, Harvard business was a phenomenal place. But at the time, I had more kinship with the people going to Stanford business school. And it was just new and different. So why not try it? And I was lucky enough that Goldman had wanted me to stay. And so I knew he could go back. Let's fast forward a few years. You finish up there, you get some experience at a few asset managers. And then in the early 90s, you meet Chuck Klein, who I'll let you introduce him. But he was the CIO for the William Rosenwald family, essentially the Walten's of their day. I believe you two first met for breakfast on the Upper East Side. I'm curious how that came together, how you landed that meeting. And do you remember the restaurant? >> I do, it's not there anymore. >> Okay. >> We had breakfast at Sarah Beths. >> Yeah, which was then on Madison between corner of 92nd on the north, East corner. So a very good friend of mine worked for a wealthy family. And he was at a wealthy family conference having to be in Pasadena, California. And he randomly is sitting next to this man and the man says, you know, we've got a bunch of money in a good name and our CIO is looking for someone to kind of succeed him and do a bunch of things. And we have this portfolio challenge and this portfolio opportunity and we're having trouble finding someone ever. And this person kind of said, you should talk to my fish. And that led to this breakfast with this man who my friend was talking to. And Chuck and I, and I like to say it was a love it for a breakfast. I thought Chuck was just fun, interesting, charming Woody. And I thought, I just like them. And for some blessed reason, he seemed to like me. And so we ended up working together and being partners for quite some time before sadly he passed away in September of 2019. Did you prepare for this breakfast? I know you're meticulous in everything you do. Did you have like a whole spiel that you were going to deliver to win him over or did you just wing it? You can spend a whole bunch of time preparing for stuff in your first public speaking course or negotiating. They say the person who does the best actually knows the subject. And so I don't spend a lot of time preparing for stuff that I'm supposed to know the subject. And so no, I didn't, I didn't do anything special. So as the story goes famously, Chuck tells you, I'm 55 or so, I want to retire at 60, come work under me for a few years and you'll be the guy managing the Rosenwald family fortune. And how old are you at this time? December of 92. So I would have been three. All right, so a 30 year old on the upper east side talking to a made man in finance. And you say, yeah, great idea, but, but thanks. No, thanks. I have a different idea. Tell us what the different idea was. But how did you have the confidence to sort of shoot down that offer? I didn't want to do it. The one thing that I tell everyone and I've always tried to do with the mod, the two most important things for any job, anyone thinks about taking one. Are you going to like the work? It doesn't matter how much they pay you if you don't like the work and are you going to like the people because it doesn't matter how much you like the work if you don't like the people and you're probably not going to be happy long term. So those two things are the most important thing. It wasn't that hard to say, hey, Chuck, if you want me to work with you, the thing that I actually know a little bit about is private equity then called leverage buyouts. And so that's what I'm going to try to tell you we should be doing. And so why don't we just do that? You'll be my partner in the Rosemallow. There'll be a lead investor and we'll go create a private equity firm. Take us inside the early conversations with Chuck about the vision for the firm, not just target investment size and the quantitative aspects of it, but the principles and culture you wanted to build around. Well, first I have to say Chuck is a really good investor and he's really good investor because he didn't take flyers and I'm sure that as you're alluding to this young punk sound of like a flyer. So what Chuck actually said when I said I basically didn't want the job to succeed him, but I wanted to partner with him was, hmm, why don't we go work together and see how that goes. And then if it goes well, we're predisposed to do this. private equity thing that you're talking about. Again, that would have been called leverage by us, but I'm not sure you do quite what exactly I was proposing. So he was appropriately cautious and judicious, but I liked him enough and the Rosa Wald said, yes, that they would be willing to be the lead investor. And so I did join the Rosa Wald showed up in April of 1993. - Did they have to vet you before you got the job? Was there some big test in front of the family patriarch and they had to say yes, this young man can come work for us? - I certainly met them, but they relied heavily on Chuck and other professionals who I met. And so Chuck and I started working together. I mean, the Rosa Wald was in the same office. It was a family office. And so they were aware of the investments we were looking at and that regular interaction with the family. And our first gear together had some happy successes and some not so good investments. But because of Chuck's brilliance, much more successes. So then the next year we did raise the aforementioned private equity fund and closed our first deal December of 1994. - What was the dynamic between you and Chuck? 'Cause given the age difference, I suspect there was a mentor, mentee aspect to it, but then you probably, that compressed and you became peers, talk about that. So first of all, Chuck and I had many intense disagreements conversations about investments. We never had a fight. We would talk about things intensely and then we share a cab home or whatever. And we never had a document between us. We just had a handshake. - And that goes back to your earlier question about the principles that you wanted to invest in in the firm you wanted to build. We always wanted to be your word as your bond. And we looked at people we brought in in the early years and said you know, if they say we're gonna do it, even if we didn't say we do it, we're gonna do it because that's our reputation too. And that was a way to think about what you were looking for and people that would join us. And Chuck and I certainly had that reputation. And by the way, we're careful whether we said something or the other one of us didn't want to do. And I always said to Chuck that you know, it's not about what the economics puts out. You will always be my senior partner. I feel that way about him and he was just the best partner I could ever have and a wonderful man. He remained a managing director and that a senior advisor until he passed in 2019. He was always clear that I would be the CEO of this thing called Leprich Bayeste. You were talking about, so I was the CEO and president but he was the managing director. And in my mind that title was way senior to mine. Now when he passed in 2019, you wrote, I think nearly 40 drafts of your Eulogy for him, which I think as a side comment perfectly captures how you approach everything which is intense and uncompromising pursuit of getting it just right. What was the hardest part about writing his Eulogy? - You know, the age difference was one of the things that I always imagined but never wanted to happen was that this would happen, that he would pass. And I would be in the position asked to honor him and I would want to do justice to a complex and wonderful, wonderful person. Getting it right is the mix of so many things. It's gotta be true. You want it to be entertaining but you want to communicate the deep affection that I have had and have for him and all bunch of other things. So yes, they took a lot of drafts to get the right stories in the right way when his wife Jane was kind enough to ask me to. - What was one of the stories you had in that Eulogy? - I think this is one. I love this story about Chuck. It speaks to all the things I didn't know and all of Chuck's wisdom, we were in Europe fundraising. I think for our second fund, so in the late '90s, our last meeting of the day had us in a car to show up in an office park in Belgium, not in Brussels, but outside, actually not far from the Waterloo battlefield, made famous by Napoleon. And we got out of the car and the patriarch on the institution we were going to see came down the stairs in winter and welcomed us, which was very sweet of this time man. And it wasn't very light, but what I first noticed was his suit. And I thought to myself, hmm, I'm not sure I could ever wear that suit. It was particularly colorful, particularly pinstriped. And I don't know what I think about that, it's Europe. And right out of the car Chuck shakes his hands as, that's a great look at suit as they're walking up the stairs and in the seniority way, like I'm walking behind and Chuck's walking, and I'm thinking to myself, oh my God, we're never going to get the money. Chuck just showed all manner of whatever. And I'm thinking about this periodically, as we went through the next perfectly lovely hour and a half investment conversation, then Chuck and I got in the car and headed back to our hotel, and we were beaten up a few days in Europe and time change, what not, at one point Chuck thereafter said, how do you think that way? And I said, I don't know Chuck. Like, I don't know what to think of your complimenting his suit, like whether he wants he thinks of, you know, a whole bunch of things. And I knew Chuck was cold blind too. We were sitting in the back of a car and Chuck puts, he's reaches out and puts one hand on my hand, taps it and says, Michael, what he got up this morning, he didn't think anything, but that was a good looking suit and he was going to put it on. No one ever puts on a suit they think doesn't look good. And it's possible nobody else told them all day how good looking that suit was. And I thought myself, Chuck, the wisdom of the ages, I have so much to learn. So he had a high EQ, I think it sounds like. But no ego that ever needed to let other people know how high it was. I could tell you other stories in the same vein, which caused us not to get investors, but that one did choose to join us. And as remained an investor to this day in every one of our successor funds. - Wow. - As an institution. So again, I'm grateful to Chuck for so many things, so much e-tobby and so much patience, which I didn't know and thought I might have ideas that were clearly wrong about, like about his suit. - That's fantastic. So what did this cast of characters, Chuck, Professor, Hennessey, your parents, your sisters? I mean, at this point, at the start of American securities, you've become very successful. You're a CEO at a very young age. What did they make of your success? - I don't think my sister's care. John Hennessey and I kept up a relationship until he passed. And I remember one time when we were exchanging Christmas letters and I had sent him a picture of my kids and he says that will be your greatest achievement. The truth is we can all get caught up in our interests, the success of a deal, our inflated sense of our own self-importance, whatever. But the people that really care about me, I think don't care about any of that. They actually, are you happy? Are you living your values? I think that's what good friends actually think about first, not anything professional. - I think it's fair to say we covered your formative years. Let's jump ahead to the here and now and how you're paying it forward as a formative figure yourself. I know you go out to Stanford and guess lecture every year and you talk to some of the MBA students there. The world they're entering is very different from the world you entered after getting your MBA. What are the universal lessons that still apply? And if you had to be candid and honest with them, where are they on their own? And they simply have to figure it out. - Well, you're better with questions than I am with answers. I do go to Stanford. I had another amazing mentor there, John Jim McDonald, Jack McDonald, and I was his research assistant. And again, when he asked me to lecture in his class, I could not say no and did not want to say no. And so I keep proud to lecturing every year for the last 20 years. And it's fascinating, it's great to go meet these young men and women and hear what they're saying. And the world is very different. So the rate of change, I used to say before this last three years of entering at everything, that the rate of one of the amazing things is the speed of change since I got out of college or since I came to, you know, whatever mental awareness I might have has been faster and faster and faster and faster. I mean, I alluded to before that there were black and white TVs first and there really weren't TVs back in the '60s for me in Montreal. And then there was color and then, you know, I was a Goldman Sachs, they FedEx didn't exist yet. Facts, machines were kind of replacing teletype. And then of course, computers and that cell phones and now in the last three years of speed of change from the internet. So that rate of change is really, really fast. And there are so many ways to answer your questions. But one thing that I've been thinking about lately is I think the internet, what it's showing is collapsing the analytics that people of my generation got hired and promoted by doing well. The ability to have to do a model and have the balance sheet balance, which coming up from a liberal arts education was not a foregone conclusion when I joined Goldman Sachs. The modeling, the research, the due diligence, as we call it in private equity, that we all do. I still do it, but certainly our board junior professional spend more time on that proportionately. And then you have this nocial rain maker. or external facing person, or relationship person, or judgment person, whatever you want to call that senior person in your profession, I think that role is never going away. But the compression of everything below it means there's far fewer analytical roles. Now you have to come to acquire a judgment. So how you're going to do that when not everyone can have the analytical role where we had a pyramid where you got good at the analytical role, then you got a chance to maybe see if you could develop the interpersonal skills to become that senior person. And if it didn't work, there are a lot of other people who have the analytical skills who may get that jump. Now I see a world which is much more told and pulled in pyramid, how the world is going to create people with judgment who have the extrovert skills and the EQ skills you referred to earlier is going to be interesting and how you get to that judgment role without doing the analytics. When I joined Goldman Sachs, if you were an analyst you could use the merger model that everything was built upon. And one guy in the back with the mainframe computer named Kevin McCuda would run the merger model for you. No one else was allowed to touch the model itself. But if you came as an MBA, they made you do all your merger plans by hand for the first year because they felt that way you really understood how it worked. And those partner track people who have post MBAs, the merger partner Goldman Sachs wanted them to have that deep knowledge. I think how we're going to develop that in people when the skill sets changing is one of many profound differences from when I came out of college. That's Wednesday's answer. If it was Thursday or Tuesday, I have a different answer, we wouldn't be less true, it just be different. There's a whole different tangent that you could go off on so many ways as to how the world changed the different set of skills that the current crop of MBAs or people out of college today are just an ice cool in our country and world are going to have to deal with. You've been generous with your time. Let's wrap up with a lightning round. You prioritize lifelong learning. What have you been learning about lately other than AI? Trying to see wonder and awe in natural beauty and other things every day, trying to have those aha moments is important. Where do you go for those? Oh, you don't go for them. We try to meet it where it is. It's easier for me to see it. I live in New York City, so in Central Park where the sun's coming through a leaf of trees a certain way, 6am as I'm out running or skiing somewhere, but it can be just how someone behaves in a meeting where they disagree with someone but do it so beautifully that they're making a friend. You can find it anywhere, behaviors, a screenshot of something beautiful, a line of a poetry or from a book. You've completed many triathlons. What's your strangest pre-race ritual? I don't think any of my free-race rituals are strange. They all are purposeful to hopefully enhance performance or forstall a failure to complete. Have you seen that Rafael Madalgo can do his serve and all the shenanigans? Yes. I have. You have none of that. No, you're trying to have to waste energy before triathlons could be hard. It's going to take enough energy as it is. You just got to try to sit around. Get ready. All right. Music. Beatles are stones. Beatles. Who's your favorite, Beatles? Well, it's easy to say Paul McCartney because he's still alive and around New York, so I'll go with Paul. You like a good steak dinner, ribeye or filet? Both. Ideally, on the same meal. Medium or medium rare? Medium. Okay. You're a man of faith. Did you grow up in a religious household or did you find your way to the church later on? My mother did take us to church when she could organize to get herself in three kids there. So I would, I was a imperfect but regular attendee at church growing up. What's something your children taught you that no one in your professional life ever could? If you believe that everything you ever needed to know, you might have learned in the sandbox as a kid. You can see parallels to that both in kids and I have four children. And also in people you're dealing with. So how would your kids describe you in your role as a mentor to them? Hopefully generously, but you'd have to ask them. Michael Fish. Thanks for joining formative figures. Thank you, Joshua. Nice to be with you as always.