Jose Manaya (3:39)

You know, my career plan was always a work in progress. I always say I almost had like a little bit of a Forrest Gump approach to starting my career first. I'm a first generation American. So, you know, I grew up in Washington Heights to Dominican, a Dominican family, Dominican parents. So baseball was big my life. And for a while there I thought I was going to be a pro baseball player.

Barry Ritholtz (4:01)

What'd you play?

Jose Manaya (4:02)

I was a pitcher. Did pretty well. Did pretty well up until the point that I didn't.

Barry Ritholtz (4:08)

High school or college?

Jose Manaya (4:09)

High school and college.

Barry Ritholtz (4:10)

Yeah, I pitched in high school. No curveball. That's the end of your pitching career?

Jose Manaya (4:14)

Yeah, my whole thing is if I threw strikes, I did pretty well. If I didn't, I was gonna get in trouble.

Barry Ritholtz (4:20)

So you. A little control issue, Is that the problem?

Jose Manaya (4:22)

Yeah, a little control issues. Yeah.

Barry Ritholtz (4:23)

It's hard to throw both hard, hard and accurately.

Jose Manaya (4:26)

Yes, it is. Yes, it is. It's like everything else. It's about trying to find the balance.

Barry Ritholtz (4:30)

Right, so. That's right. So you mentioned you're a first generation American. How did that affect you? What does that do to your worldview, your work ethic? How does it affect your outlook and career progress?

Jose Manaya (4:45)

Look, I think being a first gen and just kind of my, you know, the neighborhood I grew up, which I often describe to people, you know, have you been to Chinatown? Well, Washington Heights, when I grew up there was the Dominican version of Chinatown. But look, I mean, I grew up around strong family values. I had a great home life, very privileged that way, strong work ethic coming in. But I did grow up in a bubble. Right. So one end, what I took with me when I exited or left that bubble was work ethic was kind of understanding relationships and that. But then when I left that bubble, it was more defined by, okay, I was in different audiences. I was in situations where then more acclimating was kind of more my focus and my goal for early part of my career.

Barry Ritholtz (5:38)

Really, really interesting. You come out of tuck, you end up being an analyst. Tell us about the early days. Post grad school.

Jose Manaya (5:49)

Yeah, I think post grad school I was still trying to figure out what I really wanted to do because if I even go pre, coming out of undergrad, I had a finance degree. I was good at math. And I asked people, what are you supposed to do with this? And people mentioned Wall street and firms like JP Morgan and Goldman Sachs. And I was fortunate enough to get a job at JP Morgan. Everyone was taking a gmat. I had no idea what a GMAT was, but I figured I'm supposed to take it as well. And I went to grad school and then coming out of grad school, I went back to Wall Street. Not necessarily thinking that's what I wanted my career to be, but I didn't really have a plan for anything else. I think as I started really searching around what I wanted to do, instead of advising people doing things that were going to be there for the long term, build something. I found my way into the buy side and my first job in investing, working at AIG Global Investment Group. I think today is called Pinebridge. But that was my first real like investing job. And even there, finding my way. I started out in equities and I was like, okay, I like this. But I felt like the other side. As I ran into people on the bond side and private credit, I felt that that was more kind of cash flow based versus I used to get annoyed where my model, I felt like my models were right, but the markets never cooperated with. So it didn't matter that I was right. I felt more at home in that environment where it was more around, okay, how do I judge the downside? How do I kind of really analyze cash flows? And. And then I found myself on the buy side and I found myself as a private credit manager. I think from there, interesting enough, I said, hey, I found my thing, I love doing this. And I always found myself in situations where I did what I did really well and somebody always asked me to do a little more. And in that little more, it was always kind of like extending myself and say, okay, am I still the SME or am I now gathering and, and doing different things? And then ultimately, especially when I was at tia, it was this idea of like, oh, should we go into agriculture, should we go into commodities? And I was like, well, here I'm a kid from New York City, I don't really know anything about agriculture and commodities. But you know what, I kind of dived in and said, this is interesting. This was the other thing that took me to another place in my career that I'd say I took another. People view it as a big risk because at that point I was managing about a $15 billion private credit portfolio. Back then that was a pretty major thing.

Barry Ritholtz (8:21)

Felt like a lot of money.

Jose Manaya (8:22)

Felt like a lot of money, and it was and is. And I kind of made a decision from doing these kind of nights and weekends on this project of going into Farmland, I made a decision to say, you know what? I'm going to leave all this behind. I want to go try to build this. And even the CIO at the time said, are you sure you want to do this? Because, you know, maybe I'll tell you what, why don't you give this a run? But you know what? We'll keep your job warm for you here. I think he figured he'll come running back in six months, give this a.

Barry Ritholtz (8:52)

Run, meaning the CIO position, meaning running a Farmland fund. Oh, okay.

Jose Manaya (8:56)

And, you know, I went out and said, oh, I want to do this. We ended up becoming the largest Farmland Fund institutional manager for Farmland assets globally at the time. And one of the things that my philosophy in doing these things is taking the confidence to always kind of try things that get me excited and that I feel passionate about. But I think throughout my investing life, one mantra I've always had is, you got to be really good at knowing what you don't know. And that comes with being more humble. That comes with kind of asking a lot of questions, not being intimidated by bringing people around you that are smarter than you. Because I was like, hey, I could understand people, I could understand math. Now how do I fill in these blanks? How do I get people around me that are going to give me kind of the knowledge that I know I don't have? And that career progression was from Farmland. They said, hey, wow, you did an amazing job. Can you take real estate? Can you take natural resources? Can you take all of private markets? And then ultimately, can you be the chief investment officer and then growing that into a asset management firm? And what I realized was that what I thought my passion was was in investing, but the real passion that I really found was in building things, managing teams, and bringing teams together.

Barry Ritholtz (10:15)

So I want to circle back to building what you did at Nuveen. How do you go from JP Morgan to AIG to Merrill? What ultimately leads you to Nuveen?

Jose Manaya (10:26)

You know, what leads me to Nuveen is just, I always say, like, picking up the breadcrumbs, right? I was on a journey of really kind of searching again, what's my passion? What do I want to do? I was very fortunate. Here I am, I'm sitting at a job on Wall street at J.P. morgan. Very fortunate to have it, but I couldn't see myself doing that job for 20 years. Then I'm like, oh, I'm fortunate to get a job on the buy side. And I'm like, okay, this is great. I'm at aig. It's a terrific opportunity, terrific firm. Yet there's still that thing that I'm kind of still trying to find that feels like, hey, what's really getting my juices going? And it was always that search for that thing that kind of made me get up early in the morning. And when I ultimately landed at Nuveen, which was part of tia, that was that role. And I ended up being there 20 years. And I will tell you, the longest role I've ever had in my life, in my entire career was my five years or so as my role as CEO there.

Barry Ritholtz (11:26)

Even 20 years is a long time in the modern world to be at any one firm. It seems people don't do that anymore. What was it that kept you there? It sounds like they kept piling on new challenges and really keeping you engaged.

Jose Manaya (11:41)

Yeah, that's exactly right. Meaning the longest role I've had in my career is the five years I was the CEO. Part of that, every three, four years, someone was giving me something else to build. I always say I get itchy. Maybe I'm not the best steward in the world, but what does get me excited is building things, kind of building new teams. You know, the challenge of kind of like growing a capability. And I got to do that over the course of 20 years. I've been extremely blessed and same thing in moving to my role now. It's a tremendous opportunity. And, you know, I could still say that 20 plus years. I still get excited every morning to kind of go to work.

Barry Ritholtz (12:19)

When you say building new teams, give us an example of some of the sort of teams you helped build that kept you occupied for 20 years.

Jose Manaya (12:29)

Sure. I mean, one I mentioned the Farmland example. That was a complete startup from.

Barry Ritholtz (12:34)

From scratch, from $0, from $0 to.

Jose Manaya (12:36)

Kind of go in and building a team. You know, I'm very proud of what we did in private credit. You know, we. We started the Churchill Group with, you know, again, that was finding the right people, finding Ken Kinsel, who was a tremendous leader and had a team with them. And we started with zero. Today, that broader platform at Nuveen is almost call it just short of 100 billion in private credit. So there's multiple examples like that where basically the blueprint was either we were doing an acquisition or we were finding a team. And we're saying, okay, we've got the right makings of a Team. How do we give this team the right tools and go out and try to grow a platform?

Barry Ritholtz (13:14)

So you're no stranger to alternatives. We've talked about farmland, real estate, private credit, private debt, natural resources. What is your view today on alts? What do you think about what kind of feels a little bit like a land rush? What's going on in the world of alts today?

Jose Manaya (13:32)

Yeah. And you know, it feels like a land rush. But I will tell you that this has been building for some time. And the interesting thing is, you know, if I go back 10, 15 years ago, my pitch talking to clients around alternatives was one that was largely academic. It was this idea of diversification. Diversification. Hey, by the way, I know you haven't seen inflation in 20 years, but it may show up and if it does, are you protected for it? By the way, you may be going to a market where there's a lot more volatility. Have you thought about that? And then also, hey, have you thought about yield? There's ways to think about principal protection in your portfolio and then yield and alternatives. I would say it's just a way of bringing in the right correlations into your portfolio. Some of the biggest alpha and alternatives is the lack of access, meaning the illiquidity.

Barry Ritholtz (14:22)

You can't sell in a panic because the market's off 8%.

Jose Manaya (14:25)

Yeah. And in many ways you're going to structure and get a return you're looking for because you need to have a specific skill or access point to get those assets. So maybe the markets are a little bit less efficient. You know, the interesting thing is today that academic conversation has turned into urgency. Right. So now, while markets have obviously continued to be at all time highs, I think individual investors have felt what volatility feels like. Whether that was coming out of the global financial crisis, whether that was out of COVID and the pandemic, we have felt and seen a lot of significant volatility.

Barry Ritholtz (15:03)

2022, first time in 40 years, stocks and bonds both down double digits. Like people seem to think volatility gets conquered every few years. And whenever there's any sort of complacency, the market says now's the time to teach people volatility never goes away.

Jose Manaya (15:20)

Yeah. And throughout that time period, you've also seen the growth of index funds. Right. So also on top of that is this idea of like, you know, I always say the world's become more commoditized. When I entered the industry, you differentiated yourself by picking better securities than the next person and driving returns. Then all Of a sudden there was a focus on cost. Believe it or not, once upon a time, nobody paid any attention, nobody paid attention to fees. I think then it was, well, no, you're going to compete on fees as well. And then became the race to zero. Today, investment performance is obviously extremely important, but it's table stakes. Costs were all kind of basically at the bottom end of that curve for cost. So now it's more around what are the outcomes you're going to deliver to someone. Technology is a big component. It is the flexibility that you offer clients, but it is ultimately about what is the outcomes you're going to get to clients. And that 70, 30 portfolio, that passive fund that said, hey, you're in a target date fund, you don't have to do anything, just sit back and it all adjusts and drives kind of the returns you need. Well, in those moments where correlations go to one, it didn't feel so good. That's right, it didn't feel so good. And I think now there's more sophistication in terms of how you package solutions. More sophistication now on the need to get alternatives to clients. I think these things all now I think again, what was an academic conversation today is an urgency.

Barry Ritholtz (16:52)

So the phrase I've heard from a number of people over the past year or so has been 70, 30, 60, 40. That's the old way. The new way is 50, 30, 20. Are you in that camp?

Jose Manaya (17:07)

Yeah, look, I think 50, 30, 21, 30, 30. Look, at the end of the day I would say it's not really about whether you should be in the 50, the 30. Ultimately it starts with a conversation around what are the outcomes you're looking for, what are your needs? Right These, these markets. And when you think about alternatives, by the way, these are not get rich quick schemes. These are not like oh my God, we need alternatives because there's like this outsized return in many cases. I mentioned to you, Farmland, that was a 4 to 6% return market, but.

Barry Ritholtz (17:36)

Extremely consistent and long time lockdown.

Jose Manaya (17:38)

Long term lockdowns. Yeah. And, but it gave you a certain correlation. So yes, like all these different mechanisms. At the end of the day though, what it's really all about is what are the outcomes you're trying to drive for your clients and what is the sophistication we have and the ability to construct those portfolios. And the most important thing in constructing those portfolios is do you have access to a broad array of capabilities? Because the more access you have to different types of assets, the better. The outcome is Portfolio Theory 101.

Barry Ritholtz (18:13)

Coming up, we continue our conversation with Jose Manaya, global head of BNY's investment and wealth, discussing his experiences at Nuveen Tiaa. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. Masters in Business is proud to be brought to you by A. Lange and Sona. Inseparable from the history of fine watchmaking In Saxony since 1845, the Lange philosophy, defined by Walter Lange himself, is simple. Never stand still. Their commitment to detail is so rare, so exquisite, that every watch movement is assembled twice the first time to ensure perfect mechanical function. Then it gets completely disassembled, fully decorated by hand, and brought together again with meticulous finishing and hand engraving. The result? A timepiece built not just to keep time but to honor it. Alanga and Sona A dedication to craftsmanship and tradition that never stands still.

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Barry Ritholtz (21:14)

I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My special guest this week is Jose Manaya. He is the Global head of BNY in Investments and wealth helping to manage over $2.2 trillion in client assets. So when you were at Nuveen, you ran about a trillion dollars in assets. You led the company through a big expansion, through the COVID pandemic, and then you helped expand the entire digital engagement. Tell us a little bit about what you put together at Nuveen.

Jose Manaya (21:50)

Well, I think again was quite a 20 year journey because I joined when it was basically just the investment team for TIA.

Barry Ritholtz (22:00)

That was right after the dot com implosion. Around 04, something like that.

Jose Manaya (22:03)

That was around 04 actually. Yeah, I really started in 05 and really it was just an investment team. Like I said, I joined as a fixed income portfolio manager. At the time we're managing money for about a $200 billion general account. Everything was based in New York City.

Barry Ritholtz (22:22)

When you say general account, you're managing it on behalf of Nuveen, not specific clients.

Jose Manaya (22:27)

I was managing on behalf of the balance sheet of tia, which is an insurance, which is an insurance company. So largely just that was really the structure. Nuveen. We had not acquired Nuveen yet at that time. But from that $200 billion, you fast forward to today and what I was there to help build and it became a trillion dollar asset manager. One where it still managed the approximately $200 billion balance sheet, but then it raised another 800/billion in just outside capital. And these are sovereign wealth funds, wealth platforms, retail. And it grew to about almost 2,250 billion in alternatives as well. So pretty diversified, diversified shop, which now you're seeing a lot of firms trying to kind of capture that same, not just scale but diversity in their business.

Barry Ritholtz (23:22)

Let's talk a little bit about real assets that you've had a lot of background in. Tell us about real estate, agriculture, timber, infrastructure. Tell us how you built those areas previously at Nuveen, now at bny.

Jose Manaya (23:36)

Sure. And I think, look, I think first if you think about those different asset classes I go back to, these are not typically strategies that you're trying to get outsized returns. Sometimes they come and they're very much welcomed. They're typically pretty structured transactions. Right. Whether it's buildings with rents, farmland with leases, infrastructure with 20, 30 year contracts. Often there is a hedge against inflation, whether that is contractual or just by the nature of the commodity.

Barry Ritholtz (24:09)

Prices go up, land goes up, that follows it.

Jose Manaya (24:11)

The simple math on these things are I'm clipping a coupon, so there's a yield component and it's a pretty steady one. I have a gold like protection because if you think about what do I own, I own farmland in a particular case. Well, that produces a need for society in perpetuity. So there's a certain kind of protection in your principle in owning that or wind farms. Just again, there's intrinsic value. I have a yield, but it's usually tied to a commodity. And because of that, there's also an inflation hedge component to it. And it brings down my volatility because again, it's more of that consistent return profile. So it plays that part in portfolios that it gives a yield. It gives it in a way that should be pretty high. Sharpe ratio, lower volatility. Now today that market is trying to get into more mainstream. Now, if I fast forward to my opportunity going to bny. Now, look, I had that journey in my previous life. What I saw in BNY is where the industry is going to BNY obviously is two times the size of where I came from. But it's also part of BNY the bank. And BNY the bank touches about a fifth of the world's investable assets. So there's almost.

Barry Ritholtz (25:33)

That's amazing.

Jose Manaya (25:34)

Yeah, there's almost $60 trillion, call it 55, 56 trillion to be exact, that the bank is touching. And it's either managing these assets, it's either custodying these assets, or it's helping move the global financial markets around. That is tremendous access points to someone like me sitting as an asset manager because I'm working at a firm that is one of the largest asset servicers in the world. It also is one of the largest servicers to Wealth Platforms, I.e. registered investment advisors. Well, I have a wealth platform, I manage an investment platform. How do I get advantage of the fact that there's tremendous technology being invested to help serve asset managers? If I go back to a comment that we talked about previously, which is if the world's becoming more commoditized with performance and cost, then what is the difference? The difference in what is the tip of the spear is technology. You hear about tokenized assets of which BNY is on the forefront, that's just about helping clients move money quicker.

Barry Ritholtz (26:41)

Define what tokenized assets mean when we're talking about stocks or bonds.

Jose Manaya (26:46)

I think the simplest way that I think about tokenized assets is it's an ability to again, be more liquid. Meaning if you were in a T plus one scenario, do you have the ability to be in a T +5 minutes scenario?

Barry Ritholtz (27:00)

So for the layperson, T +1 means you sell something today, it clears tomorrow, the cash is in your account one day later, t +0, as some people call it, means you sell it and you instantly get the cash. Is that what tokenization does for people?

Jose Manaya (27:16)

That's a big component. So that's creating that liquidity where if you had to wait 24 hours, now you can wait a lot less than 24 hours. The other thing that it helps do is also kind of you're able to earn a yield on because you're getting the cash.

Barry Ritholtz (27:32)

Now, for most people, one day doesn't matter. But scale that up to an institution, scale that up to a bank or an insurer, that day times thousands and thousands of accounts and transactions really adds up, doesn't it?

Jose Manaya (27:44)

I mean, scale that to again, BNY is kind of touching and helping move $55 trillion.

Barry Ritholtz (27:51)

So T +0 or T +5 minutes, that's much better than T +1.

Jose Manaya (27:56)

And it's a big difference in your ability again to potentially earn a yield in that process. Also. Right in that, in that whole T +1, in that 24 hours. In many cases, you're not able to earn a yield while that money is clearing.

Barry Ritholtz (28:10)

So back in the bad old days when it was T plus three, we were always told, hey, it takes three days to just make sure there's no fraud. The right stock is going to the right buyer, the money goes to the right account, and when they got shrunk down to one day, well, technology has allowed us to do this, but we still need a day just to verify everything. What is it that allows us to go to T Plus 0? Is it just technology? Tell us how that works.

Jose Manaya (28:40)

Yeah, I think obviously the blockchain technology is one component. The other component is the fact that one of the reasons BNY can lead in this area is that it custodies around 80 plus percent of the digital assets.

Barry Ritholtz (28:56)

Digital assets, meaning Ethereum, Bitcoin, any other sort of things like that.

Jose Manaya (29:01)

And it is the largest custodian in the world in general. So clearing something becomes a lot easier when it's all sitting inside. I mean, think about a warehouse. If I don't have to move it from one warehouse to the other, that makes life a lot easier.

Barry Ritholtz (29:16)

You're not even moving it from one row to another, you're just changing the label. Here's who owns it.

Jose Manaya (29:21)

Yeah, now and again, I will tell you, for me, it's. I was having a conversation with our CEO about this the other day where I'm like one of the other things I love about my career right now. Look, it's been a long time since I walk into rooms and I'm learning something because typically, you know, you. I was a subject matter expert and typically most rooms that I walked into, I felt like I was the expert in that. In that category. I'm not an expert on tokenization. I'm not an expert on custody. I work at a firm that has experts and you're quickly learning and what's important there. I go back to, hey, but what I do understand, even though I know what I don't know, is this matters to my clients. So all of a sudden, if I am trying to think about, hey, how am I pitching my services to clients in Asia and around the globe and I have a differentiating factor, meaning I can help you go to T +0. That is a differentiator from a relationship perspective. And this is what I mean by where today there's so much more consolidation in the asset management industry because scale is important. And why is scale important? Because you then need to be able to service and invest in these technologies to service your client. AI is a big topic today. I would argue and say, well, it's no longer debatable that AI is here and it's going to be disruptive. It's going to make a difference. If you believe that, you also have to believe that the firms who can invest in it are going to be the winners for tomorrow. Now, being able to invest hundreds of millions of dollars in AI, that takes significant scale. That takes kind of diversified businesses. Being able to hire engineers. Where I was sitting, usually in the role of running an asset management shop, it's very hard for me to even say, how am I even going to attract engineers from Silicon Valley? How am I going to be able to pay them? Well, BNY is a massive tech stack. They can attract a lot of engineers, they can attract a lot of investment in AI. I just happen to be in that realm, part of that universe, and I'm going to be able to benefit from that technology.

Barry Ritholtz (31:34)

So let me step back a second because we're all guilty of using acronyms and even something like bny. You and I understand it, but perhaps the listener needs to learn a little more. BNY is bank of New York. It's been around for how long?

Jose Manaya (31:50)

240 plus years? I think we're at 241. 241.

Barry Ritholtz (31:55)

So more than almost two and a half centuries. More than two centuries.

Jose Manaya (31:58)

Well, I got to add to that because I'm always fat. I will tell you, even as I joined bny, there were things I did not know. You know Obviously, it's the first bank in the United States. It was the first bank to issue the first loan or warrant begun by Alexander Hamilton. It's the first company traded on the New York Stock Exchange. It was the first, first public company.

Barry Ritholtz (32:19)

Right.

Jose Manaya (32:20)

You know, our first clients of the, of the bank were George Washington and Eliza Hamilton. And you know, so it's, it's just got incredible, incredible history.

Barry Ritholtz (32:28)

Unbelievable history. In addition to all that history, BNY is also affiliated through ownership with a lot of really well known names within finance. Tell us about some of the other divisions that maybe people will be more familiar with those names.

Jose Manaya (32:46)

Yeah, and I tell you, I think this has a lot to do with kind of the recent performance you're seeing about the firm because it's unlocking what we would describe as BNY is a platform operating, has a platform operating model, meaning it has multiple platforms. Of course, it has an asset manager and it has a wealth business. As we said, it's got a $2 trillion asset manager. It's got about a $350 billion private bank wealth platform. By the way, it also owns Pershing.

Barry Ritholtz (33:15)

Giant Clearing Shop and that captures around.

Jose Manaya (33:17)

Almost 3 trillion in advisors capital that it's servicing through a technology and a service platform. It has an asset servicing arm and that asset servicing is serving both asset managers and asset owners doing things like custody fund accounting. It has a Treasury component as well. The other interesting thing about BNY is it clears all the Treasuries of the United States. It's a G sib, it's a significant bank and plays an important part in our financial system.

Barry Ritholtz (33:56)

Really, really interesting. So tell me the story of how you move from Nuveen to your role as global head of BNY Investments. You're doubling the size of the assets you're responsible. Have you approached this change? What sort of challenges did you face?

Jose Manaya (34:13)

You know, I think every challenge that's kind of, that's really attracted me, including what, you know, what kept me in my previous role and in the different roles I was in. It was the opportunity for growth. And I think looking at BNY and seeing where I believe the industry is going, just saw a tremendous opportunity of what is a $2 trillion shop should easily be a $4 trillion shop. Think about the ecosystem that we play in within bny. As I mentioned, we manage money for other people as an asset manager. We manage money also as a wealth platform for families and individuals. Yet we also service other wealth advisors through purging, but they're also the clients of the firm. I'M an asset manager. A lot of my competitors are clients of BNY as well, so. And then you think about the technology that it takes to do all that and grow that technology stack. I feel like a kid on a candy store for two reasons. One, that sets a tremendous amount of infrastructure and capabilities that are there that I should have a home field advantage to. The other thing is that has become a lot easier in my job is when you touch a fifth of the world's assets, most people are your clients. So having a conversation with potential clients is very easy to do. A lot of what you've seen the recent success of bny, and I think you said this earlier, it's a collection of a lot of different things that were either acquired or built, but it was also a very siloed organization for a while. The ability of having that cross connection, if I look at a world that AI is going to be important. Being able to touch your clients in multiple ways and have broader technology. I am sitting in a spot where in all those platform operating models, I'm two of those, but I'm fitting in pretty well. I'm trying to take advantage of the other five or six that are around me. A great example of that is Archer. Archer is.

Barry Ritholtz (36:25)

That's a digital platform.

Jose Manaya (36:27)

It's a technology platform for SMAs. Right. So that is your ability to. Clients want to be able to. We talked about solutions, your ability to go to an Archer and by the way, my previous job, Archer, I was.

Barry Ritholtz (36:40)

A client of Archer and SMA stand for separately Managed Accounts.

Jose Manaya (36:43)

Separately managed Accounts. So again, not you go back to technology, meaning you may be able to manage bonds and equities and alternatives or even tax managed solutions. Believe it or not, bringing that together in a package for individuals takes technology. Of course, asset managers, traditionally they're stock pickers or investors. They're not technology people. So you go to that platform and do that. Now when I join bny, I'm like, okay, this is great, they've acquired Archer. I know that they have a great capability for doing this and this is a growing market and already our wealth platform is a client of Archer. Before it was even acquired, the asset management arm of BNY was already a client was acquired. Now Archer is also free to grow because it services a broader capability.

Barry Ritholtz (37:29)

So if you're doing services BNY and BNY clients.

Jose Manaya (37:32)

Yeah, and that's important because again, if you think about this, the model of tomorrow and what scale matters is one you can. It's its own business and just kind of providing what Archer does to the broader. To the broader, like community. We get it inside. We get an inside view and a home field advantage in getting it ourselves. Typically if I build my own SMA platform, I have to now worry about how do I feed it to grow it. Other people are feeding it to grow it. And I get the benefit of kind of being attached to it. And I think that connectivity around, hey, everything I do on the asset management side, you know, all those clients at Pershing, they buy that as well. Should we not be engaging with our clients to do more for them? It's like, sure, we're doing clearing for you in custody and offering you technology. We also have asset management. All of them obviously buy asset management as well. So having those connective dots I think is a tremendous competitive advantage.

Barry Ritholtz (38:31)

So I want to talk a little bit about your role. I want to define it better. At Nuveen, you were CIO and then you were CEO. Two distinct positions. Your title is Head, Global Head of BNY Investments and wealth. Sounds like a little bit of each you're building, but you're also helping to direct the investing. Tell us a little bit about your roles and responsibilities in this new position at bny.

Jose Manaya (38:57)

Yeah, I think one end of the spectrum is very similar to my previous role, which is BNY Investments, is an asset manager. You know, obviously it's a much bigger one than the firm I came from, but it's an asset manager and there, you know, I'm the chief executive for that particular platform. We also have a wealth platform and very different from asset management. It's more dealing with individuals and advice. But there's also synergies in the business. Right. Meaning if you're a wealth advisor, you're talking about how do you create investment products? How do you source them? Well, we have investment products and how do we, how do we make sure those two groups are talking to each other? What's the products that we're creating? If you're an asset manager, a big part of who our clients are are wealth advisors. So having a good understanding of kind of what wealth advisors need, it really helps to have a wealth advisor in house.

Barry Ritholtz (39:48)

Sure.

Jose Manaya (39:49)

So I'm managing a larger platform, but at the end of the day, my job is still very similar. It's about picking the right teams and people. You know, we talk about $2 trillion, and I would tell you 2 trillion should go to 4 trillion. We don't own any of that money. At the end of the day, our biggest value set of what we do and have is our people. And obviously the technology that we can, we can offer those folks. But People is kind of really our business and I've kind of seen my job today really as the chief Chief People Officer for how we kind of build teams around us.

Barry Ritholtz (40:21)

Coming up, we continue our conversation with Jose Manaya, global head of BNY's investment and wealth, discussing his experiences at Nuveen TIAA. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio.

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Barry Ritholtz (42:50)

Savings terms apply. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My special guest this week is Jose Manaya, he is the global head of BNY investments and wealth, helping to manage over $2.2 trillion in client assets. So, so let's talk about who the clients are at BNY. You mentioned RIAs and advisors. My day job. But you also work with institutions. You work with high net worth family offices as well as other players in the investing world who are also clients. Sounds like you guys are a little bit of everything to a lot of different people. How do you keep all that running smoothly? How do you keep all those balls in the air?

Jose Manaya (43:46)

Yeah, well, look, I think BNY is often described as the bank of banks because again, it's kind of that broader provider. In goes the opportunity set. Again, you look at the firm, I don't know. Last I looked, the stock was about 106 in less than a three year span or thereabouts from $40. It makes it one of the best performing financial stocks.

Barry Ritholtz (44:09)

Financials have been lagging the tech sector for a couple of years. They're starting to play a little bit of catch up.

Jose Manaya (44:15)

They're playing a little catch up. They're doing better, but I think few are doing better, if any are doing better than bny. Some of it goes back to that question you just asked me. Yeah, there's a lot of these. The way typically these conglomerates or these platforms were typically managed were very siloed. The ability to bring in the technology and the leadership to say how do we have better connectivity across all our platforms is where the value proposition is. And, and the market is seeing that and the market is rewarding that.

Barry Ritholtz (44:48)

So it's funny, earlier we talked about how commoditized so much of the world has become. You're basically saying we need to be an integrated solutions provider and not just have these commoditized silos, which is what exists outside of a mega bank of banks like bny.

Jose Manaya (45:07)

Yeah, so much. We used to talk about the concept of selling watches. You know, I think that, you know, the world doesn't really, it's hard to sell watches now. People are looking for, they need, you know, our clients are getting more efficient. They need to scale their operations as well. And it's the idea of like, do I want to work with 150 managers or am I better off working with 20, 30 or 40? And if I'm going to go from 150 different types of managers, you know, to 20 or 30, how do I pick those 20 or 30, what's going to differentiate that? So I think a lot of that is what's driving the need for scale, it's what's driving the need for consolidation and it's also driving a lot of innovation.

Barry Ritholtz (45:52)

So you've mentioned technology a couple of times. We've talked about tokenization and a little bit about AI. What are the big technological trends that we can look for over the next couple of years? Where are you thinking about how technology is going to have the biggest impact on asset managers and on investors?

Jose Manaya (46:13)

Yeah, it's interesting and honestly, my narrative has changed. I used to say, look, AI is going to be very disruptive, but I have no idea if it's five years from now or 20 years from now. And by the way, that makes it very difficult to invest in it because it's when are you going to get the returns for it? Clearly now that's come into a lot more clarity because where AI has begun to already yield returns for firms and BNY is no different, is on the productivity side. I think BNY is one of the first firms to have digital employees. So digital employees that can work on real problems, that's driving productivity increases. And that's been a large part of the narrative with AI. Now the new narrative is it can also provide value add. So again, as an investor, do you have the capability of instead of the old way of we're going to look at satellite pictures and see how many cars are on the driver? Well, now AI can actually track devices and kind of see where things are coming. AI is able to go through a lot more information and disseminate that information. I still say that human beings with AI will be better than human beings without AI. That is, you're still going to need the component for human beings in the mix, but so much of the future is unknown. By the way, I think that's also the uneasy part that we are today in our markets because if you speak to individuals on one end, I can picture and say the economy is doing great, earnings are strong, consumer household balance sheets are strong, wages are still relatively strong as well. There's a strong, very constructive view to putting your money in the markets today, even at these valuations. The other side of that story is okay, but then are we losing the independence of the Fed? Are there geopolitical issues and wars out there that can also cause massive disruptions in the global economy? Policy issues and fiscal issues coming to the forefront, that could just be mistakes that happen. So at the same time there's so many things that can go wrong, right? I would say we're probably at a all time high of things that can go Wrong. Yet where you sit today should feel pretty good in terms of the economics and the economy. And I think technology is the same thing. It's like, wow, AI is going to be disruptive. What we think AI can do is literally changing every week, every month. And again, that in many ways is exciting in many ways. It's also extremely unsettling to say the.

Barry Ritholtz (49:10)

Very least since you brought up the current state of the world. Profits are all time highs, but it seems like risks are at all time highs. I want to throw two of your own quotes back at you and get your thoughts on it. In the beginning of this year you said risk assets are going higher. What led you to that conclusion? And has the year played out as you expected?

Jose Manaya (49:36)

Clearly look, and I think there was a little bit, I think I was challenged a little bit on that comment and remember I said it right after Liberation Day. So the markets were obviously fallen off. There was a tremendous amount of concern with the tariffs and what would come. I had two thoughts there. One, understanding that I thought the current administration that we have was about the carrot and the stick and we started out the year with the stick. But you know what, the carrot was going to show up at some point. And then two, this other view of most of us don't have a choice to be risk off. The idea that being risk off through these different cycles hasn't really paid off. So the one thing we should do is go back and look at the fundamentals. But yes, if you're saying I'm going to just take a correlation of one or just take broad market exposure, it's more than again, the academic conversation being more of an urgency. If you think about the actual conversation around I'm structured for solutions for outcomes in my portfolio. Then why should you be risk off? You already plan for this. I maybe plan to have part of my principal protected, maybe plan to have certain amounts of yield or uncorrelated assets in my portfolio. So my viewpoint is again, one, the fundamentals are there to not say exit the market. But two, this should not always be around. Should I buy this stock or that stock or should I go bonds or equities?

Barry Ritholtz (51:00)

Has to be broader.

Jose Manaya (51:02)

It has to be broader because we're not a hedge fund and a lot of what we do is not about that. It is about driving long term outcomes.

Barry Ritholtz (51:11)

So another quote of yours that caught my attention was noise is at all time highs. I totally agree. But explain your point of view.

Jose Manaya (51:22)

Yeah, and I'll explain it. I'll explain it both in terms of kind of the, where we are in our markets and then also like, it's also like a personal philosophy one, this is what I mean by things look very calm, things look very constructive, yet we can, I think my team at the time, and this was back in January, I think there were like 26 or 30 different like press releases or things that happened that kind of really jolted the markets in some way or caused concern. So the list of the things going on, whether it's inflation, whether it's political, the Fed policy, changes, wars, the list, it's endless. It's endless. So that I think is at an all time high of the things that, okay, what's the list of what can go wrong? But then the other thing with noise, and I say this to my kids, I try to, I'm still trying to master this, is that in most cases 80% of what you hear is just noise.

Barry Ritholtz (52:22)

Right. And already in stock prices.

Jose Manaya (52:24)

Yeah, it's there. It's like 20% actually matters. You know, I said to be a good investor you have to be good at knowing what you don't know. But I also think you also have to be good at taking emotion off the table. You could see a lot. Obviously we're a pretty divided country politically. I would say like don't bring that to your investing. Right. So it's more like take the emotion out, don't let the noise suck you in. Go back and it's about the fundamentals, it's about what's in front of you, it's about your outcomes.

Barry Ritholtz (52:52)

I love the concept of knowing what you don't know. Let's address that. What are investors not talking about, not thinking about, but should what topics, assets, geography, policy, data points, whatever. What is not at the forefront of many investors minds but maybe is getting overlooked.

Jose Manaya (53:16)

And again this is going to sound very simple and it's been talked about since the beginning of our markets. It's true diversification. And again it sounds simple but it's not. Because the old diversification is that 70, 30, 60, 40, 60 stocks, bonds, the markets are a lot more complex and sophisticated. That idea of having that conversation now around, let's talk about what I'm trying to accomplish. Not hey, I think large caps are hot now, so I'm going to put you in them. Hey, you see technology stocks, I think technology is going to do really good. That to me what's really being overlooked is again where I know a lot of people sit down with their advisors and they're getting that academic, you know, dissertation on, you should be Diversified. This is why this is how. But often the conversation falls right back to, is it large caps, small caps, is it tech stocks, is it banks, is it financials? Like that's not the right conversation. Even as it alts or publics, it's everything. It's all of that and it's using technology and solutions and packages to create the right construct for individuals makes a.

Barry Ritholtz (54:30)

Lot of sense to me. I only have you for a couple more minutes, so let's jump to our speed round. Our favorite questions we ask all our guests, starting with who were your mentors who helped shape your career?

Jose Manaya (54:43)

You know, I've had so many and I'll tell you, they started with family members. I've had professors, I've had the dean of the business school at Manhattan College. I felt like was a mentor to me. I have my previous bosses that I still stay in touch with and try to have lunch and dinner with. So I have many people that I can kind of thank.

Barry Ritholtz (55:08)

Huh. That's very nice. Let's talk about books. What are some of your favorites? What are you reading right now?

Jose Manaya (55:14)

You know, I'm not a fiction guy, so most of what I read is nonfiction.

Barry Ritholtz (55:18)

I'm the same way.

Jose Manaya (55:20)

I love all the Michael Lewis books. Recently read the Boys in the Boat. So I just love the story about people and I love reading about books that, you know, you see perseverance in human beings. Right now, I'll tell you, I'm not reading anything right now. I'm getting ready to read something and I'm wondering if it's going to stick. But I've been hearing a lot about the Meditations by Marcus Aurelius.

Barry Ritholtz (55:44)

Oh, sure.

Jose Manaya (55:45)

And I made the comment around 80% of the things you hear is noise. My understanding is that book has a lot about that in there of like what you should really spend your time thinking about. So I was that synopsis and I've heard two people now mention it. So I said, I'm getting ready to read that.

Barry Ritholtz (56:03)

Let me bastardize that for you and say what I took from that was recognize what's in your control and that's what you focus on what the Fed's gonna do. We can't control you. Don't lose sleep over it. Yeah, accept it. It's going to be what it's going to be. But focus on the things you can control. You can change. Really. It has absolutely stood the test of time. And if you're a Michael Lewis fan, I'm going to, I'm going to self promote his most Recent book that just came out, who Is Government? We did a live Masters in Business in April, and I want to say the ratio of me speaking to him was probably 3% to 97% for 90 minutes. He just regaled the audience with stories and had people in stitches. Absolutely. Hilarious stories about Billy Bean and. And Brad Pitt. Tears down people's face.

Jose Manaya (56:58)

I'm gonna go listen to that. I'm listening. I'm gonna listen. Yeah, absolutely.

Barry Ritholtz (57:02)

If you're a Michael Lewis fan, I think I've interviewed him 10, 12 times. That's my favorite interview. I heard stories I never heard before. He was.

Jose Manaya (57:12)

His books ruined all the movies that have come out off of his books because none of them come close, in my opinion, to the actual book.

Barry Ritholtz (57:20)

So I agree with you. The one that's closest is Moneyball. At least listen. The big short. I love the book. The movie wasn't bad. The Blind side. The movie wasn't bad, but Moneyball really captured the moment of the book.

Jose Manaya (57:37)

I agree that Moneyball was probably the closest you got to the book.

Barry Ritholtz (57:40)

Yeah, yeah, no. No doubt about that. What about streaming? What are you watching on Netflix or Amazon prime or what podcasts are you listening to?

Jose Manaya (57:49)

Yeah, you know, it's very similar to kind of the whole nonfiction thing. I'm a big fan of documentaries on Netflix. There's two things that I'll kind of do on streaming. It's watching the Men who Built America.

Barry Ritholtz (58:01)

Really?

Jose Manaya (58:01)

Which is a great documentary. Just again, it has, you know, the JP Morgan's of the world, the. The Carnegie's of the world, Rockefellers and Vanderbilts. But what it shows you is the tremendous amount of risk that these individuals took. And it was a very different time in America. But I love the documentaries and then shows. What'll happen is I don't watch a lot of tv. I will watch sports, but I'll hear things like Breaking Bad. Everyone talked about it. I was like, all of a sudden, I'm watching it 10, 15 years after the fact. And then that led me to say, hey, there's this show Better Call Saul. So I just went through the whole. Not just went. But, you know, I've been going through the. I went through Breaking Bad and then, like, Better Call Saul. So the only way I watch shows now is, well, they came out five, seven years ago. And now I'll go in and be like, okay, I'll dig in.

Barry Ritholtz (58:53)

So I have two things for you. We saw Mad Men during the pandemic. I never saw a single episode when it was on tv. Like, wow, this is amazing tv. And if you're a documentary fan, the Billy Joel documentary, we're like three quarters of the way through it. It's just amazing.

Jose Manaya (59:11)

And I'm a big Billy Joel fan. And yeah, I thought it was. And again, to me, it's just history and people. Right. You just kind of just love learning about people. And then especially for me, it's, I'm in awe of folk, of people who could do things I can't. Right. Like, I'm in awe of a Billy Joel. When you hear about his process and what he does, and you're like, it's.

Barry Ritholtz (59:31)

Hard not to get inspired by that 100%. Our final two questions. What sort of advice would you give to a recent college grad interested in a career in investing?

Jose Manaya (59:43)

You know, the, the advice I give everybody coming out of school and, you know, I think they're waiting to hear for some kind of special nugget on how they're going to get ahead doing models or what deals. And, and I'm like, do the easy things really well. Like, I did this intuitively, not knowing how important it was, which was, I came into Wall street, you know, they're not going to give. I was fresh out of school. They weren't going to give me a big client, they weren't going to give me a big model. But you know, what if someone said, I need copies? I ran and did copies. You know, I could do that. That I can do. Hey, book a restaurant for a client dinner. Hey, don't worry about it. I got it. So to me, it's like, early life is never going to be that easy in your career than when you're first out of school. Don't come in day one thinking about, how do I get on? How do I start traveling to meet clients and work the big deals? It's like, do the little things really, really well. That is how they're going to be able to judge you early on.

Barry Ritholtz (60:38)

Good advice. And our final question. What do you know about the world of investing today? You wish you knew 35 or so years ago when you were first starting out?

Jose Manaya (60:49)

Yeah, I think it goes back to the, when I first started learning those lessons of don't pay attention to the noise, pay attention to what really matters. So, you know, earlier on, it's hard not to get emotional about investing sometimes. It's hard even not to get completely kind of, you know, you and I watch for this in our PMs. Like, PMs can fall in love sometimes, even with companies, stocks, and even management teams that ability to now say, hey, in all these cases, be objective. Remind yourself. Be good at knowing what you don't know. Take emotion off, focus on what really should matter, not all the noise that's surrounding it.

Barry Ritholtz (61:28)

So, so interesting. Jose, thank you for being so generous with your time. We have been speaking with Jose Manaya. He's global head of BNY investments and wealth managing $2.2 trillion. If you enjoy this conversation, well be sure and check out any of the 550 we've done over the past 11 years. You can find those at Bloomberg, iTunes, Spotify, YouTube, or wherever you get your podcast from. Be sure to check out my new book, how not to To Invest the ideas, numbers and behaviors that destroy wealth and how to avoid them how not to Invest at your favorite bookseller. I would be remiss if I did not thank the crack team that helps put these conversations together each week. And I really mean this. Alexis Noriega and Anna Luke are my producers. Sean Russo is my researcher. Sage Bauman is the head of Podcasts and Bloomberg, I'm Barry Ritholtz. You've been listening to Masters in Business on Bloomberg Radio. There are two kinds of people in the world. People who think about climate change and people who are doing something about it. On the Zero podcast, we talk to both kinds of people. People you've heard of, like Bill Gates.

Jose Manaya (63:00)

I'm looking at what the world has to do to get to zero, not using climate as a moral crusade and.

Barry Ritholtz (63:07)

The creative minds you haven't heard of yet. It is serious stuff, but never doom and gloom. I am Akshat Ratty. Listen to Zero every Thursday from Bloomberg Podcasts on Apple, Spotify or anywhere else you get your podcasts.