Transcripts For BLOOMBERG The 20240706

The highest calling of mankind, ive often thought, was private equity. [laughter] and then i started interviewing. I watched your interviews, so i know how to do some interviewing. [laughter] ive learned from doing my interviews how leaders make it to the top. Jeff i asked him how much he wanted. He said 250. I said fine. I didnt negotiate with him. I did no due diligence. David i have something i would like to sell. [laughter] and how they stay there. You dont feel inadequate now because being only the second wealthiest man in the world, is that right . [laughter] one of the bestknown business families in the United States is the pritzker family from chicago. One of the stars of the family is penny pritzker, who not only built her own Venture Capital and real estate business but served as secretary of commerce under barack obama. I recently sat down with her in chicago to talk about her extraordinary career and what she hopes to accomplish as a role model for Business Leaders throughout the United States, particularly women. Penny, you are a driven person, i think it is fair to say, but very often, you see people come from wealthy families, as your family is, who are not as driven as you are. Where did you get the drive to work so hard and not let up at all . You seem to be one of the most driven people i have ever met. Penny coming from you, thats a compliment. Thank you. I grew up in a family where i was taught by my parents to whom much is given, much is expected. And, i saw them engage in building a business. My mom and dad were really partners with one another. My dad was the ceo building a Hotel Company and my mom was his right hand. She was in charge of every aesthetic decision, and they were really host and hostess together. It was a perfect business for them. And i saw them find joy and purpose in being involved in building. I was really affected by that. And they were not just building a business. They were also part of a new community. They had moved out to the west coast. They were building in our local community, and so that motivated me. That inspired me. That sense of having things where youre making a difference and creating opportunity. David your family is one of the wealthiest families in the United States currently, the pritzker family. You have your grandfather had three sons, as i understand it. One is jake pritzker, a very legendary dealmaker. One was bob, a very accomplished businessman and oversaw a lot of Large Businesses that the family owned, and your father was the youngest. He helped run and build hyatt hotels. Penny mmhmm. David can you describe what happened . Your father died tragically when he was 39 and you were just 13. What is it like, you are a wealthy family and presumably have a lot of advantages, and then your father dies . You are 13 and you have two younger brothers. What was that like . How did your father die so suddenly . Penny my dad died of a massive heart attack, playing tennis. It was a massive blow to our family. Imagine the first 13 years of my life, i lived in a family that was building a business. My mom and dad were very involved. My mother was as active in the business as my father, even though she was not paid. And my father dies, and all of that goes away. Our dinner table conversations had been about business. Our travel had been about building the company. It had really been a huge part of our life. More importantly, though, my father was this warm, fun, funny individual. Just, you know, i was so close to him. And, you know, i have enormous empathy for children who lose their parents. It leaves a massive hole in your heart and your life is instantly changed. David when you were younger, the story is your father would take you on visits to hotels and you would be the person to inspect the ladies rooms. Penny yes. David is that true . Penny totally true. We would go the business began as a series of exterior corridor motels up and down the west coast. We would on saturday mornings, we would go to our motel and he would have me go in the ladies room to make sure it was clean and he would go in the mens room. Then we would walk the property and we would talk to the general manager and we would talk to the bellman. Back then, there were not big computers. Until, of course, we got the big ibm computer which probably took up the entire space of this room. As i said, it was really a family endeavor. David in your family, the larger pritzker family, there were many Business Leaders, but most of them were men, if not all of them. As a young girl, you said to him to your grandfather, as i recall, how come i cannot be in the Business World . What did your grandfather say and why were you so attracted to business as opposed to other things . Penny when i was 16 years old, it was my grandfathers 80th birthday, and my mother said you can give your grandfather anything you want for his birthday. I wrote him a letter. What did you give your grandfather who seemed to have everything from where i stood . My letter was, dear grandpa, you are always talking to boys in the family about business. Why dont you teach me more about business . I will never forget, the night of his 80th birthday party, he grabs me, takes me out into the hallway, and he had my letter in his pocket. It was on green stationery. I will never forget that. He pulls the letter out and says, penny, i was born in 1896. How am i supposed to know girls are interested in business . But he said if you are, spend several weeks this summer with me and i will teach you accounting. You have to remember, my grandfather taught Arthur Anderson accounting. My grandfather believed that accounting was the foundation of all business. So this was his way of saying, ok, im going to help you. David 10 years after your father died in a sudden heart attack, your mother died tragically as well. At the age of 23, you have two younger brothers and no parents. So your job was to help raise your younger brothers. Is that how you did it . Penny we banded together. After my dad died, my mom was not very well, so it was a tumultuous time for us. The three of us tried as best as we could as young people to take care of each other. You know, we were teenagers, and so it was a complex time for all of us. But we made it through, and tried to Carry Forward the values and principles that our parents taught us at a young age. David did your brother say to you, at the time, im going to become governor of illinois at some point . Did he say that when he was a little boy . Penny my younger brother has always wanted to be in politics. He is a natural politician. He is extremely friendly. Hes very bright and capable and cares deeply about people. He has enormous empathy. Im so proud of him that he has become governor of illinois and i think hes doing a heck of a job. David is he going to run for president someday . Penny i have no idea, but im just thrilled with the job hes doing today. David your Family Business is growing and jay pritzker, your uncle, is considered one of the greatest dealmakers of the 20th century. He built an incredibly big business empire. When he passed away, it turned out he said he wanted three people to kind of run the Family Business. Your cousin tom pritzker, your other cousin nick, and then you, so there were three of you. Were you surprised thats what he wanted to do . Penny i was flattered because i was much younger, at least 10 years younger than my cousin tom and more younger than my cousin nick, but my uncle jay and i had always had a very special relationship. Frankly, my early career was very much about being an entrepreneur and starting new businesses and i think he really admired that entrepreneurial nature, as well as my hard work. I think he was intrigued by me as a woman. I mean, he had not grown up with women executives. In fact, when i showed up at the office for the very first time, i was the first woman who was not basically an assistant in the office, anywhere, and so i think he and i developed a lot of mutual respect. He was a mentor to me. Ultimately, thats not the direction we ended up going as a family, but i was really i felt very flattered by his gesture. David ultimately, the three of you are running this large Family Business, which is one of the larger familyowned businesses in the United States. At one point, a cousin or several cousins said, we dont think thats fair. We just want to break up the entire empire. Was that devastating to you and the two cousins helping run the business . Why did you decide, lets get out of this, and we will break up every thing and everybody will get their share . Was that a hard decision to make . Penny it was a complicated decision but frankly we made it relatively quickly. Because fundamentally, if people dont want to be partners in business, they should not be partners in business. The complex part was it was like a big spaghetti bowl in the middle of the table, all intertwined, very complicated. To take spaghetti out of the bowl and put spaghetti on everybodys plate, it took us almost a decade to do it, and we had to build at the same time we were dividing things up. You could not be static. If you are static in business, you die. We had to both build and divide, and so we took companies public, we sold businesses, we merged. We did it was like getting an additional phd in business, that 10year period. David when you are a friend of somebody who becomes president , you call him all the time barack, barack, barack, for many years. When you are secretary of commerce and he is the president , i assume you stop calling him barack. Penny he was my boss, and we talked about it. When he interviewed me for the job, he asked me point blank if i could accept the idea. And i said, mr. President , of course i can. David let me ask you about being secretary of commerce. Penny yes. David you are a very successful business person in chicago, very active in civic events and so forth. All of a sudden, someone you knew, barack obama, becomes president of the United States. In his second term, you become secretary of commerce. Why did you want to uproot yourself and move to washington for the second part of his administration . Did you enjoy being secretary of commerce . Penny i loved being secretary of commerce. It was an honor of a lifetime to serve our country and serve in his administration. Barack obama and i have a relatively long history. I met him when my kids were five and seven years old. Their basketball coach at the Lincoln Belmont y was Michelle Robinsons brother, craig robinson. I met barack and michelle when he was a state senator and i think she was working at the university of chicago. I had known them for a long time. I knew what terrific individuals they were. When barack decided he was going to run for the presidency, he contacted me in 2006 and said, would you help me . Would you become my National Finance chair . Would you raise the money for me to run for president . I thought this was a crazy idea. I had never raised money on a National Level for a president ial campaign. I had no idea how anyone did that. He said, no, no, i want you to do this role. And i did, but i really almost said no. What happened was i was sitting, talking to my husband after the evening that barack had asked me. He said to me, this is destiny knocking on the door of our nation and youve got to find a way to help. So, that led me to get involved in baracks campaign. I was the 11th person in the campaign. Over the ensuing two years, we built the equivalent of a fortune 500 company. We went from 11 people to 3000 people that we were paying and thousands of volunteers. We raised the most amount of money ever for a president ial campaign. It was an extraordinary experience. I did not serve in the first term, but when the president called me and asked me if i would help him. He really felt that his relationship with the Business Community was challenged, that he really needed a chief commercial officer for the United States, and he wanted help. You know, thats a call that everyone hopes that they get. David when you are a friend of somebody who becomes president , you call him all the time barack, barack, barack, for many years. When you are secretary of commerce and he is the president , it is a different kind of relationship. Did it make it more difficult to socialize with him . I assume you stopped calling him barack. What was the relationship like when you were secretary of commerce and he was president . Penny he was my boss. In fact, we talked about it. When he interviewed me for the job, he really asked me point blank whether i could accept the idea. He said, look, you have been a ceo. You have made decisions. You know what running an organization is like. He said, can you accept the fact that i will listen to all your arguments, but at the end of the day, i am the decisionmaker . And i said, mr. President , of course i can. What i thought to myself is, mr. President , you have never worked in a Family Business. It is a lot like that. David you were confirmed 971. There are not that many people these days confirmed that way. Were you surprised that the confirmation took not that long compared to what some might have expected . Do you think washington is more or less broken these days because democrats and republicans cannot really agree to almost anything . Penny one of the nice parts about commerce is it is bipartisan. I worked really hard during the process of confirmation to meet people across the aisle, and even folks like ted cruz who would have very little in common with barack obama, you know, he and i saw eye to eye on what the Commerce Department could do for the state of texas. So i really made it my business to say i will work for everyone in congress, regardless of what party, and i answered the phone and tried to help them solve problems regardless of who called me. David you were secretary of commerce for almost four years. What are you most proud of having achieved . Penny we did a number of things that im really proud of. We laid 100,000 miles of broadband. We revamped the patent and trade mark office. We worked with ukraine to help them. They really wanted to turn from east to west and attack and address their corruption. One of the things that i did was, as it relates to it became really obvious to me that the semiconductors we were going to have a problem in the United States with a shortage of semiconductors. Also that we were going to really run into a National Security challenge because we were designing semiconductors but we were not producing them. So i galvanized the department to write a report to the administration and to the federal government about this, and that actually turned out to be the foundation of what became the chips and science act. Avril haines, the head of dni and ben rhodes and others who were involved in the transition to the Biden Administration asked me about a number of things for advice. I said, youve got to focus on the semiconductor challenge that we face. So we did all kinds of things that have had a huge amount of impact. It was such a diverse department. You get to be involved in a lot of different things. David you now have partners and are making investments, among other things your building Real Estate Companies and you are doing things with other women in some cases. You built a company in real estate with another woman. Is it important for you to have women in business . Are you trying to be a role model . Have you tried to be a role model for women in the Business World . Penny i think it is really important to have Diverse Voices at the table, absolutely, no matter what youre doing. In business particularly because most consumers are women also. I have built two businesses in partnership with women. We started the first, this is unbelievable, 13 years ago. My partner, deb harmon, and i started the first womanowned Real Estate Private equity firm in the United States. It is hard to believe 13 years ago there wasnt one. Today, we compete a little bit with carlyle. We are much smaller than them, but we compete with them sometimes. We have built a real firm. One of our ambitions with the firm my partner deb and i, at the time, we had each been more than 20 years in real estate. Real estate is a very maledominated field. One of our missions was to be excellent and superb, to deliver great returns to investors but also to help diversify our industry. David recently, you have been selected as the first woman in harvards nearly 400year history to be elected chairman of the board of harvard. How do you have time for that . Why were you so committed and interested in doing that job which is a timeconsuming position . Penny first of all, harvard is near and dear to my heart. I went to college there, and i went to college at a tumultuous time in my life, and it really served as a very grounding place for me. I met all kinds of people that have really influenced my life. I have dear, dear friends from my experience at harvard. I think Higher Education is under attack, and i like a challenge. And frankly, after 386 years, it is about time they had a woman leading, so i felt also a call to rise to that occasion. David Harvard Corporation is the 12 people that more or less run harvard. It is like a board. You are the senior fellow or chair of it. What do you really do during that effort as a senior fellow . What is your responsibility . Penny david, as you know, because you serve on the corporation with me, we are a board really of we have two roles. We really advise the president and Senior Leadership of the university on very significant issues that are affecting either the schools or the university at large. We are involved in financial decisions. We are involved in governance decisions. During covid, lots of major topics that we worked with the university on. So we have the fiduciary duty as the corporation. The senior fellow is the leader of the corporation. It is like a lead independent director if you will. Harvard, like the university of chicago, like many, many of our significant universities in this country, they are very important to the success of our country, and its important that these institutions thrive. I find it very stimulating to try and be a good advisor and thought partner to the leadership of the university. David some people have suggested you would be a good candidate for United States senate or the presidency itself. Have you ever thought of running for anything like that . Penny no, i dont think i would be a good politician. I think im a good leader and manager, but im not sure i would be a good politician. David suppose somebody gets elected president who is a democrat and says i would like you to come back in government as secretary of treasury or secretary of state or something. Would you go back in government . Penny i would never rule out serving my country, but im really excited about what im doing today in business and philanthropy. Suppose somebody says, i want to be penny pritzker. A young girl says i like what she has done in business, government, family, philanthropy. How do you tell somebody they can achieve what you have done . Is it studying hard, getting along with people . What are the skill sets you think are most important . Penny one of the most important things is to recognize that life is a team sport and you cannot do anything alone, and it is important to be surrounded by people who are good at the things you are not good at and good at the things you are good at, but also surrounded by Diverse Voices and diversity of all types. I really got to see that in government. I think the second thing that is important is to have an open mind. To be curious. To have a growth mindset. To listen and to be constantly learning and growing. And then i think it is important to be empathetic and to care about humanity. Guests check in, then check out their phones for Financial Insights from merrill. This gentleman . Hes learning how carbonneutral investments could energize his portfolio. And with advice from their merrill advisor, theyve decided that the future is womenled startups. Shes got a million followers, but shes following trends in nextgen tech. Personalized advice so impressive, your money never stops working for you, with merrill. A bank of america company. Erik welcome to Bloomberg New economy gateway europe the world reglobalizes. I am erik schatzker. Over the next half hour i will