Back in 1997, an informal group of us at Bankers Trust got together and decided to make some venture capital investments. I could say lots of profound things about how financially savvy we all were (we actually were somewhat), but the real issue was that we were all getting paid way too much and had too much money sloshing around in our bank accounts thanks to the excessive bonus structure we enjoyed in the banking business in the 90’s. So, we masters of the universe thought we could pick venture capital winners with the best of them. My deputy was sort of the leader of the pack and he had made a bundle on one particular early stage investment, so he was sort of playing with the house’s money as they say. He had a cousin who was a smart lawyer who had a big idea in an area none of us had any experience in. We had all seen the movie with Will Smith based on John Guare’s play called Six Degrees of Separation. It laid out a proposition that through social networking we are all connected by no more than six connection points or degrees of separation. It was a radical and very cool concept to most of us. Our friend’s cousin had the idea to create a social network that played on this notion and he chose to call the company Six Degrees. We all put much too much money into the company. I recall that I invested $150,000. With the booming internet economy in those days, the company got bought by a publicly traded internet integrator. We sold it for about 12X, which meant my interest was worth about $1.8 million. Easy money, right? Then the dot bomb hit and given that we were all “locked-up” and unable to sell our shares for a year, we watched as the shares plummeted in value. The fact that my shares were only worth $75,000 when the lock-up ended was, strangely enough, not the biggest bummer of that deal. That came a few years later when a little company called Facebook took off for the moon with what was basically the same idea that Six Degrees had a full seven years before Facebook came into existence. To put a fine point on it, if I had invested $150,000 in Facebook at a stage like I had in Six Degrees, it would be worth over $16 billion today. Woulda, coulda, shoulda.
Kim and I have a running joke that during my career I was always interacting with or coming into contact with people who either became famous or infamous. I was like my own version of a financial Forrest Gump, always stumbling into people of note and finding myself only one degree of separation from greatness of infamy. I spent time on a number of occasions with Donald Trump and his family members, including having been on the dance floor with him at Mar-a-Lago in the days before he went political. I once negotiated with Ivanka on a deal we never signed. The office building I controlled got sold to Jared Kushner, Jared also put me on the New York Observer’s Power 100 back in 2009 (I was #67, surrounded by real estate billionaires….which was a total joke). Kim even sat next to Don Jr. at a dinner we attended.
Back in 2003, when I was moving out of my own venture capital company (which was proving to be a lot harder than those heady days in the late 90’s), I came to a moment when I had to choose between three job opportunities. One of those opportunities that I seriously considered was working for a private equity firm called Apollo, who owned a company called WM Mortgage, based in Woodland Hills, California. WM was the largest originators of subprime mortgages back in the go-go days. I was less interested in the mortgage business, per se, than I was in becoming one of Apollo’s go-to venture managers. I had a great deal of respect for Apollo, which was led by Leon Black (of Drexel fame) and his two loyal ex-Drexel lieutenants Josh Harris and Marc Rowan. WM Mortgage was being teed up for sale within the next 18 months and the job was to get it set up to do just that. The person with the responsibility to find Mr. Wonderful to do that job was Marc Rowan. We had some good meetings and he offered me a very lucrative job to go to California and get it done. When I balked at moving, he agreed to let me commute (paid for by Apollo) bicoastally. You see, he had done just that between NYC and Beverly Hills in his Drexel days. When I chose instead to take the offer from Bear Stearns to be CEO of Bear Stearns Asset Management, I gave him my apologies, but he continued to pursue me for two months after I accepted the Bear job, adding to the offer as he went. I was flattered to be sure, but I was even more impressed by Rowan’s doggedness in going after what he wanted, but I chose to stay the course.
The next time I heard from Marc Rowan was out of the blue in 2012 when he called me unannounced (I still don’t know how or where he got my telephone number). He had read a cover article in the New York Observer (Jared Kushner’s rag that had put me on the Power 100 three years earlier) that pictured me (in a caricature drawing) with Mike Bloomberg, sitting in a massive Ferris Wheel that reached up into the stratosphere. It was the story of my building the New York Wheel. Rowan called me because he remembered me from 2003 and 2009 and wanted to tell me that he was available to me as a resource on building a giant observation wheel since he had done the same thing with the High Roller wheel in Las Vegas that he had inherited when Apollo bought a big piece of the CityCenter Project with Dubai World just as the Great Recession was setting in. He said he had burned a lot of grey cells figuring out how to do it and wanted to be of help to me and that maybe we could work together finally. I thanked him and thought to myself how telling that was about the guy that he would remember me and that he would trouble to call.
More recently (2022), I was hired in an expert witness case to represent Apollo in a lawsuit claim that they were making against some former partners regarding theft of intellectual property. I wrote my report and was kept on a tight budgetary rope by the law firm involved. Then, when it was time for my deposition, all of the budget constraints were removed and the amount of deposition preparation I was put through was impressive. It involved going over to Apollo with its offices overlooking Central Park South. While I was there having lunch with the General Counsel for litigation (that says a lot about the importance the firm puts on litigation skill), Rowan came into the dining room wearing his trademark open collar shirt and sweater. At that time he had risen to be the head of Apollo and was reputed to be worth more than $5 billion personally. He saw us at our table and came right over to say hello, greeting me like we were old friends. He said he had read my 72-page experts report and was impressed by my opinions (another amazing factoid, that such a powerful man would read a detailed report on one piece of firm litigation). He said “go get ‘em” and off he went for his stand-up yoghurt lunch.
Now Marc Rowan looks to be the leading contender for the post of Secretary of the Treasury in the new Trump Administration. He is being hailed as Trump’s best (by far) cabinet choice. The post is the envy of every Wall Street titan and only a few ever achieve it as a crowning glory of their success. If that happens, it will also be a crowning achievement of my one degree of separation life in the fast lane.
P.S. – It was announced today that Scott Bessent is Trump’s choice for Treasury Secretary. I don’t know Bessent, so back to Six Degrees for me……..