Michael T. Johnson, Lawyer, Impact Investor and New Orleanian

 

122. Michael T. Johnson

SPEAKERS

Will Bachman, Speaker 1, Michael T. Johnson

 

Speaker 1  00:02

Will Hello and welcome to the 92 report conversations with members of the Harvard and Radcliffe class of 1992 I’m your host, will Bachman, and I’m delighted to be here today with Michael Johnson. Michael, welcome to the show. Tell us a bit about your journey since graduating from Harvard. Yeah. Well, thanks for having me first. I wanted to, want to make sure that, you know, it’s very clear in your in your call notes and things, that it’s Michael T Johnson, because I received a letter before I went to before we started, you know that summer that please use your middle initial with all correspondence with the school. As there were three Michael Johnson’s in our class.

 

Michael T. Johnson  00:43

Michael T Johnson, yes, very specific. There actually one day, actually freshman year, one day, I got a call from the the water polo coach, because one of the other Michael Johnson has played water polo, and the guy just started talking to me, and after a few minutes, I’m like, I have no idea who this is. And he’s like, why were you late to practice? No, he was like, you’ve been off of practice for two weeks. You know, recognize your coach’s voice. And I’m like, I played rugby and that guy’s got an accent. I don’t know who you are. Oh, I think I got the wrong guy. So how many other times have you guys been confused? Do they get that was the only one? I think that was the only time for that. But it’s I do get a lot of you know, I am technically a lawyer still. So I get, I’m in the legal directory in Louisiana, I get a lot of pleadings for other Michael Johnson lawyers, and have to explain to people that you screwed up here, somebody else. But all right, all right. So, Michael T, so, Michael T, so, yeah. So graduated. I wasn’t exactly sure what I wanted to do when I was coming out, but I might come from a family of lawyers, and I had worked in my grandfather’s office all during high school and all during college, so it kind of made sense to me to go to law school. It seemed like kind of something nice to do, and I wasn’t going to wasn’t going to hurt me. So I went out to Stanford Law School and spent three years out there. Once I got there and I started really getting into the legal side, it became clear to me that I really wanted to do transactional work, and I wanted to be involved in finance and use the legal use the legal door to get into the finance world that so that was definitely top of mind there. But the other pull to me was coming back to New Orleans. So that was, I grew up here, from here, always wanted, always thought about coming back, always thought about maybe getting involved in politics here, trying to, you know, figure out some way to get back to the to the city in the area. And really had to make a call around second year, which is, you know, your people who went to law school will understand this. You know, your second year, you do internships or clerkships with law firms that summer, that for all intents and purposes, that’s an interview for a job. And you know, if you’re pretty good and you like the firm, and most, most likely, you’re going to wind up getting your first job at that firm. So I had some offers to be in New York or DC and also New Orleans, and kind of had to make that call at that point, which is, do I come back to New Orleans and sort of close those doors? Because you can go from New York to New Orleans a lot easier than you can from New Orleans to New York, you know, in that profession. So I had to sort of do a little soul searching, and decided that I did want to be in New Orleans, and it was better for me to effectively go and work for those companies and interview those those firms at that point, and have them interview me really, so I can know where I’d be happiest when I came, you know, because I wanted to come back to New Orleans, and so did that. And once I got back here, I went to a started with a firm called Jones Walker in New Orleans. Well, I think it’s probably the largest law firm in the state, definitely the biggest corporate firm. And we were doing some pretty good work, you know, it was not, it’s not cutting edge New York corporate, corporate work, but it was very, you know, we were doing public company work and big company acquisition work. So I spent three years there and really had a fantastic training the summer. The summer I interned there. I think there might have been about about six or seven associates in the corporate section by the time I joined the next summer. So after you get out and you pass the bar and join, join the firm, all but one of those associates were gone, and there was a split off in the firm. So a couple associates left to the went to the other the other startup firm, but then a couple left to be general counsels at other firms, or one of them actually went to be an investment banker. It was all kind of good things, but of good things, but there were two of us who joined that year, and we got dumped. You know, they we were the guys. They’re the only guys they had. So they just dumped a ton of stuff on us. So I got a lot of responsibility early, and like a lot of client facing stuff, very early, and just learned a ton. I. You know, work like a dog, but it was the perfect time to be doing that, when you’re 2526 years old, right? And, you know, just, just do that and learn, learn a ton and got very I really kind of specialize, I think, in their public company size, did a couple IPOs did public mergers, things along those lines. I liked what I did, and I if the worst, the worst thing that ever happened is that I stayed at Joe’s Walker and was today, a partner in the corporate sector Joe’s Walker, that would have been fine with me. I mean, I I liked what I did, I liked the people, I liked the work, but I always kind of wanted to be on the other side of the deals that I was doing. I was like, I can do that, and I can do what those other guys are doing. And the whole business aspect of it really intrigued me a lot, you know, a lot. So always kind of looking for an opportunity to make a move. And when I think 9797 we were hired to do an IPO for a company called Omni energy services, which is a there’s a company that actually really simple business. They drill holes in the ground. I don’t even think this is done anymore. They drill drill holes in the ground, so that some other company can come along and put dynamite in the holes, blow them, and then you can do reading the 3d seismic imaging to find out where oil deposits are. I think the technology is like surpasses now, I don’t think you do this anymore, but these guys, it was almost like a Mad Max. If you go to their site, you know they had, they had air boats with drills on the front of them, this swamp buggies they could get in the swamps and different things and to get back and to drill these holes. Well, they were, they were about ready to go public. So they hired us, and Jones Walker, and I was the lead associate on the deal. Well, advantage capital, where I am now, they had done, and they had done an LBO, the company, and basically owned, you know, they own 95% of it, probably, or something like that. And so I really got to know the advantage capital people during the IPO process. And so we took them public at the end of 97 and then by about mid, mid 98 the the Steven Stahl, who founded advantage, you know, kind of was like, Well, you know, what do you feel like you want to be doing for the rest of your life? You know, be a part of know, be a part of General Walker. I’m like, I want to do what you’re doing. And so, yeah, that’s very interesting, because we’ve talked about you coming to doing this. I’m like, Well, you know, tell me where to sign up. So got that, got that deal done by about Halloween of that year? Because, yeah, so, so about November, I had joined advantage, November 98 and it’s funny to look back at the motivations that advantage had, and I had their motivation was, we can bring you over and you can do a couple of deals for us, thinking that, you know, I’ll document the the actual investment. So, you know, you make an investment in a company, you buy an equity round, or whatever you can do the documentation. We don’t have to hire. Documentation. We don’t have to hire an outside lawyer to do that. You can do it. We usually get reimbursed by the company. So we’ll do a couple of year that’ll pay your salary, and then we’ll get all the rest of your time, basically, for free. That’s how, that’s how they were thinking about it. I was thinking about it. It’s like, I know you want me to be a lawyer and I want to come in, but I want to be a business guy. So if I got to work two jobs, I’ll do my day. Job as a lawyer, but I’ll work nights and weekends trying to learn the investment business, because that’s eventually where I wanted to be. Well, neither one of those actually turned out to be what we did, so I came over and I did a couple of deals. And, you know, it’s always tell people, it’s like, it’s amazing how good a big law firm can make an associate look, right? I got an army of partners behind me to go ask questions too. I got a form database, and I can go and pull forms up. I got a whole secretarial pool to do document production, you know, none of which I had when I just come over by myself, right? So I did a couple deals. And finally, just like guys, this is not, this is not productive. It’s not good for you, it’s not good for me. This is, this is not where we want to be. And the meantime, I had, had spent some time doing doing, you know, company work, and had a supply boat company that I was kind of lead, lead person on a development company here in New Orleans that did historic renovations of historic buildings into condos and hotels, and then, and then I picked up Omni, since I knew a lot about the company, since I had represented them, so I still worked with them. Still worked with them. So it was kind of the companies that I did. But what I didn’t know about advantage was really how they raised their money. And I just thought, Oh, we got this, you know, investment firm down the street in New Orleans. So I get to stay in New Orleans and do the stuff that I wanted to do that I always thought I’d have to move somewhere to do. And so this was awesome to be able to go right down the street, you know, and do the type of work that that I wanted to do. But advantage specializes in and at the time, and I’ll eventually go through, I guess, all the stuff that we do, but at the time, advantage really well. Advantage started in. Uh, as a way to drive capital to underserved states. So the whole idea that, you know, states like Louisiana at the time, one of the programs that we started with was in Louisiana, and Louisiana had kind of been redlined. This is back in the 80s, because of corruption, because of, you know, oil and gas boom, you know, bust and boom cycles that happened down here, and really didn’t have any outside institutional capital down here whatsoever. And so it was actually a Harvard economic economist named Belton Daniels, was hired by the legislature and came up with this program that basically would give tax credits to insurance companies for investing with funds that then, in turn, agreed to invest in small businesses in your state. So Steven Stoll founded advantage was was a portfolio manager in insurance companies, and somebody pitched him a deal with this. And he said, Yes, that’s interesting, but he’s like, I actually think if you really knew what you really knew what you were doing, you could create a business around this stuff. So he started looking at it more and and started and formed advantage, basically, to work under these programs. So that was the capital that they used to do that, you know, to go do the LBO for Omni. That that’s how I met them. So when I joined, they probably had had a few funds in Louisiana, few funds in Missouri, maybe 150 200 million. That’s actually, man, maybe about that under management, somewhere in that somewhere in that neighborhood, but when I joined so that, so now, now I get here and I realize that you guys are raising money through structured financial products, right? I mean, we’re selling structured kind of tax credit bonds to insurance companies. So this is heavy, heavy legal work, which this is right up my alley. And you’re doing public policy and advocacy work, going around the legislatures and trying to convince people that to to adopt these programs. And I had this political bug in me. I’m like, this is, this is this is my, this is my dream job, right? I just didn’t even know it. And so if you sort of combine my political junkie and my deal junkie stuff all together, it’s like, this is, this is I took to to it like a duck to water. So I really gravitated towards our advocacy side, to our structuring side, and spend most of my time. I don’t do as much anymore, but when I started, I did a lot of, you know, political work and, you know, and all of our structuring and fundraising with our investors, putting together our funds and closing them and bringing them the capital. And so that’s just, it was just a godsend to be able to do that kind of work and be here in New Orleans. And so did that for, I’d say that that was like 98 to 2002 or so. And as I said, really had to shy away from the direct investment side. But that was okay, you know, as I was doing, I was doing a to me, it was, I want to be a principal. I want to be a principal investor. I want to, I want to do things. I want to, you know, create deals, not just facilitate deals as a service provider, right? So I was able to do that, but just do it on our fundraising side, rather than the direct investment side. So that was first couple of years we were here. Then in 2002 there was a program adopted at the tail end of the Clinton Administration called the new markets tax credit program, which is a I remember, I remember going to, you know, when the administrations get ideas, and they said, one of their ideas was that we’re going to do this new market steal. And the new markets was, we’re having tremendous success during thedotcom boom, but it’s all going to California and it’s all going to New York, and the rest of the country is sort of being left behind. So we’re going to go after the new markets, which were basically your urban areas and your rural areas, and bring some of that success to those areas. And that’s what they termed as new markets. And there might have been six or seven programs that were under that umbrella, and I remember going to like something at the Federal Reserve where somebody in the administration was cheerleading about about these programs, and it’s like, this is interesting. Maybe we could see we could do something here, and but that was even before the bill had passed. And so it gets passed, and they so now the Clinton kind of push program, and the Bush administration sort of inherits it. And so like, well, how are we going to do this? And so they put a little bit of a different stamp on it and made it a little bit, you know, business friendly. I mean, it’s always meant to be business friendly, but, I mean, it was like they, I think, pushed it a little further. And so we looked at, you know, came back to it and said, Well, we could really do this. And it lined up very well with the type of work that we had been doing before. The only difference was, it was 100% focused on low income community investing. So they kind of, when you it’s sort of a competitive application process, and they grade you on your track record of investing capital in targeted areas, your track record of raising money from investors using tax credits and other incentives, and then your track record of investing in low income. Communities. And we’re like, oh, well, we’re going to do great on the first two, but, you know, I’m not sure, so sure about the second the last one. But we took our portfolio and we analyzed it with the definitions of low income community. It turns out that we would, we have been doing about 30% of our investing in low income communities, not, not by not because that was our mandate, not because that’s what we were trying I think a lot of that was investing a lot of money in the states like Louisiana, where, you know, city of New Orleans got a lot of areas that are low income South Louisiana, same, same thing. So we just had a big overlap. So we’re like this. This will be great applied. We were one of the so the first round of awards were in 23 I mean, 2003 and we were one of the largest allocatees That first year. So there’s probably been 20 allocation rounds since then. It’s kind of been an, it’s an annual, sort of competitive allocation around. And we have, I think we’ve been winners maybe 15 times. So, I mean, we were one of the, you know, largest investment firms that is focused on the new market stuff. And it really has turned us. It crystallized what we were at advantage. I remember the early days we I’d sit through a lot of meetings, be like, you know, the the deal guys would say, we don’t want to tell anybody, you know, we don’t tell me how we raise money. We’re a venture firm. That’s all people need to know. They don’t even know how we raise our money, whatever. And then you’d have the policy people be like, no, no, no, no. We gotta go sell. You know, we’re here to, you know, increase economic development in your community and tax revenue, and that’s where we where we are, and how many jobs are you going to create? And they’re like, no, no, there’s no difference. You know, transparent. Once we got to the new markets world, I think we had to say, no, no. This is, we are now an impact investment firm, and that’s what we were, but we just weren’t calling it that. We didn’t, didn’t sort of have that lingo and that down. And the new markets really makes you by year by year applying, you got to quantify the impacts you’re doing. You’ve got to be able to tell a story of the deals that you do. How do they impact the communities that you’re in and the people who live there? Very jobs driven for us. We’re we focused on, there’s other there’s other companies that focus more on Community Services. Community Services, Community Facilities and things like that. But we’re jobs, you know, that that’s we do. We invest in small businesses and try to create job opportunities for for residents. So that really crystallized who we are as as a, you know, you won’t call it a double bottom line firm or whatever you want. But we try to produce, you know, we try to put together investment deals that have good return for our investors, but great return for the communities that we’re in. So

 

Will Bachman  17:29

that’s that

 

Michael T. Johnson  17:31

that has been, I guess, 20 years now, of doing federal new markets. Now there’s state versions of it that get added on to it. There’s other state programs that that’s that can kind of be twin to it, that focus in different areas. And that’s, that’s part of what I do, is try to figure out how to marry programs together. How to, you know, bring the best of certain programs to each other that work for our investors and and spin that out. But we’re probably, you know, fast forward, you know, we’re probably manage a billion dollar portfolio. Now, of you know these targeted investments, and I make a pitch for another interview you might do is Scott Murphy, who is a fellow graduate, is my counterpart who runs our investment side. So he kind of manages all the investments, and I kind of do all the all the structuring and bring the money in. So we’ve been together for, I think he joined around 2001 absent. He did two years in Congress, but he’s been with us all during that time, so been nice to and we did not know each other. We did not know each other Harvard, which is the weirdest thing, because we both lived in Penny factor, which is not a big door. And it wasn’t like, I didn’t know you. It was like, No, I don’t even recognize you. We must have been a completely different time, time schedule, pseudo. So

 

Will Bachman  18:45

Well, Scott is welcome on the show whenever he is ready. Yes, tell me a bit about how that mission and as well as just the requirements of the programs that you’re working through

 

Speaker 1  19:01

at the margin, how does that shape the types of businesses you invest in? You know, at the margin there might be some businesses that might be potentially look like a better investment, but they’re not going to produce as many jobs in the region, so you would default to ones that maybe are going to produce more jobs. Tell me a bit about that kind of decision making process and how it sort of shifts the kind of companies that you invest in. Yeah, there’s a couple of different answers to that. I mean, one is, people always, oh, what do you specialize in? I say right now, we don’t specialize in anything, because, if you look at because all of these programs also have tight time frames, so you raise the money in order, in order, in order to qualify for the incentives, you go and you raise a fund, and you might have 12 months to invest that, invest that capital into the qualified businesses that you’re out there. So for me to say, a couple of years ago, a good example, we had, I think we had about 50 million that we needed to invest in Nevada businesses in in 12 months. Well, you’re not going.

 

Michael T. Johnson  20:00

Be able to be as I want to be a FinTech specialist in Nevada businesses in 12 months and put $50 million out. It’s not realistic. And those, these are the types of things we get into all the time. So we have to be generalists. We always have been. So we’ve done early stage investing to things that I call, we call sort of stretch senior lending, basically right under what a bank would do, right? A bank, bank’s not going to underwrite you for $3 million they might give you a million and a half. We can figure out how to get you three and things like that. So that’s on an investment type. So there really is no we’ve got a few areas where I think we’ve invested a lot in and have some expertise in, but we’re not we can’t afford to be. You know, go deep on one or two verticals like that. We have to really be generalists, and we also have to be generalists on the balance sheet. We have to be able to be equity investors and lenders. It’s the only way. It only way it will work with the businesses we’re trying to do. So there’s a lot of and that’s Scott’s world, and really of dealing with how to put together an investment team and how to find companies and how to put that capital out in ways that make sense. He’s very good about managing the return versus the impact side of it, but that’s always a tension, and that’s kind of also my side of the shop is to kind of try to keep us honest. And you’re right. You do get businesses where you line up and you say, I’m willing to forego trying to hit the home run for the impactful deal, right? If I can, if I can put money out and and have a lot of, you know, have a big job creation story, or the right kind of job creation, I mean, so a lot of them look at, does a company bring, you know, does a company bring in people? We call them accessible jobs, right, where you don’t need a college education, or they’re, or they’re out there of an outreach to people coming out of people coming back to society from being in prison, or they’re, they’re looking at the disabled, you know, communities, or the veteran communities, things like that, which will have some, some niche impact that we might be looking for. So all these, we kind of call an impact matrix, where, if you’re looking at a deal, we score it on, you know, obviously there’s an economic analysis of it, but there’s sort of an impact score of it, and we rank those, you know, rank deals against each other, and are able to come out with things that we want and but it’s a balance, right? I mean, your mana, it’s we manage the impact as much as we manage the economic return, right? I mean, it’s to try to we have to portfolio. And so we make sure, on a general, on a portfolio basis, we’re performing

 

Will Bachman  22:33

share share, one or two success stories of businesses you’ve invested in that kind of illustrate the type of companies that you help fund. Well,

 

22:45

you know,

 

Michael T. Johnson  22:47

probably our most successful, you know, financial Well, we’ve had probably the two most successful financial investments, and we may have missed some, but you know, we were, we were an early investment in a company called fleet core, which now is, I can’t remember, it changed their name. They’re a big public company. But it was, it was a company called fuel man, actually, in New Orleans, and it was, the idea was you would get a card. They had a fleet of trucks, this business down here, that fleet of trucks, and they would give their their truck drivers, this car that you could only buy gas, basically, you can only buy gas, and you couldn’t go to the convenience store and buy the other store and buy the other kind of stuff. So it was like I was a prepaid sort of card, and that business has turned into a multi billion dollar international payment processing company from its early days of, you know, giving it to truck drivers, you know, in from a small New Orleans business, but we were an early investor, and that one got some bigger institutional money from some of the Boston firms, and that went public, I don’t know, 15 years ago or so, maybe now that was a big one. Recursion Pharmaceuticals is probably our biggest one right now, which is a company that’s using it’s an AI driven looking at imaging to speed up drug development, and that’s about how I have to stop, because if you go any further than that, I’m going to be making it up, because I don’t understand the technology. But they went public about three or four years ago. It’s a nice, nice hit for us. So those are two. Two are probably the biggest ones that look sort of what a venture or private equity deal would look like. But I, I also point to we have a like a company called North End call centers in Omaha, Nebraska, and then this is the impact story, right? You know, it’s like this woman who had worked in economic development and in call centers had an opportunity to purchase this business that she worked for, and they kind of had some contracts to do these, because kind of a sleepy business. And she turned it around, she bought it, you know, we financed her by. Buying it. And she’s turned us into, I mean, it’s one of our poster child, you know, children for economic development. So she’s in the hardest, sort of most distressed part of Omaha, Nebraska. She’s now expanded and, I think, two or three buildings, and the stuff she does with employees. I mean, she runs a van service that goes and gets people because they have, you know, transportation problems. I mean, she’s, these are very, very entry level jobs, but she moves people up fairly quickly through this call center management, and she’s just done phenomenally well. But it’s that that’s not going to be a 10 bagger for us, right? I mean, that’s not the economics of that deal. That’s more of a loan deal to support her and to get the economic development of what she’s doing to us the impact of that. We talk about that deal as much as we talk about any of the other ones, right? Because this is, this is what we do. It’s the other side of it’s the other side of what we do. So and then, and then, I guess it’ll round it out through we being specialists, sort of in incentives and tax credits. We have, in more recent years, gotten involved in federal, federal and state Low Income Housing Tax Credit deals, a lot of the renewable energy deals on the tax credit side there, and then some other things we do. We have a little bank that we that we bought, that we’ve it’s a it’s a bank that specializes in seven a lending SBA, seven day guaranteed lending. So it’s a one branch, one branch bank with a national footprint doing SBA lending, which has been, it’s been exciting. We were right in the middle of kicking it off when COVID hit, and so our one little $50 million asset bank did 900 million in PPP loans because, because we were SBA specialized, and PPP was SBA, and so we were sitting in the right place. So that was an interesting time where it’s sort of like because there wasn’t a lot of other investing going down. So everybody sort of shut down. Okay, all hands on deck. We’re going to do everybody’s doing PPP loans, so underwriting and then booking PPP loans for people. So tell me, what was it that was so powerful about drawing you back to New Orleans? So you, you know, had offers in the metro, in the metropolis, in New York, and you decided to come home. What is it about it? Is it you like the music? Is it the rice and beans? What is it New Orleans that brought you back? I’ll tell you how I used to answer this, but my mom told me, I have to stop doing this. Alright? Like, well, I said, you know, I just like, you know, I love going to saints games. And she would saints games where she’s like, You have to stop telling people that you came back to New Orleans because of the saints they’re because it’s safe. They’re not that good. But I did see a Super Bowl. I did finally get to see them win a Super Bowl when I came back. But it is, it’s the culture, and it’s not. I heard something one time, and it was very easy to believe about New Orleans, but I was kind of surprised, really, because I just don’t know the other city, but the two most of decent sized cities, the two most native, the largest Native populations, cities, New Orleans and Pittsburgh. And I didn’t realize that about Pittsburgh, but I totally believed it about New Orleans. People, they don’t leave, and people choose to come here, right? So even if you it’s not a you have to want to live here. It’s not an easy place to live. It’s a fun place to live, but it’s not an easy place to live. And we dodge hurricanes. We, you know, have some off and on, very bad crime problems here. We don’t have the, you know, sometimes the most functioning governments, and so you have to want to be here. So people who do live here love it, and that’s, that’s why they stay. It is, it is a cultural thing to me. I mean, it was somewhat family. My all my family is here. My sister left for a little while, but, but she’s back out too. So, I mean, really, my whole family was here. So it was some of that, in some business connections here, but it’s cultural. It’s just who I am. And New Orleans has always been a big piece, always been a big part of me. I mean, I drag people every year down to Mardi Gras from Harvard, you know, has had a crew that would, you know, sort of an open invitation. Whoever took you up on it, and, you know, wound up taking a crew every year down here and ride in Mardi Gras, para H and do all that. So that was that. That’s really what the draw was, and also, but being honest, there was a part of me at that time, you know, coming out of Harvard and law school, that I really, I really wanted to run for office, and I really wanted to to to work the Public Service angle, and never because once, once I got here and started doing what I was doing, and part of what it what was great about advantage is it led me the first five. Five years or so, I was at advantage. We were very focused on Louisiana. It was, it’s not true anymore, but at that point it was probably 60, 70% of what we did, versus now it might be 10% of what we do. We’re very national, but I was able to do and what we do is economic development. So I mean, I was involved because of what we were doing on a policy level, with all of the economic development groups, with the city economic development groups, with the state economic development groups, in all of those conversations. So I was getting that, you know, scratching that itch of being able, like, what am I doing for my city? Well, I’m, you know, I’m going to Metro vision trips. I’m talking to, you know, how can we, how can we bring capital for this? How can we set up this? So I was getting that through work, but still here. But I did come in. I did actually walk into my boss’s office one day and told him that, you know, I thought I was going to run for state rep, and, you know, I said, Listen, it’s a part time deal in Louisiana. And I said, I’m not, I’m not well off enough to just say that’s all I’m going to do. I need to, I need to? I need to continue to work right? I said, but obviously I’m not gonna be able to give you 100% of my time. Hopefully we can work something out. And he said, Boys, sure, that’s, that’s, that’s, yeah, we’ll work something out. That’ll be fine. He said, but that’s the stupidest thing I’ve ever heard in my life. He’s like, why would you do that? I’m like, Well, that’s all he’s wanted to do. And he’s like, You are so set up here. You like, you don’t know. He’s like, You are a you’re on the cusp of something great here in advantage, because he just knew what I was doing at the firm, just fit in so well and where we were going in the future. And he’s like, just, just, just stop. And I probably still would have run until they they changed that district. It was one of the it was a redistricting year, and so they changed the demographics of it a little bit. And it probably wasn’t a a winter district for me. So I wasn’t, I was, I didn’t want to do it enough to move. Let’s put it back. So tell me a bit about your life in New Orleans outside of work. Yeah. So I guess I was, I got married when I was about 30, after a couple of years of working, married a woman who actually was our she was a lobbyist, actually in the legislature, and were married for a few years. We got divorced, but we didn’t have kids, so it was very, you know, very amicable. And, you know, we both had our own careers. It was sort of easy to, sort of to break this off. And then I met a woman from Mississippi trying to think when I was probably 40, right after. I mean, it was right after my, you know, maybe a year after my divorce went final, and I met, I met my wife, Alicia, and great story. I lived a block and a half from a restaurant called Clancy’s, which people have been in New Orleans. They people come to us should go, if they haven’t go. It’s one of the best places in the city. But I lived a block and a half from there as a single guy who doesn’t know how to cook, I pretty much lived at Clancy’s, and one Friday night, I got a text from one of my friends. He says, you know, we’re at Clancy’s. Okay? I get those. I get those periodically, and, you know, and just because, you know, people knew I’d be in the area, might come by texting back like, are you with your wife? Is he a work thing? Like, you know, what is this? And didn’t get a response. Didn’t get a response. I was going to go and it’s like, and then Clancy’s just set up. You walk in the front door, and you go straight and you can you walk into the bar, and off to your right, I mean, off to your left is the dining room, but it’s all open so you can see, and it’s pretty small. I’m like, I’m just going to walk in, just head to the bar and look over there, and if he’s with his wife and whatever, who I know, well, I just go say hi. If he’s with a work thing, I’ll, I’ll figure, I’ll figure that out, right? You know, I could my excuse be, I’m just going for a drink. And so I walked in, and he’s sitting at this table with this beautiful woman who’s not his wife. And I’m like, Hmm, this is interesting. So, so I gotta go. I gotta go investigate it. Well, his wife was in the restroom, but she was sorority sister of now my wife, and so she and she coming into New Orleans. So we met that night, and she lived in Mississippi, and she had two children, and after maybe a year or two of we talked about this the other night, two years, maybe, of dating, two, three years of dating. We we decided to get married, and I said I would move to Meridian, Mississippi, which is where she was living. And that lasted about she told me. She was like, thank you. And that lasted about a week. And she said, No, no, I think we’re going to come to New Orleans. So I’m like, well, thank you. That’s good. So it’s three hours away, and I’m like, I can make it work. I just gotta get gotta get in. I gotta be in the office a couple days a week to sign checks and stuff like that, but I can make it work. But she decided it would be better for everybody to be in New Orleans. So she and the kids, we got married in 2013 she and the kids moved to New Orleans then, and Dylan, my stepson, were. Was in sixth grade. My stepdaughter was in first grade at that time. And you know, that was a big change for me. I mean, as a, as a guy who, you know, even when I was married, we were, you know, no kids and running around doing whatever. Now, now I got two kids I gotta deal with. I got homework, and I gotta bring kids to school and all this kind of stuff. So that was a big change for me. But great, you know, it was a great, great, great thing for me. And then a year after we got married, we had our daughter, whose name is Clancy, because we met again, I bring that circle full around. So she’s 10 and fourth and she’s in fourth grade now. And my stepson graduated from Ole Miss last December, and he’s working in Dallas in commercial real estate. And my stepdaughter is about to graduate high school, and she’ll be going to Ole Miss in the fall. So my wife’s family, or if you haven’t picked this up, are Ole Miss crazies and her dad. Her dad has accepted me, even though I’m an LSU fan because I went to Harvard. So he thinks eventually I’m going to be smart enough to figure out that much better. So there’s still hope for me. I didn’t go to LSU, so tell us about your podcast. Oh, that’s great. So I’m totally inspired by you and what you’re doing here. I was talking to a friend of mine and just one night and saying, Yeah, I’ve been listening to these things. And it’s funny how many times that I have talked to people. And this is about work, about personal stuff. And I’ll be like, you know, I just heard this. Some this, some of the, you know, these podcasts I’ve been listening to, because I don’t listen to other podcasts. I’m not a podcast person. But this is, this is the one I do listen to. Yours is the one I do listen to. And I always find stuff and stories about people, what people what people are doing, and sort of have some kind of related to business or personal. And I was telling, telling my friend Tom about this, and I’m like, you know, wouldn’t it be cool to do it with our class? And he’s like, you know, I’m looking for a project. Like, okay, we’re in. So he’s done all the tech stuff and all that stuff. I just need to show up and talk or just listen, actually. So we’ve been doing that. We were class of 240 we probably about 10% through the class now. And this is for you’re basically doing a version of the 92 report for your high school class. It’s exactly, I mean, it’s the same. Tell us what you’ve been doing since graduation. And then we went to Jesuit High School. And there is in Jesuit High School in New Orleans. There is this really tight sense of community. And if you talk to Jesuit high school graduates in this in this city, you get a lot of what Jesuit meant to me and how I still carry it with me. And we’re all still pretty involved in the school. So it’s even more of an, sort of an impact turn back than what, what you sort of say, What do you remember from Harvard and that kind of stuff. It gets even more into, you know, I brought back this, you know, men for others as our motto, and things like that, that people will bring that back to, how do you see that in your life? How do you how do you live your life? You know, with, with the Jesuit teaching sort of instilled in you so,

 

Will Bachman  37:58

and what’s the name of your show,

 

Michael T. Johnson  38:00

Jesuit journeys, some attorneys, all right, which was a little concerning, because now we’re getting some kind of inquiries from other classes. And I’m like, no, no, this is our class. Like, like, I’m not, I’m not, I’m not, I’m not in the interview business. I don’t want to interview a lot of classes. Talk to my people. But I was like, we had to make a little specific to our class. But it’s been great. It’s been great. And, you know, and obviously, you know, you touched, you touched on New Orleans and and why I’m here. And one of the things that everybody who lived in New Orleans at the time, you know, has to think about and deal with, is, you know, how did we deal with Katrina and what happened there? And I, I had a really interesting experience in that our business was not New Orleans centric, right? I mean, we’re in a 22nd floor of a high rise, you know, that’s not going to our our business ain’t going to flood out or something like that. So, you know, we could continue to operate. And so we did a quick check of all of our companies. And generally, I think we had, I think we had one sort of like convenience store loan down in really, really South Louisiana, where the building was just gone. I mean, it just didn’t exist anymore, kind of deal. But generally, most of our investments were fine, but we took the entire office and brought them up to St Louis, where as our second largest office in St Louis, and we all worked out of there for a couple months, and we talked about this new markets application. And one it was due, I think, the week or so after Katrina and the Treasury Department, who runs this they, they gave everybody an extension. That was, you know, if you, if you were, if you were in this area, part of the world, they they would give you a break and say, you know, you’ve got another three weeks, or whatever it is to do it. And we threw away our we just threw away our application. And so we sat down, and five or six of us who had, you know, there’s probably 30 people, went up to St Louis, but five or six of us who kind of worked on the application in st. Lewis just sat down and rewrote this entire application on how we were going to use new markets to rebuild New Orleans. And it was just like, one of those talk about something that wrote itself. It was just like, it’s just a labor of love to write that and to be able to do that, but you really do post that he started that question. It’s like, if I can’t go back, where would I go? And for a New Orleanian, it’s a tough call, because it’s, it’s a, it is such a, it’s such a unique place and such a personality. And I kind of look at cities that also have personalities, you know, San Francisco obviously does New York, obviously does Austin, Texas comes to mind, you know. But it’s like, you know, you can’t just go live in, you know, generic town a, if you’ve lived in New Orleans, it doesn’t work. So some really kind of soul, soul searching, you know, times. But luckily, you know, my house was fine, and as I said, the business was fine, and it also allowed us to be a little dispassionate about what needed to be done. So we, we got called in to to DC pretty quickly. There’s some relationships we had up there. And say, you know, y’all are in this incentives business. And, you know, what can we do? Like, can we do something to, you know, can we use some of these programs, like, can we, you know, to speed the rebuilding up, or something like that? And you said, we, I mean, you could, you could just insert, you know, the Gulf opportunity zone, you know, which is the affected areas for low income communities. And run the same program you’ve been running on low income communities. You can do that. And so we’re like, that, you gotta come talk to people about that. Okay, so I went and I met with tax counsel for the House Ways and Means Committee, and he just, you know, he asked this question of like, he’s like, Well, my boss believes in the market. He’s a market guy, and he’s like, why he doesn’t like tax credits, tax credits and they distort the market? Well, the market’s got all the answers. And so why? Why would we do this? And really, I had, at that point, that was 2005 so I guess I had seven years of this, and honestly, had never been asked that question before. You know, last day, I’d never been anywhere. We’re talking incentives every day, and they’ve never been asked that question. They kind of caught me. I said, you know, I said, your boss is right. I said, I don’t, I don’t. I don’t want to say boss is wrong. I said, but the market, the market’s telling you not to put $1 in New Orleans, right? They just pulled the plug on the economy of a major city, of an of a region, right? There’s nothing here. All the powers off. There are no people here. It is just is closed. And that’s not really conducive to investing, right? I mean, like, where am I putting my capital at night, but in there, you know, Mark, the market is right. Don’t do it. Essential politically, if it’s okay that you can write off a city or write off a region and say it’s done, then let the market play. But if the political reality is you’re not willing to let New Orleans die, you know, then you’ve gotta move the market back. And that’s what these programs can do. And so that became part of I’m not, I’m not taking credit for that. It just an antidote about it. But that is part of what the go zone package became, which was a bunch of, you know, it was, I think they accelerated, like 30 years worth of low income housing, tax credits, incentives to the area. They did a special, couple billion dollar new markets allocation to the area. It really, really did help in the recovery, you know. So it gave people. You knew that you didn’t have to convince people to invest in it. Those dollars were going to come as long as you could find good things to do with it. So you knew it’s like, hey, if I got this idea and I know I’m going to rebuild this, there’ll be people that are actually actively looking for deals there. So that was really helpful. But a couple years later, we saw that guy, and he said, you know, because I remember, he goes, he goes, You really only guys who came up and weren’t, like, in tears sitting in my office, like, in tears. I’m like, Yeah, because we had the luxury of not really being in it, right? I mean, my house was fine. Or I didn’t have to worry about, if I had a plant in New Orleans, you gotta fix that plant, you know, if I had a, you know, restaurant, you gotta worry about fixing it. We didn’t have to do those kind of things. So we could kind of take a step back and say, we know the area. We know what to do. You know, these things can be helpful and not, not just like be overwhelmed with the situation, you know of what was going on because, because our personal business weren’t that weren’t that effective. So that was, that was a pretty interesting time to go through. Michael, tell me about any courses or professors that you had at Harvard that continue to resonate with you? Yeah, so I knew that question would be coming. You know, I was a classics major, so I and I probably over, over emphasized those classes, and I took a ton of them, and probably more much more than needed for my major, but I really enjoyed those and but when I look back on the classes that I enjoyed, I really think to me, it was it was it was the core classes. Those are the classes that really resonated with me. I mean, act 10. To me, I needed to learn act and I think everybody needs to learn micro, macro economics. It should be required study for high schoolers. You know, if you don’t understand. That it’s kind of hard to understand how this, how this world works, you know, if you don’t understand that, and you know, obviously justice to a freshman, you know, an 18 year old kid, and kind of makes you think, makes you learn how to think, actually, you know, but and then senior, I think senior year, I took two of the classes that I remember distinctly, that I just loved, were the Michelangelo class, which Stupid me. Spent a semester in Rome studying classics. Junior year, took the Michelin Michelangelo class after I did that with dumb you know, do it first so you know what to see when you’re there. And then I took a class on the American Revolution, which I just loved. Forget the professor, maybe Bernard Bailey, was that his name, it was just fantastic. And just because it was perspective of, it was a deep everybody learns about the revolution, you know, in high school or whatever. But the really learning, the real political things, of what was going on and what the real economic pressures, of why things went the way, they were just just fascinating to get that level. But funny story on classes, I had the luxury. I have a nephew that graduated two or three years ago from Harvard when he was freshman. Went up to see him and went and he took me to have breakfast. And now mem Hall, which, whatever, which is kind of cool. And then he said, Well, you want to, I had time. Is you want to go to class with me today? I could do that. He said, Well, I’m going to, I’ve got a Latin PL, Latin American politics, history of Latin American politics, something like that. He said, this great professor, sure, I’ll sit through it. And so I sat through it and leave, and we leave. And he said, what you think it’s great? I said, but I don’t consider that history. He said, What do you mean? I’m like, I knew all that stuff just from living through the last 30 years and reading about it. It’s like, my life is now history, like I’m old. But it was, it was cool to see that, you know, it was good. It was kind of cool to see that be back in that, in that setting. So

 

Will Bachman  46:56

I’m curious, you know, being a classics major, do you still ever read any like Latin or Greek, just for fun? No, no, I I lost that, and it was interesting. The Latin was always Latin was because it’s more

 

Michael T. Johnson  47:14

romance language, I think too, it’s, it stays with you a little more. The Greek was because the Greek alphabet it’s a little, I think, a little harder, at least, for me to stick. That did not stick with me that much, but now, probably within about four or five years, I that was that was gone. Yeah, part of part of me also thought maybe I’d go back to Jesuit and teach Latin or teach Greek, but that’s gone too.

 

Will Bachman  47:38

So I’m curious what’s and for me, like, I majored in physics, and all the equations are gone, except for maybe force equals mass and acceleration, right? Like, I, I couldn’t go to a quantum mechanics question now, but there’s some, like, residue that remains. What’s the residue of your classics education that remains for you, having, you know, forgotten, the actual ability to read Latin like, what, what? What is the residue that remains of what you take away from those classics classes? You know, I think, I think people would say vocabulary. But to me, like a lot of illegal because you got root, roots of all, a lot of words can come from that which it does. I think more to me, it’s a writing style.

 

Michael T. Johnson  48:19

For some reason, I write in a way that I think is very influenced by translating Latin, and it’s hard for me to describe, but it’s a lot of phrasings and things along those lines that I think come from that, and it come from taking those sentences apart and putting them back together in English, I think has bled into some, some of my writing style, I think

 

Will Bachman  48:45

the dative and genitive and nominative accusative cases, right? And a love and a love of Italy and a love of Rome, like, you know, my favorite places in the world are over there, and so that certainly, that certainly felt amazing. Michael T Johnson, where can people who wanted to follow up or just keep track of what you’re doing? Yeah, you. Where can they find you? M johnson@advantagecapdotcom,

 

Michael T. Johnson  49:12

we actually just rolled out a new version of our website, advantagecapdotcom this week, I think. But yeah, that’s it. I’m I’m always, always watching that email, and I’d say I’m more of a a watcher of social media than actually a participant and post things. I probably have 15 Instagram posts in the history of my my account like that, but I’ve been using a little more to promote this Jesuit journeys podcast. But other than that, I’m not a very active poster, but I do see things that are out there. So that’s so cool that you’ve done that. And by the way, listeners, if you are interested in doing it for your high school, you know, let us know. We’ll help you get set up on with the whole website template and everything. Yeah, will thank you for that. You were very helpful and good to start.

 

Will Bachman  50:00

Didn’t give us your playbook. It was certainly sped up our development a lot. So wonderful. Michael, thank you so much for joining today. It’s a great discussion.