Lawrence Steyn, Investing in an Industrial America

 

139. Lawrence Steyn

Lawrence Steyn, Will Bachman

 

Will Bachman  00:00

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 Lawrence Steyn. Lawrence, welcome to the show.

 

Lawrence Steyn  00:16

Thank you. It’s great to be on I love receiving these, and I’m thrilled to be able to be part of it.

 

Will Bachman  00:23

So Lawrence, since you you’re thrilled to be receiving these. Very kindly to say, you know, my first question, tell us about your journey since graduating from Harvard.

 

Lawrence Steyn  00:32

All right, I’ll do this in the incredibly boring way and just go somewhat chronologically. So when I graduated from Harvard, I moved out to Los Angeles for a couple of years to take a job with Walt Disney, which was a blast to be able to live in that part of the world. Work in the entertainment industry. I was in a role where we were helping them think through how to finance new theme parks and new movies around the world. And for some reason, which I can’t quite explain, I decided to leave that and go into traditional investment banking. So after a couple of years and in LA and including being a character in a theme park for for a training program which was pretty outstanding, what character were

 

Will Bachman  01:23

you?

 

Lawrence Steyn  01:24

I was a penguin, and I was kind of grabbed at the last second to be in this training program. So I wasn’t really prepped, and they didn’t really have a great character. So they gave me a penguin who’s one of the Mary Poppins penguins. There’s an animated sequence in Mary Poppins, where some penguins come out and engage, and no kid knows the Mary Poppins penguins. It’s a completely terrible character to get and so I was telling all the kids that I was chilly Willie, which is actually a Warner Brothers cartoon, so probably a fireable offense in hindsight. But the thing that’s pretty amazing is you’re out there in this costume, and it’s 90 plus degrees and you can’t, like, you just get sweat, and it just like, kind of pours down your face, and it’s just miserable out there, and kids come up to you, and they grab you and like, you can’t see them. And a mother lifted up a child to give me like a kiss, and I swung my head around, you, kind of sense there’s a child there, and I have a beak. It hits the cut of the kid in the head, and the kid is crying, and the mother’s angry at me, and I’m sweating. And so the whole thing was, was kind of like, was actually, I mean, in its own way, a great experience, but it’s, it’s a harder job than I probably the hardest job I had in the 30 plus years since, since graduation. So

 

Will Bachman  02:46

like method acting, there you try to really get into the role of the penguin.

 

Lawrence Steyn  02:50

I was. I was a penguin. I felt it. I felt it. I It convinced me to not become an actor. And so then I said, I’ve got to become an investment banker after the experience, right? So I am so I moved to New York, and then I went down a track that probably way too many of the class are familiar with. I went into investment banking, started at Goldman for a few years. The good part about that, well, two really good parts. One of the good parts is I spent some years in London, the probably the better part is I met my wife there. So that was a a true work romance that has continued to this day. And we went to London together. I think we had a great time there, came back to the US, went to work at Morgan Stanley, did that for 11 years as a Goldman for 10 years London. Of that was about three Morgan Stanley for 11 years, and then moved to JP Morgan as a vice chairman of investment banking. And I did that for roughly three years. And then, then COVID came, and I turned 50, and I said, Oh my God, you know, I’ve been in banking for, like, 25 years. This is terrible. And I had that, that midlife crisis about, what am I doing? And my wife was working at a with a SPAC, and introduced me to an autonomous vehicle company, and so I went to this autonomous vehicle company called pony.ai it was my chance to test out how to work within the tech industry. Work at a startup, do something really differentiated, and it was incredibly hard. It was probably by far the hardest job I had over the many years. I The company was was Chinese centric. So even though the company was headquartered in Palo Alto or just outside of Palo Alto in Fremont and. And was technically domiciled in the Cayman and most of our shareholders were venture capital firms who were Western. The company had a large nexus with China, and this was in 2020 2021 as the relationship with China started to go very bad, between the US and China. And so I showed up to help them accomplish the de SPAC. This was the great era, the de SPACs companies going public with 10s of billion dollar valuations, and we were days away from completing the de SPAC when the DD IPO failed. Some people in your audience may remember there was a ride share company, the Uber equivalent of China, effectively called Didi, that went public without the Chinese government’s permission and got just smacked down very heavily by China, who then went after and in a startling month or two, just destroyed large parts of the Chinese tech sector trying to reassert government control over technology. And our little autonomous vehicle company, days away from going public, was caught up in that and we had to. We were told, in no uncertain terms by the Chinese authorities to to not go ahead. And our investors in the US got spooked anyway, by what China was doing to its tech industry. So we, we pulled this back. We went out. We raised money from the Middle East, from mubadala in the UAE, then eventually from Saudi Arabia, from the niam project in Saudi Arabia, which is actually a pretty fascinating time. I got to go to Saudi Arabia for some time. It’s a fascinating country. So so we were fine. We had money, but I got to see firsthand the battle between the US and China starting to emerge where China did not want to have a strong tech sector until they got their arms around that the US didn’t want to have Chinese companies having access to us coding. That was when they started to limit the NVIDIA chips going to China. It was just a complete geopolitical nightmare, and our company was was right in the center of that. We also into an interesting development. We we had one of our little autonomous vehicles was driving around Fremont doing what it should be doing. No one in the driver’s seat, and it hit a median on the highway, which it should not have done, and put aside the reasons that it did it. There was some coding issue. Okay, that’s unfortunate. No one got hurt, though, the car was fine, but it gave a mitza, which is the National Highway Transportation Safety Authority, I guess the test case to come in and try assert its control over autonomous vehicles. They had wanted to do this against Tesla and others, but the government’s kind of wary to take on Tesla, wary to take on crews, wary to take on Waymo, not too wary to take on pony.ai we were exactly who they wanted to come at this Chinese, small cap, little company, and they came down heavily on us. And it was a it was interesting, in hindsight, to be there in the center of the government’s focus of trying to assert its control over you, and we had our team of lawyers and lobbyists, and I started doing a lobbying campaign. I went around Capitol Hill, I went to the California representatives, both within the state and then in DC, trying to lobby for our cause was just very interesting, in some ways, disillusioning to see the quality of the dialog that you have with your representatives, but interesting nonetheless. Anyway, after a couple of years of doing that, it became pretty apparent to me that while pony was a great company who has since gone public, it’s actually now a public company. What I was brought on to do, they’ve been able to accomplish, was never going to go public as an American centric company, and a large part of my role, besides being the finance guy in a company of a lot of tech nerds, was to be the Western guy in a company of a lot of Chinese people. And so it became pretty clear, I think, to me and others, that that was not the greatest and best use of my time, nor the right way for pony to continue to develop so in a great turn of events, a private equity firm who I had spent a lot of time with when I was at Morgan Stanley, I was at a charity event with one of the general partners, and he was asking how pony was going, and I was walking through all. These government issues. And he said, Well, why don’t you come over and join American industrial partners? We’ve been waiting 10 years for you to join us. And so day or two later, we shook hands, and I moved over there. So I’ve now been in American industrial partners for a bit over two years. Private equity firm, one of the larger ones, focused on the industrial area, and it’s actually pretty fascinating right now, the the

 

Lawrence Steyn  10:28

government issues, whether it’s Trump or whether it’s the business issues of post COVID, of changing supply chains, you’re getting to see, once again, I’m getting to see firsthand how these things are rolling through the business world, that as you shrink supply chains, as Trump, the Trump administration tries to work its way through tariff considerations, the fact that we’re an American centric, manufacturing centric private equity firm puts us in a very interesting position to see how a lot of these trends are playing out, and as much as many of them are probably destructive for the economy as a whole. We’re actually in an interesting place to observe the shrinking of supply chains and the refocus and the RE industrialization of America and the build out of American hard enterprise. And so that’s interesting to see, but you still compare, you know, it’s fascinating. Pony, as I said, has gone public, given the day, it’s a six or $7 billion company started 789, 10 years ago by seven guys in a garage. And of course, the stories like that are numerous, and for us to generate a billion dollars takes tons of capital, big operating teams, tons of resources, and it just makes you realize, you know, we’re happy to do what we do, and you know, I enjoy it, and we’re pretty good at what we do, but the opportunity that you get in the tech world to create billions of dollars of value through a low capital, high IQ work effort is actually pretty phenomenal to see. So So while this is the right place for me, I hope to be at AIP for many years. I enjoy it. It’s a great group of folks, great group of engineers. And again, I think we’re good at what we do. I do look at what happens in that venture capital tech world, but it’s hard. I do have to say I’ve crossed that off my bucket list. I’ve been a tech company, CFO, I’ve tried my hands at world changing technologies. I think autonomous vehicles, robotaxis, will be massively successful. I hope they are. I’m going to keep some of my pony shares and see how they play out. But that that that job function of being that tech guy is incredibly difficult. So, so I’m at this private equity firm now. Our family has, which is my wife and my son, have moved from New York down in Miami. We still spend a fair bit of time in New York, but we’re really in Miami. Now, interesting to see the Miami side of life. It’s a to a decent existence, but a very different existence than New York, and it’s come full circle now you said, start with my graduation. My son’s now graduating from high school, or he will be in a year. So we’re going through the college application process, and so we’re we’re all in on the stresses of that. So I’m sure many other class of 92 parents have are going through at this point. So that, I guess, is the chronological history of of where I am today.

 

Will Bachman  13:43

All right, I have many follow up questions. Okay, okay, so my first one, so you were vice chairman at of investment banking at JP Morgan. I think you

 

Lawrence Steyn  13:56

said, yeah, there were a bunch of us. I don’t want to make it seem like the unique one, although it was a great organization and a great role, but yes, that’s correct.

 

Will Bachman  14:06

So that sounds like a pretty senior title, so kind of a two part question. One is, what does that mean in practice? And number two, a lot of people enter investment banking. Not many people become like the vice chairman of investment banking. What was your kind of distinctive superpower that you were, you know, and we’re not, this is a show where you can brag and you don’t have to be humble, right? What? What was do you think that you were particularly good at that allowed you to be so successful in investment banking.

 

Lawrence Steyn  14:45

So I’ll good questions, and I’ll answer them by answering the second one. First, I think my superpower, and I think it’s not much of a superpower, but it is surprisingly rare. Is, I think I actually listen to what people are saying. And I think there is a view in many industries, but definitely in investment banking, and I see it now in private equity, where we’re a consumer of investment banking services, where people want to come in and they want to be really smart, and they want to say really clever things, and they want to prove themselves out. And that’s all fine. There’s nothing wrong with that. I think in many cases, you’re better served by actually listening to what other people are saying, especially when they’re your potential clients. When you go into a company meeting and they they have something that they’re looking for, they have a problem, they have a challenge, they have a need. And I think what I did well is I would just keep my mouth shut and just listen to what they were saying and be thoughtful and put myself in their shoes. And I think that’s actually valuable. I think, you know, in a surprising way, and perhaps not that surprising, but you build trust, and you build a relationship, and you actually deliver something which they appreciate, I think, coupled with that, the second aspect of it is being creative. There’s an an easy way to come in and say the obvious things and repeat back what kind of superficially the conventional wisdom that’s fine, and oftentimes the conventional wisdom is right. But I have often challenged myself to try do something that’s a little bit different, to take time before I go into meeting a company, go into a situation and just say, what’s the unexpected twist? What would be something that would be unexpected, probably wrong in many cases, but perhaps right in a way that people haven’t thought about. And I think that helped me. So as I came up Goldman, I was too young for it to really matter whatever Goldman’s, you know, a salt mine anyway, at Morgan Stanley is really where I developed the skill. And I’d say the culmination of my Morgan Stanley career was when a company called United Technologies, who had been looking at acquiring Rockwell Collins, United Technologies, big conglomerate, they did carrier, air conditioners, Otis, elevators, Pratt and Whitney jet engines, Hamilton, Sun strand and Goodrich, Arrow parts. So massive, massive conglomerate, very, very successful conglomerate, had looked at Rockwell Collins for decades. There was no surprise about that. Everyone knew that, but they didn’t know how to really make the approach in a way that would be successful. And I came to them with an idea to do it, with a strategy, with a way that they could make the approach, and they ended up taking that. It wasn’t the way the deal got done. So what I came in with as the idea, how do you reach out to them? The structure you put in front of them wasn’t what they actually did, but it opened the door for them to call Rockwell Collins and say, Look, we have this unique idea. Rockwell thought about it for three or four months. Eventually, Rockwell said, forget that idea. It’s too complicated. Just buy us. And United technology said, Great, that’s what we wanted to do in the first place. So we ended up doing that deal. I was the we were the sole advisor to United Technologies. It was the biggest industrial deal up to that date, and it was one, probably in my whole career. I must have done 100 something deals. That one is the one I am most proud of, because it was actually a really unique idea. Unique ideas in this world are very far and few in between, and that was one and and

 

Will Bachman  18:47

I think, are you allowed? Are you allowed to share, like, what the unique idea was, or is that confidential?

 

Lawrence Steyn  18:53

I’m allowed to share it? It’s in the proxy statement that they put out. It’s just very long and detailed. It would probably bore you extensively. But I guess if I were to sum, well, I’m trying to do how to there’s no great way to summarize it, it would have, it would have been United Technologies who wanted to buy Rockwell Collins instead contributing one of their businesses into Rockwell Collins. So Rockwell Collins would have stayed as a public company, stayed with all shareholders, would have kept the Rockwell Collins name, which has a rich heritage, but United Technologies, would have owned about 60% so they would have had the controlling stake. And there’s kind of like when you describe it, okay, no big deal. That sounds reasonably simple, but the amount of effort and structuring that goes into making that happening is very high. So it’s a super complicated deal that’s only been done a couple of times in history. And the application of that was was very, was very differentiated. And so it let United Technologies call Rockwell and say, Look, we’re not actually. Trying to buy you. We love you. Being an independent company, we just want to get 60% of you by dropping our business in. But we’re, you know, it’s okay, and Rockwell was intrigued enough to continue the conversation until Rockwell said, Look, just buy us do what everyone else does. So I guess that’s kind of the the idea probably not as exciting when you say it as it is, in my mind. But you know that was kind of the the idea,

 

Will Bachman  20:25

okay, and All right, so, oh, on the listening piece, what were some of your kind of go to questions or just statements to listen kind of better than the peers. Like, tell me more about that period be quiet or, you know, like, what were some of your questions that you really helped dig in to be great at listening and kind of getting people to open up.

 

Lawrence Steyn  20:59

I think there were many times when someone is speaking and you or you’re speaking, and they ask you a question, and there’s the fast first answer, which is not actually the answer that you get in many cases, you see this oftentimes with a of course, a TV journalist is interviewing a politician, they never actually answer the question. They answer whatever question they want to answer, but it’s not often the asked question. And I think listening to an answer that someone gives you, or thinking about the question they’ve asked you and making sure your answer is actually really responsive. So a lot of times you’d be in a meeting and someone would ask you a question, and I think just being able to pause and think for 1015, 20 seconds without talking and say, what actually are they asking? Why are they asking it? Why do they care? What’s their agenda and asking that question, what are they trying to figure out for themselves, which is not always that obvious, because they don’t always ask the question perfectly, or they may not even know exactly, and then really allowing that question to blossom, so to speak. So you actually listen to what they’re saying, both in terms of how they answer your questions, and how you’re answering their questions, and really making sure you’re trying to be responsive, as opposed to just trying to move on and get to the next page or get to the next point or just keep the conversation going. And sometimes answering a question can be uncomfortable in its own way, because you’re giving a definitive point of view, or alternatively, you may not necessarily know the answer, and owning up to that in a meeting is that sometimes embarrassing, because you’re supposed to be the expert. You’re coming in here with your idea. And I think being able to have that conversation is it’s actually not something people are that comfortable with, nor take that much time with but I I think listening is is actually partially that just pausing and being really reflective about what they’re saying and why,

 

Will Bachman  23:11

okay, okay, I would be deficient if I didn’t loop back to your work at American industrial partners, and you joined a couple years ago. So you have seen firsthand, touching many manufacturing companies and being in the room and conversations. Tell me about what’s been going on and the kind of conversations and around around these tariffs over the past few months, right? I mean, you see in the news, and I can’t things like it may have actually been counterproductive where, you know, companies, because of all the uncertainty, have actually canceled plans to build new plants or whatever. But what sort of the types of impact have you seen on the ground?

 

Lawrence Steyn  23:59

It’s definitely slowed everything down. I think at this point, the likely conventional wisdom case is that not much is going to happen above and beyond what’s already happened. So the reciprocal global reciprocal tariffs, some extra weight in China. Some extra issues with Mexico and Canada, we’ve probably scoped out a large part of what we’re going to scope out, but not quite sure right, right now, other geopolitical issues have obviously replaced tariffs as the focal point for the Trump administration. Peter Navarro feels like he’s been put back in a box and carted off stage, and you don’t really see him anymore. And so I think our general view is we probably roughly know the parameters that we have to work with. But during this number of months it’s been it’s been one where a lot of. Conversations and thoughts have been put on pause just to see how things are going to shake out. It’s not the outcome as we stand today is not terrible. Could have been far worse had the initial Liberation Day tariff proposal has been put in place, I think we would have been in a very bad place. And I think you you saw that in the immediate financial market reactions the market now we’re back to close to our all time highs. I think people have generally moved on. I do question the long term impact in general. I’m a I’m a very you mentioned you had served in the military. I’m a big believer in a strong US global leadership role. And I do think the reduction in the role of the dollar as a global reserve currency is problematic. I like when America leads on global economic issues. I like when America is viewed as a good trading partner. I would hate to see that change. And you know, these are things that play out over decades and decades, and who knows. But I, I would like to see us return to a period of relative stability. I do think the American manufacturing base is hyper important. I do think we need to have good manufacturing base. I do think there are many. I think we’ve seen that the lack of our ability to access some various materials has proven to be problematic. Some of these, can you

 

Will Bachman  26:43

give us a just, maybe a sanitized example or two? So bring us inside the boardroom. In the news, you hear a lot about, like, very generic, like, general kind of statements, but bring us inside the boardroom of a company or two, sanitize it and like, oh, you know, this company was thinking about, you know, building a new plant in the US to produce these widgets. But, you know, we had to put all that investment on hold because we had no idea what our, you know, what our cost of goods was going to be, and it was actually going to be cheaper if we built it in Mexico or something like, Give us an example of the sorts of discussions that you see happening.

 

Lawrence Steyn  27:22

So we, as I mentioned, we, in some ways, we’ve been not, not because we were smart, right? This one, I am not going to take any credit for we were we’ve been investing in American manufacturing capabilities for decades, because that’s part of the thesis of our firm, that we’re we’re good at helping American manufacturing companies thrive. I mean, we invest globally to be to be clear, but our history and the majority of our businesses are America centric and focus on American manufacturing. And so in many cases, what we found is actually the businesses we own are more valuable to people around the world because they have an American manufacturing base. And I think that’s the direction we were going in post COVID Anyway, as people started to move supply chains out of Asia and back to, well, Mexico, the US, Mexico, the whole kind of North America trading area where that stumbled for us, or has been something we’ve been focused on, is we use Mexico, right? We thought that was kind of what we were meant to do. We, you know, Trump had renegotiated the NAFTA agreement and had an agreement that he was obviously happy with and took a lot of credit for. And so what was the surprise to us was some of the barriers put in place between the US and Mexico, and that was those were highly uncertain. And so we have some very good manufacturing capabilities in Mexico. Or we, we sold off our largest Mexico manufacturing business a couple of months ago, so that, but that was caught up during the period where these tariffs were being put in place, and so we were having negotiations with a Counterparty, and we have to put them on pause while we try to figure out what the implications of the tariffs would be. You know, when they first started to come out, these things were moving dramatically. Every day, what the expectation was, what’s included, what’s not included, what the tariffs rates were, and so, so there was, there’s a lot of uncertainty. So, so I think for us in general, because we are long American manufacturing, the the support, American manufacturing sector, if you think that’s what comes out of tariffs, is good for us. I mean, we if it comes at the expense of a recession, that’s not great. But if it can be done in a world where, you know, there, there’s a there’s there’s a value. You for being an American manufacturer, that’s good. But the uncertainty along the way about what these were, you know, it’s just interesting, because I think that the way the tariffs are introduced is very instinctual to the Trump administration. It wasn’t you think about usually, these things are done. There’s months of study. There’s very elaborate ground laying. They’re not released on some big, you know, four by six poster in the Rose Garden, and that’s the first time anyone gets to see them. And these things are massively consequential. So I think it was just more the uncertainty created led us to observe that a lot of negotiations, a lot of investment was put on hold. But frankly, again, like, I don’t want to be overly dramatic about this, because now what are we in June and Liberation Day was two or three months ago, and it kind of feels like we’ve kind of settled into a new regime. And so the short term impacts of all of this, I think, have been less dramatic. I do wonder about the long term impacts, but those are more theoretical at this point, and who knows? So, um, so it’s probably not exactly in the the context of being a good listener. It’s probably not exactly the answer that’s fully responsive. But these things have, have, have generally come and gone reasonably quickly, and at least in our specific slice of the world, they haven’t been that dramatically impactful, and in some cases, they’ve actually been helpful for us. Now, I think again, a rising tide tends to lift all boats. We’d rather see the economy thrive, and so you’ve got to kind of navigate that. But I think we’re in an okay place, at least from from the tariff issue, but that could all change tomorrow, but at least right now, I think we’re in an okay place

 

Will Bachman  31:55

in terms of sort of barriers to the growth of the manufacturing industry. I uh, some things that you hear, and I’m curious to get your perspective in America, are, oh, yeah, you know, electricity, like even being able to hook up to electricity and having enough power, getting skilled labor, because, you know, manufacturing has a whole set of skills the local supply chain, like you could build one plant, but if all your suppliers are in Asia, then, you know, that’s challenge, or just getting the permits to build and overcoming all the different environmental reviews and all the different local, you know, zoning boards and stuff we don’t want a manufacturing plant. What would you say are maybe give us an example, sanitized of, you know, in real life, if someone is actually trying to, you know, restore and re industrialize America, what are some of the real life roadblocks that you know, lay people like myself may not be aware of?

 

Lawrence Steyn  32:59

Yeah, and to your credit, you actually nailed, as you’re asking the question I was thinking about my answers, and you nailed many of them, the grid, the electricity infrastructure, especially for data centers, to support the AI build out huge, huge issue. We are very strong believers in the need to re Electrify America, to strengthen that that’s not easy. Takes a long time. It’s a very complicated process to build out the infrastructure to support data centers. Skilled labor incredibly challenging issue. Unskilled labor is also a very challenging issue. We happen to be in a world of a pretty good autonomy right now. I don’t know that immigration policies have yet truly impacted that, but I hear anecdotal stories about that. But clearly the need to generate both skilled and unskilled labor capabilities is super important supply chain. The fact that you can go to apple and say, We would like you to manufacture in the US, and you look at the 1000 components that go into an iPhone. So I think you’ve, you’ve hit on many of these. I think for us, the biggest challenge is that, like I say, these, these policies, maybe some tariffs are good, maybe they’re not, but maybe a little bit are good. It’s, I know there’s a pretty active debate about it. The whimsy of it, a little bit has been problematic, because if you knew there was a policy that was in place that was sustainable and constructive and was there for a decade or two decades, you would say, Sure, now we know what to do. If it’s pro building out US manufacturing, that’s great. And so if you’re a car manufacturer, or if you’re a semiconductor manufacturer, and you need to know you have kind of a 10 year runway, a 20 year runway, to have this be effective, you’d like to know those policies are in place. And I think the way both the policies were introduced, and you’d like them to have had a strong intellectual. Surrounding at least, I think you would where you’re like. This is why the tariff is what it is. This is the goal we’re trying to accomplish. These are the countries we’re tariffing against. Here’s the path to remove these. And if you knew what that looked like, you could then, I believe, be more comfortable making some of these big, decade long investments that I think the US is really looking for in very advanced manufacturing capabilities. If you think they might be reversed in two years, they might be reversed in four years. It can be ended by a lawsuit. I think you you can’t do anything. You can’t really plan around them. You can’t really make, make the changes. So I think if there was a very effective pro US manufacturing policy that had bipartisan support, that you felt might be here for a long period of time. I think some of these goals, which I actually tend to agree with, would be would be valuable. I also think when people talk about, we want to bring manufacturing back to the US. What really are we talking about? We want to bring data centers to the US. We want to bring shipbuilding back to the US. We want to bring auto manufacturing to the US. Like, what are we trying to bring back to the US? Semiconductors, like all of these things, are very different questions and have very different answers and challenges. And so I think just this very broad concept of we want to remanufacture in the US, we want to bring back manufacturing doesn’t really mean a lot. And I’m not sure we have the I don’t know that we have the employee workforce. I don’t know that we have the government incentives to really accomplish everything at once. And so again, I think there’s a point where a very thoughtful policy that had has bipartisan support could actually be very powerful, I think a policy based a little bit more on whimsy. And again, it kind of feels like for good reason, perhaps, that this has now gone into the back seat of what the dialog is about. You know, this was all people talked about. Now, of course, we talk about other things, so I think that a more consistent, specific, targeted policy that had broad support could be very powerful and effective.

 

Will Bachman  37:17

Okay, I want to ask a question that maybe is a little personal, but I’m just guessing. Okay, I’m just guessing. But someone who was investment banking for 25 years and was like, Vice Chairman, I mean, I imagine you were probably, you know, conservative and, you know, sort of invested wisely and stuff, and have a bit of a nest egg, and if you felt like it, I imagine that you could probably stop working. Now, I’m just guessing maybe have a lower, you know, cash burn, but you know, I’m what is it that keeps you at work and that, you know, gets you excited to look what’s sort of your objective function that that you want to accomplish professionally?

 

Lawrence Steyn  37:59

That’s a good question. I i It’s interesting because I, like I said, when I’ve always enjoyed working I invest in banking was hard. Investment Banking was hard, but I love the relationships I had with my clients. I love trying to be creative. Most deals you do are not that creative, but every once in a while, you come up with something that was very important. I was very involved in how GE dismantled itself to become a series of individual companies. I was very involved in, as I mentioned, United Technologies at certain phases in its existence, these in the in the industrial landscape, are pretty significant events, and I was just an advisor, and there are many advisors, and the companies had to make the ultimate decisions. But I love being around that and part of that, because they’re consequential. And I thought you could really add value and really come up with great ideas. The move into the technology space was a way to try something that was going to be transformational, and I think will be transformational, and so I love the thought of doing that. It’s very different to be working at a tech startup than working at a major service provider. But both were, in their own ways, fascinating. The Tech one was a lot harder, a lot harder, but was itself very exciting. I do think American industrial partners are. Where I am now is really just a great place to be. You’re a principal, you’re making your own decisions. You know, we’re in the industrial economy. We’re a large private equity fund, but in the world of everything, we’re not yet, although hopefully in the next few years, we will be. And so we do our deals. I think when you look at the companies that we acquire, we bring them back into the world much better than we bought them. Usually, their their earnings have gone up substantially. Our track record of doing that have increased. Their employee base and creating increasing their earnings. De levering them is actually very good. We’re pretty conservative. We don’t, you know, we have almost a zero loss record in what we do. So I think we’ve done a really good job of making the American economy stronger in the places we’ve invested. But more than that, I think it’s just a great group of guys and girls. I think, you know, it’s just a good organization that really likes what they do, has a strong culture, believes in doing things well. It’s a pretty good life. You know that when deals are happening, of course, you work hard, and it’s a very competitive world, and there’s a lot of smart people out there pursuing the same set of opportunities, but we have our approaches and so on. I just really enjoy it fundamentally. And as our son goes off to college, it’s kind of like, well, I don’t know what else to do. I don’t love all that much. And you know, and the American industrial partners is good to work for and worked with. And so I anticipate being there a number of years. It’s, it’s just more intellectually challenging. It’s good culture, it’s good people. I’m not quite sure what else I would do that I would enjoy more. I like backgammon. You know, I play backgammon in Miami. I won a Miami championship. What I did? I did I

 

Will Bachman  41:19

backgammon? Okay? Oh yes, yeah. Two minute diversion on backgammon. Tell us, like, how? How? Tell us about your backgammon career, right? How does someone, how does someone win a backgammon championship in Miami? That’s

 

Lawrence Steyn  41:33

well, so I, I started playing chess like many people did in in, you know, when I was young, and I was never that good at it. There’s too much memorization. There’s too many rules. It’s like too hard to be a good chess player. You’ve really got to be smart in a certain way that I’m not. You’ve got to remember a lot of stuff. And Backgammon is not that. Backgammon is how do you handle odds? And it’s, it’s not actually a lot of people who know how to play backgammon find that as they get better, and I found this, the game is actually very different than what you think, whether you want to be offensive or defensive, what the strategy is, how you handle various situations. And so I got an app. This was probably during COVID or before COVID. I got an app in my iPad, and I’ve probably played like 50,000 to 100,000 games in it. But it’s just like, because it’s like, great, you get in an airplane, and rather than, you know, watch some show or something like, I just enjoy that. I find it. And so I belong to this, like, a social club in Miami, and they’re like, it’s backgammon night, and I’m like, I’m gonna show up, and it’s gonna be a bunch of 50 year olds, and it’s gonna be very depressing. There’s gonna be like four of us, and we’re gonna have our backgammon boards and so on. And I showed up, and it’s like 100 people, and it’s like the DJ is playing. People are drinking, having a lot of fun, and and it’s a backgammon tournament. I’m like, All right, so I am. So I played through, and I want it. And so I have my little backgammon crown. And, you know, claim for a week I was the backgammon leader of Miami. And no, it’s, it’s a great game, though. Actually, if many people have probably played, I just find the the the assessment of probabilities, how you handle certain risks, how you cannot a lot of times in situations you something bad happens to you, you lose a game for certain reasons. You’re like, Oh, I’m never going to do that again. But if it’s not the right probabilistic outcome, that would be the wrong takeaways. You’ve got to be very thoughtful about what are the right takeaways. And yeah, anyway, so it’s kind of like my my secret passion, but you can’t, in the end, it can’t be a full time thing, so I do it in my spare time.

 

Will Bachman  43:48

Okay, this sounds like we should have at our 35th reunion coming up. We got to have the 92 backgammon championships.

 

Lawrence Steyn  43:56

We should bring it on exactly, exactly my secret pleasure, okay? Lawrence

 

Will Bachman  44:05

switching gears. Tell us about any courses or professors or activities that you were involved in back at Harvard that continue to resonate with you in some way.

 

Lawrence Steyn  44:15

Yeah, so, so courses. You know, I think these are the old standards loved justice, that one has actually been that’s a Michael Sandel core class where you look at different theories of justice. I mean, I think as you get older in life, and you to try to think through much more thoughtfully about what’s happening politically, what’s happening generally around the world. Some of the rubrics that you learn injustice remain very important in thinking through situations. It’s one of actually with my son. This is a few years ago, when we were looking for things to do during. COVID. We went online his now, his justice courses online, and to go through that again and be able to refresh on all the various authors and philosophies was was quite fascinating. So I remember that quite fondly, the one I actually enjoyed it at Harvard and did a kind of a seminar. I don’t know if they still do them they used to do, and maybe they still do these weekend seminars at Harvard where you could come back as an alumni and kind of deep dive in a subject, Marjorie, Garber and Shakespeare. So I took it as a core class, and then went back to Harvard for a long weekend to do a deep dive on it. And that was pretty fascinating. It’s it’s it’s so hard, once you leave college to find the time to go through authors like Shakespeare go. I mean, I’ve gotten to see Shakespeare, Broadway or whatever, but to have the time to actually do this very thoughtfully with a number of other adults in the room. What’s actually pretty fascinating you realize is how many people, especially in the years that came before us, are so well read, people who have such knowledge and so on. It’s kind of humbling. And so the whole process of going through the Marjorie Garber class and then coming back and doing it again 10 or 15 years after graduating was phenomenal, and I really enjoyed that

 

Will Bachman  46:22

you have a favorite Shakespeare play.

 

Lawrence Steyn  46:29

They all come to my mind immediately. You know, I probably rattle off 20, but none more than others. But they’re all, all of them, I guess, and in terms of activities, well, most of my activities were centered around the International Relations Council. So those would be model uns, okay, things like that, especially through my son, who’s been pretty active in his Model UN program at school, and we just were in with the UN recently up there at the UN ocean conference in France, and he was working that with a an NGO. And so being around that was pretty fascinating. I think the especially in this day and age where geopolitics is so fraught, I think the clubs like that are actually quite valuable, and so I remember the model uns and the that organization quite fondly. I did, although it’s more of a joke. I did. I was on the squash team for two years, but, you know, that was only because they didn’t cut anyone. I still continue to play squash and tennis as I get older, and pidel as I get even older, and so, you know, but those are probably the activities that that I still I think I have some good memories of

 

Will Bachman  47:59

Lawrence, if listeners want to follow up and find you online, where would, where would you point them? Is there a website or a bio page on your on your firm, or where should, where should people find you?

 

Lawrence Steyn  48:10

Yeah, and I would welcome that. And I would love it. I’m on LinkedIn, pretty easy to find there. I don’t do a lot of other social media, actually. I mean, I did when I was with Pony. I had a Twitter and I had a LinkedIn and I had an organization who wrote my tweets and wrote my LinkedIn posts, and that was all kind of silly, but I still check LinkedIn and I do our organization, American industrial partners, does have a website where I’m linked in there. I would love it if to hear from folks and be back in touch with folks. That would be phenomenal.

 

Will Bachman  48:45

All right, well, we’ll include your LinkedIn link in the show notes. That would be great. Lawrence, it was great speaking with you. Thank you for sharing your story here on 92 report. Thank

 

Lawrence Steyn  48:58

you very much. It was a pleasure to be on I appreciate it. You.