Transcription
So, um Robin, you are the CEO of Man Group. Right?
Correct. And you're not a man, right?
I So, I Well, since I last looked, yeah.
And you're the first woman to be the CEO of Man Group in 250 years or something like that?
Something like that, yep.
So, how did you get to that job?
Yeah, determination. Um how did I get to that job? One, I worked there for a decent amount of time. Two, I've held lots of different roles. And I've got lots of war wounds to show for it. Um and I was the best person for the job when it came open.
Okay. And the best person for the job always gets the job?
I'd like to think so.
Okay. And uh Ken, um your firm has been extraordinarily successful in everything it's touched, uh but in the Great Recession of '07-'08, you came very close to not being that successful. Were you ever worried that you weren't going to survive in the '07-'08 period?
So, '07, no. '07 was actually phenomenal year for us. But there was a There was a day '08. I remember getting the elevator at home and saying, like literally, I I hope when I come back, we're still in business. And CNBC had a van parked outside of our four walls trying to get that bankruptcy footage. So, it was a It was a tough 16 weeks in 2008. Uh the good news is history's written by the winners. We've had a great run since 2008, and that moment's largely become a footnote in our history, but one that I'll never forget.
Michael, um you're identified as the CEO for a long time of Ryanair, but you didn't start Ryanair. Uh Mr. Ryan started it. Had you not um been working for him, do you think you would ever have wound up in some capacity like your job you have now? Because Did you The personality you have now is a personality Did you have that personality before, or did you grow it as you kind of were running this airline?
Yeah, it was it was I Did I always have a deformed personality? Probably. I was educated by Christian brothers and then Jesuits, so it was a miracle I survived that. Would I be in the airline industry? No, I would hopefully have gotten a job in a proper functioning industry where you could make money like Kenny. Um but the Unlike Robin, in my case, I got the job in Ryanair because nobody else wanted it. Uh the Ryans had set up Ryanair to be at the start of EU deregulation back in 1987. They wanted to kind of compete with Aer Lingus on the Irish-UK routes, and they lost 20 million in 3 years, and the thing was going bust. Uh I was this bright young guy coming out of college, had my accountancy degree. I was actually very quiet, reticent. I don't want to be a uh never wanted the publicity. Um and eventually, they ran out of chief executives. There was nobody left to run the bloody place. So, I was sent in to just staunch the losses, do whatever you want, and go wherever you want to do. My first recommendation was close this turkey. It's never going to make money. It's doomed to bloody fail. This industry is for the birds. Uh and Tony, thankfully, uh sent me off to see Southwest in the States at the time when Herb Kelleher, who was doing what he did so well in Austin, in Texas, uh he was a legend, and he was the guy who kind of created the low-fare industry. Um and I was sent off to see him. Um I I and I have this legendary dinner with Herb Kelleher.
What do you do What I mean, you know, what do you remember at the dinner with Herb Kelleher?
Absolutely bloody nothing. Uh I was He was at the time about 65. I was about 26. He drank me under the table before the starters had even got there. But I saw Southwest I we I'd come from Europe Oh, everything was slow. A plane would arrive in an hour and 15 minutes later would turn around cuz the pilots had to have a smoke, and the cabin crew had to have a winge, and everybody had to call their union to see whether they were feeling like going out on the next flight of the day. This thing arrived in was like a Formula 1 pit stop. Aircraft in, everybody on it. Aircraft out, gone. Yeah. And it was pretty clear if you could turn planes around in 15 or 20 minutes instead of an hour and 15 minutes, you get two more, three more free flights per day per aircraft. So, that's where it all came from. So, it was a combination of Tony Ryan's stupidity in setting up an airline, but Herb Kelleher's vision in saying, "You can actually run a very efficient airline," which is the key to Ryanair's success.
Now, earlier, you mentioned a couple times safety as being an exception to some things, but sometimes, people would say, "Well, if it's a low-cost airline, maybe they're going to skimp on safety." How can you assure people you're not skimping on safety?
Uh you can't, uh but ultimately, we've now been doing this for about 35 years. We have the youngest, newest fleet of aircraft in Europe. We have a fleet of 3650 Boeing 737s. We bought them all from new. We own them all. They're not owned by some bloody leasing company. So, you know, we own them all. Depreciation's our only charge. We have no debt on the balance sheet. We train all our own pilots. We have 16 simulator centers. We do all our own aircraft maintenance in aircraft maintenance in-house, and we're about to take the engine maintenance in-house as well. So, the best you can do is you point to your record over 35 years. And certainly, in our first 15 or 20 years, it was, "Well, it's a bit cheap, and you know, they don't do the maintenance." Uh I think that's kind of disappeared, but you're only as good as today. We do 3 1/2 thousand flights today. We carry 700,000 people today. Today, we have to do everything safely. Tomorrow, we have to do everything safely. And I It always makes me worry statistically, the bigger and bigger and bigger we get, I always worry statistically, you're likely to have a screw-up somewhere along the way. But so far, for 35 years, we've managed to avoid it.
Okay. Ken, many people don't realize you operate two big businesses. One is the most profitable hedge fund ever, uh Citadel, but you have a separate business, uh Citadel Securities. What is Citadel Securities, and why did you start that business when you already had a very profitable hedge fund?
So, Citadel Securities is one of the largest market makers in the world. In fact, we we trade about 25% of the US equity turnover every day. And over the past couple weeks, we've averaged about a trillion dollars a day in turnover. So, it is a a firm that is at the center point of liquidity around the world. It is powered by world-class technology, great predictive analytics, and a really, really brilliant management team. So, it shares much of the same DNA as the as the hedge fund side of the house. Great people, great technology, great analytics. It's It's very much similar to what we do in the hedge fund in terms of the the culture and ethos, but we do with a very different commercial intent.
Now, there's a story that might be apocryphal. Many stories about people who are famous have apocryphal background stories. One of the apocryphal background stories about you is that when you were in college, you got Harvard University to allow you to set up a antenna that would receive stock quotes, so as a student, you could trade stock. Is that true?
So, it was a satellite dish, actually. You know, I was I was updating my Xbox with my son next to me, and he was about 13. He's He's 18 now. He looks at me and goes, "Dad, you were alive before the internet." And And back in the '80s, there was no internet. There was no like stock quotes were actually hard to get. So, I had a satellite dish on top of the dorm room. The cable actually came through the fourth floor window, down an unused elevator shaft, and into my room. And that gave me access to real-time prices from the floor of the New York Stock Exchange. And it worked. It worked.
And if you hadn't done that, or if your early trades hadn't worked, would you be doing something more important like being a lawyer or something like that?
private equity, David.
Right. Okay. Well, there's no higher calling than private equity, of course. Shouldn't be chasing girls around the college dorm.
[laughter]
So, so Robin, um can you explain delayed gratification, Michael? Um you're a publicly traded hedge fund. Yeah. Most hedge funds are privately owned. Why are you publicly owned, and what's the advantage of being publicly owned in the hedge fund world?
Well, not my choice, by the way. So, I'm sat in that seat. So, 35 years roughly of listing. So, advantages. Everybody knows what's going on at Man Group. There is nothing to hide. And so, in those quarterly updates that we do that Michael looks so forward to doing, um we are completely transparent. And clients like that. Institutionally, if you're going to be in a space where people are looking at you and saying, "Hang on a second, are these people we want to do business with?" Sometimes, there's an advantage to having to tell everybody what's going on in your firm every quarter. So, that's an advantage.
Right. But you came to this firm uh to largely as a lawyer and as a compliance officer. Yeah. Usually, compliance officers are people tell you can't do this, you can't do that. How did you get
say I was a good compliance officer.
[laughter]
People telling you you can't You can't do this, you can't do that usually don't rise up to be the CEO. So, were you a not that good compliance officer?
Um I believe that sometimes, the best people to understand risk are the people who want to take the risk as well. If you sit me and in my executive team, they'll probably sit down and tell you, um perhaps the person with the highest risk tolerance in the organization is me. And that's something that either I've grown up on because I've I was a sort of a litigator, I guess, in American terms, or a barrister, if you go back into the the UK. So, I'm an advocate. I understand risk. I've grown up in risk. I've run towards risks when sensible people have run away from them. And that makes my understanding of risk management, which is what we do all day, and what we deliver all day, um quite acute. So, no, it's not usual. Was I a terrible compliance officer? I'm not going to I don't think I was terrible, but I understand risk.
Okay. Michael, I'm not Long ago, you said that you wanted to charge people to go to the bathroom in your planes. Did that plan ever work, or And why were so people so upset about that? Because couldn't they go for 45 minutes without going to the bathroom if they didn't want to pay?
It's one of the great free stories that keeps on giving. But I did an interview with some BBC news journalist about 25 years ago. I don't know what we were on about something else. I don't I'm taking seats out and putting sand in cabins, and you know, like the tube in London, they'd be hanging onto the rails. And she said, "What's next? You're going to charge for toilets?" And I Yeah, we have a team working on that at the moment. And you know, if we could take out the two toilets at the back, we could put in six seats, and six seats would be 4% lower fares than the And it still comes back every time. You're the guy who wants to charge for toilets on board planes. There is actually We won't do it, but there is a theory in it. Actually, if you could take out two of the loos, only have one toilet left, and charge for the planes. You look at the extent to which people obsess about not paying for our baggage fees on board. You people packing over weighing their scale on the weigh scales in their bathrooms. I'm not going to pay bloody Ryanair for the bag. They do the same thing with the toilets as well on board. We could put extra seats on the plane. And with extra seats, we'd be able to charge lower air fares. So, we're not going to do it.
You talked about once about charging extra for people overweight.
No, no, we were very good. We never that that We actually never did that one. Uh one because it would make Don't give them ideas. That was actually [laughter] that that came out of the states, I think, where with respect uh a lot of uh physically challenged people. Uh the Europeans are a bit slimmer, although yes, because we're paying so much environmental stupid environmental taxation over here. Uh no, we never planned to aircraft weights are done on average weights for adults and children, so it make no difference anyway.
a good business in Europe, why don't you just take that business to the United States? Why don't you go to the United States?
Because that is where the culture starts to go wrong. You believe in your own This We work this very well in Europe because we have pretty much incompetent competition in Europe. I love Lufthansa, Air France, KLM, and these guys are run by incompetent European government-owned airlines. The US airlines are a bit more aggressive. You They are much stronger and much more well embedded. And the minute we and our management team says, "This has worked great in Europe. Let's go all go off to America, California, or Florida, and we can run an airline over there." They'll all be out the door to go to sunshine. I mean, if you've spent any winter in Ireland, everybody wants to get the hell out of the place. So, that would be distraction. The other man I and Kenny have demonstrated over many years and said that zealous focus on your business. Do not get distracted. And I don't want to go to Europe is a deregulated market. The only good thing about Europe is this is a deregulated market for air travel. So, thankfully, I get very little government interference. The minute I go outside of Europe to the Middle East, to Asia, to the US, it is hugely government regulated. And the states is already a reasonably well-run Although, it's quite expensive. Now, it wouldn't work because And it would undermine Ryanair because we'd all get distracted.
trained as an accountant. But usually, the accountants I know are usually low-key people, very boring people. How did you get this personality as an accountant?
I mean, firstly, I mean, a lot of people question whether I was trained or even trainable. Um I did pass the exams, but only barely. Um you know, I grew up on a farm. Uh I So, I'm a farm boy. Uh We We were learned how to work hard. I was always I mean, if I came through accountancy, I didn't I I wanted to be very kind of quiet and retired. I don't like the publicity. Uh but I recognized when I got into Ryanair, we'd no money for advertising, so we had to do something. Branson at the time was running around getting you know, getting do all the cheap publicity. Herb was very good at it in the states as well. So, it was the obvious thing to do was okay, you can't be successful here if you're going to be a kind of quiet as a mouse accountant. So, let's reinvent Now, and remember, the Irish are generally good at being brash bullshitters. So, it there is a gene in all of us where we just talk a lot of rubbish. And we're very good at talking lots of rubbish. In fact, we've built generations
an accountant with your personality?
Um would I hire an accountant? Thankfully, I have much more sensible people hiring accountants than the likes of me. I would hire people people I mean, I I look at CVs like Kenny looks at CVs. He gets these soulless home loaders out of Harvard. I want people if they grew up on a farm, they're in the door straight away. And I thing I look for is not what your degree was. It's what summer jobs did you do you know, during your holidays from school and from college. And if you worked hard, and you went out, you know, to be you got part-time jobs, those are the people I want working in Ryanair. I want people who work hard. Brains, it's the airline industry. We don't need a lot of brains, and we don't need very bright intellects cuz it's a stupid industry anyway.
Ken, Ken, uh recently, the mayor of New York um pointed out that you had bought an apartment in New York, and he wanted you to pay a so-called pied-à-terre tax, even though you um have employed thousands of people in New York, you're building a new building in New York, you're contributing a lot of tax money to New York. Did that upset you?
Uh what upset me was the actual the the personal attack. Like where you you were at the White House Correspondents Dinner on Saturday, where they tried to assassinate the president. And not too far from where I live in New York is where they assassinated the CEO of United Healthcare. So, I think the willingness of the mayor of New York to make this a a policy debate, a personal attack, just demonstrated a profound lack of judgment. Just a profound lack of judgment. And I I understand that New York has bills to pay. Would you like to run New York for us for a couple years?
I'm unelectable, Kenny. Nobody would vote for me. Yes, [laughter] but like you can actually
from running Ryanair. Are you going to Ken, you're going to go ahead with your building in New York?
Well, you know, I'm meeting with the governor um Thursday. Okay, you'll figure it out.
And we'll we'll talk about our future direction New York. Here's the real question. Is New York going to put their fiscal house to order and run itself from a position of a strong government that's pro-business, or are they looking to play I I Why do the Americans think we can do socialism? Like we have none of that in our DNA, and we're just going to screw it up.
Now, Ken, you are a very large, maybe the largest donor in the United States of various political candidates, and you've met many of these political candidates. Uh you're probably smarter than all of them. Why don't you just run for president yourself? You ever thought of that?
Didn't you just say I was smarter than all them?
[laughter]
I mean, David, like what what a nightmarish job these people sign up for. To be the president of the United States, you wouldn't want to do that job? Okay, if you could snap your fingers and be in the Oval Office, of course I'd love to do that job. That would be like such Like I love solving problems, but it's not that simple. You've got to go through a a campaign cycle, which is just the most humiliating and degrading process in the American American society. So, uh you're also a very large donor to lots of charitable causes. How do you deal with people coming to you every hour on the hour for a charitable contributions?
Uh Case and Julia. You have somebody that takes care of it I do. I've got two outstanding people that take care of it. Uh you know, my job my job is to manufacture money. We spoke of that early on. I've got my investment team. I focus on the business as much as I possibly can. I've got great people around me who are involved in our philanthropic efforts, who are involved in our political efforts. They know the values that are important to me. They know the key objectives that we're trying to you know, obtain. Like how do we educate American children to be the future leaders of the free world? But my day day-to-day out, it's about driving the returns for our shareholders.
The US hasn't had a recession for more than 10 years. It's a technical more than a technical recession. Um usually have them every seven years or so. Are you worried about a recession in part because of the war in Iran, or anything else coming to the United States?
I mean, look, the business cycle has been banned. We We both know this. You know this. We all know this. The business cycle has not been banned. We're going to have a recession around the world at some point here in the in the foreseeable future. What worries me is not the fact that we're going to have a recession. It's that we're losing the fiscal space to engage in counter-cyclical spending to keep the economy on the strongest possible footing. And And frankly, if there were a panic in the credit quality of the of the leading sovereign debts around the world, the US happened to the UK just What, about 18 months ago now, was it? Liz Truss's moment? 10 days. 10 days of excitement, yep.
I mean, terrifying, is it not? As a risk manager?
Yeah. All right. So, the the key is the Western world has to put its fiscal house in order. So, that we have more flexibility and more capacity in the next downturn to keep people employed, to keep our businesses going, to keep our economies as strong as possible when they're under duress.
Okay. Robin, uh this week in the United States, uh uh the the King of England is visiting the president. You're a British citizen.
I am.
What do you want to have the King get out of those meetings? Are many people in England focused on on that? And why send the King? Why not send the Prime Minister to meet with the president of the United States?
Well, there's it's great when you're asked to speak about why the King is doing something. Anyway, so, I I saw on social media, I do that thing, interviews with the American general population about Did you know the King and the Queen is coming? And a lot of them said, "Not really, and I'm not sure why." And when asked what they should do, the American public population, these folks on social media, said they recommended certain burger joints they could go and visit. Which I thought was very useful. Um in the UK, when asked, there were at least five interviews where people felt sorry for the King having to do this visit, because what were they going to do? And how predictable or unpredictable is that conversation? How meaningful is it going to be? I have to say, I haven't spent much time thinking about what I think the King should be doing. I I Strangely, I'm a little like you. I'm kind of focused on what we're supposed to be doing every day, which is earning value to clients. Nevertheless, these are difficult times. And what we need is sense and stability, and what we need is some version of how we find solutions in things. And if the King can add to that debate, terrific. But I don't think I'd be holding my breath.
Okay. All right. Let's suppose I have some money, and I want to invest them in a group. And I say, "I don't really know much about investing, but I'm going to give you, I don't know, 100,000 pounds, or 100,000 dollars." What kind of rate of return could I expect to get if I went into a reasonably safe but hopefully profitable investment that you would give advice for me.
So, number one, let me just explain Man Group deals with institutions and we don't deal directly with wealth and retail. So, I'm just being mindful that somebody doesn't ring up the phone at the end of this. Um number two, it depends what you're after at the moment and I think if we really think about wealth portfolios right now, what worries me or what I think about a lot is whether wealth and retail are having the access to diversified portfolios that they should have to try and weather the storms of these volatility that we're seeing in markets. So, with 100,000, it depends on where your risk profile is. It sort of depends on how old you are. It sort of depends on how much risk you want to take. It sort of depends about where you want to be in Europe or where do you want to be diversified. It sort of depends whether you want to lock your money up or not for a period of time. So, I think it depends on a bunch of questions in the middle of that. But the thing that worries me or the things that I think we talk about a lot with the people in this room about how do you navigate markets at the moment when you have such volatility and such dispersion.
If you want to go into something relatively flat and relatively safe. In the In the hedge fund world, there seem to be many more men running hedge funds than women. Why do you think that is and is that going to change anytime in in our lifetime?
Um it's an interesting question about whether the the the historical bunch of people who have gone into these careers are, right? There's a certain gender to nature to this. When we started looking at this years ago, we started to look at Hang on a second, where are we recruiting from and is there some bias in the pool or and then we looked at the pool and then we looked at universities and we looked at who was taking the courses from whom we were hiring from and they were predominantly being populated by men. That is changing but it's changing slowly and what you're not going to do is find us clicking our fingers and finding different populations of gender makeup and all the very best people to run money and ultimately there is a little bit of bias in that or a little bit of gendered nature in the in the pool of people. Would I like to see it change? For sure.
Michael, I suppose you want to go on a vacation outside of Europe. And uh would you fly another airline and do you fly other airlines to find out what mistakes they're making and uh what airline do you think is the best next to uh Ryanair?
I occasionally have to go to the States on investor road shows uh David to explain to investors like you don't put 100 grand into Man, put it into Ryanair shares at a 22% discount year-to-date. Um I mean I fly whoever's cheapest going across the Atlantic. That's my only other kind of
You don't When you fly for you're going on a vacation with your family, you don't fly first class on some other airline. You always want to be in the coach.
No, I I want to be on Ryanair. I want to be seen on Ryanair. And the great thing about flying on Ryanair too is I can't fly I have to fly in rows three, four, or five cuz if I'm up in the front row of seats, everything's we're doing some VIP kind of nonsense that it is. So, and the great advantage of it too is when I'm flying with Ryanair, I'll go up and pull the boarding cards at the boarding gate. Uh inevitably I get about 25 Facebook pictures and I appear on the all these people say, "God, your man is up there doing cutting edge frontline back to the shop floor" kind of stuff. No, actually I'm going on the same flight as you but it's good for cheap PR.
have Do you have complaints? Do you tell them right then and there or do you tell them right there?
of complaints. Usually I'm pulling the boarding care passes too slowly or I'm the reason the flight is going to get go delayed but I'm also respon- I run our complaints department where we have a very prompt policy of responding to all complaints within 24 hours usually with a polite no. For most For most passengers, what's the most important thing? Price, safety, or getting there on time?
Uh safety is but but I mean assuming that safety is a given because without safety you have nothing. 99.999% of passengers want to make a booking wants the cheapest fare to XYZ. It is not available same it is not I mean destination obviously route frequency but 99.99% which is why the internet has transformed air travel and a machine learning which we had probably didn't spend enough time machine learning is going to transform it again for the next 10 or 20 years.
Okay. Ken, when you're hiring people, do you want people that are high IQ, are hard workers, good athletes? I mean somebody comes in front of you but they're first in their class at Harvard but they're kind of nerdy and they don't really talk very well. Uh do you hire them or do you rather have an all-American athlete who looks great? Uh what kind of people do you want to hire?
So, I I need both. I need both. I need I need people who are that all-American athlete with with a lot of charisma, a lot of leadership, and a lot of intellect cuz I need people who have like the innate leadership skills that go with that. But I also need some of the people who are just wickedly smart, often a bit introverted, but we've got tough problems that need to be solved and they know how to solve them.
Final question. What is the best sovereign wealth fund in the world in your view?
[snorts]
I would have to say Norway is except they don't have enough exposure to Ryanair but we're we're getting there. That's why I'm back up in Oslo again and again and again trying to persuade them to upweight their investment.
Ken, do you have the same view on the best sovereign wealth fund
[laughter]
You have many of them invest with you. Yeah, I like this this is an absolute no-win question for me. But I will say this, I will say that the fact that the leadership team of this sovereign wealth fund is so committed to the betterment of the people of Norway is actually really touching. And I I think everyone should give a huge round of applause to Nikolai and his team for their commitment to bringing the best and brightest to this organization and the consistent focus and how to deliver for the people of Norway. It's really quite remarkable.
[applause]
Robin, I assume you would have the you would have the same view. The best sovereign wealth fund that you invest with or that you're with today.
What he said plus plus cuz it Why Why say something when something's been said so eloquently? Plus this. We all get better, all of us, on the financial provision side when we work with the smartest people in the world. And so that there is nothing better than working with a team, an investor, a sovereign wealth with Norway who make us better at what we do and that's what this team does. Thank you all very much. Thank you. Thank you.
[applause]