Michael Levy: Wall Street Is Mercenary. Texas Is Legacy.

There is no doubt that the financial crisis of 2008 had a profound impact on myself. I probably learned more in those couple few years than I learned in a decade prior to that. When you're in these situations, it's important to be calm and not let your emotions get the best of you. I watched the capital markets boycott tobacco, and you know who made a lot of money? The people who stayed invested in the tobacco business. And so what did I learn? Have really good management information systems, really good data, understand, invest in those systems.

Welcome to The Deal Table. I'm Ryan Harper.

I'm Lane Kerik.

And on today's episode, we speak to CEO of Crow Holdings, Michael Levy.

Michael Levy, 50 years in New York City working for Morgan Stanley and other financial services business, uh, migrated to Dallas to become the first non-family member CEO of the iconic Crow Holdings.

Old Parkland is also the headquarters of Crow Holdings, and The Deal Table is filmed in the Pig Room, which is part of Old Parkland.

We talked with Michael about his career at Morgan Stanley and other financial institutions in New York. We talked about what it was like to come in and step into the family business. We talked about the operating divisions, their expansion into oil and gas. So a wide-ranging talk, and we hope you enjoy today's episode.

I know we both appreciate you coming on here and doing this with us.

Well, if there are more things we can do at Ole Park, that'd be helpful. And, you know, we have our own objectives about the campus, and we're trying to build up its intellectual content and its presence in the country. So thank you. And thank you for being part of that.

I can't tell you how many people come down here. I'm from Memphis originally. And I'll have friends that'll come down. And we'll have them over here and have lunch. And they're just gobsmacked when they see this campus and take a tour. It's such a unique place.

I think people underestimate the impact of the physical space on the human spirit. And you can tell. I've worked in the crappiest basement office buildings in Manhattan. And it's just— it's a place where people go to die. And productivity— and this is for big financial institutions, and I've worked in big fancy office buildings with beautiful views that are inspiring, and you know, part of like, it makes, it has an impact on human beings. Like, there's, it impacts relationships, it creates places for people, and not everybody gets that. A lot of people look at real estate as, you know, a cost, you know, or just a place I have to go to.

So this is, this transcends that.

Undoubtedly.

I know for me, like, over the last, I'd say, year and a half, two years, I was like, okay, because I had a membership to Cowboys Club and I'm like, in Frisco, I'm like, this is a cool spot. Frisco is the place to be. I live in Dallas and anecdotally there's aspects of Dallas that are not so nice. And it's like, okay, homelessness is going up, crime is going up. I need to move the business. I need to move. I need to get to Frisco. I took one meeting with Lane and Andy here and I'm like, oh, so Dallas really is still the big cheese.

I think there's certain industries. I think if you're in finance, Broadly, let's just say broadly speaking, it's definitely Dallas and not Frisco and not Plano and not Arlington. It remains Dallas. But if you were, you know, in an IT company, you know, with 50,000 employees around the world, then like, you don't need to be here. You can be up in Frisco and it'll be great, you know? And it'll be perfect for you. So I think it's very industry specific.

You know, that is interesting because like, I never thought about that. I just think in terms of like, Oh my God, I see Old Parkland, it's such a beautiful campus. This is clearly where all the money of everything is here, right here. And maybe I'm just like so poor that I get easily enamored by things like that.

This is easy to be enamored by.

Yeah, but, but it leads me to a question of like, when you're doing transactions, when you're doing real estate, like how does that factor in? Because like I would never even thought about industry-specific when it comes to location?

Um, look, I, I, I think having this very unique, very impactful physical space, if this property was in Virginia, for example, it may not have the same impact, but people do not expect this when they come here at all. And so when they leave, they're going to remember being here. And that's very different. You know, I've been to the world's nicest office buildings in New York and Tokyo and Los Angeles, and they just kind of blend after some period of time, even though you might remember the building. But if you visit Old Parkland and you come here to Dallas, you're never going to forget your visit. And that impact that it has, no matter what business you're in, whether you're in the real estate business or the widget business, or I think it has an impact that's positive for your for your relationships, for your brand, you know, whatever the right word is.

One of the coolest things I would say about this, this campus is, um, and I don't know, invisibility field or, or, or field perception or something is, is everybody drives by it like every day. I mean, we're right beside the tollway. You drive by it every day and it's almost got this SMU feel to it. But like when you ask most people, they're like, they've never heard of what Old Parkland, what is that? And it's just this weird, unique ability to where you're in the middle of Dallas, everybody drives by it all the time, but only a select few actually know what's here, what exists. And again, I know it's industry-specific because if you're a family office or equities or finance, clearly you know. But just the common day person, they just drove by and they're like, yeah, it's SME, right? You know? So it's just an interesting quirk about this complex.

To me, what must have been fascinating is back in 1913 when the original building was built, that they had— that building was built in Dallas in 1913. When you think about that architectural style in this part of the country in 1913. So, and the fact that it still has vision and relevance 112 years later is really fabulous.

Did, just speaking about this campus, did that have an impact on you moving to Texas and joining Crowe?

I don't think it had a direct impact, but I will tell you when I came down here for the first time in 2014, um, I had been coming to Dallas for a long time for business, but I came specifically in 2014 to meet Harlan. And I drove up to the building. I was like, what the, you know, I did not expect this. And so did it have an impact on me? Just like it had an impact on you, just like it's had an impact on you. Sure. It had an impact. And is it nice to go to work every day in a place that's as beautiful as this, and a place that has the network of people that are here every day, and the amenities and rooms like this, yeah, it's fabulous.

It's terrific.

You know, would I have, would I have moved to Dallas specifically to work in Old Parkland with no other considerations? I think it's a broader, I think it was a broader set of considerations.

Like $1 is your salary.

Yeah, maybe not. But it didn't hurt. How about that?

Yeah.

Fair?

Yeah. Yeah.

How tough was that decision, 50 years in New York, and, Is that right? 50 years career on financial services to come into a family office, be the first non-family member to serve as CEO of this iconic family. Does it feel a little overwhelming?

It was difficult until it wasn't, meaning there was a period of time and we talked off and on. So it wasn't like a 3-month, my first meeting. It was a couple years, and so for a period of time, my life there was very established, you know, with grown kids, or kids who were growing up, and deep family, and a career, and a job, so I didn't take it lightly, right? But, you know, I came down with my wife on one of our trips, and we spent a weekend here, and looked at each other and said, "We gotta go do this." And from that moment, it was just, it was super easy, and from the moment I came, came down here, it's been phenomenal. I mean, it's been great. It's been an 8-year love affair.

Yeah.

So on that same vein, we talk about culture and leadership a lot. What is it like coming into an established business like Crowe, uh, 70— well, 77 years now? Do you bring your own leadership, or do you— or in your own culture, or do you need to fit the mold of what's already been here and the legacy that's already been laid ground?

Since I wasn't here for most of those 70-plus years, uh, all I can— I guess I would say with hindsight, um, Harlan and, and the leadership team must have seen in me culturally a great fit. There's no way that they didn't. Uh, there's no way that I would've been invited to be here if they didn't see in me. Did I fully understand that at the time? I couldn't, because even though I had gotten to know the company and the team, you're still an outsider kind of looking in. And so it looks like it's a fit, but you can't really tell. But they knew. That who I was as a person fit the culture of this place. So no, I didn't change myself. The environment around me changed dramatically, but the human that I am and the person that I am and the style that I have and the approach that I take every day hasn't changed since I came here. I didn't change my suit and all of a sudden change my behavior. They just saw a person who fit with this place and this culture, and then when I joined, I just, I've said this before, but my, most important rule, certainly in the beginning of my career and still to this day, is do no harm. Don't do anything to break this incredible storied, you know, American business icon. And, but I think culturally I fit already.

Yeah. 'Cause one of the notes I was writing was like, you know, do you just, when you join an organization like this, do you just, you know, if you just hold on and, and try to steer, or do you just try to nudge?

There were two things in my life. One was my experiences before, primarily at Morgan Stanley, and two was instinct, which was working at a large financial services company. And I had worked for almost 25 years. I started at Prudential Securities. I worked for a little while at Salomon Brothers, and then I spent almost 20 years at Morgan Stanley. I would watch in the middle of night restructurings take place, memos take place. You know, the new, new person comes in, they've got all the bright ideas, they're gonna bring their team, they slash the old people, they come up with a business plan. Then in 2 years they don't succeed and they get turned over and turned over and turned over. And I had been put in those positions in my own career to go in there in 90 days, let's have the business plan and you'll restructure things and move things forward. And I realized how much damage gets done through that kind of behavior. And so I knew when I joined that that would be the last thing that I would focus on. And the first thing that I would focus on is shut my mouth and keep my ears wide open and learn and listen. And you have an organization that's been this successful for 70-plus years, you need to step back and learn and listen. And so I had the luxury and the privilege, uh, to do that for the first year or two because it was a well-run organization. Harlan was running it with Ann Raymond and other people at that point in time. And so I didn't have to step into a broken company. I didn't have to step into a big vacuum or a void, and it gave me the time to listen and to learn.

Where does that come from? Because like, if you come from this, this history of, of, you know, slashing and cutting and changing from the get-go, did somebody like plant a bug in your ears? Like, hey, you're coming to a completely different environment. I just, just pause and listen.

I just knew from my own experience. Okay. My first week on the job in 1994, when I got done with training in investment banking, I walked into the 18th floor of, of, uh, the One New York Plaza for Prudential Securities, and they laid off 25% of the floor in a single day.. And I realized very quickly, okay, that's the way it works here.

Right.

And what you watch is that just creates a mercenary culture. Doesn't mean that the people are bad and incredibly bright, incredibly talented, incredibly capable, but the relationship between the people who work in the organizations and the company itself is one of a mercenary relationship. And that's something that never really appealed to me. My whole career has been about the bonds I've built with the people that I've worked with, fighting the fight and the, the ultimately the love that builds and the friendships that built by working with people. And that always appealed to me. And so I spent my whole career in that environment, but it never appealed to me. That sensibility never appealed to me. And so when I joined, that would never have been what I thought. My first thing was, how do I figure out how the business works, who the people are, what's the history, and build relationships with people?

It's interesting that you put it in terms of like mercenaries, cuz like when I, at least anecdotally, outside looking in, I see what's being built here, what has been built here, I would never ever think mercenary. I would think established, legacy, wealth, stable, patient, concrete, powerful. But like, so it, it goes back to this conversation of New York, Texas, Wall Street, Crow.

There is nothing— look, the world's a big place, right? And the way people do business in in Beijing versus different versus Tokyo versus Sydney, Australia versus— and so, you know, you need to understand culture around the world. But yes, relative to New York and the world I came from, that was a much more transactional business. The nature of the business, yes, the institutional relationships are there and the personal relationships matter, but people move around so much. And so it, for a variety of reasons, creates more of a transactional environment amongst the different institutions. And one, they get so large at some level, it becomes difficult to have an institution, a relationship with an institution that has 100,000 people. The relationships, but that, that person you have a relationship is one of 100,000 people with 6 committees sitting between them and the final decision. And so it's just a different dynamic. And down here, We have much less of that. We have more of it as more of the world's largest companies are coming to Dallas, right? And fewer and fewer private families and other private businesses are making up the mosaic of the financial services, you know, industries that are down here. But it's definitely a different head that.

You bring to the table. You speak about that in a quote from D Magazine interview. You said, "I don't sit around with Harlan and talk about profitability and returns. We talk about doing the right thing." thing. That certainly would appear to be somewhat of a contrast to the Wall Street mentality. Can you give us an example of where that intersection is of profitability and doing the right thing?

Look, I think if you work for a public company, for the most part— I know there are exceptions, so these generalizations are probably too broad— but if you work for a public company, you know the one thing that matters: stock price, right? And therefore you probably know the one thing that matters is earnings that quarter. And you probably know the business at the end of the day is all built around stock price and earnings. And that's the hallowed ground of that institution. If your firm is owned by a private equity firm, you know that IRR clock is the hallowed ground. You know that's what everybody's solving for. You might work for a partnership with lots of different people who— or might be a small partnership, a big partnership, and the culture of that partnership will decide what the the holy grail of the partnership is. You also can work for an individual or family, and their goals and objectives are what's gonna define how that company or that organization is driven by. It is possible that a family or private institution is going to drive you towards a quarterly earnings objective or some other near-term financial metric. And if you don't meet those metrics, you know, not only financially perhaps less better off, but culturally it may be really bad for you. The Harlan McCrow family take a very different approach to the business, and they— I think it's his dad. I wasn't— of course, I never met his dad, but I think it was a very different business model. It was never about the entity, the company, making a certain amount of money. It was entering into formal partnerships and informal partnerships with the people that work with you not for you, the people that work with you in your organization, in aligned structures that if they do well, you do well. And so we have an organization built around that concept of sharing. And so when you look at our senior leadership team and the people in the different roles, they have the entrepreneurial motivation to go out there and create opportunity, right, for themselves and for the company. And so we're just the net beneficiaries of that. And so I don't sit there from the center and say, okay, our earnings target this year is X dollars. I know that we're doing business in a certain way. We can look at what's likely to happen with the resources we have on the table, with the investments that we have teed up, and we'll know generally where things may be going over the next 2 years, but we won't be driving to that overall corporate financial outcome. So we try and make good strategic decisions in areas of secular growth. We try and bring on great human beings who are very capable at what they do. And we put in place aligned economic structures between themselves and the company. And that's something that Triangle put in place 77 years ago. And of course there's been tweaks and changes to the structures over the years, but that prevails to this day. And so no, I don't have to sit there and say, you know, we're not gonna meet profits this year, Harlan, and we got some problems, so we need to do a RIF and lay people off. That never happens. Here.

Right.

So there are multiple operating divisions of the business, and you sit on top as the CEO. There's a multifamily family office. There is Crowe Capital being invested. There is outside capital being invested. There's real estate. There's non-real estate.

Yeah, I think we just confused the listeners more. I can make that a little clearer.

If you want me to.

Please, yeah.

Okay.

Um, if you think about us, just think about us in, in, in 5 ways or 5 silos, for lack of— I think it's 5. Um, and this is not in a particular order, but I'll just do it out of, out of memory. We started as a real estate development company. We actually own still the first building that Trammell built over here on Cole Street.

Wow.

It's really cool. It's a 12-foot-high clear height industrial building. Um, and we have a real estate development company that's spread across the United States, uh, where we build apartment buildings, industrial buildings, and office buildings. And we have a great business and a great team, and it's, it's very established. Um, we have a real estate investment management business. Um, uh, we started in 1998 to raise our first real estate private equity fund that was unrelated to our development business, right? A different group of people who were going to invest in real estate through funds. And that business has grown up and we now have a terrific real estate investment management business that's headquartered here in Dallas, Texas. The third business we're active in is in the oil and gas business. We've started in the past several years an operation out of the Permian. And we're drilling at this time. I have, in my career, while I've been around energy, I've never been hands-on energy. And I went out a couple weeks ago and saw the team frack 3 wells we're working on. I thought that was the coolest thing. But it's— and the oil and gas business is a really interesting business. We could spend a lot of time talking about it from all different angles. We have a community solar development business that right now we're waiting to see what happens with the investment tax credit and all of the various economics behind that industry. But America needs more energy, and we're trying to produce it not only under traditional ways, but under renewable ways where it makes economic sense. And so we have a team that, that executes across that business line. Those are the 4 active operating businesses where our people are in the field, you know, driving outcomes for us. In addition to that, we're an investor and we invest in all sorts of companies. You might think of us as a kind of an in-house private equity firm, for lack of a better word. And so we're engaged in that capacity, but in that capacity, we're not running the businesses, we're investing. Either in people's funds or investing in operating companies where we're taking a minority interest typically. We have a couple where we have a majority interest. But those are really the 5 pieces to Crow Holdings.

How do you allocate your time among those activities?

Well, you try and be strategic about it, but the reality is you spend more time— I think to answer your question as specifically as I can, one, I have areas of my historical experiences or capabilities that bring biases to the table that influence how I spend my time. Sometimes that's positive, sometimes that's not positive. I think all of us go to where the problems are versus where the good things are happening. And so I get pulled, but I spend most of my time in general in a word I'd call business development. How to grow these activities, how to create opportunity, how to allocate resources. You know, if we have ideas, because within each of these businesses there's sub-businesses and sub-activities that take place. Um, in real estate today, you know, data centers are the belle of the ball.

Yeah.

And, uh, so what does that mean for Crowe? And so you think about from a business development perspective, where are you today? Where would you like to be? What will it take for you to get from here to there? It always comes down to people. I mean, the job is always about people. Yeah. It's whether they're clients of ours, partners of ours, um, uh, and most importantly, the people that work here every day. So I spend a lot of time trying to figure that out.

Yeah.

Um, and, uh, during your time at Morgan Stanley, you wore a couple of different hats and, uh, it sounds like you put out fires, uh, as they— at their request. One of those was in the— when real estate melted down in '08, '09, you were, you were brought in to kind of reorganize and tackle that. Did that inform your activities here at Crowe in the back end of the pandemic when real estate hit the fan?

Sure. I mean, you know, one of the nice things growing up and working in these large financial services companies, you do get exposed to a tremendous amount of deal flow and, and things that expand your knowledge base. So yes, I had been around lots of good big things and lots of bad big things, right? But there is no doubt that the financial crisis of 2008 had a profound impact on myself. I probably learned more in those couple few years than I had learned in a decade prior to that, right? And I think those are the types of things, if you have not gone through them— and you've been through them, you've been through a few— you can't explain them. You have to live through them. You have to have the experience, yeah, um, in order to really understand how bad it can get, and therefore what are the things you should be doing when it's not bad to protect yourself, to make sure you never go to that side, and that side is insolvency, right? It's always about getting to the other side. If you're in good businesses, in good markets, America's up and to the right. Maybe it won't be in the future, we can sit here and have that discussion, but America's been up, up and to the right for a really long period of time. And it goes through these dips. And so the issue is just making sure that when it comes down, that you've got the financial wherewithal, the solvency, the liquidity, to get through to the other side. And in the real estate business, it comes down to leverage, it comes down to cross-collateralization. It doesn't come down to a lot more than that. It's not that difficult to get to the other side.

[Speaker] It's funny, because like with the '08 crisis, obviously we're all familiar with like the short sales, not short sales, subprime mortgages. And if you zoom out enough, all those houses that caused so much, and obviously I'm minimizing what happened, all that turmoil, the irony is if they had enough runway, they'd all be the most valuable companies in the world right now. And it's just like, it goes back to what you said, it's just, can you hold on long enough to go through it?

Well, when you lever yourself up 75 or 85 or 95 cents on the dollar and you don't have big liquidity reserves, you know, I mean, it's happened this cycle again. We had a spike in interest rates in early '22. I mean, the office real estate sector, which you can talk about, has had its major challenges, but the entire rest of the real estate sector, right, has basically been fine, very, very good. But there were a handful of folks who just levered their properties up, interest rates spiked, they don't have the reserves in the capital, and they're losing assets just because they're too highly levered and don't have the liquidity to get to the other side. Maybe that's easy for me to say sitting in a position from an institutional perspective, having the financial wherewithal to do that, versus an entrepreneur who's trying to build a business and try to scrape together every dollar of cash so that they can be in this business. So I'm not suggesting that everybody's in this position to be, you know, 45, uh, equity, right? Um, but nonetheless, the answer to getting to the other side in real estate is leverage.

Yeah.

Yeah. My father was a real estate developer. He was a Holiday Inn franchisee, but after he exited that, he became a real estate developer. And I remember he did a development. We lived in Memphis at the time. And the first phase of it went really well. And then he sold the second phase of it. And he was levered. He borrowed money from the bank to do it. And he sold the second phase. And another developer made a lot of money. And I remember asking him, I was young. And I said, Dad, why on earth did you sell? Why— you left all this money on the table. And he said, son, if you're leveraged in real estate, once every 10 years, you're going broke. And he said, I made money on the first development. You're right. Having the ability to have enough equity in the deal to survive is really critical.

It's critical. And then this business being a long business, yes, you need to get to the other side, but then it's also going to be how is your relative track record versus others? And so the starting point is don't ever get caught short and not get to the other side. But when you get to the other side, then you need to look at your book and your performance and compare that to the market because investment partners are going to see how you did and how did you behave during that period of time.

So before we get too far beyond it, we're talking about being a CEO of all these different companies, or not, I mean not companies, but verticals. You know, as a CEO, I've heard you, you have to work on the things that you, that nobody else wants to work on. You have to fix problems. And you were talking about business development, like what, what do you, to, to dovetail into Elaine's earlier question about where do you spend most of your time? Is it business development or is it, or is it just making sure you don't drive off a cliff?

Oh, it's much more business.

Development.

Um, and, and look, sitting any, it has nothing to do with me. Anybody in the seat, when you're the CEO of an organization, you're empowered in the ways that other people aren't. And so when you say, well, you have to do the stuff that nobody else is gonna do, part of it is because that's your job, right? You're empowered to do these things, right? And I think when we have crises going on or big, big things, I'm gonna rush to that, I'm gonna focus on that. But I would say, you know, for this organization, first of all, I've been here 8 years, we've had no crises. Even the past couple years, I mean, we've done incredibly well throughout this whole period of time. We have an incredibly seasoned, capable, talented, You know, there's 600 people who work for organization, right? The last thing they need is Michael Levy to teach them how to teach them, to help them build an apartment building. The last thing they need is Michael Levy to help them work on a complicated situation on a, on a given deal. So my skills, while I may or may not, but I think I have those skills, aren't really needed in those, right? And therefore my time is free. And my time is free to think about the future and how are we gonna get from here to there and how do we build businesses. And it takes years. We're not an M&A shop. We're not a big company that's out gobbling up and buying companies. We have for 75 years always built things organically. We have over 75 years spun off, IPO'd, sold, but we've never M&A'd and brought in a big company here. We've organically built everything. It takes It takes years to organically build businesses, right? You wake up after 3 years and you kind of look at it like either I have a business or I don't have a business. You know, it takes a long time to build these activities. And so I'm very focused on, I'm focused on building and growing capabilities within our existing businesses and or business activities that we're not engaged in. We had been prior to a few years ago, a small investor over the past 70 years in a variety of different ways in the traditional energy or the oil and gas business. But we never owned and ran an oil and gas operating business. And so we started that under the past— probably 2 years ago is when we made that investment. But we made investments prior to that. We had been building up to that for several years. And it'll be 5 to 10 years before that business is a scale business at a level that's meeting our goals and objectives.

And that's what I spend my time on. And, and when you talk about future, what is that, uh, in relation to you? Is that 1 year, 5 years, 10 years? Like what, what vision are you looking at?

It depends upon what I'm doing that day. There are days when I'm focused and you know, on what are we gonna be like in 20 years from now. But I think it's more of a 5 to 10 year window. Yeah. If I, if I said, where am I really focusing my energy and attention, where am I thinking about? I'm thinking about that 5 to 10-year window from today.

And I think for me personally, obviously my business is very small in comparison to anybody else in this room, but it's getting out of the head of looking to tomorrow, looking to next month, and really forecasting into that year's conversation. And I think as smaller guys, we probably struggle with— It's hard. Thinking in those perspectives.

Look, we're all in different seats and we all have, you know, different opportunities. But I think if I was a small entrepreneur building a business, you know, I'm, I'm just focused on getting through the month and getting my payables made.

Yeah.

You know, like getting my receivables in and hiring the next person. Someone just quit. I, I think it's very difficult. You can have a vision and you always should have some vision. Right. But when you're in a large organization, that being said, in my last organization, Quarterly earnings were, you know, that was what we were shooting for. And so like, you'd like to think that, oh, you're thinking 5 or 10 years out. You're not thinking 5 or 10 years out. One, you're an employee and you're a mercenary, right? So when you're a mercenary, how far do you really think out? Right, right. Not that long.

Yeah.

And so the whole institution isn't built around long-term thinking. Right. The Crow family's built around long-term thinking. And there are other families that are, there are so many wonderful families that I've gotten to know in this city, right? Dallas is just a really special place, and there are some great American families that are really focused on doing the right thing in their businesses, maintaining terrific cultures, really focused on the long term. And I'm sure they're in every city in the United States. I have no doubt, you know, from San Francisco to Los Angeles to Detroit to New York, there are great families and private businesses that are really focused on doing the right things, being patient, being very long-term oriented. Um, I just didn't grow up in that environment. And so being in this environment today is just fabulous.

What was that transition like though, going from a quarterly mindset to now 5, 10, 20, 20 years? Was it more just like, hey, I have to pinch myself because now I'm.

On vacation every day? I just— well, unfortunately it's never been like that. I— there was no abrupt— I guess it goes to the point that You know, Harlan and they must have seen something culturally in me that they knew would fit. There was no jarring when I came here. I underwrote the culture and the opportunity pretty well. We had spent a fair amount of time talking, and so we got to know one another. It was refreshing. The biggest feeling I had, and I know we'll move on to other things, was, look, I loved my work. I really loved all the things I did. When I worked for Prenatal Securities, when I worked for Solly, when I worked for Morgan Stanley, like, I had a great career, and I loved with what I did and I learned a lot of things, but when I came to Crowe, I felt like I could remove a straitjacket from me, right? Because ultimately you are a lieutenant for that institution or that organization. You're fitting inside the box, right, that you've been asked to kind of operate within. And so when you, when I came here and you were a private family, remember Morgan Stanley's a bank regulated by the OCC, right? But you're a private family business. Your box is the world. We can do anything we want to do. Harlan and I would talk all the time, still tease him today, why aren't we in the bicycle manufacturing business? We can do anything that we want to do here. And the human liberation and the creativity that comes from that, that was the biggest human impact that I had.

And I still have to this day. It's funny 'cause like— And by the.

Way, that's probably something that you have as an entrepreneur. I know you've made a path and you're doing something, but you have that creative freedom. And having that creative freedom is, at this point in my life, at 50 years old, when I moved down here, like, what a gift to give to myself, to get that freedom, that creative freedom that I didn't have. But I learned technically incredible things working within those environments. So I'm not trying to sell them short at all. I couldn't do what I'm doing now if I didn't go through those experiences.

But boy, have I loved this. There's a, there's a good show, and I know you don't watch TV or anything, but I'll say it's more for anybody else listening that I just came across this past week. It's called SAS Rogue Heroes, and it's about the— it's a BBC show, and it's about the creation of the SAS during World War II. And, and your story reminds me of that show a lot because that the creation of that unit stemmed from, hey, y'all are still in World War I mindsets. 'Just let me out of the box. Let me do my own thing.' And they basically gave this guy, this young lieutenant, young captain, a blank page. Just go over there and wreak havoc. And out of that, he was able to create a brand new regiment and help win the war of World War II for the British. So it, and it kind of pairs nicely with this mercenary and just kind of like, you know, release the dogs of war type mindset. So it's kind of fun.

Oh yeah. So your varied experiences, I think, prepared you really well here. And I suspect aside from the cultural fit that you must have, you were in investment banking, you were in traditional wealth management, traditional securities, you were in real estate. It sounds like from reading your bio that you kept getting dragged back into real estate, that it wasn't necessarily where you were aiming for.

Well, it, It was a little bit of both. You know, when I first started in investment banking, it was 1994 and Wall Street was bailing Main Street out in the REIT IPO wave and they dropped me in the real estate group. But back then, real estate was viewed as a backwater of these large financial institutions. And really like M&A and media and telecom, those were the places to be. So I did, I was like, okay, well, I'm now in this, business and they put me in the real estate group. So I navigated my way out of the real estate group, like 2 years into it. And I went into the M&A group and I hung out with those guys for a while. I was like, eh, not really what I thought. Yeah. And then, uh, I went in the media group and, and that was interesting. But then there were mergers. Uh, I went to Salomon Brothers. It got bought by Smith Barney. It got bought by Citigroup. People changed. And so all of this navigation of my world was taking place around me. And when I looked up after that, I said, you know, what is it that you like?

The people?

Where is— do you have some technical expertise at this point in time? Where do you have some relationships? What do you like to do? And I dragged myself back into, willingly back into real estate at Morgan Stanley. And then I was doing real estate exclusively through 2011 for Morgan Stanley. And then they asked me to take on illiquid alternatives. And so I did that for a couple years.

And then traditional— Was that unwinding of hedge fund assets?

No. Illiquid alternatives, what I meant specifically by that would be venture capital, private equity, private credit, infrastructure, real estate. And so all of that is illiquid alternatives. Pick another word. The firm's word they used at the time was the merchant banking business, which was not the right word. But it was an investment management business focused on illiquid alternatives at that time, specifically around a private credit business, a venture capital business, an infrastructure business, a private equity buyout business, an Asian private equity business, and the real estate business. And all of that made up merchant banking or illiquid alternatives at the firm. And so then I got asked to do a job that was— that cut across all of those different asset classes. Yeah. And then after I was done— I wasn't— you're never done. I did that for a while, and then I was asked to take responsibility for liquid equities and liquid fixed income with a firm called Traditional Asset Management. And so I did that for a while. And then I met Harlan Crow. And then I came back to real estate willingly. Although our company isn't entirely real estate.

Yeah, and you sort of touched and felt all the activities that now take place under Crow at some point. So made you highly qualified for this role. So in any family office, You know, it has a life that extends to the last generation, I guess, of the family.

Well, remember, Harlan's still here.

Harlan's still here.

All right.

Incredibly dynamic guy. Yeah, absolutely. Very, very visible on campus. Yes, sir. Engaged. Yes, sir. I love seeing him in the debate room. And but how do you see the evolution of the Crow Holdings? How does it— you know, I think.

Look, Harlan has been I think he's been brilliant in the way that he's handled this. He was— he had made the decision before I joined. He was the only family member working at Crowe, right? And he is today the only family member at Crowe, right? That the only way for the institution to survive over the next 75 years— just picking another 75 years— was to bring in someone from the outside to lead the organization and to transition it from a family-run to a professionally run organization, right? And so I was part of that. There's been obviously other, we have a fabulous board here that's just outstanding industry professionals. And so that's been in place for quite a number of years. And there's other elements of how this company can continue to be run successfully when the day comes that Harlan's not engaged. Right. And, um, and so we've moved, we have moved to professional management. Um, if, If Harlan was with us right now, he would have this conversation and he would look at me and he says, Michael runs the railroad. And that has all been thoughtful and methodical by him to ensure this company goes on for multiple generations, 'cause I think he's seen lots of families, like we all know the statistics. What's the probability that a family's gonna survive the third generation? What's the probability they're gonna survive the fourth generation?

They're very low.

Like really low. His approach was to, uh, to take it to this level, to develop a board of sound professionals and to continue to keep the family members who aren't working in the business. But how do you continue to keep them close to the business? And that's including them in things that we do. And it's obviously holding various family meetings and family councils and, and including them and having relationships with the people in the family. There is a way to do this.

Yeah. It's interesting you bring that up because like, One of the, the things that my, my group have talked about for a while, for several years, is generational wealth is, is a, is a myth because so many businesses or so many families' second— not second, but third or fourth— lose it all. And, you know, you only have a few of the Vanderbilts or the Crows.

Or whoever's— or the Rothschilds. Yeah, I mean, look, nothing Nothing is forever. But you can, if you love your company and you love what it's doing, you think it's a good place there, you know, there are, there are ways without going public that you can try to maintain. And I also think, you know, we don't access the private capital markets at the company level, but obviously the private capital markets are so huge and liquid now that, you know, you can raise capital in the private markets, you know, for your company if you wanted to grow and do the things that the public markets used to be the only place to do that in. But that's how we're set up, and I'm highly confident. I'm obviously incredibly biased, but I'm highly confident. And we talk about it a lot. It's the proverbial beer truck. If the beer truck comes by and takes me out tomorrow, you know, how are we set up?

Oh, it's a beer truck that takes you out? It's a beer truck. I always thought it was the bus.

Well, hopefully it pours on you. So one thing about the '08 crisis, because I know when we were preparing for this, that, you know, there's also, there's obviously a lot of adversity, a lot of turmoil, but there's gotta be a lot of pride about navigating through that. What are some lessons that you learned from that, that you maybe apply to today?

Look, the, for me, I'll just respond to your questions and the words you use. The pride comes from the people that I fought the fight with, right? That, that we, we worked together to rise the phoenix from the ashes. That team of people, those, those guys and gals that we, we did it that was just the relationship and the bonding working. That, like, when I think about the pride, it wasn't some anything beyond that, but it was really cool to go through that experience with these people. The other thing that was important is given the job I had prior to the downturn, I was not responsible for the decisions made that led to the failure of the, the firm and those funds. And so I didn't have the emotional baggage that I had just pounded. You were an investor and 2 years ago I pounded the table with you. Invest $500 million with us and we'll give you great returns, and within 2 years I'm coming back to you saying you've just lit a match to most of your money, right? It's very difficult to be that person, but because I didn't have that history, it was easier for me emotionally to step into these very difficult, very human, very disappointed multi-billion-dollar losses And so that's the first thing I need. What did I learn? First is, because I didn't have the emotional context, I could be technical and clinical about it, right? And when you're in these situations, it's important to be calm and not let your emotions get the best of you. Um, and then I also really learned that having good information, good data, understanding where things are— it had— the business had grown so quickly and the management information systems were so poor that when it blew up, nobody really knew what was there. It was a pile of spaghetti. And you literally, in the middle of the crisis, are trying to figure out what's your exposures. This is real estate. These aren't securities. It talks back to you. You have needs or forward commitments. Understanding the financial analysis of a given investment while the markets are gyrating around it, you've got to be on top of all that information at any given point in time. And the management information systems that were built weren't built strong enough. The business grew from $10 billion to $95 billion of AUM in something like 7 years, right? And so the firm didn't build the infrastructure to understand what it had. And so the first thing was like, okay, what do we have here? And it took us months to figure that out. And so what did I learn? Have really good management information systems, really good data, understand, invest in those systems. Teams. That was really important. The second thing was it was getting to the other side. There were really good assets. I mean, we're talking about tens of billions of dollars of assets that ultimately were handed back, literally handed back to.

The lenders.

Um, almost all of it was good real estate. It just was 85% levered. And if the team had gone into it— the third thing is alignment. You know, the people that had made those investments were using other people's money and didn't make any substantial investments themselves. It was nothing but upside. It was nothing but the promote. And while the institution had sizable co-investment off the balance sheet of the institution, the individuals didn't. And so you didn't have pure alignment. When the people were sitting there underwriting the deals, they weren't thinking about it necessarily, I don't think, I mean, as an LP would. And so alignment, leverage, good data and information, bring a cool head to the table. There are probably 3 or 4 other things, but I mean, isn't that meat and potatoes? Like, is there anything I said? There's, there's nothing that I said that's.

Particularly unique or insightful. Yes and no. 'Cause there's, there's, there's things that I'm working on in my business, or not, maybe not my business, but my personal character of, of the value of, I mean, I, I, I feel like I am even keeled or even level-headed most of the time. But there's sometimes that I do get angrier, and I'm, I'm never like visibly angry, but the, the pure savages in business that I know personally, there's never a rise. They're just like, yeah, that happens, you know? And you're just like, how did you get to that point? And then when you zoom out, I can only assume it's because they've gone through far worse, you know?

I, I— there's no doubt that the experience has shaped me and But that being said, it was very clear in January of 2022 that something was wildly wrong, that no matter what Jay Powell said in December of '21, he was completely wrong. And you watched the interest rates spike and I had PTSD. There is no doubt that what I saw in January, February '22, I was like, "Oh my goodness, are we— this is different than the last time around, but I don't know what this is going to lead to." So you talk about emotions and being calm. It took me a couple months. It was kind of like until March, probably April of '22, before I just— the PTSD started to come down. So we're all affected by our emotions.

Can't help it. Yeah. '08, '09 was really challenging for me. I was running a wealth management firm out of Memphis, Tennessee, and we had our clients' capital allocated, including to hedge funds and other private equity deals in New York. Managers were suspending and gating. I'd meet with the managers in New York. They were in a panic. They didn't know how things were going to fall out. You learned that Madoff had gone under. And I went to New York to meet with people that were far upstream from me looking for comfort and the confidence that they understood what was going on. And I came home going, they don't know anymore. Than I do. And I've got clients asking me, how's this going to play out? I really like your comment that America has thus far always been up and to the right. And so, you know, that's fundamentally the position to take then is we will get through this. But I had 300 family office clients, and it's very difficult to hold that many hands. So, I was allocating their capital. They were suffering losses. None of them were suffering losses that changed their lives, but you lose 20%, 25% in a portfolio, it's really bad. And I'm the guy standing at the gate. So I had PTSD from that.

Well, you just raised a point. And as you're thinking about insights from people older and been through this stuff, this point of communication. So we as a firm at that time were melting down. This has kind of started in earnest. October, November of '08, it's like people are leaving, jumping ship, getting fired, and communication back to our investor clients just fell off a cliff. And we did a terrible job. We did the best that we could, okay? But in hindsight, we did a terrible job of communicating, and you just walked through the dynamic of it. People at all levels just didn't know, right? The impact, what was going to happen, where was the bottom going to be, when was the end? What can I underwrite? What can I count on? And then people were also losing their jobs. And so Joe or Mary, who you had known for all those years, is gone, and you don't have that trusted person to speak to. So people lost confidence in the whole system. Looking back with hindsight, we could have done so much of a better job on communicating.

So much of, so much of a better job. Yeah. One of, just because we're talking about it at length right now, one of my favorite movies is called Margin Call. I don't know if you've seen that. I know you're not much of a traditional media, and I hate to be the guy that keeps bringing up shows. The whole show, the whole movie is about like a 24-hour period of this analyst realizing that, oh, we have a significant problem in the mortgages. And then they call this midnight meeting, and then they're the next morning, you know, opening trading bell, they unload their all their positions. And it's just a 24-hour period where actually it's less than a 24-hour period. But it's just a fascinating movie, and I would love to get insights on what it was like when people on Wall Street realized what was going on, or if it was that quick.

Everybody has a story. I mean, we, our building was one block from Lehman Brothers headquarters, and Lehman Brothers was the firm that, they went down, right? The Fed didn't bail them out. And literally I had friends who were going into the office, and an hour later they're walking out with a box full of 20 years of their lives with stock that was worthless that they had not sold. Like, everybody has a story who went through it at that period of time, you know? Everybody. There's no way. It's like living through 9/11. Like, no matter where you were on the island of Manhattan, you have a story about 9/11. About the global financial crisis, if you worked in the financial services industries for one of these firms that was involved in this stuff, I assure you, you have a story.

Yeah, it was interesting is it comes down to perspective because like in the '08-'09, I mean, at 28, 29 years old, I'm not a kid, but I'm also not like an established adult adult. Um, but I'm wanting financial services. I just knew, hey, economy's kind of doing bad. And it wasn't until years later when you started having, uh, movies like The Big Short or Margin Call come out and you're like, oh, so that was what was going on. So I think most people had no.

Clue what was going on. Well, there was, it was jaw-dropping fear. I mean, you know, you can point to the events that bailed us, if it wasn't for Paulson and that TARP program, it wasn't the volume of money, right? It was the willingness to say, "I'm gonna use the bazooka," and, you know, and forcing the banks to take the initial TARP. That was the, the market was like, "Oh, the US federal government is going to bail out." 'Cause once the federal government let Lehman Brothers go under, I mean, Morgan Stanley and Goldman Sachs were a day or two from being bankrupt themselves, literally. And so if that had happened, nobody understood, and it was the government that put the backstop, and then it was China ultimately that bailed us out. The liquidity from China bailed out the US capital markets ultimately, because they brought non-government, non-US government money into the system, and they became the marginal buyer of great assets. And then the system started recoiling. But there was a couple months in there. That it just was jaw-dropping fear.

Yeah, the only thing I really remember other than traditional media now is like Jim Cramer yelling at the end, the.

What are you doing? Well, he yells every day.

He's an entertainer. He's an entertainer. Yeah, a lot of people like him. They're interesting entertainers. Yeah, whether you're gonna make money listening.

To them is another question. So I'm interested that you, that, that you've gotten into the oil and gas business. That's not something that's historically part of the, uh, of this family.

Um, not in a direct sense.

Yeah.

Yeah. So then it sort of begs the question of what else, right? Is it bicycle factories or, uh, you know, do you, do you feel like you have this wide playing field?

I— look, we made a decision 5 years ago that we wanted to, because, you know, we are real estate, right? And you look at what we do, that's who we are and what we do. And, uh, but coming out of— you think the global financial crisis of '08 was difficult? The '88-'89 period for the Crowe family was incredibly difficult. And so they started investing in the '90s in things other than real estate. Yeah. But still the core businesses were real estate. And so we were looking for something to diversify us in addition to real estate. What could we do as an operating business where we provided opportunity for people, right? That's the key thing. My job is to create a certain profit. My job is to create opportunity for the people that work here. And given the structures we have, that means we create opportunity for ourselves. Yeah. And so the question was, what business or businesses could we be in, right? That makes sense for us to provide opportunity for people, right? And could diversify away from real estate. And so the correlation between real estate and energy is not very high. First point. Second point, we are in Dallas, Texas. It is the en— you know, energy capital, maybe Houston is, but nonetheless, it's an energy capital intensive city.

Yep.

And so we looked at secular trends and it was very clear the demand for energy was going up. And I know if you read in any given day now, they talk about data centers and other needs for energy, but it was clear 5 years ago that the energy curve was going to escalate. And you could tell that it couldn't be met just by renewables. No matter what was taking place, you knew that the volume of renewables— and so we were looking at different ways to invest in energy. And I don't want to bore you with details, unless that's the point. And then it became very clear that the capital markets were going to boycott oil and gas for non-economic reasons. And I had seen this in my career once before, which was the tobacco industry. I watched the capital markets boycott tobacco. And you know who made a lot of money? The people who stayed invested in the tobacco business, right? And so I said, when an entire industry is being boycotted for non-economic reasons, there's less of a supply of capital going into that business. I want to be in that business. And so you watch the big private equity firms, you watch the large, the folks like Exxon and others go from reinvesting back in the business to dividend out to shareholders. And you're like, okay, demand and supply. So we have this demand for oil and gas, and yet the supply of capital is diminishing for non-economic reasons. I want to be in that business. And so, and that's playing out as we see it live. And obviously by being in Dallas, Texas, we have great relationships and access and people and networks. If we were in New York versus being in Dallas, it would've been a lot more difficult to build this business. Yeah. Being here was a competitive advantage. Being in Old Parkland with the people that are here is a competitive advantage.

When you say non-economic, are you referring to like, just like the whole cancel.

Culture or just— ESG. ESG. Okay. Climate change. You know that. Okay. And I'm not taking a position here. I'm just stating a fact, right? There is millions of people all over the world who are definitely focused on diminishing the supply of capital into the oil and gas industry for reasons that are unrelated to the capital markets or economic return. They're focused on that because they want to drive down carbon in the atmosphere, right? That's their motivation for doing it. And that's why the capital's leaving. Not all the reason, but that's— and so I saw that as a non-economic reason for capital boycotting a sector. And you just look at demand and supply, and that's played out. I mean, the large private equity firms are largely gone. Even the dedicated oil and gas private equity firms are a shadow of their former selves in terms of scale. So capital is no longer a commodity, and therefore returns on capital have gone way up.

Yeah. How do you balance the risk-reward on that? Because like, if, if, if, everyone is out, obviously there's a huge opportunity there, but in that also increase the risk.

Or— Less of the supply. The risk to me, is there a demand for oil and gas and will that demand grow? Absolutely. Well, I don't know if there are people— I'm just saying. Right. So that's demand for oil and gas. And the supply of that ultimately is a function. Now it's a global issue. I know the United States doesn't control. But ultimately, if we're going to retard the amount of CapEx globally that we're putting into the exploitation of oil and gas for these reasons, we're ultimately going to diminish the amount of supply on a relative basis. And so that demand and supply— and this conversation gets very tricky very fast because they're very small movements in demand and very small movements in supply that have a profound impact on pricing. But nonetheless, in general, you've seen a diminishment of supply of capital globally. And you can see it in every metric. And so fundamentally, I don't view that as more risk. Are we absorbing the risk of the oil and gas business?

Yes.

Is it very risky? It's risky. Remember, Rooter's a real estate developer. And so there's a lot of things we're comfortable with around here that perhaps others wouldn't be comfortable. We're also not a quarterly earnings shop, right? And we're very long-term focused. In the way that we look at it and go back to, to real estate. What is it that takes real estate down? It's leverage. What is it that takes oil and gas companies down? It's leverage, right? So watch your leverage and try and find the best people to find the opportunity and take advantage of these returns. I mean, you're talking about unlevered returns looking at these opportunities, you know, 15 to 30% going in returns in the asset class.

Wow. So you referenced the impact of being at Old Parkland and having the network of people here that are moving capital around in the markets who presumably are helping to source opportunities for you in that space. How much of that happens? How much of what's happening with Crowe and your operating businesses touches and feels the people in this community?

It's more indirect than direct because it, it Sometimes it's direct. Sometimes you're doing business directly with somebody in the community, but it's, you're trying to diligence a situation. You're trying to diligence people. You're, you're talking to a friend of yours who spent 30 years in the oil and gas business on campus, who's been wildly successful.

Right.

And you say, hey, I'm thinking about making an investment with these guys over here. And he is like, oh yeah, we backed them for 10 years and they're great people. And let me tell you about 'em. And that type of diligence, right? Or I have a problem. And I don't know who to call. Yeah. You know, hey, look, you know, you should call Joe.

Yeah.

He's, he's been doing this. He's a great friend of mine. That trust that's been built up. And Dallas is a small, big city. And so, yeah, one of the things about being a small, big city, if you, if you don't treat people well, if you screw people over in this town, right, you're very quickly not gonna have opportunity to you. And so the ability to use that network to help you diligence, Good, honorable people, right? Markets change, bad things happen, but good people who do what they say they're gonna do and are good and capable of what they do. That's what I'd say the community and the network helps us more than, you know, they showed us this specific deal. Now, have that being said, you know, the business we're specifically in is definitely a function of the people in our network who are helping us on things like diligence and references and people. Who knew somebody who knew somebody who had this opportunity that came our way. And so the network is very important for us in accessing opportunity.

Yeah. Tell me about the expansion of.

Old Parkland. Oh, well, nobody outside of Dallas is gonna know what we're talking about here. So we have just completed construction, or we are completing construction on a 285,000 square foot foot expansion, um, that will be fully completed by August.

Okay.

Tenants will begin to move in, begin to move in in February. Uh, I think that it will begin to get a vibe, you know, this summer. It will have a fabulous restaurant and bar concept that will be phenomenal. It will have a gym that is so much better than our gym here. And, uh, if you go over and visit the building, it's, it's this.

Yeah.

It's just 10 years newer. But it is this design, this architecture, this theme, this tenancy, right? It's this tenancy. There are people from this side of the campus who are expanding and taking additional space. Dallas is a sucking sound of commerce. You know, there are people coming to town. And so we've created, yeah. You know, we've created opportunity and as the years go by, we'll continue to grow the campus.

Yeah. It's funny you say people outside of Dallas won't know what we're talking about, but when I talk to people around the country and I reference Old Parkland, there seems to be, within certain communities, a great awareness of the Old Parkland community.

So, just spend a minute on it, and I'm not trying to advertise here, but one of the things about Old Parkland, like, you can, you can work in beautiful real estate, right? You could work, you could have all the attributes that this place has, the location, the architecture, you could even have the network or the tenancy, But what this place has that I think very, very few places in America have is the delivery of intellectual content to the old Parkland community, whether it's speakers or debates or civil discourse. And since you're here, you know the caliber, right, of people that come here, whether it's politics or sports or science or business or healthcare, right, that come here from around the world to speak and that you have access to it by being part of this community. Right.

That's what makes Old Parkland work. It's really remarkable. I just think back on the people I've heard in the debate chamber. And how is that organized?

Who runs that? We have a team. Look, Old Parkland was Harlan's gut instinct, right? This part of town was just kind of recovering from, you know, it's early 2000s. It's still a scrappy part of town up here in Oakland, and this site was slated for demolishment, right? And they were going to build apartment buildings, right? And he saw this physical building that he had seen probably his whole life, and he said, nope, I'm gonna actually buy that building and I'm gonna make that my office building, right? Just the main building at Old Main. Yeah. And that's just out of his gut. And he didn't know exactly what he'd do with the rest of the land, but what led from his building through his gut over these years Yeah. Was just, well, I'll build another building, I'll build another building. And he kind of navigated his way through creating this campus. He simultaneously navigated his way through this, the speakers and the debates and the intellectual content. Right. Now that's blossomed out into, we have a full team, right? Yeah. We have a team focused on programming. We have a team focused on execution. We're expanding the campus materially with this additional 285,000 feet. We have a really cool theater that we're building over there. We'll have more speakers, we'll have more debates. So, uh, we'll, we'll just continue to add more resources to that as time demands.

I have a daughter who's an art history graduate from Tulane, um, and she came to see Old Parkland while she was here in town, and she was just astounded. She said, I can't believe you work in an environment with this art and architecture. Um, it really is remarkable.

One of the things that's difficult for me or for anyone here, is when you walk the campus, we don't do a good job of describing anything, right? You kind of have to look at something, you guess. You might see a little name, okay, 1832, but you really have no idea. And you don't know, is it important, is it not important? And, um, of course we have a database and we can track it, and we have an art curator, and Harlan's got a gut around a lot of these things, but we're working on, we've actually worked on and are implementing an app, uh, that will allow you through GPS positioning to go into a given room and it will just highlight what the things are. Oh, wow. So maybe on your daughter's next trip, we could actually give her more than, well, what's that? And we could give her something that would say, oh, that is, you know, by XYZ artist.

Really cool. Earlier you were talking about the networking aspect of this location of Old Parkland. And I mean, even just at lunch, you go to the lunch in the canteen, it's just like you throw a stone and there's something that could positively impact your life. Or you're talking about the speaker series. I had the honor of going to the Kennedy withdrawal speaker when he came in and talked about his book and just the 100 or so people that were in there watching. It's like everybody in the room is somebody I would love to have lunch with and have an extended conversation with. So it's just amazing the pool of talent that's just here on location at all times.

Well, glad to have you here with us.

Yeah, I love it.

It's a pleasure. So New York, maybe as we head towards wrapping up, I thought about you this this week because I saw that it'll now cost you $9 to drive into Midtown Manhattan.

Yeah, just one more cost.

So as a capitalist, do you think that'll work? Do you think it's going to reduce traffic congestion in New York City? Do you care?

I think it'll have a very marginal— I'm not a traffic expert, right? You know, at the margin, will it impact somebody? You know, yeah, at the margin it will impact somebody. Will it raise a few shekels for— excuse me, a few dollars for the city of New York? Yeah. Will it offset the massive loss in subway and train ridership since COVID and the Fridays?

No.

What else are they going to do? Are they going to continue to add more taxes into the people that live there? But they've been able to do it. And notwithstanding the general outflow and outmigration, you go to New York and you speak to your friends like, New York is back and it's great and it's vibrant. And so from a political perspective, I don't think the politicians in New York are really suffering the angst of, you know, this city's gonna really continue to lose people if we continue to drive up the cost of living here, because the apartments are full and people are living there and businesses are doing business there.

Yeah, it's expensive. One social feedback I've seen is a lot of the labor class that would come, that commute into work and work at the restaurants and work at the service industry, they're the ones that are outraged.

Look, that's happening, forget New York, I mean, the cost of living in some markets has gotten to a point that the people who actually provide the services to allow have to commute so far and the quality of their lives is so diminished. This is a major issue. We just saw this past week in the ski industry at Park City, the ski patrol boycotted or just went on strike and shut down the mountain effectively 'cause they can't afford to live there, right? And so, but every city, you know, every major city in America is dealing with this at one level or not. And some of them are doing a good job of driving costs down through taxes and managing fiscally, and some are not doing a good job. And I think New York, I'm not in the middle of their budget, I'm not involved with their politics, but I don't think they're trying to appeal to the low-tax sentiment that, actually, you saw in the Wall Street Journal today, something like, 17 states either reduced or eliminated taxes this year. It was just in the journal this morning. So interesting. New York has not gone in that direction. I'd like them to. It'd be great. I think it'd be good for New York.

I, I love New York. I haven't been there since, uh, pre-COVID, but, you know, I, I, I love going there. I want to be able to go back there more, but I just haven't had opportunity or a reason to lately.

What I would— on, on New York, And you were asking me earlier about differences. Here's the one thing I'd say to you that New York has in the world of finance. It would probably, it's probably similar in the world of art. It's probably similar, maybe not music as much, but in the world of finance, there's no place in America, there's probably no place in the world that has the dynamism, the innovation, the energy, and the intersection of people in this industry like the city of New York. And so when I go to New York and spend time, and we have an office there and I spend a fair amount of time, You know, I come away from a day of being in New York and the amount of ideas that have come to me and the conversations I've had, it would take me 2 weeks to have that same level of interaction here that I have there. And so that's a huge benefit that it has. And I also think there are certain industries. If you were going to start out as a musician, you're going to go to Nashville, LA, or New York. If you're going to start out as an actor, you're going to start at LA. In LA or New York. If you're going to start out in finance and you really— I mean, people start in finance all over the country, but I even advise the young kids who work for us. I was like, listen, I'm thrilled you're here. It's great. But that remains the epicenter of this industry. And if you want to get the most chops, the most reps, the most experience, the most deal flow, that's the place you're going to get it in still to this day. And maybe over the next 30 years, Dallas will I love Dallas and we can all be Dallas Bulls together and we can sit in a room and talk about over the next 30 years and maybe it will displace New York as the financial capital of the country. And it certainly is possible. And if you look at trends, that just statistically you could see that happening. But today that's not the case.

Well, going back to your analogy of mercenaries, like you're going to, there's a lot to be learned when you're under fire all the time versus just being on the mountaintop. Yeah.

You know, it honed your skills.

Yeah.

It honed your skills. No doubt about it.

Yeah.

So one of the questions I love to ask people is books. Like as far as like whether you're a CEO or up and coming or established, what books do you recommend for business?

I can just, I can just tell you what I'm reading. You know, I'm reading Daniel Yergin's The Prize, which is the history of oil and gas. It's a nice 900-page book, won the Pulitzer Prize, an amazing book. I'm probably 300 pages into that right now. So I'm reading that right now. I'm reading a textbook on data centers. We have a data center business and projects, and I'm technically not as deep in it as I want, so it's a textbook around the industry that I'm reading right now. I just finished James Michener's, this is not a business book, The Source. It doesn't matter, I'm just telling you stuff I read. And I work really hard to make the time to read. You know, look, it's one thing to read War and Peace, and it's another thing to read a 100-page simple book. But I try to read 20 books a year, you know, in total. I can't say that there's any one business book that has had a profound impact on my life. There was a leadership book that I read like 20 years ago called The Radical Leap. Written by this guy named Steve Barber. And LEAP was an acronym that stood for Love, Energy, Audacity, and Proof. Like, look, you know all these self-help books. Oh, here are the 7 rules, or the 3 rules, or the 9 rules, and everybody— And when I read most of those books, or I listen to them on the podcast, you know, my eyes start rolling. I'm like, great, okay, you know. And maybe it's 'cause I'm older now, and when I was younger, my eyes wouldn't roll. I would hang on the edge, you know. Remember Stephen Covey's 7 Habits of Highly Successful People? People. If I could just follow those habits. And then you realize it's not that easy. But this book, Radical Leap, it called to me. And I think the book is also.

Consistent with this culture. I have a book to put on your list, especially for the data center adjacent, it's called Chip Wars. I've read that book.

Oh yeah?

Yeah, just before, yeah, I just finished it.

It's a great book. Yeah, it's a great book.

Love that. Yeah. Lane, it's basically about why chips are.

Being— History of the semiconductor business.

Yeah, yeah, yeah.

And why they wind up in Taiwan.

Yeah, yeah, which is fascinating because like, to summarize, is basically Taiwan was like, they saw what happened in Vietnam. They're like, yeah, United States is not going to do that again. So how do we make us not be victim to China?

Well, I mean, we made ourselves another victim again, right? We're so dependent upon Taiwan. And you may have seen this morning one of their underwater cables between them.

And China was cut.

Oh, I did not see that. Someone's making it clear to them they're at risk. So, you know, we have a tremendous risk in our economy. Yeah.

That obviously are coming. I'm glad that you've read that book. Yeah, that's a great book. For data centers, yeah. Yeah, yeah, great book.

Lane? Oh gosh, Michael, thank you so much for being on the Deal Table in the Pig Room. I'm not sure if we're the host or you're the host since we're playing on your field here. You're the host, yeah. But we value your time, we thank you. When I first arrived here in Dallas in 2019, our friend Andy introduced us and you were very gracious and met with me and gave me some ideas and some thoughts. And so I'm forever appreciative of your generous spirit. Great to see you doing your thing, man. Yeah, it's great to connect with you and appreciate you sharing your time with us.

Yeah, I've enjoyed this as well. You know, just, you know, we got to learn a little bit more about old Parkland, learn about— again, I'm just fascinated about this whole mercenary New York.

And then just like— You know, the word, I'll just finish with it. That word is an ugly, it can be perceived as an ugly word, okay? And I'm obviously, I'm not trying to paint an ugly picture. I worked with some awesome human beings, like honorable, loyal, tremendous people. But I still, the relationship between the people that work and the company itself is an annual economic relationship with very little other strings holding it together. And that's just very different than what— and it's very transactional. This is a relationship-based market, right? And even the larger companies in the market, the people here are relationship-based. And so when their New York colleagues come down, you, you, you see that difference. And there is a difference. And, and I know in the way people here want to do business, they want to do business with people based on relationships with people. And when the big large financial institutions come by, you recognize that you may need to do business and you are doing business with them, but it's different.

Yeah, and I appreciate the disclaimer. I, I didn't take it as— okay.

I just don't want it to be.

Misinterpreted, but I, I can understand in this day and age how it could be. But like, I didn't— but I do understand the, the transactional versus relationship because, because I've, I've known people that have new— new to Dallas from New York, and they're like Oh, so what do you do? How can you help me in my career? And people are like, whoa, whoa. So get to know, buy me a drink first, you know?

So on that point, my, my wife, we've been together since we're 23, um, my whole career in New York. So whatever that was, from '94 to 2016, right? Um, she can count on one hand the number of times that I asked her to go to dinner, right? Literally on one hand related to the business. So you come, I come down to Dallas and everyone I meet, right? Literally from a business perspective, very early discussion is, hey, why don't we get the, the, the families together and why don't we go to dinner? And it, my wife in the beginning, she's like, they don't want to go to dinner with me. They're not really into, they're just being nice, Michael, you're new to town. They're being, I was like, no, they actually want to get to know me. And you know, by getting to know you, they also get to know me. Like, this is really, this is culture. This is important down here. And it's very different. Um, yeah. And that dynamic, and that goes back to relationship, it matters in a very different way. And, uh, it appeals to me. Mm-hmm.

But I think it appeals to a lot of people.

So, well, you can tell by, you can tell where people are moving to. Exactly. So it's obvious, right? They're moving to the Southeast and the Southwest. And, uh, there's something attractive about these environments. Part of it's culture, part of it might be weather, part of it might be infrastructure. Part of it might be costs, but.

Culture is part of it. I don't think it's the weather, but I think it's the relationships.

Pleasure to spend time with you guys. Thank you, Michael.

You bet.