Managing $525B & Building the World’s Largest Multifamily Office | Kurt MacAlpine, Corient

1. 0:00 – 5:32

   Building Corient and managing $525 billion

   1. DSDavid Senra0:00

      [instrumental music] How do you describe what you do?

   2. KMKurt MacAlpine0:04

      Um, so I'm a partner and the CEO of Corient, which is the largest multifamily office in the world and the largest non-bank wealth manager serving ultra-high-net-worth clients. And so today, we're managing about five hundred and twenty-five billion dollars of assets on behalf of clients across fifteen jurisdictions globally.

   3. DSDavid Senra0:21

      We hung out in Miami a few weeks ago, and at the end of that meeting, I was like, "Damn it, I wish we would've just recorded this."

   4. KMKurt MacAlpine0:28

      [laughs]

   5. DSDavid Senra0:28

      It would've been one of the best episodes I would be capable of creating because it's not only that you're the largest in the world, you have five hundred and twenty-five, uh, billion of assets under management for client assets, right? But it's the fact that you came from almost the outside and re-engineered the incentive structure of an existing industry, and the way you thought about doing this was fascinating. I would step back too, it's like at thirty-nine years old-

   6. KMKurt MacAlpine0:52

      Mm-hmm.

   7. DSDavid Senra0:52

      I don't think you'd ever been a CEO at that point.

   8. KMKurt MacAlpine0:54

      Correct.

   9. DSDavid Senra0:55

      Correct. So can we start the story from you're thirty-nine, you're getting recruited to be the CEO of this Canadian company, and then bring us up to where you are today?

   10. KMKurt MacAlpine1:03

       Sure. So, um, CI was a publicly traded Canadian asset manager, trading on the Toronto Stock Exchange, had been public for about twenty-five years at that point in time. The primary business was Canadian asset management. Um, and essentially economically-- and there was a small wealth management business in Canada, uh, or, or small relative to the size of the asset manager. But economically, the entire, um, profitability of the firm was derived effectively from the Canadian mutual fund business.

   11. DSDavid Senra1:29

       And they were making how much at the time?

   12. KMKurt MacAlpine1:31

       Several hundred million dollars a year of EBITDA.

   13. DSDavid Senra1:32

       Okay. And so why did they need a new CEO?

   14. KMKurt MacAlpine1:35

       The mutual fund industry, like, like all industries, kind of go, go through, through ebbs and, ebbs and flows, and I think that the, um, go-forward growth prospects for mutual funds as a structure, in particular, rise of ETFs, you know, increasing importance of alternatives, um, just the e-expected growth, uh, or the growth, kind of the trends around growth that we were seeing in mutual funds started to taper off relative to, to other areas. So the company was looking for a new strategic direction for the business at that point in time, decided to do an executive search. I was fortunate enough to be the candidate they had selected as, as part of that search process.

   15. DSDavid Senra2:10

       But you come in with a rather, like, aggressive plan. Like, where did that aggressive plan come from?

   16. KMKurt MacAlpine2:15

       A couple of different things. One, um, I, I had an opportunity to, to spend-- I spent my entire career in the industry through a couple of different lenses. So I spent ten years in a advisory capacity working as a management consultant. Spent about four and a half years, post that, four to four and a half years as an operator, uh, inside of an asset management business. And, and through that, you, you kind of build points of view and perspectives. You see things that work really well. You see things that you think, uh, are, are ripe for improvement. And in the case of this particular business, I saw tremendous benefits towards globalizing and diversifying the company, and I had a very strong point of view that I wanted to do that by launching an ultra-high-net-worth wealth management business, first in the US, hopefully generating enough success to be able to globalize that business.

   17. DSDavid Senra3:02

       Why was that the most interesting idea to you?

   18. KMKurt MacAlpine3:05

       It was interesting for a few different reasons. So I think that, um, there were really kind of three things that stood out to me. The first one was in wealth management, and ultra-high-net-worth wealth management in particular, um, you know, industries have headwinds or tailwinds. Obviously, I believe wealth management has a tremendous amount of tailwinds. There's more wealth being created today than ever. That wealth is more concentrated than ever. There's more complexity tied to that wealth than ever. It's transitioning generations faster than ever, and it's more global than ever. All of those things support the underlying need for advice. So that was kind of the first piece. Second piece was I felt like it was an industry that was, uh, ripe for disruption along a couple of different dimensions. So the first one is around the industry structure. So think of it as our industry as a giant barbell. So on one end of that barbell, you have large banks that theoretically can do everything for clients or certainly have the resources to do so. But whether it's governance, bureaucracy, internal conflicts, in my opinion, they give, give back a lot of the scale benefits that clients should ultimately be benefiting from.

   19. DSDavid Senra4:13

       Wait, what does that mean?

   20. KMKurt MacAlpine4:14

       From a size perspective, you know, they have access to capital, they have access to resources, they can theoretically make strategic investments. It's challenging sometimes to align and mobilize all of those things where clients ultimately benefit. So companies over time, whether it's the governance, whether it's internal policies, whether it's bureaucracy, just prevent clients from getting the full underlying benefits of the firm. That could be as a result of how the business is structured, how compensation plans work, which I'll come back to, or just how information flows, or how teams are ultimately constructed. On the other s- end of that barbell, though, you have small local firms that exist all throughout the country, literally all, all around the world. Many of those firms are doing exceptional things for clients. The challenge is scale becomes a challenge because that may limit your ability to get access to world-class managers that have capacity constraints. It may limit your ability to negotiate purchasing power on behalf of your clients. And it may limit the services that you're ultimately able to, to provide to them. So you start to run into limitations around what you can do for clients as a result of the scale. In between kind of these two ends of the barbell, there's a tremendous amount of white space that just creates opportunities for disruptive new entrants. So that was the second piece. And then the third piece is,

2. 5:32 – 11:42

   Why wealth management’s incentives are broken

   1. KMKurt MacAlpine5:32

      I felt very, very strongly that the industry was built on a flawed structure, and I'll explain to you what I mean by that. So effectively, regardless of the firm, regardless of the market, almost all advisory businesses are built the same way, wealth advisory businesses. Advisers are independent contractors sharing somebody's brand, somebody's technology, and somebody's office space. Those advisers not only compete with one another for next new clients, but they can literally take clients from one another inside of the same firm, which creates a tremendous amount of isolation, uh, not collaboration.

   2. DSDavid Senra6:07

      So if I'm a customer of JP, or I'm just using an example, JPMorgan Wealth Management- I'm, I, I'm tied to one person, right? But I'm actually a customer of that person, not JP, because they're not working as a team. Correct?

   3. KMKurt MacAlpine6:20

      Correct, in the sense that depending upon the firm, the advisor, the client's experience is tied to the advisor that originates the relationship with them. So think of it as most wealth businesses are built to serve advisors. We wanted to build a wealth business that was built to serve clients, and the advisors and the firm and the resources support those underlying, uh, support the underlying clients.

   4. DSDavid Senra6:44

      Yeah, and there's all this, like, incentive misalignment. When we were talking in Miami, you were saying, like, you know, let's say you need an expert to come to a meeting-

   5. KMKurt MacAlpine6:51

      Yeah

   6. DSDavid Senra6:51

      ... and that expert, one hour of that expert's time is ten thousand dollars. Can you tell that, like, that story?

   7. KMKurt MacAlpine6:56

      Yeah. So that, so that was the first. So the first piece is you have this advisor to advisor tension, which creates silos or isolation. So that starts to limit the expertise that can be delivered to the end client just due to the structure of the business. The second piece is the advisors and how the other front office capabilities or services, uh, work with those advisors. That could be tax professionals, it could be financial planning, it could be wealth transfer, it can be family office. And in most instances, those services act as a cost center to the advisor. So where ideally the client would benefit from the full expertise, there's a limitation around the advisor sitting there saying, "Do I need to bring this person because it's gonna have a negative impact on me personally to bring them to the conversation, or can I work around that conversation?" Right? So there's tension, in my opinion, between the advisors and the front office staff that ultimately supports them. And then the third area of tension is effectively you have advisors who are paid effectively for doing two things: generating as much revenue as they can or commissions as they can from clients. That's the first step. The second step then is how much of that you can hoard and not share with other people, because when you're paid under those structures, you're incented to not only aggregate, but the more that you share, the less that you ultimately earn. So, so that creates obviously the tension, as I mentioned, between advisors, but everybody that supports the advisors typically gets paid on the financial success of the business. And often those two things don't converge and it creates a lot of underlying tension. So my whole view was if you step back and say your advisors have tension, your advisors in front office have tension, and your advisors in middle and back office have tension, the big loser is the client, because the client doesn't get access to the full benefits of the firm. The client is marginalized down to the individual person or team that originated the relationship with them. The second big loser, in my opinion, is actually the firm, because these businesses don't end up be-becoming companies, they become platforms where individuals plug into the businesses for, for some sort of period of time. But you're not really building a team, a culture, you're not collaborating and problem-solving together across the firm. That's limited from a, based upon the silo that you ultimately work in. So when I step back and look at those three things, tremendous amount of tailwinds, an industry with a barbell-like structure that's ripe for disruption and, and an operating model, call it, which I believe to be fundamentally flawed. It just creates an opportunity, in my opinion, for, for somebody to come in and, and disrupt that with the goal of doing more things for clients.

   8. DSDavid Senra9:33

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3. 11:42 – 22:15

   Bringing the partnership model to wealth management

   1. DSDavid Senra11:42

      So before we get back to going into this existing structure with these ideas and th-this understanding, where did this flawed, like, the difference between you're not building a company, you're building-- so you have a platform. Like, what is the history of this then? Where did this come from?

   2. KMKurt MacAlpine11:57

      You know-

   3. DSDavid Senra11:57

      Why was it set up that way to begin with?

   4. KMKurt MacAlpine11:59

      It's a great question, uh, and I don't know the answer to why it was set up that way to begin with, but it's, it's the business model that all large wealth managers seemingly have taken. And when I look at that, and if I step back for a second and say- Put aside the structure of wealth management, but what are wealth advisors ultimately doing for clients, and what service are you providing? And I think about the role that wealth advisors play as kind of the ultimate human capital business, right? In order to be good at the job, you need a tremendous amount of EQ, a tremendous amount of IQ. How those advisors pair that together to work with clients is ultimately what defines success. So if I park the structure that the industry has chosen and, and look at, well, how are other human capital businesses structured? They all kind of have the same underlying structure. So as I mentioned, I was a partner at McKinsey & Company. Every single management consulting firm's a partnership, every law firm's a partnership, every accounting firm. Many of the most successful investment businesses, advisory businesses, uh, operating companies are partnerships.

   5. DSDavid Senra13:00

      But wait, the wealth managers weren't.

   6. KMKurt MacAlpine13:02

      Weren't. So effectively, to wildly overly simplify the Corient structure, we created the first true professional services partnership and applied it to the wealth management industry. And the goal was to use that structure to create a fundamentally different experience for clients and ideally a much more attractive collaborative environment, uh, for colleagues, and given it's a partnership, ultimately owners of the business as well.

   7. DSDavid Senra13:28

      Okay, so let's go back. You have this idea. You're like, "I'll take the job, but I have a super aggressive plan."

   8. KMKurt MacAlpine13:32

      Yep.

   9. DSDavid Senra13:33

      What's the response of the company?

   10. KMKurt MacAlpine13:34

       So that was part of my pitch as part of the interview process to the board, was they had asked my opinions, obviously, as part of that on the future, how I saw the future direction of the company. I outlined a strategy. Probably the, one of the, the core pillars of the strategy was to, to effectively launch the business that's, that's Corient today. Um, fortunately for me, I had a phenomenal board. Uh, the board was comprised of significant owners of the business who had a tremendous amount of vested interest in the company, um, but were also great at delegating, but also collaborating and providing advice, so it was, it was very, very welcomed. And because we had such a transparent conversation around what the strategy will look like as part of my interview process, we were able to hit the ground running from the day that I started.

   11. DSDavid Senra14:19

       Weren't you running a similar idea or playbook to the original founder of that company too?

   12. KMKurt MacAlpine14:23

       You know, so it's interesting. Um, so you're probably referring to Bill Holland, who was a previous CEO, who was the chairman of the company.

   13. DSDavid Senra14:29

       Okay.

   14. KMKurt MacAlpine14:30

       So Bill, um, uh, Bill and, and, and Ray Chang, and Ray's, Ray's daughter was, uh, on the board with us ultimately as well, um, had done a tremendous job of effectively building scale in the Canadian asset management industry. So at the point in time, they saw an industry that was subscale, ripe for disruption, um, and, and took advantage and built-

   15. DSDavid Senra14:51

       They did that through acquisition?

   16. KMKurt MacAlpine14:52

       Through acquisition.

   17. DSDavid Senra14:52

       Okay.

   18. KMKurt MacAlpine14:52

       Through a series of acquisitions in the Canadian marketplace focused on, uh, on the mutual fund industry, and, and did an amazing, amazing job with it, and a lot of that kind of put CI in, in, in the privileged position that the company was in, uh, at that point in time.

   19. DSDavid Senra15:06

       And so something we, um, you repeated when we, we spoke previously is like, I- I don't remember the exact line, but basically you think the most dangerous thing that you can do is stand still.

   20. KMKurt MacAlpine15:13

       Mm-hmm.

   21. DSDavid Senra15:14

       Uh, like the biggest risk is taking no risk.

   22. KMKurt MacAlpine15:16

       Yeah.

   23. DSDavid Senra15:16

       So y- they're in a dwindling, what sounds like a dwindling business.

   24. KMKurt MacAlpine15:20

       Yeah.

   25. DSDavid Senra15:20

       So what, are you just gonna sit here and, and just take less money every year, or are you gonna do something drastically different?

   26. KMKurt MacAlpine15:25

       Yeah, and I think that that, that to me, I always tell people, you know, oftentimes people get comfort when things aren't changing. That's when you should be the most uncomfortable. I mean, 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.

   27. DSDavid Senra15:55

       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 wanna be the best in the world at what you do.

   28. KMKurt MacAlpine16:06

       Yeah.

   29. DSDavid Senra16:07

       If you had never been a CEO up until y- thirty-nine, right?

   30. KMKurt MacAlpine16:10

       Yeah.
4. 22:15 – 24:25

   Sharing the benefits of scale with clients

   1. DSDavid Senra22:15

      Say more about the aviation business. We were talking about this before we started recording.

   2. KMKurt MacAlpine22:18

      As I mentioned, we're serving ultra-high-net-worth clients across a variety of different, different markets, uh, around the world. So we have tremendous scale in terms of the, the size of the business, but also the relationships and the families that we ultimately have access to. And we thought that there was an opportunity for us to provide a service to them or multiple different services, aviation being one example, where through just the size and scale and the relationships that we have at Corient, through perhaps taking a different approach, we could provide them a, a relatively unique service. So we effectively have an aviation business where we own aircraft on behalf of our clients for their collective use. Um, so think of it as we take the balance sheet risk from buying the asset. We take the, um, uh, the risk associated with the monthly management fee, and then clients effectively pay, uh, uh, for the use of the aircraft, um, uh, you know, depending upon how they use it. So it's really given us a unique op-

   3. DSDavid Senra23:09

      But not, this is not a profit center for you.

   4. KMKurt MacAlpine23:11

      Correct.

   5. DSDavid Senra23:12

      This is the in-- most interesting thing-

   6. KMKurt MacAlpine23:13

      It's, it's-

   7. DSDavid Senra23:13

      ...'cause like I was trying to, you know, wrap my head around all this, uh, the, the last time we met, and the, the, the model I had in my mind was like you, you're kind of, you have this like Costco shared economy scaled to what you're doing.

   8. KMKurt MacAlpine23:26

      Yeah.

   9. DSDavid Senra23:26

      So can you go into that a little bit?

   10. KMKurt MacAlpine23:28

       The way that I like to position the business is I think that we've built what I deem to be the only truly conflict-free business in wealth management, but let me define that. I think businesses get conflicted two different ways. The first way that they conflicted, get conflicted is based upon the structure of, of the business or how they ultimately govern themselves. So think of it as two different standards of care. Fiduciary standard of care, you're operating in the client's best interest at all times. You're obligated to do so because of that standard. Or, or a suitability standard, which is effectively is, is the product or the service that you're offering good enough to extend ultimately to the client. We have built the entire business to be a fee-only fiduciary business, so operating essentially at the highest standard of care. We're the largest business in the world that operates under that standard of care, so anyone larger than us has the ability to operate at a lower standard of care. So that's the first piece. Second piece is, um-

5. 24:25 – 27:58

   One compensation plan, one P&L, no exceptions

   1. KMKurt MacAlpine24:25

      In terms of the business model that you ultimately put in place, and this ties to how we ultimately serve clients and how we work together. And so the goal when we launched the business was I wanted to make sure that there were no structural impediments to collaboration from the onset. So if you think about every possible decision that you could make that would prevent something from collaborating, we've effectively, in my opinion, removed it, um, at the launch of the business. So I'll give you t- two examples. So we have about give or take three thousand people inside of the Corient business today. We have one compensation plan. We have no exceptions to the compensation plan. And the reason for that is once you start to put exceptions in place, let's say you and I work together, you're paid one way, I'm paid another way, it is very, very hard for us to objectively serve a client with different outcomes or different objectives, and that is kind of true across the different, the different elements of the business. The second example I'll give is I run one P&L across the firm, and I don't do any form of chargebacks. So again, you think about getting great experts in front of clients as quickly as possible with relevant expertise. Once you start to put silos in place, once you start to segment your P&L, once you start to run chargebacks, you're inherently creating underlying friction in the business. So effectively, you know, by operating the business that way, fee-only fiduciary standard, uh, a structure in place that maximizes collaboration with no restrictions towards it ultimately happening, it allows you to think about delivering services for clients that are, that are different and outside of, call it the norm of just traditional wealth management or wealth advisory services.

   2. DSDavid Senra26:00

      This is what I was trying to get to, where it's like you're not concerned about what other people in your industry are doing. Your north star is like, we just want to keep serving clients better.

   3. KMKurt MacAlpine26:09

      Correct. Exactly.

   4. DSDavid Senra26:09

      And so that ser- if we can offer a service that ultra-high-net-worth people would benefit from, it doesn't matter if other people in the industry are not doing that.

   5. KMKurt MacAlpine26:17

      Correct.

   6. DSDavid Senra26:18

      That is the only thing we're focused on.

   7. KMKurt MacAlpine26:19

      Absolutely. We want to be the best in the world at serving ultra-high-net-worth clients, and we think we can do that through deep specialized expertise. So the advisors, again, I mentioned people love to play on optionality. I can serve a tech entrepreneur, I can serve a small business owner, I can serve a corporate executive. Those are all very different skills. So, so we push ourselves, deep specialized expertise that starts in terms of the clients that you ultimately serve, and I'm always encouraging people, be as specialized as possible. The more specialized you are, the more relevant you are, the better advice that you can ultimately, uh, give to your clients. And then it extends beyond the service offering, and the goal is by pairing all of these pieces together, we can do more for clients because we're helping to connect the dots. Like a lot of the services that I had mentioned are services that clients need or want or ultimately use, and if we're not piecing it together for them, we're putting that burden ultimately on them. So by being able to manage somebody's financial plan, somebody's wealth transfer, managing their investments, overseeing their tax, executing their trusts, by thinking about that as a collective problem, as opposed to, you know, five or six individual decisions, I think it leads to meaningfully better, better outcomes. But again, you can't do it if you have a structure in place that prevents you from, from being able to achieve that. And that's why it was so important, launch the private partnership to align objectives and create a fundamentally different experience, and then audit every possible area of the business model to ensure that there's nothing internally that would create these tensions or silos or conflicts that would limit

6. 27:58 – 39:21

   Why independent wealth managers join Corient

   1. KMKurt MacAlpine27:58

      the client experience.

   2. DSDavid Senra27:58

      Okay. I'm glad you said it because it's like forty-five minutes into our last conversation where I was like, "Oh, shit." I started to grasp, like, this flywheel that you have. What I found interesting is like, okay, this, I, I, I'm gonna extend this, like, shared economy scale-

   3. KMKurt MacAlpine28:12

      Yeah

   4. DSDavid Senra28:12

      ... metaphor. You're doing that for your customers. It's like I'm, like, taking care of your aviation or art management or all these other things that-

   5. KMKurt MacAlpine28:18

      Yeah

   6. DSDavid Senra28:18

      ... you can go to other places for. It's like I don't need to make money off that.

   7. KMKurt MacAlpine28:20

      Right.

   8. DSDavid Senra28:21

      Like, I just want to serve you better, and I know-

   9. KMKurt MacAlpine28:22

      Correct

   10. DSDavid Senra28:23

       ... you'll stay with me, and therefore, like, the, the compounding effect of that, like, not only there's very low turnover-

   11. KMKurt MacAlpine28:28

       Yeah

   12. DSDavid Senra28:28

       ... like churn with customers.

   13. KMKurt MacAlpine28:30

       Yeah.

   14. DSDavid Senra28:30

       In some cases, it goes into the next generation, which is, uh, very interesting.

   15. KMKurt MacAlpine28:33

       Multiple generations, yeah.

   16. DSDavid Senra28:33

       Multiple generations. But then you also do shared economy scale with the, the wealth managers that you're acquiring.

   17. KMKurt MacAlpine28:40

       Mm-hmm.

   18. DSDavid Senra28:40

       Where it's like, if you're, like, a little boutique, like, explain the benefits of how you're taking the scale that you have at Corient, and you're approaching somebody that, you know, there might be two guys or three guys in an office, but you want to acquire them. Why would they come and agree to do it with you?

   19. KMKurt MacAlpine28:54

       A lot of different reasons, I guess, that people would contemplate transacting. If you're looking at it strictly from a client perspective first, then you can kind of work your way back. So from a client perspective, scale creates benefits if applied in the right manner. So our scale creates a number of different things for us. So I'll just give a few examples. Access to certain managers, right? So you think about some managers are capacity constrained, they're harder to get access to. Having scale and being a, a more meaningful investor for them creates opportunities and access points that otherwise might not have existed.

   20. DSDavid Senra29:25

       I don't think I understand that point.

   21. KMKurt MacAlpine29:27

       On the investment side, there's kind of two things. One is, are you able to get invested in the best managers in a respective, you know, discipline or asset class? And the second piece is, does your scale create purchasing power benefits? So literally the volume under which you're investing, does that allow you to negotiate better rates on behalf of your underlying clients? As a fee-only fiduciary, on, on that second point, whenever we negotiate better rates for our clients, we pass those rates on to the clients for their collective benefit. And then that, that, that extends a lot of different ways. The lending rates that we're able to get for clients tend to be better because of the size and scale and the broader institutional relationships that we have, um, the services that we offer. So the m- i- i- if you're a five or ten or fifteen billion dollar wealth manager, your ability to offer things like tax and trust and family office and aviation and art management at scale, virtually impossible. So clients will then ultimately benefit as well.

   22. DSDavid Senra30:24

       More products and services to give to their client-

   23. KMKurt MacAlpine30:26

       Yeah

   24. DSDavid Senra30:26

       ... and a better c- way better cost structure than they, they can get themselves at the business level.

   25. KMKurt MacAlpine30:30

       Pricing. Correct.

   26. DSDavid Senra30:30

       Okay.

   27. KMKurt MacAlpine30:30

       So you're getting better access, ideally better access, better pricing, and more services. And then if you're sitting in the ... shoes of the entrepreneur running the business, like what's in it for them, the way that I think about Corient, because I don't think of it as us buying people's firms. People are coming to be partners at Corient. They're coming to own and operate the business alongside myself and the other equity partners of the firm. So this is about founders continuing on the entrepreneurial, or, or partners continuing on the entrepreneurial journey they've already been on. It's just we're doing it together than us doing it independent of one another.

   28. DSDavid Senra31:06

       Do they see everything? Like, let's say you wanna acquire me, correct?

   29. KMKurt MacAlpine31:10

       Yeah.

   30. DSDavid Senra31:10

       And we're going through this conversation. Like, I see access to all your books. I see everything?
7. 39:21 – 48:25

   Staying the course when the stock market disagrees

   1. DSDavid Senra39:21

      now.

   2. KMKurt MacAlpine39:21

      Yeah.

   3. DSDavid Senra39:21

      We'll come back to-- There's a couple other things I wanna talk about, which again, is this the, the day you do the acquisition, the branding, everything is completely integrated.

   4. KMKurt MacAlpine39:29

      Correct.

   5. DSDavid Senra39:29

      But the story of how you built this is so wild. I wanna go back-

   6. KMKurt MacAlpine39:33

      Sure

   7. DSDavid Senra39:33

      ... to when you took over the company, and then we're gonna launch into Corient.

   8. KMKurt MacAlpine39:36

      Yeah.

   9. DSDavid Senra39:36

      The acquisitions you did, the fact that the stock market hated what you were doing-

   10. KMKurt MacAlpine39:40

       Yeah

   11. DSDavid Senra39:40

       ... and you were just resolute in the, the, the face of this drastically falling stock price.

   12. KMKurt MacAlpine39:45

       Yes.

   13. DSDavid Senra39:45

       So if we go back to like, "Okay, I laid out this plan to this, like, sleepy Canadian company."

   14. KMKurt MacAlpine39:49

       Yeah.

   15. DSDavid Senra39:50

       "I'm going-- This is what I wanna do." Then can you bring us from that point until, uh, basically how you've been building Corient?

   16. KMKurt MacAlpine39:57

       Yeah, so there's a couple things. So one, you know, kind of the first thing is you have to have conviction in the business and the idea, as we've talked about a lot. I had a tremendous amount of conviction in both the opportunity for the business and in, and in tune, ultimately what we could do for clients. The second piece, as you mentioned, is volatility. So, so you have to kind of put that, uh, a little bit in, in, in context as well is, is can you-- You know, public companies don't typically love transformation stories.

   17. DSDavid Senra40:21

       Well, do-- Hold on. We gotta define volat-volatility.

   18. KMKurt MacAlpine40:24

       Sure.

   19. DSDavid Senra40:25

       How volatile was your stock when you were doing this?

   20. KMKurt MacAlpine40:26

       Sure. So, like, in, in twenty twenty-one, we were, I think, the, the best or second best-performing financial services stock in North America. Twenty twenty-two, the second-worst.

   21. DSDavid Senra40:35

       Right. [laughs] Yeah.

   22. KMKurt MacAlpine40:36

       And so you talk-

   23. DSDavid Senra40:37

       That's volatility

   24. KMKurt MacAlpine40:37

       ... you see a lot of tremendous volatility. So then you can start to unpack. I mean, so, so there's a couple of layers to that, right? So, so one layer is public markets don't necessarily love transformation stories. Now, to be fair to the public markets, we were taking effectively a Canadian asset management business and using the cash flow to build and launch a new ultra-high-net-worth global wealth management business, so pretty meaningful-

   25. DSDavid Senra41:03

       That's a hard right turn. [laughs]

   26. KMKurt MacAlpine41:04

       It is a pretty meaningful, meaningful departure. Now, if you think about the underlying benefits, you're effectively creating diversification. You're diversifying from asset management to wealth management, from more mass affluent to ultra high net worth, from a single country to, to multiple different geographies. So the, the merits of doing it makes sense, but kinda call it the journey from the starting position around the conviction of the idea and how public markets, you know, ultimately respond takes, take, uh, you know, different turns and, uh, and different courses. The second thing is, when you're looking at public markets, a lot of it ties into the underlying composition of your shareholder base, right? And, um, a-and I'll tell you what I mean by that. So we had a series of strategic investors, let's just say somewhere, you know, fifteen, sixteen, seventeen percent of the entire float. Um, we had a very small, uh, index inclusion, uh, just given the s- company that we had, the market that we traded in. So let's just say twenty-five percent of our float was, call it, locked up by strategic investors that didn't have intentions of selling, and then, um, indexes that effectively had to hold the stock. And that creates seventy-five percent of your float that's active. That is an unusually high active, uh, active share. So you say, "Well, what-- So who comprises the active share?" It's hedge funds, uh, and it's mutual funds. So hedge funds obviously are looking to optimize performance, so a lot of the volatility comes-- The reason twenty twenty-one was such a good year from a share price appreciation standpoint is obviously you had a lot of hedge funds piling in. Twenty twenty-two, a lot of the hedge funds ultimately, uh, leaving, and that creates a tremendous amount of volatility in the stock. And then on the mutual fund side, so the mutual fund holders of the public company tended to be value-oriented mutual funds that have been in net redemptions from a, call it, a category for a number of years. So think of it as every single morning, people wake up having to sell your shares to fund redemptions in their underlying mutual fund.

   27. DSDavid Senra42:59

       Because there's headwinds in that industry.

   28. KMKurt MacAlpine43:00

       Inside of the undersi-

   29. DSDavid Senra43:01

       Okay

   30. KMKurt MacAlpine43:02

       ... u-underlying mutual fund. So again- There's a lot of different factors you can attribute to it, but the reality is you, you have a series of things happening at once: building a brand-new business, creating a massive transformation story inside of a public company, and then calling it ha- having a composition of your shareholder base that doesn't... It's not like you have 85% of your shares locked up in a small float that dampens volatility. You kind of have the opposite. But look, you have to stay true to the convictions that you ultimately have. And the part that gave me a lot of confidence was I had a tremendous conviction in the opportunity. I was able to see the business and the strategy taking off relatively quickly. So there-- so, you know, once you start to launch the strat-
8. 48:25 – 51:52

   Betting on the business through share buybacks

   1. DSDavid Senra48:25

      How many years into this are you like, "Hey, maybe we should find a partner and go private?"

   2. KMKurt MacAlpine48:30

      So we were always going to go private, which I was very, very transparent about with the market. Um, and, and the way that I was assuming we were gonna go private was through a share buyback program. So during the course of my entire tenure at CI, we were doing two things. We were building Corient, diversifying, globalizing the business, while at the same time reducing our share count. And again, I thought, and the way I've described in the media many times, is I felt like our shares were, in my opinion, criminally undervalued. I thought there was a tremendous disconnect between the underlying value of the company- And what we were ultimately trading at. Part of that, like I mentioned, was tied to these underlying dynamics. Like, if every single morning you wake up with somebody having to sell your shares, um, for, you know, things outside of your or their control, that creates a tremendous buying opportunity. And then the question is, do you have conviction or not in yourself and what you're doing to actually transform the business and buy the shares? And, and we did. So that's what you saw, us buying a tremendous amount of shares back while at the same time as transforming the business.

   3. DSDavid Senra49:33

      What was the, the financial, um, outcome of those share buybacks?

   4. KMKurt MacAlpine49:37

      So we took ourselves private, so-

   5. DSDavid Senra49:38

      No, I know, but, like, how much?

   6. KMKurt MacAlpine49:40

      It depends. I mean, we were buying over a period of time, but it was a significant return, and we were buying a lot of those shares back at twelve or thirteen, uh, dollars a share, right? So it was very, very meaningful return from a, from a shareholder perspective.

   7. DSDavid Senra49:52

      The, the reason I bring that up is because, uh, my friend Adam, who's the founder of AppLovin and one of my biggest partners-

   8. KMKurt MacAlpine49:56

      Yeah

   9. DSDavid Senra49:56

      ... he was sitting in, in that chair where you are today, and he has the same kind of conviction and, um, that you do. And his whole thing was like he went public, told the story on the podcast, I think every day for like two hundred days-

   10. KMKurt MacAlpine50:07

       Yeah

   11. DSDavid Senra50:07

       ... his stock price just dropped.

   12. KMKurt MacAlpine50:09

       Yeah.

   13. DSDavid Senra50:09

       I think it went from like twenty-eight billion down to three.

   14. KMKurt MacAlpine50:11

       Yeah.

   15. DSDavid Senra50:11

       And then he's just like, "Well, I'm not running a three billion dollar company." He's like, "Either this..." He j- I think at the time, he thought it could be like a hundred or two hundred billion dollar company.

   16. KMKurt MacAlpine50:18

       Yeah.

   17. DSDavid Senra50:18

       Now I think he thinks he can get to a trillion. But he's like, "Either this thing is, you know, a hundred or two hundred billion or it's nothing."

   18. KMKurt MacAlpine50:23

       Right.

   19. DSDavid Senra50:23

       Then he's just like, "This makes no sense. My stock price is three billion. We're doing a billion of EBITDA."

   20. KMKurt MacAlpine50:27

       Yeah.

   21. DSDavid Senra50:27

       And so he winds up taking all the cash flow from that, buying back the stocks, and I think he borrowed like another five billion or something.

   22. KMKurt MacAlpine50:33

       Yeah.

   23. DSDavid Senra50:33

       And everybody around him is like, "You're fucking crazy, dude."

   24. KMKurt MacAlpine50:36

       [laughs]

   25. DSDavid Senra50:36

       And he goes-- And he says very nonchalantly on the podcast, he goes, "Yeah, that worked out very well for the company. We made like fifty or sixty billion- [laughs]

   26. KMKurt MacAlpine50:42

       Yeah

   27. DSDavid Senra50:42

       ... from that share."

   28. KMKurt MacAlpine50:43

       But here's the interesting thing between the disconnect between public and private markets.

   29. DSDavid Senra50:46

       Yeah.

   30. KMKurt MacAlpine50:46

       So what you're describing in a public market, people have this visceral reaction to. If you describe that to a private equity investor, they would say, "That is the standard blueprint under which we operate business and extract value." So it is amazing to see the underlying disconnect between how people think about the business as an owner and an operator of the business versus how people think about the business through, "Am I gonna buy some shares of this public company or not as well?" And oftentimes, when you're going through these transformation stories, you have to think about the end game, right? Again, we were sitting on, in my opinion, very vulnerable earnings entirely driven by the Canadian mutual fund industry. It was a-- Like, yes, it was a lot of earnings, but it is a very, very-
9. 51:52 – 59:08

   Taking CI Financial private with Mubadala Capital

   1. KMKurt MacAlpine51:52

      we're not letting these shares trade the way they are without buying them. There's no way." And so we were buying and buying and buying and buying. So the, the, the notion of-- back, back to your initial question of going private was, so I was approached about two years ago right now, actually, by Mubadala Capital. In fact, I received an inbound call, and the message was, "We love the business. We love the strategy. We understand exactly what you're doing and why you're buying the shares. We think it's gonna take you about nine years to effectively buy the shares remaining that you ultimately wanna buy."

   2. DSDavid Senra52:25

      Did you also think that at the time?

   3. KMKurt MacAlpine52:27

      Yeah.

   4. DSDavid Senra52:27

      Okay.

   5. KMKurt MacAlpine52:27

      So, so, so they said, effectively, "We think it's gonna take about nine years. And we think along that journey, there's gonna be trade-offs around your ability to execute the Corient strategy, just given the capital requirements on both sides." I had agreed with a hundred percent of that. And so we really hit it off and had conversations from there, was around how do we take this business out of the public markets, deliver a great return for the shareholders of the business, and then put the business in a private context where we could kinda own and operate it, um, outside of a public company. And I, and I felt like CI never belonged, even before I showed up, like a Canadian mutual fund company never really belonged in the public markets anyway, and this just created a phenomenal opportunity for us to do it. The context by which we went private, I think is also equally unique. So again, that was kind of the message. So we took ourselves private with no incremental debt on the business. There was actually de-leveraging or an equity infusion tied to it. There were no cost synergies, no change of strategic direction. In my opinion, I picked up the best strategic partner on the planet with an equal amount of ambition, uh, to see this thing forward. And I think from their standpoint, look, if you take a look at the Mub-Mubadala Capital or just Abu Dhabi Inc. more broadly, it is an incredibly ambitious place, right? They are-- they have done a, a phenomenal job of creating wealth, building wealth, diversifying wealth. And fortunately for me, the entire team at Mubadala saw what we saw from a business perspective, saw the end game, saw a lot of similarities, I think, in terms of how they were building Mubadala Capital. It was effectively started inside of Mubadala Investment Company, a sovereign, built it into this phenomenal business and just, just saw, I guess, a lot of, you know, us in, in them strategically and ambition-wise, and it's been, it's been absolutely amazing. So we took ourselves private. We announced it in November of twenty twenty-four. We completed it in August. We completed on August twelfth of twenty twenty-five. On September third of twenty twenty-five, September second or September third, we announced we were buying on the same day the largest ultra-high-net-worth wealth manager in Europe and the second-largest ultra-high-net-worth wealth management business in Europe. And as an example, if we were still a public company, back to how people respond, in a public context, that would've been an impossible transaction to execute, just given a lot of the dynamics that you've mentioned. In a private context, in my opinion, it was the best possible thing we could've done for the company. And the reason I say that is everything that I said about the opportunity in US ultra-high-net-worth wealth management is equally true in the rest of the world. I firmly believe that there are no global Ultra high net worth wealth managers that exist in the world today outside of Corient. And to me, that was a tremendous opportunity for us to go capitalize on.

   6. DSDavid Senra55:20

      Why do you think no one else pursued that strategy?

   7. KMKurt MacAlpine55:21

      Um-

   8. DSDavid Senra55:21

      'Cause it seems obvious in hindsight.

   9. KMKurt MacAlpine55:24

      So I think, um, I think people would disagree, potentially disagree with my statement and say, "Well, of course, there are other ultra high net worth or global wealth managers that exist." My pushback would be, they're not. There are a handful of multi-jurisdictional wealth managers that exist. By that I mean banks that operate in multiple different jurisdictions. The reason I say mul- multi-jurisdictional, not global, is if you think about it through a client lens, so let's just say you're a client of a firm that ha- has offices in multiple different jurisdictions. You're, one, those are all a series of regional P&Ls, right? So the client relationships get mapped into an underlying region, and the compensation system and the structures that people have in place create or limit or eliminate the ability to collaborate. So I'll just give an example. Let's just say there's a billion-dollar family that exists, and they have money across four different jurisdictions, and they happen to have those assets at one firm. And the family says, "You know what? I'm gonna take all billion dollars and I'm gonna consolidate those assets in Miami." So what happens in practice internally is three of those P&Ls that are losing assets inside of those organizations are negatively impacted. One of the P&Ls is very positively impact. And then at the individual advisor level, almost all of those people tend to be commission or revenue share generating advisors. So three of them, pay goes to zero on serving the client. One of-- one person's pay probably quadruples on the back of serving the client. So the thought of saying that they are putting all of that aside and serving clients, um, regardless of those internal tensions or conflicts, you know, ma- makes for an impossible situation. So, you know, a lot of the stuff that we touched on earlier, the private partnership that we initially built for the US marketplace, we've globalized it. Again, I have one compensation plan that is not only true for the US, it's everybody around the world, and one P&L. So instead of thinking about clients in terms of what regional silos do they access us, we think about clients, how do we serve them all around the world anywhere?

   10. DSDavid Senra57:22

       Okay, the way I think of you in my mind, tell me if you disagree, is like you're kind of obsessed with incentives.

   11. KMKurt MacAlpine57:28

       I'm obsessed with alignment. So if I think about it this way, again, it's very simple what we wanna do. We wanna be the best in the world at serving ultra high net worth clients. I, in a human capital business, it is imperative that I have strategic, cultural, and financial alignment to achieve that. And so incentives are a huge component of that. Incentives drive a lot of behaviors, a tremendous amount of behaviors.

   12. DSDavid Senra57:52

       Charlie Munger has this great line where he's like, "In- uh, incentives rule everything around us."

   13. KMKurt MacAlpine57:55

       Yeah. So, so then if you think about that, once you start to create fractures in the incentive, like I, I feel very strongly that every single client of Corient, regardless of where you live or how you've entered the business, should have the same opportunity for an equal elevated experience. So similar to clients, I wanna make sure that all of our employees have the same opportunity, regardless of how they've entered the firm. So as an example, if you were entered via direct hire in Seattle or an acquisition in San Diego, I wanna make sure that every single person here is treated fairly. And, and you need to make sure that in order to treat somebody fairly, you should be paid for what you are delivering for the business, not whatever historical, you know, entry point or position that you ultimately had. It's equally imperative that you are paying people for things that drive collaboration and better outcomes, as opposed to things that drive, you know, personal or independent or, or, or siloed, uh, siloed behavior. So we've been very, very adamant to ensure that, one, clients can always get the elevated experience, and in turn, every single employee of Corient is treated fairly. So by having one compensation plan, I can literally walk into any one of our offices in the world, and every single person knows that for an equal level of performance, they're gonna be treated exactly the same as all of their

10. 59:08 – 1:04:43

    Acquiring great partners and building one company

    1. KMKurt MacAlpine59:08

       colleagues.

    2. DSDavid Senra59:08

       Okay, I love how you, you summarized that. You're obsessed with alignment. So I wanna talk about acquisitions. Since you started, you've done how many acquisitions? They're about twenty? More?

    3. KMKurt MacAlpine59:16

       Probably closer to fifty.

    4. DSDavid Senra59:18

       Closer to fifty.

    5. KMKurt MacAlpine59:18

       Yeah.

    6. DSDavid Senra59:19

       As y- you have more AUM, do the size of the acquisitions have to keep going up or no? How do you think about this?

    7. KMKurt MacAlpine59:25

       I'm not-- It's a great question. So I'm not looking for scale on acquisitions. I'm looking for exceptional people who align, again, I keep saying the same thing, but it's important, strategic, cultural, and financial alignment. So whether that is a fifty billion dollar acquisition, a five hundred million dollar acquisition, or anything, you know, in between or on either side of those parameters, that's less relevant for me. Like, in a partnership model like the one that we have, I need those strategic, cultural, and financial alignment, um, things to be true. So, so we don't never look at it from AUM. We never look at it from scale. We're looking at how is this additive to the business that we're ultimately aspiring, uh, aspiring to build? And look, fortunate for us, I think the, given the scale, uh, what we've built s- is, is at least currently resonating really, really well, and, you know, we're excited to, to take advantage of. But again, it's an ultimate screening criteria. So if someone sees our model and, and they're looking for something totally different, they're not gonna come here. So it's great for us because we're able to filter through the structure, and it's great for them because they have total clarity in terms of what they're, what they're looking for.

    8. DSDavid Senra1:00:31

       So let's go back to this obsession of alignment. Uh, explain, you acquire my company-

    9. KMKurt MacAlpine1:00:36

       Yeah

    10. DSDavid Senra1:00:36

        ... what happens the very next day?

    11. KMKurt MacAlpine1:00:37

        Sure.

    12. DSDavid Senra1:00:37

        You told me the story in Miami I thought was very fascinating.

    13. KMKurt MacAlpine1:00:39

        Yeah, so we've kind of, let's just-- So the business is about six years old, a little more than six years old. There's kinda really called three phases of, of building the business to get to the state that we're in. So the first phase was acquiring enough scale. Again, this is a proof of concept. I thought there was a tremendous opportunity. The question is, was it gonna resonate and take off? And so there's, call it a period of time, let's just say the first eighteen months, where we were focused on accumulating the scale. And the reason that's important is because the scale drives how you think about integration, the services that you're gonna integrate, the providers that you use. If you're gonna build a five trillion dollar company versus a five hundred billion dollar company versus a fifty billion dollar company, how you think about integrating is very different. So there was a period of time where we were accumulating the scale to start the integration journey. Second piece was effectively starting down that integration journey. So we had scale, and it was a matter of now how do we pick or make the various decisions that ultimately drive integration and morph the organization. So some things come faster than others. And then the third piece was where we're at now, which is a fully integrated state. And I think that's really, really important. And if you had asked me when I started, again, 'cause people love optionality, which of those three phases were- would people be most comfortable with, I would've said people would've been most comfortable with the first phase, right? 'Cause it's the least amount of change at the start.

    14. DSDavid Senra1:01:57

        Yeah.

    15. KMKurt MacAlpine1:01:57

        It's actually not true. People are most comfortable with the current state 'cause they know exactly what they're getting into, which is interesting. So you know, like, if you're selling a firm to us, here's exactly what life is gonna look like on the other side. You're gonna know it two ways. One, 'cause I can tell you what it looks like from the conversations, uh, but also there's a ton of people now, three thousand in total, that you can reach out to and interact with what is life like here. And the people who've been through the journey with us, um, tend to be the greatest ambassadors, and I think a lot of our success, or the reinforcement of the success, comes from people who've come, the clients themselves have had a great experience, and they become great ambassadors for the business as we continue to grow.

    16. DSDavid Senra1:02:37

        But what does total integration look like?

    17. KMKurt MacAlpine1:02:39

        Everything. So on, on day one, you're on our brand, you're using our technology, you're working in our offices, you're collaborating together across the firm. The collateral's been changed. You're on our comp, you're on our benefits. So it's effectively a full integration. With one caveat, though. This business is all about continuous improvement, and so I'm a huge proponent of, again, constantly changing, constantly evolving, constantly pushing ourselves. So while that state of being integrated is true, every single acquisition that we make, every hire that we make, every conversation we have creates an opportunity for us to think about how we continuously improve the business. So we're benefiting as well from these acquisitions in the same way that the acquisitions are benefiting from us. And to me, that's the-

    18. DSDavid Senra1:03:21

        Explain a little bit more about that.

    19. KMKurt MacAlpine1:03:23

        Yeah, 'cause I mean-

    20. DSDavid Senra1:03:23

        How you benefit

    21. KMKurt MacAlpine1:03:23

        ... if I think about, like, if I'm looking at-- Again, if you, if you have a business in this space, the only reason that we should work together is if two things are true: I make you better, and you make me better. If those aren't true, in my opinion, then it becomes a financial transaction, and that's fine, but that's not ultimately the objective that we have in place. So we're looking, what are you doing for clients? How do we benefit from that? What expertise do you bring? How does that expertise translate to better outcomes for clients that we have? Same thing, there's hopefully things that we're doing that benefit you, so it becomes immediately this mutually beneficial, uh, experience. I'll give you an example. So when you grow up in management consulting, right? A lot of the work that you do as a management consultant tends to be, um, high-level strategic work that often skews more confidential in nature. And so you, you tend to do a lot of work, let's just say, in a vacuum to some extent, and then there's an implementation phase. So there's a lot of pros to that. There's a lot of challenges to that around driving adoption. So I'll just, you know, kinda tell you a story, which is I think relevant to how I think about integration. So we're building the company. I need to pick a brand. And you need to pick a brand for the business, that can be an emotional thing for people, right? Entrepreneurs oftentimes will name the business after themselves, right? So, so there's a, there's a--

11. 1:04:43 – 1:12:39

    Giving employees a voice in building the brand

    1. KMKurt MacAlpine1:04:43

       You know, it extends beyond just the name. It actually becomes personal. So there's really kind of a lot of different ways you can handle it, but let's just say two extremes. One extreme is you pick a name and tell people what the name is, right? So call that the fastest pathway to an outcome, but the least collaborative possible way that you can do it. Or the other end of the spectrum would be, how broad can you go? So I'll just tell you exactly how we picked the name of Corient, which I think is a pretty neat story. So I did a town hall across the firm and said, "Look, we're at a point now we're in an integration journey. We need to name the firm. And I have no idea what the name's gonna be. I don't actually care what the name's gonna be. But it's really important to me that everybody here who wants to be involved in the naming of the firm has a voice in ultimately doing so." So I said, "Look, we're gonna hire a third-party firm to help us with this. Our chief marketing officer and I are gonna facilitate a series of focus groups. Anybody who wants to participate in a focus group can put their hand up, and the goal is ultimately taking an infinite list of names and narrowing it down to finalists." So firm was a lot smaller at that point in time. We had, like, seventy-five people participate in these focus groups. So we get all the way down to a list of finalists. We then had a firm mock up the finalist names. I ran a town hall across the, the partner group. My chief marketing officer presented the names. And branding's kinda fascinating, right? Because if you like, you know, uh, a certain type of b-- If you like golf and you have a logo with a golf course behind it, you're more likely to vote for it than if you don't like sailing and you have a logo with sailing behind it. So we mocked everything up under the same brand. I did a partner town hall. We presented it, and I did a live vote, and we named the firm together. And the reason that was important was on day one, every single person who wanted a voice in the process had a voice. It was totally transparent. Everybody knew where we were going. So on day one, when people were calling and telling their clients about the firm, anyone who was here had an opportunity to name the firm and, and be a part of it. So that those little decisions, one, it changes how people think about and embrace change, and I try to take that concept and apply it wherever we can. I think it leads to way better outcomes 'cause you're just getting more people providing input, and people embrace the change better because they can see their input reflected in what- whatever you ultimately decide.

    2. DSDavid Senra1:06:56

       Okay, I love that you just told a story about branding and marketing, 'cause that's one of the things I wanted to talk to you about. I wanna tell you, like, give some background on, like, how I actually found you, which is-

    3. KMKurt MacAlpine1:07:05

       Mm

    4. DSDavid Senra1:07:05

       ... kind of hilarious and a twist of fate.

    5. KMKurt MacAlpine1:07:08

       Yeah.

    6. DSDavid Senra1:07:08

       It involves our mutual friend Rick Gerson. So I get all these, like, inquiries into my website all the time.

    7. KMKurt MacAlpine1:07:13

       Yep.

    8. DSDavid Senra1:07:14

       Obviously, there's huge, uh, demand for corporate speaking.

    9. KMKurt MacAlpine1:07:18

       Yep.

    10. DSDavid Senra1:07:19

        I-- So people always-- I get a bunch of inbound, "Well, will you come speak at this company, X, Y, Z?" And I'm like, "I, I don't do any of this." It's like I- I have a very tight partnership-

    11. KMKurt MacAlpine1:07:27

        Yeah

    12. DSDavid Senra1:07:27

        ... with, you know, my partners. It's like, there's one way to work with me. If you wanna work with me, it's through the podcast, and it's like-

    13. KMKurt MacAlpine1:07:31

        Yeah

    14. DSDavid Senra1:07:31

        ... comprehensive. It's not just ads on the podcast, it's events, it's... So that's the way to do it, right? And so I, I got a few from this company called Corient.

    15. KMKurt MacAlpine1:07:39

        [laughs]

    16. DSDavid Senra1:07:40

        And they, they like, "Hey, we listen to your podcast. We're in Miami too. Would you do this?" And like, you know, I never responded. And then I'm essentially, like, embedded into Michael Dell's merchant bank.

    17. KMKurt MacAlpine1:07:50

        Yep.

    18. DSDavid Senra1:07:51

        And I'm close friends with Greg, Greg Lemkau-

    19. KMKurt MacAlpine1:07:53

        Yep

    20. DSDavid Senra1:07:53

        ... who's one of the co-CEOs. And I fucking love Greg. [laughs]

    21. KMKurt MacAlpine1:07:57

        Yeah.

    22. DSDavid Senra1:07:57

        Like, I just absolutely love him. We hit it off from, from day one. And he sent me... They don't do much media, and so he sent me this interview. He's like, "Hey, check out this interview that me and Byron did," the other co-CEO.

    23. KMKurt MacAlpine1:08:08

        Yep.

    24. DSDavid Senra1:08:09

        "Tell me what you think, because we don't do much media." And it's like, I think it's like CNBC's, like, Wealth... I think the program might be called Wealth or something like that.

    25. KMKurt MacAlpine1:08:17

        Yeah.

    26. DSDavid Senra1:08:17

        And so I'm watching it, and I watch the whole thing, and there's four ad breaks, one sponsor-

    27. KMKurt MacAlpine1:08:22

        Yep

    28. DSDavid Senra1:08:23

        ... the entire time, and it's Corient.

    29. KMKurt MacAlpine1:08:24

        Yep.

    30. DSDavid Senra1:08:25

        And I'm like, "Oh, that's..." Like, it... I was like, "I know that name." I searched my email. I was like, "Oh, this is the same company. That's interesting." So then I'm having breakfast in Miami with our mutual friend, and I had already met you at this time, but I didn't know that.
12. 1:12:39 – 1:19:34

    Building a business that lasts for generations

    1. DSDavid Senra1:12:39

       forever.

    2. KMKurt MacAlpine1:12:39

       Yeah. But it comes back to the theme around conviction, right? So a lot of times, advertising is one of these areas where, at least on a relative basis, you're investing a tremendous amount of capital in advance of any sort of underlying tangible benefit. And I think you're right. It, it is a proven strategy over time, but it depends upon how people are thinking about their business. The reason we have the ambitions we do, the reason we built the business in the way that we have is I think this should be the forever business in ultra high net worth wealth management. So if you, if you think about it as a forever time horizon, you're gonna think about brand building very differently than if there's a temporary-

    3. DSDavid Senra1:13:15

       Exactly

    4. KMKurt MacAlpine1:13:15

       ... kind of lens or a temporary owner to it. And look, in a lot of areas, a lot of industries, financial services in particular, wealth management specifically, there's a lot of temporary owners. So they're thinking about the business In 18 to 36-month increments. They're not thinking about it across generations. And, and if you're thinking about it in that period of time, you're optimizing for a return and an exit. You're not optimizing for a client experience, an employee experience, building a forever brand. And I think that's probably how-

    5. DSDavid Senra1:13:44

       That's the only thing I'm interested in.

    6. KMKurt MacAlpine1:13:45

       Yeah, and how a lot of the... Like, so if you were to kind of segment who you ultimately engage with from your business, it's probably people agnostic of industry that meet those characteristics.

    7. DSDavid Senra1:13:56

       My friend Sam Hinkie has this great line. He's like, "The person with the longest-term view in the room wins."

    8. KMKurt MacAlpine1:14:00

       Yeah.

    9. DSDavid Senra1:14:01

       Because it goes, also goes against human nature. Um, I got one, another question for you. You were in Chicago for the majority of your career, like the last, like-

    10. KMKurt MacAlpine1:14:09

        Uh, mostly New York. So born and raised in Canada.

    11. DSDavid Senra1:14:11

        Okay.

    12. KMKurt MacAlpine1:14:11

        Most of my professional career was in New York, and then I moved to Miami.

    13. DSDavid Senra1:14:15

        I wanna get to Miami.

    14. KMKurt MacAlpine1:14:16

        Sure.

    15. DSDavid Senra1:14:16

        Like, why-

    16. KMKurt MacAlpine1:14:17

        Sure

    17. DSDavid Senra1:14:17

        ... you're so bullish on it. Why you, the headquarters, you're- you have crazy office space-

    18. KMKurt MacAlpine1:14:21

        Yeah

    19. DSDavid Senra1:14:21

        ... that I went to.

    20. KMKurt MacAlpine1:14:22

        Yeah.

    21. DSDavid Senra1:14:23

        Um, why Miami?

    22. KMKurt MacAlpine1:14:25

        It's a great question. So, um, so again, I launched the business... So if you think about the timing, I literally launched the business at the start of COVID.

    23. DSDavid Senra1:14:32

        You said April 2020.

    24. KMKurt MacAlpine1:14:33

        '20. Yeah.

    25. DSDavid Senra1:14:34

        I was like, "Oh, shit." [laughs]

    26. KMKurt MacAlpine1:14:34

        Yeah. So it's, uh... Look, that creates a tremendous amount of challenges, but also a tremendous amount of opportunities because effectively, you know, the world stops. Everything about everybody's normal schedule and agenda halted in March of 2020, and that just gives... So either, you know, do you let that impact you, or do you take advantage of that? So that allowed us to really accelerate the building of the business, starting to have those conversations and laying a great foundation for the company. So as we're building the business, again, Corient is a separate, distinct, independent entity from CI. So I needed a headquarters for the business and but because of how I built the business, I had totally, you know, free reign in terms of where do you ultimately put, put the headquarters. So there was, there was no kind of particular transaction, no corporate historical ties to any one particular area. So if you think about it with a totally clean slate, where do you want the headquarters for the business ultimately to be? I picked Miami. Uh, I picked Miami for a lot of different reasons. I would say one of the things about Miami that really stood out relative, I think it makes Miami unique not only in America but in the rest of the world, is how engaged people are locally around creating positive reinforcements for building a community. So, uh, you know, one of my good friends, one of our good friends, is the mayor or former mayor of Miami, Francis Suarez. Francis was the ultimate ambassador. I don't think that I've ever seen a better ambassador for a city than him. Pers- take personal involvement, create connections, build relationships. So you think about it, there's a decision around where do you want the business to be, and then there's a secondary decision, well, how do you actually establish the business once you've made the decision? And I find a lot of times people will sell the ambition and leave the second part up to the individuals. [laughs] And I think what Francis in particular, and it's true for the Miami ecosystem that he really created under his tenure there as mayor, is it just created this very incredibly welcoming environment. So I chose to, to pick the Miami as the headquarters, uh, moved to Miami myself, and effectively built the business, and it's been absolutely amazing because we're by no means a pioneer of moving to Miami. I picked the headquarters at the end of 2020. But we were a little bit early relative to the flood of movement that's happened on the back of us. So the worry that I had at that point in time was, was there going to be enough local talent to hire as the business continues to grow? I mean, the answer was yes even in its current form when we moved, but it's even more true now given all the great migrations that we've ultimately seen, seen on the back of it. And you know this from your time in Miami. Once you get there and spend time there, it is an... The quality of life is unbelievable as well. So it becomes, again, you build momentum around, around something and continue to reinforce the momentum. And, you know, I think we're still in the early days of, of what we'll see in, uh, see in South Florida. So it's worked out significantly exceeded my expectations, uh, across the board, both in terms of how we've been able to, you know, establish a presence and operate the business, the employee, uh, and the colleague satisfaction in what we've been able to do.

    27. DSDavid Senra1:17:41

        I love how when I asked you, where'd you pick your headquarters, and then how you designed your business, it was the same exact idea. I started from a blank sheet of paper.

    28. KMKurt MacAlpine1:17:48

        You have to. You have to. I mean, look, someti- again, at some point, businesses, y- you end up too far down the path, and it's very, very hard. So you have to push yourself, right? Is, is if you're gonna build something from scratch, how do you avoid pitfalls? You have to learn and study mistakes you've made, mistakes other people have made, just successes you've had, sh- successes other people have had. How do you really kind of draw on the best of it? I mean, it's... We didn't really cover it today, but we talk a lot about the partnership. One of the things with the partnership, when I launched the partnership, the goal that I had set out for ourselves is I wanted the structure and features of the Corient partnership to be better than the structure and features of any partnership that had come before us. And the reason I wanted that to be true was, like, we're building this thing from scratch.

    29. DSDavid Senra1:18:34

        Mm-hmm.

    30. KMKurt MacAlpine1:18:34

        And you, you wanna be able to say, "Look, I've drawn on all of these lessons learned from all these other great partnerships that existed in other industries. How do I take the best of them, improve on the areas that I think are ripe for improvement, and, and really kind of use that as a catalyst?" So not only was it a partnership, when people actually get in and audit the partnership, they're like, "Wow, this is really built in a way that's friendly." And it's done that way because, again, you just become a s- a student of all of the things that have come before you and try to use it to influence your decision-making.

Episode duration: 1:19:34