Jennifer Prosek – Nailing the Narrative (EP.396)

28:08Navigating, how do I go about brand building and money raising in the Middle East? So navigating is a big part of it because the world has changed. That's one of the macro themes in our portfolio. The Middle East would be one. The democratization of alternatives is another. Credit and where that's going. whether there will be credit issues. I think that's going to be in the next 12 to 24 months, a huge theme. So there are these interesting themes that bubble up every year that a little bit different. Those are some of them. Really curious about the chicken and an egg from your perspective. You talk about the Middle East, you say, well, everyone's going to the Middle East, so we're going to go to the Middle East.

28:45How do you get a sense of where capital is likely to flow? Oh, that's a great question. The cool thing about having the portfolio of clients that we do is at any one time, there's something interesting going on with one of them that's signaling us about the way the market's gonna move. I always say I am blessed to work with the smartest investors in the world, full stop. So I am traveling the hallways of hundreds of these firms and I'm just picking up the signals. It's an amazing job to have. We're seeing trends as they're developing. So at any one of these macro themes, we saw like, ooh, that's coming.

29:24It's sort of like if you're not obsessing right now about how AI is going to destroy your business, you're crazy. You've seen enough of it at this early stage to make some guesses about where this is going and hopefully get in front of some of it. So if you look at those two big pools, say the sovereigns, the Middle East, and then democratization of alts, very different in terms of how you would approach the Middle East or a private wealth manager in the US. So let's start with the Middle East. What have you learned about what's successful for people trying to raise capital in the Middle East?

29:58First of all, a lot of our managers are making five or six trips to the Middle East on a regular basis during the season. It comes down to building relationships. And the Middle East is very relationship oriented. So it's not very different than any other LP in the sense that you need to go and prove that you are a trusted relationship before you're going to get a check. And I think too many people think it's going to be easy and it's not. And one thing that has definitely changed a lot is the math is all that counted in the past. Meaning if you were performing, you didn't even have to really talk to your LPs.

30:37They were writing checks. Now I interview LPs on panels and I ask them for the GPs in the audience, what does it take? And every time they said years of relationship building before they write a check, years. And I do think that in a world that is getting less and less trusted, especially with the technology we're facing, truth and trust is the North Star. How do you build trust to the extent that someone's going to trust you with their capital? So I think the reason it's become hard and you have to take so many trips in the Middle East is you've got to prove this is going to be a relationship.

31:16So that relationship orientation is everything. It's not very different from anywhere else. I just think there's a perception of easy money that's not actually true. And then the Middle East isn't one place, obviously. You have to say, do I align more with Abu Dhabi or Saudi or Qatar? And then you start to unpack, How do you approach it? Every one of these places now has a very serious investment conference where they want the best managers in the world showing up to their investment conferences, which is why we spend so much time there. The investment conferences in the Middle East do draw LPs from the region and GPs into one space to do business, and it can be efficient and effective.

31:57What have you learned about different cultural norms in the process of traveling over and meeting with people and building those relationships? I have learned that we're all human beings. In my first couple of trips to the Middle East years ago, there are certain things, especially as a female, that you felt just sort of uncomfortable, whether it was the dress code or anything else. But I remember having a meeting at actually a big sovereign wealth fund, and we met with the two men in charge. And of course, everyone was dressed in their traditional dress. And I was intimidated, I won't lie. And then I found out that these two guys, they both went to American universities.

32:37And there was some sort of program in the Middle East where American universities would take kids from the Middle East, but they didn't know where they were going till they got on the plane, pretty much. One of them ended up in the University of Indiana, and the other one ended up in New Hampshire. And they were talking about how surprised they were that their roommates were doing XYZ. It was very funny. And it just broke down the humanity in the first five minutes of the meeting, and I realized humanity is relatively the same. Having said that, listen, you have to respect cultural norms. I don't go to Saudi and wear a dress with no sleeves.

33:12That's disrespectful. So I think there's basics that end up happening in different regions. But I would say for the most part, humanity is humanity and relationship building is relationship building. We're going to take a quick break in the action to tell you about SRS Aquium. Want to make sure your M &A processes aren't stuck in the past? Partner with a company that's been defining the future of dealmaking for nearly two decades instead. When it comes to M &A innovation, SRS Aquium has reshaped the way that deals get done, streamlining processes for maximum efficiency and minimum headaches. Professional shareholder representation, online M &A payments, digital stockholder solicitation, SRS Aquium pioneered each and continues to set the bar for game -changing innovation.

34:07So leave the days of disjointed deal management behind and define your future with SRS Aquium, the smartest way to run a deal. Learn more at srsaquium .com. That's S -R -S -A -C -Q -U -I -O -M .com. And now, back to the show. When you go from the large pools of sovereign wealth funds to thinking about a more dispersed private wealth market, what have you seen of the firms that have been successful in raising private capital in this movement of democratization of alts? So the democratization of alts is such a huge deal. And I would say almost none of my clients understand the amount of money and time it will take to do true consumer marketing.

34:59It's consumer marketing. You're trying to get to the FA and then you're trying to influence the consumer, basically. It may be a high net worth consumer, but it's a consumer. So I think institutional marketing, and I don't mean fundraising, I mean our kind of marketing is relatively contained to a small target of people. The democratization of alts is consumer marketing. So I think that there is a massive education process that needs to take place about what it takes to build a consumer brand. And also just the armies of people it takes to sort of hit the retail channel from a sales perspective.

35:36So I think we're early in figuring out who's going to win in the wealth channel, but I do think it requires a whole different game. What are the components of that game for those who have been successful? It's wider marketing. It's paid advertising. It's paid LinkedIn targeting. It's all these things. You look at what a retail asset manager like a Schroeder's or Franklin Templeton does to market to people buying funds, that's what it takes. And if you look at those retail asset managers, They're way ahead of the game, not just in distribution, but in their mindset on what it takes to market. I mean, I can only guess what T.

36:17Rowe Price spends in TV advertising. I see it all the time. So you're talking about a whole different world. And that actually fascinates me because we actually represent a lot of large retail asset managers. There's sort of this arms race going on between, will the retail guys win? Because they're, of course, buying up alternative asset managers because they've got the pipe. They've got the distribution. They've got the marketing. Or will it be the alternative asset managers who are bringing on people and trying to market? It's an interesting arms race going on right now. So when you go from the capital side to the investment side, you mentioned credit as being something that's obviously exploded, AI.

36:57I'm really curious, how do you get up to speed as an organization to help serve those types of trends? Typically speaking, we will have had a few clients in a space that give us all the indication we need to make a big move. I don't know how many years ago, five, six years ago, the majority of our large private equity firms were like, hey, we should launch a private credit division. So it just started to pop up in that way. We had a couple of legacy private credit firms who have been around for 20 years. It just started to come up in almost every conversation we were having with anyone. Should we launch private credit?

37:38We're very lucky that we have a portfolio that is so big and wide that we see these things bubbling up early. And I forget what book it was, but there was some sort of philosophy like shoot bullets and then throw a cannonball at it. You see enough bullets that you know one's going to be a cannonball and you go for it. So we've been lucky enough to work with Eldridge for a long time. So we've understood sports investing for a long time. And then we're lucky enough to work with Arctos, who's really the pioneer in GP stakes in sports investing. So once we had those guys under the hood a couple of years ago, it was obvious to us, we should have a sports means finance practice, which we hired a guy named John Schwartz, who was at the NFL.

38:26He was head of comms, but he had a banking background, perfect hire for us. We're not going to be a sports firm. We're going to be a sports meets finance firm. And that was an early move in a space, but we already saw where the signals were going. How do you go about something like approaching AI? So new technology, not going to be the experts, but it's clearly of interest to what your clients are doing, and therefore they have to figure out how to communicate? So I've been on the board of a AI firm called Signal AI for six years. And I've told all my senior people, we need to be experimenting with tools every single day.

39:06So we're pretty obsessed with making sure that the senior people at our firm are experimenting with new technologies. And we actually, as much as we run a marketing communications firm, we also VC into emerging technology companies, usually in our space. And that's been really helpful to help us stay ahead of the game. We also have some really incredible clients in the AI space, which helps us stay informed. Listen, I'm running a firm, so I'm freaked out about the future. And anyone who isn't is crazy. We've basically been in the hourly billing business our whole lives. And I think hourly billing is a threat if you read anything about AI, law firms, consulting firms, hourly billing businesses that have armies of people doing things that the machines can do.

39:53That's over. So you have to be obsessing about your own business model. And I think what's very cool about the private markets business is it's all run by founder entrepreneurs. I'm a founder entrepreneur. So we actually share together, what are you worried about? How can we help each other? I've learned this, But no one really knows where this thing is going. But I have to say, if I had any advice for anyone, just make sure you're experimenting, reading, and maybe sitting on the boards of some emerging technology companies today. So Jen, I've often described you as an entrepreneur competing in the PR space.

40:29And part of that has been these series of either new initiatives or people to lead them that you bring in over time. You mentioned Deirdre. Maybe that's a good place to start. How do you go from you're a communications firm to there's a well -known TV journalist who then joins you? So I'm obsessed with talent because I feel like I run a talent business. So I'm always in the market meeting people. I stop my day when someone says, gosh, this person's extraordinary. So Deirdre's an interesting story because she came to me through someone I know, and I just thought we'd have a coffee. She's obviously someone you'd want to get to know.

41:14She's been sort of a famous TV anchor for most of her life. I had coffee with her. It was love at first sight. I mean, for both of us. So we just figured out like, we need to do this, but we have no idea what it's going to look like. And then I sort of looked around for the low hanging fruit. Obviously, Deirdre can train anyone to get on stage and is amazing at it. That's low hanging fruit. But what could we do next that is unique? So part of it is hiring people who are also entrepreneurial. The reason Deirdre has been so successful here is because she is entrepreneurial. She isn't someone who joins and says, okay, tell me what to do.

41:51Of course, I had things to do, but she also created some of her own things to do, which there's nothing that gives me more psychic income than co -creating a whole new venture division, whatever, with someone who's actually entrepreneurial. And John Schwartz turned out to be the same way. I met John. I had sports on the brain, but if you ask me, rank order the hires you need to make at this moment, it wasn't that. He was so perfect and so entrepreneurial and so tired of corporate jobs that I'm like, we could build something together. So I love builders. Not all my ideas work, but I'm a fast failure gal.

42:27Like I experiment. If it doesn't work, I just move on to the next one. But I do believe you have to be blowing up the playbook on a regular basis and experimenting to get the really great stuff. I mean, Katie O 'Reilly joined me from Milken. she's building this conference concierge practice with me. It's amazing. It all does start with the one great person. I could have all the ideas in the world. I've got to bring in the person who's going to entrepreneur alongside me and make it come to life. Part of it is reading the tea leaves and seeing what's ahead. Part of it is just stopping your day when you know you've just met someone really special.

43:06And what's great about being a private company is I can just make those moves when it makes sense. I do not hire people often when I need them. I hire them because someone's very special comes across my desk and I'm like, this was not in the budget, but I'm doing it because it's all about the people. What are some of those new experiments that you're thinking about today? Well, interestingly, if you asked me, have I been focused at all on being a female in business? I would say zero. I never even thought about it. I've never had any issues that are large about being a female entrepreneur. It's been all good.

43:46So I empathize with a lot of gals who have not had it that way, but I've had it really good. And in fact, I've loved being uniquely in a business sometimes that there aren't a lot of women. Having said that, if you asked me five years ago, how many female CEOs do you have in the portfolio? I'd be like, five, six. I have 40 now, 40. Women are getting elected into the top seat in a big way in this business. And I have gone out of my way to help the special ones build their profiles because I know it's going to get them ahead, whether it's getting the board seat they want, getting the top job. So I have a whole program called Take the Stage, which I do with females and diverse executives.

44:30But where am I getting to where the business opportunity is? This is the working title. It's a little silly. I can't use it, but there's a girl boss advisory firm right in front of me. And the reason is, if you look at the unbelievable women I work with, Jean Hines at Wellington, Jenny Johnson at Franklin Templeton, Robin Grew at Man Group, and the list goes on. I was one of the first people to take them on stage. These women don't want to go on stage often. They've been in their operating roles or investing. They didn't have to be front -facing. But I just knew, I get you on stage and the world falls in love with you.

45:09You can move hearts and minds. And those women do. And I think it's contributed so much to them discovering their leadership power. I mean, Robin Gru is a great example. she was the GC and COO of Man Group. Such a special talent. I knew it. I knew it years ago. And I'm like, I want to work with you. I want to work with you and show you your power on a stage. And if you've seen Robin Gru, who is now the first global CEO of Man Group, Man Group was founded in the 1700s. She is magic. Anyone who meets her, hears her, is inspired. And that inspirational leadership, you can't put a price tag on it.

45:49That's what every employee wants. They want an inspirational leader. So I think some of these women are really changing the course of time and changing the complexions of their firms. And I'm just really excited about it. So I think there's actually a psychic income in there for me and probably some business income too. What else is on your mind? I love LPs, I realized. Me and my colleagues, we are totally unthreatening to LPs. We don't raise money from them. So I've been trying to figure out how can we work more with LPs? And actually, I was invited to do a workshop at SBAI recently called Take the Stage, which was all about brand building for LPs.

46:31I was wondering, are they going to show up? Do they really care? They do. They care about their personal brands. They've been under fire. A lot of the university endowments have had to face really treacherous media and attacks. There's been just way more of my world and their world coming together. And I'm really interested in exploring building more of those relationships. And there are some very special LPs who are some of my gal pals. I love going on stage with them. They're amazing. I want to do more of that. So listen, it's great for my business to get really close to LPs, even if it's just for Intel.

47:06but I'm really looking forward to exploring more of those relationships for our firm. As you've spent some time writing in your LinkedIn newsletter, I'd love to ask you about some genisms, these catchphrases you create. I'll throw a couple out and have you talk about them. The concept of the minus mindset. The minus mindset, actually, I did not create those words, but I saw them in The Economist. It was an article about how it's very tempting for leaders to add and add and add and add to the plate of your best people. But how about minusing? That concept of the minus mindset, what can I take off your plate that you shouldn't be doing?

47:48I call it best and highest use. Are we dragging you down with so many new projects that you're not doing your best and highest use? I just loved the concept of the minus mindset. What's really terrific about LinkedIn is the analytics. I know when I've written something and it captures the audience. So, you know, when you get 50 ,000 views in three hours, you kind of know you're onto something. Minus mindset's a popular topic that's not talked about a lot in leadership. How about nice or necessary? Oh, that's one of my faves. So I'm often asking my folks, especially in volatile times or bad economic times, I always say to my peeps, look at what you're doing for clients and ask yourself, is it nice or is it necessary?

48:34Because if it's nice, it's going away. It's getting cut out of the budget. If it's necessary, we're going to survive. And I think it's a really important rubric for us to look at our work for clients and always be moving it into the necessary zone. But I always say this also to my moms, my gals who go out on maternity leave. I'm like, here's the good news when you come back. You will separate the nice from the necessary. You will not be spending any time on the nice. If you were gossiping at the water cooler for like half an hour, you're not doing it anywhere. You are doing only the necessary because you're not going to have time.

49:08And frankly, a lot of my gals come back better after having kids because they separate the nice from the necessary and they know how to laser focus into what they need to do, not what all the other noise. Saying no is so hard. People don't say no easily. That nice but necessary mindset makes you say no to the things that really don't count or are time wasters. How about the 51 % rule? Oh, yes. The 51 % rule means if you're in a leadership position and you have a 51 % good day, you are killing it because your job is chief problem solver. I tend to be an optimist and I tend to be a glass half full person.

49:47So that was really about how when you grade your day, if it was only 51 % good, it was actually a great day. And I love this concept about luck moments that every great leader was born with the same amount of luck moments. But the people who hit it out of the park are the people who know they're at a good luck moment and say, okay, tune out the noise. This is my moment. And they max it out. And they also know how to turn a bad luck moment into a good luck moment. So I think having an over 51 % great day is partially in your control because have you turned the back luck moments into good luck moments?

50:25Can you grade the bad things as good things? I like to look at bad things that happen to me and ask myself, was I actually able to learn from that and turn it around? As you look at the last couple of years, as you've rode this growth with your clients and a lot of private markets, what have been some of the more difficult aspects, the other 49 % of running the business? We put a stake in the ground on private markets super early. And I will tell you something, that was hard because we were trying to sell something people just did not want to buy. And actually my entire career, I was trying to sell something people did not want to buy because it was an idea before its time.

51:04So the whole idea for this business was that the only market in financial communications and marketing was on defense when I started my career. It was all about M &A transactions or crisis. Financial services companies didn't believe in the concept of brand at all. So the idea that one day they're going to wake up and care about this stuff was crazy. So I think I spent about seven years knocking on doors with my idea that the world would change and people weren't buying. So I think any entrepreneurial venture, you have to like really stick with your conviction long enough for the weather to change and the stars to align.

51:43Had I given up on those visions easily, this place wouldn't exist. So I would say that I think making your own luck is a really important thing, but I think nothing beats grit, hustle, and hard work in building anything. When you're working on that seven years ahead and you have an organization with you that you have to keep pushing in that way. How have you gone about motivating all the people on your team and keeping them energized when something takes that long to come to fruition? I always ask myself, actually, if I got hit by a bus, what does ProSec lose? One thing is the chief motivation officer.

52:21One of the things that I obsess about is making sure people know what we stand for, where we're going, and how they fit into it. So you would never ask anyone at ProSect, where are you guys trying to go and what are you trying to be? Everyone knows. And that's why they're here. Don't join the firm if you don't want to be on that mission. So there's like a mission that's very clear. I think the other thing that motivates people is that we've created a beautiful cultural bubble that is a beautiful community. So even if the world is really horrible, it's really nice in here. And people are motivated by that.

52:56I think they're also motivated by we are a firm of celebrations and thank you. If you're doing great stuff, you're going to hear from me. That's great. I mean, I sent a note to the guy who cleans our terrace the other day because he was here on Juneteenth on the day off cleaning the terrace because he cared about it. And I'm like, Jose, that's freaking amazing that you cleaned the terrace on a day off. You didn't have to do that, but it shows how invested you are in the place. So when people notice that you've done something well, that is so motivating. I think too many people in business don't understand the power of thank you.

53:35And I think that that's motivating. What are you most excited about for the next couple of years? Oh, my God. So many things. I'm excited about dominating the financial services space and continuing to. I have a joke that my strategy is called proopoly. I want a proopoly. I want it. And it excites me. It excites me that I get to work with the smartest people in the world. I mean, I do. They're tough and rigorous and sometimes not always kind. But the reality is I am motivated by their ideas. I mean, also like if you look at my career, I can't really take credit for the fact that I have a really great financial personal plan.

54:17I have long -term care insurance. I have everything. And I had it early because of my clients. I get to learn every day. And I always say, shame on me. If I run a crappy business or a business with bad margins, shoot me because I get to learn from all these unbelievable people. So I will always be motivated by that. I'm a growth freak. I'm a progress freak. I have to move forward. I'm like a shark. I can't swim back. So I'm motivated that the next five years, I think are going to be really exciting for our business. I think the emerging market of marketing has maybe 10 years left. So that's a growthy 10 years.

54:54and that's exciting. I have another half of my business, by the way, which is just big corporates and I love them too. But since we're on capital allocators, we'll talk about the private markets. All right, Jen, I want to make sure I get a chance to ask you a couple of closing questions. Some of these will be a little bit different. So you mentioned at the onset that when you convene people in a small setting, sometimes just one great relationship they made can change the trajectory of their career. Was there one great relationship that you made early on that changed the trajectory of yours? Oh, yes.

55:26So when I was in my 20s, I end up running this business totally over my skis, but we were like four people. Our clients were terrible. It was not ProSec partners. I had no interest in staying with it. It was small and ugly. And I figured I'm going to go take a job at a big PR firm in New York. I was in my 20s, probably 25 years old. I ended up interviewing at this firm called Fleischman Hillard. I end up in the CEO's office who was like 60. I'm like 25. I'm like, why am I in the CEO's office? They must've been like, who's the whippersnapper with her own thing. But he shuts the door. His name was Jan Van Meter.

56:02He shut the door and he said, look, I'm retiring soon. I have a daughter around your age. You've got the job if you want it. Everybody loves you. He's like, but why don't you put your head down, grow your business and sell it to us one day? Why don't you do that? And I was like blown off my chair. I'm like, literally, I was like, you could do that. My parents were teachers. I didn't have a lot of exposure to business. I kind of left that meeting, like talk about luck moments. I knew I had just gotten the best advice of my life. And that was the day I decided, you know what, I'm going to put my head down and make the ugly small thing as good as it can be incrementally every year and give it a shot.

56:42And I never went back to thank Jan Van Meter. And two years ago, I read that he died. I was devastated because I'm like, I am a you know what, how could I have never gone back to this man? So I called our trade publication and I said, I have to write a story about the generosity of this advice. And I did. And so his family and everyone knew what a standup person that was. But I think about that and I think about what I would be doing if it wasn't for that. So that's how I think about relationships. That one good piece of advice, that one relationship, it can change the course of time. What are the most impactful two or three lessons that you've learned from your clients?

57:26I have learned to be fiscally smart. I have learned to be a great investor. As you know, I have a GP stakes business. Where do you think that came from? So I am really good at knowing somebody's doing something really good and copying it in my own way. I would say I've also learned in the world of founder entrepreneurs, we're all obsessive creatures. We're happy to work 24 seven. I've also got to observe how that can destroy your life. And I do think about the human part of that too. So I get to sort of watch the business and personal experiment of life. Also, you know, I'm in the crisis communications business.

58:04So I deal with people at their lowest moments when they share their deepest, darkest secrets. And I take that super seriously. But of course, as a human being, I learned from that too. What's one fact that most people don't know about you? I have a motorcycle license. That's probably it. I'm first generation American. Yeah. Which two people have had the biggest impact on your professional life? Oddly enough, I never met my mother's mother, my grandmother. She died at 50 of cancer, but I have a picture of her on my desk and she's on a motorcycle with her two little girls in the sidecar in Switzerland.

58:45And this is a woman who had an engineering degree, was a business person, raised two girls on her own, rode a motorcycle. I mean, I wish I met her. I feel like I have the coolest DNA. So I wouldn't say that she obviously made an impact in that tangible way. But knowing that you come from brave stock has actually been motivating to me. The other person, of course, was my first partner in business, Dan Jacobs, who has passed away. I went to work for him out of college because I couldn't get another job. It was a recession. I didn't mean to work for him. I didn't want to work for him. I didn't want to be in a suburb.

59:25I didn't want any part of it. But the reason I ended up with the business is he knew I was going to leave that business when the market turned. And he uncharacteristically, probably when I was 24 or 23, was like, I think you're a great talent. Let's shut down business and open our business. And we became 50 -50 partners. And that's how it started. So for somebody to take a shot on someone that young is just weird. I mean, you look back at it like that's so weird. I mean, granted, but the business was like a nothing. But still, he believed in me. And I think that was really impactful. All right, Jen, last one.

1:00:00What life lesson have you learned that you wish you knew a lot earlier in life? The two most powerful words in business are just ask. I did know that from a young age. Why don't you just ask for what you want? X percent of the time, you just might get it. So I can't say I learned that later in life because I knew it early in life, oddly, but it's been so incredibly important. I think what I would have done differently is I think I would have gone bigger with my talent moves earlier in my career. Talent is everything. I remember reading a book by a guy at Google who hired the first 5 ,000 people.

1:00:36And he said, the difference between an average engineer and a rock star engineer is billions of dollars. And that is true. So I wish I knew that earlier in my career. Well, Jen, thanks so much for sharing your incredible insights on what's happening in the markets. Thank you for caring. Thanks for listening to the show. To learn more, hop on our website at CapitalAllocators .com, where you can join our mailing list, access past shows, learn about our gatherings, and sign up for premium content, including podcast transcripts, my investment portfolio, and a lot more. Have a good one, and see you next time.

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