Conventional wisdom holds that there is really just one path to a top job in finance. And it starts with getting an M.B.A. from Wharton, Harvard or Stanford business schools.
But Los Angeles is home to several high-fliers who came from much lower-profile institutions, including those in the Cal State system. It might be harder to get to the corner office from there than it is from Harvard, but a number have succeeded.
“If there’s a lesson to be had for non-big-name school people, it’s this,” said Ted White, a managing director at Beverly Hills hedge fund Legion Partners and an alumnus of Cal State Sacramento: “Find a place where you can prove yourself and start that methodical process of building out your capabilities and demonstrating to people that you can do it.”Of course, a degree from a big-name school is only the beginning, according to conventional wisdom. If you aspire to a top finance job, you also must spend a couple of years working 90-hour weeks as an analyst on Wall Street and then either stick around and go for managing director or jump to a private equity firm or hedge fund until you have a track record and the right connections to start your own shop.
But none of the three state school alumni the Business Journal interviewed felt like they needed a tour of duty in Lower Manhattan. And, candidly, they probably wouldn’t have been hired on Wall Street when they graduated.
White grew up around Sacramento and didn’t want to leave the area. Fortunately for him, the sleepy state capital has a vibrant financial industry that gave him a great start.
“I was pretty lucky in that being in the Sacramento area, there’s actually a fair amount of buy-side institutions and things I could do without having to move to a money center,” he said.
His breakthrough came after he hounded Bill Sherwood, then-chief investment officer at the state treasurer’s office, for an internship after graduating from business school. Sherwood liked White, but the investment office had never done an internship and he didn’t know where to begin.
White said he’d handle all the paperwork and make it as easy as possible, so Sherwood signed on. When a paid position opened up with the state’s debt advisory committee, White was poised to grab it.
“My chances of getting that job and getting into the state system without having done that internship and knowing those people would have been zero,” he said.
He soon made a move back to the investment office, where he felt his future was, and got his second huge break when the late Matt Fong was elected treasurer in 1994. In California, the treasurer gets a seat on the state’s public employees’ and teachers’ pension fund boards, and White often filled in for Fong at those meetings. This was critical in establishing White as a real player with the state’s institutional partners.
“I had the opportunity at what was the ripe old age of 29 to sit as a deputy treasurer on the boards of Calpers and Calstrs,” he said. “I was by two or three decades the youngest one.”
And while he was only making about $70,000 – far less than his peers on Wall Street were pulling in – White said his Sacramento experience prepared him well for his eventual move to the private sector.
Smaller pond
Like White, L.A. native Scott Beiser graduated from business school knowing he wanted to be in finance but not wanting to leave the comforts of home.
“I didn’t want to go to New York City,” he said. “I was born and raised in Los Angeles and wanted to stay here.”
As a result, Beiser hitched his wagon to a then-upstart firm called Houlihan Lokey when he got his M.B.A. from Cal State Northridge in 1984. At the time, Houlihan employed about 25 people. And as the Century City investment bank grew to 900 employees with offices around the world, he stuck around, becoming chief executive last year.
“The firm was much different; the industry was much different,” Beiser said. “Today, I probably couldn’t get hired by Houlihan Lokey.”
But one huge benefit to being at the then-much more intimate firm was that Beiser was able to grab an important job early on. He became the “staffer,” where he assigned tasks to other employees. He credits that position as the single biggest thing that propelled him into the chief executive role.
“You had to know the talents and nuances of the senior people,” he said. “You had to know the skill set of the junior people. And you had to know something about every single project, which you were capable of doing 30 years ago when we were much smaller. It gave me a chance to actually get to know the clients, the financial workings of the firm and all the people.”
And as part of the job, Beiser had opportunities to advise senior executives. He used those to become memorable and earn their respect.
“I was never shy to come up with suggestions and poke my head in to say, ‘Why don’t we do it that way?’” he said.
Foot in door
For those who can’t get the golden ticket that comes with an M.B.A. from an elite school, relationships are the key.
One well-known West L.A. fund manager without an elite business school pedigree said he’d advise someone looking to follow in his footsteps to try to get into accounting or consulting and use that as a bridge to business school. The executive, who requested anonymity because he’s in the midst of raising a fund and is in the so-called quiet period, said that was how he started his career, going from Northern Arizona University to accounting giant KPMG – although he never did end up getting that M.B.A.
For those taking the accounting path, the fund manager said, joining the transaction diligence practice, where financial reports are scoured for private equity clients and other strategic acquirers, is a way to get into the brains of dealmakers. One doesn’t need a fancy degree to do it, just a role – no matter how small – on the deal team.
“Just get in there,” he said.
Building relationships was also important to both Beiser, who has spent his career at one shop, and White, who moved around a bit.
White said working in state government prepared him well for his eventual move to the private sector.
When Fong decided not to seek re-election, White felt it was time to leave the treasurer’s office. He moved to Calpers as a portfolio manager, a position that was created just for him.
While there, he became friendly with Eric Knight, the founder of Knight Vinke Asset Management, a Monaco hedge fund that focused on one of White’s pet issues, corporate governance. It was Knight who finally convinced White to leave government and join the private sector as a managing director at Knight Vinke, where he remained until co-founding Legion in 2012.
White credits his time in government, where he was put directly into the fire at a young age, for preparing him for this seamless transition into managing a private fund.
“Within the state service, one of the neat things about the institutions, pension funds, all the quasigovernment agencies, I think you can actually get a pretty good level of responsibility and experience pretty damn quickly in your career,” he said.
