The Master Investor Podcast with Wilfred Frost

Episode: Harnessing Insecurity: Harvey Schwartz on Leadership & Markets

Date: November 19, 2025
Guest: Harvey Schwartz, CEO of The Carlyle Group
Host: Wilfred Frost

Episode Overview

This episode features a candid and insightful conversation between Wilfred Frost and Harvey Schwartz, CEO of The Carlyle Group and former President/COO/CFO at Goldman Sachs. The discussion centers on how Schwartz has harnessed personal insecurity and adversity to fuel his leadership, the ongoing evolution of global capital markets, and the current and future outlook for the global economy, especially private markets. Along the way, Schwartz reflects on the importance of humility in both investing and leadership, shares lessons from his unconventional path, and offers advice for entrepreneurs and investors alike.

Key Discussion Points & Insights

Schwartz’s Background: Harnessing Insecurity (03:16–10:36)

• Unconventional Upbringing:
  Schwartz opens up about his challenging childhood, with both parents suffering from mental illness and the loss of his mother at 14.
  • “I’ve often said my core competency is insecurity.” (03:26, A)
  • Grew up feeling like an underperformer, failing in high school, only attended college after a friend intervened with admissions.
• Academic & Career Beginnings:
  Initially rejected from Rutgers, he was later admitted after writing an essay on his failures.
  • “By the time I was…17...I barely got out of high school.” (03:57, A)
  • Early career included bond trading at J.B. Hanauer, then Citi, then Goldman Sachs in commodities.
• Openness About Struggle:
  Schwartz began openly discussing mental health after encouragement from Ray Dalio (07:05–10:36).
  • “Just by talking about it, somehow some air came into the room that I didn’t even know the room needed.” (09:24, A)
  • Emphasizes the persistent stigma and the accidental evolution of his public advocacy.
• Philanthropic Impact:
  Actively supports mental health organizations, inspired by his own experiences and realizing the resonance his openness had with others.

Private Markets vs. Public Markets: Growth & Dynamics (12:08–16:23)

• Evolution of Private Capital:
  Schwartz traces the rise of private equity from its origins to its current dominance in capital markets.
  • “Private equity didn’t even exist…there was basically leveraged buyout…That was the available pool of private capital.” (12:14, A)
  • The number of public US companies has shrunk dramatically since the 1990s, while private capital options have expanded.
• Drivers of Private Market Growth:
  Maturation of private capital offers companies more options, longer-term capital, and flexibility compared to public markets.
  • “It’s just capital…as private capital grows…they just have different opportunities to select from the menu of capital choices.” (13:16, A)
  • The average company stays private much longer today.
• Geographic Comparison:
  The US remains the deepest and most innovative capital market, but Schwartz highlights London’s role as a historic financial hub and points to global competition for capital.
  • “There’s a reason that is historically embedded in the depth of the US Capital markets that allows for creative evolution of finance.” (16:23, A)

Macro Perspectives: The US, UK, and Global Economic Outlook (19:00–22:36)

• Global Economic Trends:
  Schwartz reviews the major forces that have driven global growth in his lifetime and notes many are slowing or reversing—except for technology.
  • “We’ve now moved into an environment globally where there’s more nationalism…inflation’s been more persistent…there’s more changes in velocity and political leadership…” (19:21, A)
  • Stresses the universal desire among leaders for economic growth despite these headwinds.
• Europe & UK:
  Remains an optimist about long-term prospects for both, despite short-term political or fiscal issues.
  • “Economic growth heals all issues. Stagnant economic growth leads to much more difficult outcomes.” (21:07, A)
  • Private capital’s role in supporting infrastructure and industries is seen as increasingly vital.
• Competition for Capital:
  Describes global shifts as underlying a “competition for economic growth…Capital is the blood flow of economic growth.” (21:55, A)

US Economic & Market Outlook from Carlyle’s Global Perspective (23:32–27:11)

• Portfolio Perspective:
  Carlyle’s companies are showing healthy growth (8–10% EBITDA/Cash Flow); the US economy feels “quite resilient.”
  • “The economy feels quite resilient. The consumer feels quite resilient.” (23:40, A)
• Risk & Market Valuation:
  Aware of market concentration (eight companies dominate S&P 500 cap). While market pullbacks are natural, fundamentals remain sound if earnings hold.
  • “Anytime you have eight companies that represent 40% of the S&P 500 market cap…it would almost be unreasonable not to question the sustained momentum…” (24:39, A)
  • Emphasizes distinguishing between technical “profit-taking” pullbacks and true underlying economic weakness.

Historical & Policy Reflections: Why No Major Recessions? (27:11–30:50)

• Resilience Post-2008:
  Massive fiscal and monetary interventions after 2008 and Covid largely explain the absence of major recessions since.
  • “If I said…in 2008…you’re going to get this much capital…do you think there’d be a recession? I think the answer would be no.” (28:37, A)
• Confidence as the Key Economic Driver:
  “The greatest economic elixir is confidence. And if people have confidence, they will spend. If they feel good about the political framework, they'll feel confident about their jobs.” (00:00/30:23, A)
  • Recessions often linked to a collapse in confidence—he draws historic comparisons to the Great Depression.

Interest Rates, Private Credit, and Systemic Risks (31:03–35:28)

• Interest Rates:
  Critiques the expectation for consistently low rates—as unnatural and a result of crisis, not normalcy.
  • “I actually have no idea why everybody roots for lower rates…that is not the market clearing normal cost of capital…” (31:32, A)
  • Zero rates are a manipulated outcome, not a productive goal.
• Private Credit Markets:
  Long-term demand for private capital remains robust despite sporadic credit events; most recent incidents involve banks.
  • “Credit is just credit. And this notion that private credit's at odds with public credit, credit is just credit…” (34:34, A)
• Risk Management:
  Private market credit events should not overshadow the overall strength and necessity of credit provision by both private and public vehicles.

Personal Growth, “Imposter Syndrome,” and Career Reflections (35:55–38:51)

• Imposter Syndrome:
  Admits he didn’t feel confident until his 30s, despite external success.
  • “Imposter syndrome basically says…a lack of confidence despite significant evidence of success.” (36:46, A)
• Career Setbacks:
  After leaving Goldman Sachs (not chosen for CEO), spent five years not working, grateful for financial independence—Carlyle opportunity was unexpected.
  • “I really had desired not to work…then this incredibly unique opportunity came across from Carlyle…a compelling reason to get back in the game.” (37:47, A)
• No Sense of Vindication:
  Continues to frame achievements with humility and gratitude.
  • “I still sort of pinch myself every day and think, Jesus, how did I get here?” (38:48, A)

Investment & Leadership Wisdom: The Power of Humility (39:42–40:55)

• Final Advice — Humility:
  Stresses humility as the central tenet for investment and leadership.
  • “Humility to me allows for the opportunity of only good things. Learning, teamwork, a willingness to ask questions, bringing people together…” (39:42, A)
  • Asserts best investors learn from losses; humility keeps you open to growth, while arrogance “shuts all those doors.”
  • “I would encourage everybody to be humble, which really just means be open to learning, I think, and all good things should flow from that.” (40:39, A)

Notable Quotes & Memorable Moments

On Harnessing Insecurity:

• “My core competency is insecurity…now I think I ultimately figured out how to harness that insecurity, and it played to my advantage.” (03:26, A)

On Breaking Stigma Around Mental Health:

• “Just by talking about it, somehow some air came into the room that I didn’t even know the room needed.” (09:24, A)

On the Nature of Investment Success:

• “The best investors in the world have many defeats and have many investments that don’t go well. But if you’re humble about it, you’re willing to learn from it.” (40:28, A)

On Economic Resilience:

• “The greatest economic elixir is confidence. And if people have confidence, they will spend… you have to look through all that noise and ask yourself, is the economy pretty good or not? And the answer is pretty good. And if earnings hold up, the markets will hold up.” (00:00 and 26:14, A)

On Career Perspective & Gratefulness:

• “I still sort of pinch myself every day and think, Jesus, how did I get here?” (38:48, A)

Segment Guide

| Segment | Timestamp | |--------------------------------------|--------------| | Introduction and Setup | 00:00–03:16 | | Harvey’s Early Life & Insecurity | 03:16–10:36 | | Opening Up About Mental Health | 07:05–10:36 | | Private Markets vs. Public Markets | 12:08–16:23 | | Macro Trends & Global Outlook | 19:00–22:36 | | US Economy & Market Fundamentals | 23:32–27:11 | | Interest Rates & Credit Discussion | 31:03–35:28 | | Personal Growth & Career Reflections | 35:55–38:51 | | Final Leadership/Investment Advice | 39:42–40:55 |

Takeaways

• Mentorship, humility, and openness are powerful forces in leadership and investing.
• Long-term outlook for both private markets and global economies remains largely optimistic—but humility and adaptability are essential.
• Erasing stigma around mental health and discussing failure openly can be transformative in both personal and professional realms.
• Confidence—not just in markets but at every level—is a foundational driver of economic vitality.
• Humility is the critical ingredient for learning, teamwork, and long-run success.

This episode is a rich blend of market wisdom, candid leadership lessons, and personal narrative—making it essential listening for investors and professionals alike.