Join Gary Hall, President of the Infrastructure & Public Finance Division at Siebert Williams Shank & Co., and Bond Buyer executive editor Lynne Funk, in a discussion on what's in store for funding infrastructure in the U.S. as the interest rate environment continues to challenge issuers and investors.
Transcription:
Lynne Funk (00:09):
Good afternoon everyone, and welcome to this Bond Buyer Leaders Forum. I'm Lynne Funk, executive editor at the Bond Buyer, and today I am delighted to welcome Gary Hall, president of Infrastructure and Public Finance at Siebert Williams Shank. Gary joined Siebert in 2013 as the national Head of Public Finance Banking and has risen to [00:00:30] also be a partner in the company. Prior to that, his professional career span more than three decades and included key roles and investment banking, private equity law and government. Gary has also held multiple prominent positions in the industry, including serving on the board of SFA on FINRA's fixed Income advisory Committee, the Milken Institute's Public Finance Advisory Board, the Corporate Affiliate Board of the National Association of State Treasurers, and he's also a former member and chairman of the MSRB. [00:01:00] Gary is also on the board of Iteras, a publicly traded transportation company, and that's not always done, but I think that's enough for right now. Gary, welcome. It's so great to have you.
Gary Hall (01:12):
Nice hearing from you, Lynne.
Lynne Funk (01:16):
All right, well we have quite a bit to cover today and the muni market has seen some changes over the past few years, of course last year and the year prior lower bond volume, we've got an ongoing Federal Reserve policy [00:01:30] uncertainty city exiting the industry. We're going to talk about what that means from Muni banking in 2024. But I think I'd like to start with leadership and given that this is a leader's forum, I want you to talk about siebert's role in this market. How has it evolved and what are your goals for the firm in 2024 and beyond?
Gary Hall (01:52):
Well, first it's probably important to note the evolution of just spr, right? When I joined the firm, Lynne, it was a 100% [00:02:00] muni underwriting platform and now my underwriting business is probably 33 to 40% of the firm. So we've grown and evolved a lot. That speaks volume as to the commitment that the partners of the firm have to making sure the firm is around when the partners are no longer around. As you know, we were fortunate to have Mural Siebert, the first woman on the New York Stock Exchange to be one of our serial founders here, and when she passed away, [00:02:30] the firm is ster flourishing. And so that commitment remains today. So the foremost commitment is that reaffirm is going to be around forever. One of the strongholds of our platforms will always be municipal bonds. I say this jokingly to a lot of my colleagues is that rarely do my colleagues have a CEO who stays up at night and reads muni indentures and is involved in crises.
(02:57):
But Suzanne Shank grew up in the [00:03:00] muni business and is committed to being, and still today is a banker. So we will be here in the marketplace for our clients. We have a real bullish view about the need for infrastructure in the country. We've done a lot at the firm to evolve and grow. I would say probably more recently the two biggest paradigm shifts for us was making sure that our branding being more noted by technical excellence and leading with the ideas, engendering credibility [00:03:30] within staff ranks and being there for our clients even when we're not issuing bonds, just to be an ideal partner. So working with folks on multi-year capital plans, making sure we can talk about optimizing debt portfolios, things like that is really very, very important to our clients even when they're not issuing bonds. And then the other thing is intrinsically we've worked hard to shore up things to make sure that we can leverage our resources for our clients.
(03:59):
So first [00:04:00] thing we've done is we joined forces with Apollo and now we have a bigger balance sheet that we can tap to ensure when we are doing elephant transactions that we can withstand and take bonds into inventory to withstand sort of market turbulence. And then also our Salesforce is probably larger than many, most other firms in the business and a Salesforce that not only has relationships with your portfolio managers, but also with [00:04:30] your buy side analysts to be able to contextualize credits and sell credit stories to ensure that our issuers get maximum performance day up. So we've made a tremendous amount of investments in our muni platform to ensure that we can be there for them and for the long haul and really close that value proposition gap, if you will, between our firm and bul bracket firms.
Lynne Funk (04:55):
Right. Actually, you mentioned, I want you to talk about the secondary [00:05:00] desk. I think you've grown in this space. Talk about how that growth, why does that matter so much for issuers, particularly as you said, when they're not in the market and for the market at large, what is it?
Gary Hall (05:13):
Well, our firm, we've always done a lot of trading with what I call tier one investors, your major bond funds, but a lot of your BO market firms, they do billions of dollars of trades there. On a pretty routine [00:05:30] basis, we have sort of captured this niche of not only going downstream in tier three and tier four investors, and it used to be before tax reform, a lot of your financial service firms, your banks and your insurance company when you're in Senate to invest in immunities today, it's primarily professional retail. And this became more pronouncing during covid. During Covid, there was a need for a lot of liquidity in small block trades and we were there for [00:06:00] a lot of issuers and sorry investors during that time to the tune of close to 50 to 60 billion in 2020 in the heart of the pandemic. That loyalty with professional retail has now carried itself over post the pandemic and has allowed us to swing leverage in the primary market.
(06:21):
I'll give you an example. We were in the market today with a deal for the Port Authority of New York and New Jersey and [00:06:30] it was papered at a 650 million transaction. They had a retail order period yesterday where 900 million of orders were obtained in the retail market. That's one leverage their way for the institutional period today. And the large composition of that professional, I mean large composition of that retail was professional retail. A lot of those professional retail clients, totally 53 [00:07:00] different investors bid for those bonds. A lot of that are secondary trading partners. So again, that secondary trading activity, bills loyalty and connectivity so that we can swing leverage in the primary market for our assure clients.
Lynne Funk (07:18):
Right. Okay. 900 million, huh? Pretty good on a $650 million deal.
Gary Hall (07:24):
Yeah.
Lynne Funk (07:25):
Alright, so somewhat follow on with that. What about quantitative solutions? You've grown this team too, right? Talk about why that also matters and explain why do these bankers who are not necessarily on the front line, what are they doing?
Gary Hall (07:44):
Well have most other firms have had heads of quants for years and these folks have primarily been relegated to our largest issuers and more sophisticated accounts. [00:08:00] And so the silo, so the rest of our clientele throughout our footprint has not really received the benefit of this innovation. Again, I think having a leadership that understands some of the inner conditions of the market from a competitive standpoint was very helpful in convincing my partners to say, Hey listen, let's double down in this innovation. Let's build a group, put a ring fence around them [00:08:30] led by one quantitative senior banker, but have them have their own little ecosystem where they're in their geeked out whiteboards, looking at things for our clients on our dime on our time, trying to come up with innovative ways to help our clients efficiently tap the market or optimize debt portfolios or again, build out those multi-year capital plans.
(08:56):
And so we have a five member banking member team led [00:09:00] by Giles Nicholson, who we recruited veteran, a known entity in the markets, been in a lot of different places, but most of all someone who has a strong reputation for collaboration and teamwork because when you have quant bankers, it's great to be tethered to your desk and be a model jockey, but being able to translate that innovation first to your bankers so they can get the word out to your clients and then ultimately to clients, it's critically important. We call it plain [00:09:30] English who's going to make translation. And so having five members devoted to that gives us two things. One, as I mentioned before, folks are constantly looking at ways to optimize our clients' debt portfolios and making sure that we have all the innovation that's necessary. The other thing that gives for us is organic communication throughout our organization. These bankers are not just housed in New York, we have a banker in London, for example. We have one in California. And so having [00:10:00] bankers all throughout our footprint allows the messaging to get out about what innovation is being applied every day to certain clients and so that we can really share best practices.
Lynne Funk (10:10):
It's funny that you say that because I think some of the concerns the people have in this industry about any kind of technology that you're speaking about here with these quants are doing that it's going to somehow lessen the ability of bankers to lose that personal touch. And what you're talking about is actually improving it, [00:10:30] bringing it up, bringing
Gary Hall (10:33):
Only if you have the connection between the frontline banker and the idea creating folks. And that's one of the reasons it works well for us is because irrespective of that we have a strong ethos of collaboration and teamwork that really allows this to permeate our organization and get to our clients in a way that I think has a palpable impact.
Lynne Funk (10:59):
So [00:11:00] this is a good segue then to we prepped for this forum. You mentioned you do not want fork and knife bankers at seabird. What do you mean by this? And tell everyone what this means.
Gary Hall (11:16):
In fairness, it's not my term. When I came up in the business, a little personal history. So I was in the doldrums of different areas of investment banking at a predecessor of JP Morgan Bank one. [00:11:30] And there was person who recruited me into public finance, made it clear that in order for me to be a banker that will be able to sustain his tenure and be around forever, I had to really know my stuff. He said, I happened to come from Chicago, my grandfather was a city council member. My first job out of college was working in the daily administration and he didn't want me to rely on [00:12:00] parochial relationships as my means for client development. He wanted me to be able to engender confidence from stakeholders based on my ability to generate ideas and earn that credibility. And so he said to me, he said, you're not going to be a banker who gets all this credibility over lunch and dinner through fork and knife. And so throughout my career, that's been something that's been staying in my brain. And so I want bankers to resemble what I tried to be [00:12:30] the person who definitely, you want folks who love to work with you, but they respect you and they value you and you're generating ideas that help them do their jobs better. And they have confidence that when they give you a transaction that you're going to structure it appropriately and give them the best advice. So they'll be in the best position to get the pricing performance that they deserve day off.
(12:50):
So that's what we mean by pork and convey. We want folks who can go from A to Z who can structure, I started out in Lotus one, two and three and [00:13:00] then Excel and DB, C. And so we want all of our bankers to have that scale and so left alone, they could structure a transaction themselves.
Lynne Funk (13:11):
Makes a lot of sense. I think I was speaking with somebody recently who had said in terms of munis, you're not going to come out and just whine and dime people to get a transaction done in this business. Just not going to happen in you can. So let's actually talk a little bit about [00:13:30] the infrastructure. You're president of it and then president banking, it's the bread and butter of the market, what's needed, whether it's transportation, ports, airports, and how do you view your role, Bert's role, sorry, as addressing the needs that are out there? And I know there's a lot of ways you can slice and dice that question, so I'm going to let you have at it. It's pretty broad.
Gary Hall (13:57):
So let's start with the need [00:14:00] as evidenced by the fact that we passed this huge infrastructure bill and then there's another aspects of it in the inflation reduction Act, the 2.6 trillion of infrastructure need that the US civil engineers said it's needed. I think that's absolutely the case and when you travel abroad and you juxtapose the infrastructure, but what we see here, you can see that there's tremendous amount of need for reparation and restoration [00:14:30] of existing infrastructure in the US And then there's another bucket, what I call is the aspirational infrastructure. Yes, we have to fix the roads and fix the airports, but what about widening the roads or deepening the ports to allow for more economic activity out of these areas and to increase regionalization or expanding and increasing the number of runways in airports as we [00:15:00] have areas that are growing exponentially. And then when you add on that the population migration and folks are going to different places and you see the growth in places like Texas and other warm weather climates, you start to see that the strain on infrastructure is becoming more pronounced.
(15:16):
And so you have that restoration and reparation of existing aging infrastructure. You have the need for new infrastructure, brand new roads, brand new terminals, brand new runways. And then there's another piece [00:15:30] that I think is really, really important and that's that what we call protective debt issuance for sustainability. We need to address sea walls not being high enough. All right, we need to weather rise generation, utility generation systems are all throughout the country. We need to have different sources of clean drinking water as we start to experiencing droughts. And this is only going to compound the need for infrastructure [00:16:00] going forward. So when I look at retrospectively at where the volume has been, I think it's been understated because we look at the volume of bonds, not the amount of proceeds that have been generated in low interest rate environments. We issue bonds with premium bonds and so proceeds exceed the amount of bonds are actually issuance. Right. So
Lynne Funk (16:22):
You're talking Gary, I'm sorry to interrupt you. You're talking back like 2021, right when you're saying the low interest rate? Absolutely,
Gary Hall (16:29):
Absolutely. I'm talking [00:16:30] maybe 18, I mean five years. I think there's been a 20% or so undercounting of what the actual need for infrastructure if you're just looking at a bond insurance. So this confluence of needing new money projects in that bucket and then needing to refinance as we've seen in years past when rates were low for us here at Siebert, we think that there's going to be a long and strong thriving municipal market [00:17:00] for years to come. And I go back, this might be a little bit of cherry pie and baseball and USA patriotism, but the fact that we have a tax exempt way to fund our infrastructure needs in the US is not, and I think it's going to be around forever. I know from time to time there's discussions about whether or not tax exemption is going away and we can quibble on whether or not we need to do it. We can advance refine [00:17:30] on a tax exempt basis, but the core of issuing bonds to fund our major infrastructure as we did for the Golden Gate Bridge and the area canal will always be here and prevalent in our country, which gives me a really tremendous amount of confidence that this is the markets to stay.
Lynne Funk (17:52):
Some folks, it depends on who you talk to in this industry. Some participants think that in the next say like [00:18:00] 25 and out, that issuance is going to be much higher because some of these needs needs to rebuild and just the baseline infrastructure and then not talking about what actually is needed above that. Do you think that state and local governments are willing to take on that level of what the need is?
Gary Hall (18:22):
I think we are in the embryonic stages of appreciating this need for protective debt. [00:18:30] A lot of folks have written that we could have a hundred percent increase in muni volume just based on climate change projects or climate adaptation projects. And I think that is definitely the case. It will require some education in all markets. Notice no one mentioned anything about green and ESG, that's not what we're talking about. We are just talking about to be protective and be the resilient. And so whether if they're irrespective [00:19:00] of your politics in Florida, you want to make sure that Miami doesn't sink below sea level irrespective of your politics in Texas, you want to make sure that you can have warmth in January. And so weatherizing, these generation utility grids is going to be very, very important. And you can argue as to how we got there, but the need is going to be prevalent. And so you see people thinking about this like the Satan city of New York and thinking about how they [00:19:30] can build stronger sea walls. And so I think we are an Emory United stages of folks understanding the magnitude of this. I think it's incumbent upon us in the municipal bonds industry to start to educating folks about the risks associated with not looking at this. And I starting to see investors paying more attention to this issue.
Lynne Funk (19:55):
So we're kind of talking about the potential [00:20:00] and the good things, but what about risks? What about headaches though? What keeps you up at night question, but truly what sets your risk in underwriting these deals to build this infrastructure? And I think that's something that needs to be talked about as well.
Gary Hall (20:17):
Absolutely. So in the current market, what keeps me up at night is that we have volatility. A lot of my clients have not even been in higher interest rate environments, right? So getting clients to understand that 4% [00:20:30] and 3% 30 year money is not promised and you've got a background when somebody wants to visit. Getting our clients to appreciate that has been, it's been more art than science. And so the volatility, the market where you're starting to see outflows be more consistent from bond funds, you have an inversion in the yield curve which is resulting in [00:21:00] a lot of unsold balances. And so with these unsold balance in mark to market and needing to have trading positions have real risk associated with it. What keeps me up at night is that I don't believe I'm getting paid for that risk. We have had a pretty modest increase in takedowns on the underwriting side for years now.
(21:25):
Our issuers and our financial advisors and municipal advisors would say we do it to ourselves through the cannibalization [00:21:30] based on the pricing proposals that we provide. A lot of that maybe because we had so many firms in the industry, I worry about that now in Canada with so many bankers moving around that they will use pricing as their way to get into different deals. But I don't think that we are being adequately compensated for the risk that underwriting actually incurs in the underwriting process. And as you have big behemoths like Citigroup who were very active in [00:22:00] the competitive market, go away, you might see some shrinking in the appetite for certain firms to actually take the risk they were taking before. That's one thing. From a credit perspective, what keeps me up at night is, and maybe this has a lot to do with my Midwest underpinnings and seeing the very generous bargaining provisions for several employees, I get concerned about post-retirement medical benefits, [00:22:30] opex op,
Lynne Funk (22:31):
Right?
Gary Hall (22:32):
And you see this aging public workforce that we have and starting to benefit from these generous retirement benefits and the rising cost of healthcare. That combination and inflection point is going to be extremely costly. And I know our rating agencies have addressed this and want folks to have a process for dealing with that, but as an actual credit risk, I think is undervalued and it keeps me up at night as to someday [00:23:00] that rooster is going to come home to bear fruit and we're going to see how that impacts certain state and local government issuers around the country.
Lynne Funk (23:09):
Yeah, and is it something along the lines of too where you, I mean we have an aging population, you mentioned that, and so the younger people are not coming up to sort of fill this void. So I know a lot of the issues I do speak with too that they're having trouble even just hiring themselves. So it's bringing talent in there. And we're [00:23:30] going to get back to that talent question in a little bit. Let's wait on that. I think that's not just issuers, but are there any other, in terms of covid funding is drying up, federal aids is coming out of that? I know you mentioned opes pensions. Is there anything else that keeps you up at night?
Gary Hall (23:51):
One of the things that I think we are finding at our firm that we have to do a little bit more work with our issuer clients is [00:24:00] educating them about how to sell their credit stories in the marketplace to investors and the need that investors have, not just of the objective information that they can get from all of your financial disclosures, but the subjective metrics they use. What have you done with that covid money? Do you have a rainy day fund? What will you make the tough decisions to cut services when [00:24:30] there's budgetary strength? If we have a different pandemic, how are you going to deal with that? Investors want to know those questions. And so working with our issuer clients to be available during the marketing process to be responsive to investors during that, to be prepared to answer these questions is something we spending more time than we have in the past.
(24:53):
And you just can't have pre-prepared video screens to do this. They [00:25:00] want actual time. So maybe not live roadshow, but virtual roadshows having an interview, one-on-one calls, how you deal with questions when you're not in the market, having investor friendly websites so they can get interim financial information and understand, get a temperature of your credit health when you're not at a market. All these things are critical to investors having confidence in you when they're making their buying and pricing decisions. So a lot of it, we [00:25:30] were doing pre covid, but after Covid and during Covid, we saw that investors had a greater appetite for access to our issuer client decision makers and wanting to make sure that they can get the information they need to understand the credit fundamentals of each issue they buy.
Lynne Funk (25:49):
I've been saying that or thinking it and saying it for years. It's really, it's such an interesting story to tell too. There's a lot of positive stories to tell out there too for [00:26:00] the issuers. It's not just reactive to when something is negative, it's important to communicate that in a way they have to become more sales like themselves.
Gary Hall (26:13):
You're absolutely right. I mean, the other thing I would say that the combination of covid and people needing to be more community and wanting to get in front of clients, that's number one. And then secondly, the composition of our muni volume being [00:26:30] now more new money than refunding, we bank differently. When I was coming up, my ability to be tethered to my desk and knowing how to look at refunding analysis because most of our volume was driven by refundings, that was critical for me getting an idea in front of clients early. But today, given what I said before with the huge amount of money issuance, the need to have your fear on the pulse as [00:27:00] to what does not only the policy objectives of different issuers are, but the political realities. You got to get your butt out of your seat. You got to get in front of these clients, you got to go to these board meetings, you got to understand what's taking place.
(27:14):
You got to really feel those credit challenges and understand those credit strengths to be able to sell these deals in the marketplace because investors price deals differently even if they're rated the same, of course, because [00:27:30] they have their own internal metrics. So we're telling our bankers it's critical for you to get in front of clients. And I know it's easy now to get on the Zoom and get on the teams and make it efficient for your client to have interaction, but it's critical for you to understand the context that these clients are making financial decisions. And so going to those board meetings and being a part of these communities really, really important. And I think there's a thirst for our bankers to do that post covid because we were sitting at home at our desk so much, right? [00:28:00] The downside of that is that we had people who were only brought into our industry during that period.
(28:09):
And so the apprenticeship that you typically have by learning, looking over your shoulder when you don't have that around, we saw some degradation in the development of our junior bankers because of that. And so we are having to double down and trip it down to make up for that and getting folks next to one another so that we can really, really ingrain some of the development [00:28:30] skills in our bankers so they can add value quicker. So that's the sort of tug and pull that we had post covid, but something that we're keeping in mind going forward.
Lynne Funk (28:44):
So actually it might be opportune time then to talk about, I want to go back to young talent a minute because you've touched on it just now, but I have something else I want to ask you before that because we want to close on more of an outlook. So let's go over [00:29:00] to your role as a former chair of the MSRB. It's something else that I think perhaps from your seat and from others in the industry is what are your thoughts on the board? What's the regulatory environment? We saw the recent rate card changes happen or not changes, the SEC did not approve the rate card changes their budget, the MSRV, what are your thoughts on all of this in terms of the MSR?
Gary Hall (29:28):
Well, a couple of things. There's [00:29:30] been a shift. I had a 21 member board, there's now 15, 16 members, whatever. So it's a heavy burden for each board member. Now, given the smallest size, I would say one of the things that I've been very excited to see or emboldened is that when I was involved in the MSRB and definitely when I chaired stakeholder engagement was something that I thought was critically important. [00:30:00] And I read some notes and I think that was an point of emphasis that this current board has as well, making sure those folks who are paying the fees and being regulated and the issuers are all involved in having active discussions on where things are going. And so for example, we made this big decision during my tenure to migrate away from data centers, which had been a huge investment in prior to the cloud.
(30:29):
And we had [00:30:30] some aspirations for what that would bring, but we didn't do this in a vacuum. We went around and we talked to folks, we made sure they understood we had buy-in, and that was critically important. So my first thing is that I would definitely encourage the board to continue that or double down more, especially in this market environment we're in, as I mentioned before, take downs have not expanded and the fee generation has a lot [00:31:00] to do with where volume is. And now that we're seeing a Rosie a picture for volume and we're seeing some volatility where we're having more secondary trading, more fees are coming in, more revenues coming to the MSRB. And so as stewards of that, there has to be some proactive discussion. And I know they do this to ensure that folks understand where the investment is going and making sure that folks have buy-in on how those resources being treated as it relates to the regulatory environment and the interplay between the [00:31:30] SEC and the MSRB.
(31:33):
I was extremely committed to having a very open and direct conversation with Jay Clayton, who was the SEC chair at the time, and he was extremely responsive to those sort of overtures. And it ran the gamut. Everything from rulemaking to big strategic changes we're making and even staff changes that I was contemplating. I didn't move without making sure [00:32:00] I had those discussions with Jay. I know we are self-regulatory agency and we should be able to operate on our own, but I just operated that I had a partner that I wanted to make sure that they were on board every step of the way. And for disclosure, I worked for Gary Gensler early in my career as a White House fellow. I know he's an active listener, and so I would assume that the opportunity exists there. And I also know Mark Kim, the CEO, very, very well [00:32:30] and have tremend my respect for him. So I think that we will be able to survive this recent, and I'm hopeful through active engagement and proactive collaboration we'll get on the other side of it. This is a critical point in infrastructure for our country. Technology is going to pay a huge role in this going forward. And having our regulatory regime on the same page is really, really important.
Lynne Funk (33:00):
[00:33:00] Okay, so I was going to ask, actually, somebody actually in the audience asked, we have a question for the audience here. I'm going to give it to you. This is going to go back to the under repaired infrastructure. Is there a market for Reg D bond issuers to help with the under underpaid, under repaired infrastructure? Do you know what? I'm sorry. I actually don't know what that means.
Gary Hall (33:27):
I think what they're asking is, well, [00:33:30] here's what I would say. I'm a partner in an infrastructure fund and while our municipal bond platform has a tremendous amount of ability to fund our infrastructure need there will need, we would continue to need a diversity of capital sources including private equity, sophisticated investors, and [00:34:00] your non-public market access, right? And we're seeing this, there are a lot of projects, whether it's shifting construction risk over to the private side or sometimes just operating risk, we are seeing the monetizations of sun, what I would call monopolistic assets of government. And that's going to be something that's going to take place over time and it will continue.
Lynne Funk (34:22):
So I guess in terms of just public private partnerships, is that something maybe perhaps you're happening much more, I mean more [00:34:30] often. Is that a challenge in terms of, because as we kind of started this conversation that the tax exemption, the tax mark is such a jewel of sorts, it's so unique in the world and the universe of infrastructure that issuers are maybe hesitant to jump into bringing private money in.
Gary Hall (34:50):
Well, we often focus on the cost of financing, but when you're doing a huge project, you have to think about the cost of construction. And one of the things that [00:35:00] impacts the cost of construction is the ability to get to market fast and build something fast. In most of our state local governments, they actually cannot have locked in construction prices or raw material contracts unless they have bonds encumbered money encumbered. And so being able to transfer that construction risk over to someone else to get a project online quicker can also save money because [00:35:30] the cost of construction has gone up exponentially over and beyond the cost of financing. So there'll still be creative needs for funding sources today we're spending a lot of time at our firm thinking about IJ the infrastructure package and how we can weave in those federal grants into some of these multi-year capital plans that we've seen. And so that's really, really important to the toolbox that you have as a state local government and building big projects.
Lynne Funk (36:00):
[00:36:00] Okay, let's go back then for a moment to the younger folks, the younger people in this industry, the people who you want to eventually, as you said, take over from your CEOs and higher management, given all the challenges, and there are quite a few that this industry faces, how do you lure young talent to this industry? More importantly, how do you keep them there? Right? Make sure they have room for growth, room for opportunities.
Gary Hall (36:29):
Four Ls, [00:36:30] listen, leverage, learn, let go. Lemme tell you what I mean by this. My mom used to always say, there's a reason you have two ears and one mouth. I think we have to do a tremendous amount of listening. I learned, I had a hard lesson on listening during covid and at my firm, I'll be candid with you. During the whole George Ford classes, [00:37:00] being at a firm like Seabird, obviously minority owned, I thought I knew exactly the hearts of my employees and then got some feedback that we were not being considerate enough of those people who came up through law enforcement where their parents were law enforcement and irrespective of what you sat on race, that still was very, [00:37:30] very important to folks. And so needing to make sure that you understand and listen to folks to understand where they're coming from and make sure they're feeling included is critically important.
(37:40):
We're doing the same now as we think about how we're going to get better and more efficient, we're now making investments in technology so that irrespective of the fact that I walked to school with no shoes on and learn this way, if we can get to that same answer faster, we have to be open to it. [00:38:00] And so we have to continue to learn and get better and stuff. And then leveraging, I mean, we have a strong mentorship, DNA at our firm. It comes top down. Our CEO is committed to it. And so making sure not only that you are committed to skills development, but that you're there for your colleagues and that you're tapping people who are coming up the pike to be there for them, just not for the professional development, but also the personal development. And [00:38:30] given that some of them went to school during Covid and had started their jobs during covid, having that professional development and that personal development is even more important, and that's something that's really important.
(38:41):
And then the last one let go. It's so funny. I still today have to remind bankers that they don't have to own the deck and that they can actually trust that junior bankers can actually add value. And some of the greatest ideas I've received in the last five years are from people [00:39:00] who had the naivety or the brilliance to ask why we're doing this. And so by giving them a platform to add that value and speak their minds, it makes us better. And so letting go and allowing folks to really be included is really, really important. And then the last thing I would say, and this is really important, we call it point a differentiate at our firm, is encouraging folks to take risk. Why not? Because we [00:39:30] want them just to take risks for risk sake, but actually to make mistakes because we believe that truly you learn more by your mistakes than you do about your wins.
(39:41):
And so if we can have that professional development taking place organically and folks learning from their mistakes and not being worried about being branded by that mistake, our ability to keep them probably enhances our ability to do so. But more importantly, their ability to grow [00:40:00] and to get better and figure out if this is for them, it becomes a little bit clearer. So it's a muscle that we have to use all the time. I spend more time on it than I thought I would in this role. I thought I would be all about strategic and all this other stuff, but making sure that we get all that we can from the assets that we have in the seats are critically important to our clients and our industry. When I go to our conferences, I say this all the time, it's a silver tsunami. Look out when I'm on the podium [00:40:30] and I see a lot of gray hair or no hair. And that's because we got to do a better job of attracting younger folks, writers.
Lynne Funk (40:39):
Gary, we covered quite a bit. Is there anything I did not ask you though, that you wanted to leave the audience with? Perhaps?
Gary Hall (40:50):
I would just say that our industry showed through Covid how resilient we are as an industry. And so I have a tremendous amount [00:41:00] of pride in working in public finance and building my career in public finance. And I think a lot of times we don't beat our chest enough about the improvements we're making to society and the schools and the roads and the hospitals that we're all contributing to finance to make this a better country. And I think we should take a little bit more pride in our ability to add value to our country.
Lynne Funk (41:27):
That's awesome. Well, you [00:41:30] bring up being in person, being at conferences, being events, I'm very excited. I'm going to see you next week in Hollywood, Florida at the Bombay Southeast Public Finance Conference, which you are you Sieberts, co-chair of. So I'm hoping that some folks on this session also will be there as well. Gary, it's been a great conversation and flew by. Flew by so fast. As per usual, I talk
Gary Hall (41:55):
Fast. My Chicago roots, I get a lot out.
Lynne Funk (41:58):
I know, but it's [00:42:00] funny. We can continue this for another hour I'm sure, but we're going to let everybody go and you as well. Thank you so much for coming on and I much appreciate your time and I can't wait to see you next week.
Gary Hall (42:10):
Thanks for having me.
Lynne Funk (42:12):
Alright, take care everyone. Have a great day from the Bond Buyer. See you next time.
