Anthony Scaramucci, known in finance circles as the ‘Mooch’, is one of Wall Street’s schmoozers. Founder and managing partner of hedge fund SkyBridge Capital, he’s also the brains behind the annual glitzy Las Vegas hedge fund meet-up, the SALT Conference, which now brings together 2,200 finance professionals and investors and will include Richard Branson and Michael J. Fox among its speakers in 2015.
He also flunked the New York Bar exam twice after graduating from Harvard Law School and was fired by Goldman Sachs as a young analyst in the bank’s real estate business in 1991, 18 months after being given the job: “My boss invited me over to his house, offered me a beer and I knew it was going to be bad,” he said. “He said there was a recession and they had to make cuts. Also, I wasn’t very good at the job.”
The point, he told a room full of students at the London School of Economics Alternative Investment Conference, is that you have to learn from your failures, particularly if you have aspirations to become an entrepreneur. “You will prepare for thousands of potential failures, but there will be millions of pitfalls,” he said.
Getting fired by Goldman was a devastating blow, particularly to a recent graduate with big debts, even if he received $11k in severance pay, but the next day he had a “fistful of quarters” and was using New York payphones to call contacts in a quest to find a new job. “My friend said that he knew a great job in equity sales at a great firm – Goldman Sachs.”
The story goes that he called up his old boss and pleaded for him to put a word in, despite being fired less than a month earlier. He was let go on 1 February 1991 and re-hired on 28 March. “The HR department said we could pass it off as an interdepartmental transfer and no one need know I was fired – but they wanted the $11k back. I said they could tell anyone they wanted that I was fired, but I wanted to keep the money.”
Skybridge now has a healthy $13.3bn in assets under management, but it wasn’t an easy ride. The SALT Conference was borne out of necessity, he says, when the firm lost 57% of its assets at the height of the financial crisis. “Someone recently asked me how I came up with the ‘strategic brilliance’ to launch a conference in Las Vegas. I said we were going out of business and we were throwing ideas at the wall.”
Scaramucci says he has four pieces of advice for budding investment bankers and hedge fund managers.
1. Dial back your insecurities and don’t be afraid to fail
Scaramucci says that an investment banking analyst is the “worst job imaginable”, but at the time he applied it was the most sought after. “I turned up to the interview in a black-on-black polyester suit, a thin tie and pointy shoes. One of the managing partners at Goldman said I was the worst dressed graduate they had ever interviewed. I was unprepared, but wanted to go into investment banking because it was the most socially cool job. But 18 months later, I was fired.”
He says that failure is part of the journey, and students need to focus on targeting something that will make them happy, rather than increase their status.
2. Seize whatever opportunities present themselves
Scaramucci says that Skybridge wanted to buy Citigroup’s hedge fund seeding business when the bank was being dismantled after being rescued by the US government in 2008. After a meeting with Mike Corbat, he was offered the whole fund-of-funds business instead. “I wasn’t wearing one of those adult diapers, but it would have been handy. I composed myself, said that, yes we were ready to buy it and six months later we had it.”
3. Be adaptable
In 2005, when Scaramucci resigned from Lehman Brothers, he wanted to keep his stock options, believing that their value would soar. His request was taken to a committee at the bank and, ultimately, rejected. “Thank god,” he said. “You can believe something wholeheartedly and then be 100% wrong. As an entrepreneur, you need to adjust.”
4. Be ethical
As predictable as this sounds in an era of contrition in the financial sector, Scaramucci believes that ethics are incredibly important, particularly if running your own business. “If you’re not ethically sound, the people underneath you will be much worse than you.”