Jeffrey Solomon – Vision, Tenacity, and Empathy (EP.09)

 

Jeffrey Solomon is the President of publicly listed Cowen Group (TK: COWN), a financial services company focused on supporting and providing active management to the marketplace. After graduating from the University of Pennsylvania in 1988, Jeff deferred an acting career with a brief respite on Wall Street, but he hasn’t looked back since. In 1994, he joined Peter Cohen, then the former head of investment bank Shearson Lehman Brothers, to form money management firm Ramius Advisors. Ramius grew to become one of the largest hedge funds in the world, and in 2009 merged with boutique investment bank Cowen Group.

Following the merger, Jeff switched over to the investment bank and today serves as its Chief Executive Officer, where he embodies the firm’s core values of vision, tenacity and empathy.

Our conversation starts with a passionate description of Pittsburgh sports, and flows to how active managers succeed in the 1990s and need to evolve to succeed today. We discuss the importance of empathy in the investment business, and touch on how Jeff’s summer camp experience as a kid informs how he manages people today.  His answers to my closing questions are just amazing. If you’re short on time, fast forward to the 51st minute of the show.  You’ll miss plenty along the way, but you won’t want to miss these.

Please enjoy my conversation with Jeffrey Solomon.

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Show Notes

2:36 – Jeff’s background and conversation on Pittsburgh

5:32 – End of acting career and beginning of partnership with Peter Cohen

7:38 – Genesis for starting Ramius and basic investing tenants

9:17 – Early capital raising for Ramius

10:34 – Difficulty of ’98, leverage and correlation, contagion from LTCM

13:31 – Rapid asset growth post tech crash and Ramius return/vol. target

14:39 – Active/passive discussion and views on today’s low vol. environment

16:34 – Positioning for the next ten years

18:52 – Mauboussin’s behavioral cost, passive investors often don’t achieve index returns

20:12 – How active management looks in the future – longer-term and more concentrated

21:24 – Similarities and differences in managing private cos. vs. public, managing for quarterly results

25:54 – Managing a firm and the need for empathy

31:12 – Philanthropic work

34:57 – What you learn at summer camp and Jeff’s difficulty with transition

38:09 – Market risks and opportunities, Cowen’s forthcoming volatility products, ETF risks

42:05 – Difficulty in predicting the future, Wall Street core functions in the next ten years

45:03 – Closing questions