Invest Like the Best with Patrick O'Shaughnessy - Jared Kushner - The Mechanic - [Invest Like the Best, EP.403]

Starting point is 00:00:02 Hello and welcome, everyone. I'm Patrick O'Shaughnessy, and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. Invest Like the Best is part of the Colossus family of podcasts, and you can access all our podcasts, including edited transcripts, show notes, and other resources to keep learning at join colossus.com. Patrick O'Shaughnessy is the CEO of Positive Sum. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of positive sum. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of positive sum may maintain positions in the securities discussed in this podcast. To learn more, visit psum.vc. My guest today is Jared Kushner.

Starting point is 00:00:58 Jared has lived more lives than just about anybody I know his age. He ran Kushner companies for years investing in real estate in and around New York City. He owned the New York Observer. He was a senior advisor to President Trump in his first term. He now runs affinity partners, which we discuss in detail, a private equity firm built to find and execute unique investments around the world that stemmed from Jared and his team's unique set of experience in business and government. This is one of our longest episodes ever because there was so much to discuss. We cover real estate, negotiation, geopolitics, his work in prison reform, Operation Warps Feed, the Abraham Accords in the Middle East, business, investing, his family, and everything in between.

Starting point is 00:01:36 Jared told me I could ask him about anything, and I really enjoyed doing so. Please enjoy my conversation with Jared Kushner. You said something to me once, which has probably been in my mind every single day since you told me the story. And the punchline of the story is, thank you for this training. I'd love you to explain that mentality or idea of yours, where it came from, and maybe what the origin story was of that specific phrase. The origin of it comes from a bunch of stories.

Starting point is 00:02:05 And I would say it's probably over the last couple of years that I've realized that I could overcome challenges and that now when I get a challenge, I don't get afraid of the challenge. The general idea that I shared with you was that I look at setbacks or things that don't go the way you want them to go in life. And when that happens, I think through what is God trying to teach me? What is God training me for instead of saying, why is this happening? And what I found is that a lot of the successes I've had in life in my different careers, I can often trace back to challenges or failures that I've had in previous iterations

Starting point is 00:02:41 of my life where having to work through a problem and seeing that maybe I don't get to where I wanted to get to, but then it still works out in a good way is something that's been an ever-present theme in my life. So, A, it's a more fun way to look at life in the sense that if something doesn't happen instead of being upset or emotional about it, it's more productive to say, okay, well, this is a teaching lesson and a training opportunity. And I think it just goes to the general approach that I've learned to bring to the different things that happened to me in life, which is just to have radical acceptance and to say you can't worry about the things that you can't change. So just stay focused on what is the actual problem. What are the things that you can do to understand the

Starting point is 00:03:26 problem? What are the different maneuvers you can make to try to overcome the problem? And then just put all of your effort and energy into focusing on creating the best outcome possible versus being upset at people or circumstance that you can't control. Do you think this is just a relatively simple, active choice? As you scan back on your life, was there a moment that you just said, okay, there's one of two ways to go here. The world is happening to me or the thank you for this training mentality. I'm going to do what I can. Does it happen in a moment? Is it cumulative over time? you think it's accessible to everyone? Like, how do you think about it? I've had debates about this with friends, and my orientation is towards the fact that happiness is a choice. You wake up every morning

Starting point is 00:04:11 and you can look at all the blessings you have. We're alive, we're healthy, we have our family, you have a roof over your head, you have what to eat, you have exciting things to do, or you can wake up and focus on all the things that don't go right and maybe some of the problems you have. I've learned through the course of my life, everyone has problems, and it's a function of how much you allow these problems to consume you. And I think a lot of it is figuring out the proper context that you want to put those problems in in order to create the framework you want to bring to approach them. But I do think that being optimistic and positive is way more fun than the alternative. And I think often it can manifest better outcomes. And I also think being negative

Starting point is 00:04:50 and defeatist and angry can also manifest outcomes. So I don't know, maybe it's different for different people, but I've found for myself the framework that works is to basically wake up every morning, be grateful for all the things I have. I pray every morning. And what I do, I just thank God for all the blessings I have. And I find it it's the same words in the prayers that you say every day, but depending on what's happening in the world around you, they sometimes have different meaning, depending on the challenge or the opportunity or the accomplishment that you're facing on that given day. I'd love to zoom in on some of the specific examples of things that you've been through that I think have been formative for sure, and especially try to focus on some that I have not

Starting point is 00:05:29 heard you talk about in this format elsewhere. I think that thinking of you as a product of your time as a New York-based real estate investor is really interesting. I think you did 14 billion or so of transactions in that sort of chapter of your career. But I want to zoom in on one ominous sounding address, which is 666, and have you tell that specific story of what happened and what it taught you? It taught me a lot, and it was a very challenging investment that went on for many years. We signed the deal in 2007 before the crash of Lehman. At the time, New York office buildings were on fire. Manhattan's vacancy rate in the Plaza District was about 4%, which meant the rents were going

Starting point is 00:06:10 up double digits every year. There was a real scarcity, and it looked like a very good investable asset class at the time. my father wanted to focus on office buildings and we went into that market and we bought 666. We had a thesis at the time, which I think was the right thesis. We just had the wrong timing and the wrong capital structure. The thesis was that on Fifth Avenue, the retail was starting to go up and value tremendously. And a lot of the old leases that had been signed, you could mark to market at tremendous uptick. So at the time, the income that was coming from the retail was something like maybe $20,000,

Starting point is 00:06:47 12 or 15 million dollars, and we thought over time that could be 50 to 60 million dollars. And if you sell that at 20, 25 times, there's a massive markup in the value that you can create from the retail. So one of the good things we did was we bought it with a capital structure that allowed us to unlock the condominium of the retail from the office building over time and then pay off the debt on the retail once we created that unlock. In the time that it takes you to do those condominium documents and you need to figure out how to get your lenders consents and then you need to get consents from the city, the market crashed and the dynamics changed dramatically. So we were still able to execute that thesis. The building we bought was for $1.8 billion,

Starting point is 00:07:30 which at the time was the largest price ever paid for a single asset in the country. Our thesis was that the million and a half square foot building was probably worth about $1,000 to $1,200 a foot, which we thought could have been roughly $1.5 to $1.8 billion, which is what Class A office buildings were trading for in that market, and that the retail alone, if we were able to complete the unlock over three or four years, could have been worth north of a billion as well, maybe a billion to a billion three. So that was really the thesis going into it. And then obviously we got hit with terrible timing. It wasn't just us. I mean, that was the great recession. Everyone went through it. And for me, as a young guy who didn't have a ton of experience in New York or in office buildings

Starting point is 00:08:14 or had to navigate complex situations in that regard, was kind of faced with a really big challenge. And so the way I did was, and again, it was very difficult, but I woke up every day, just tried new things and tried plan A. When that failed, it went to plan B, when that failed, it went to plan C. But ultimately, we were able to create a great outcome there where we brought in Carlisle Group and the Chira family to buy 50% of the retail for 500. $125 million at the time. And then we kept a 50% that allowed us to pay off a lot of our debt, pull out a little bit of cash, which was helpful at the time. And then we were able to turn that value into north of a billion of value over the next three, four years. And the Chiro's did a great job along with Carlisle. And we were able to get our 50% of the profits, which also returned

Starting point is 00:08:58 a lot of our cash from the original investment. The office building was a little bit more challenged because we lost tenants. And then the office building component went through a big retentening, We ended up bringing in Vernado into the deal, recapped it, was able to turn him out the debt. And it turned out to be an okay deal. But at the time, I was a 25, 26-year-old. In New York, I had every predator you could possibly have in my debt from L&R, I-Star, Cerberus, Colony, Vernado, Apollo. They were all going for the jugular, and they all really wanted to take the building for me. One of my biggest turning points in that deal was I went out to see Tom Barrack, who my father-in-law introduced me to.

Starting point is 00:09:38 he says, Tom's a killer. I was very afraid of Tom because he had a reputation for being a total pirate. And I went out to see him and I sat down with him and I said, look, this is the situation. We don't have to do anything for another two years. But if we don't do anything, the value of the building is going to atrophied further. I think it's in the interest of the debt holders and us, the building is going to need more capital. We can inject more capital into the building, but we need to change the terms of the debt in order to do that. And Tom asked me questions for about two hours. and he looked at me after and said, Jared, I was expecting something totally different. I've had people come in, try to be wise guys. You came in here with no lawyers, no representatives, no legal threats.

Starting point is 00:10:15 You basically came in and said, I recognize this a bad situation. He said, look, you didn't cause this situation. The rents were $120. Now they're $60. And I think your thesis is right, that if we work together, we can salvage value for both of us and let's figure out how to create a joint objective and let's work together. And that was a real turning point for me in the building because Tom became a great advocate. And in some ways, I liken my approach to Congress later on, which is everyone had a vote, everyone had a different issue. One guy had his fund expired at this point. One guy had an ego issue. And I had to kind of satisfy each person's micro issue in order to accomplish the greater restructuring. And so we were able to salvage the investment and get the bondholders pretty much most

Starting point is 00:10:57 of their money back. We were able to salvage our investment, which turned out to be okay. But it was a brutal time. I mean, it was many years of just meetings, and a lot of people were making a lot of threats. And as a young person, I really learned how to deal with very complex negotiations with very, very high stakes. What was the stress like you were in your early 20s or mid-20s? You couldn't have done that much before this. Was that the first time that you had at this scale? If you think back on the stress itself, describe it and what it was like and how you got your arms around it?

Starting point is 00:11:25 I'd been used to stress. I mean, I had the previous situation in my life a few years earlier when my father had an unfortunate situation with the company and he had to take some time away. And I was forced to kind of jump into the company and the company was under siege from prosecutors. And that was also an unfortunate. So I joke that the first six years of my career, I was either getting kicked in the nuts or kicked in the stomach every day. And some days it was both. Those were six very, very tough years for me. And I think at some point you just kind of get used to it. And you realized, like I said before, you could wake up and you can focus on all your problems or you can just acknowledge that these

Starting point is 00:11:58 are the problems that exist. You don't say why I'm in this situation. You just say I'm in this situation. So I have to choose to find a way to be constructive and I have to choose a way to work to try to create outcomes. And my mindset was always very much focused on create win-wins. How could I convince somebody who has more leverage across the table to do something that I want to do? And it was really by catering to their interests more than their sympathy or their fears. I had to find ways to make it worth their while to try to get them to do things that aligned with what I thought was the best outcome possible. I was wondering about what your experience and generally New York City real estate and investing in that sector, a very competitive high stakes place, can teach you that no other experience

Starting point is 00:12:41 in the world can teach you. So I was going to ask about that. I also remember you telling me something around early in your career across a lot of that 14 billion, you had bigger ideas than necessarily you had capital to match the specific idea. And so it was very very, very important that you work with the incentives and the desires of your counterparties to find creative ways forward. I would just love to hear a bit about those two things in conjunction, like what New York can teach you that maybe nowhere else can, that you had that experience, and then also this creative dealmaking early on when your ideas maybe outstrip your specific resources at that moment. So New York real estate is probably the most competitive real estate

Starting point is 00:13:19 market in the world. It's filled with a lot of characters and colorful people. Some are incredible people, some are terrible people, and you just have to find your way to navigate through it. As a young guy, I got to meet them all, and I was able to differentiate myself ultimately by being somebody who focused on the next deal instead of the last dollar. And as I saw everyone who I was dealing with particularly in 666 was most people were very short-sighted. Tom was phenomenal. It really made me think, well, I should just try to be a good person to people, be honest. don't operate the way that a lot of others were operating. And I think that that differentiated. People really wanted to start doing business with me. And it helped me refocus on what I wanted to accomplish.

Starting point is 00:14:05 So coming out of that deal, I learned a million and a half lessons from it. So I find in life, you learn very little when things go right. You learn a lot when things go wrong. And I learned a lot about how to structure your capital. I learned that it wasn't maybe the most prudent thing to make big concentrated bets unless you have super high conviction, but you should figure out how to find ways to create asymmetric risk profiles and deals. One of the first buildings I bought in New York was a building called 200 Lafayette Street, which is in Mulberry. He was owned by an old guy who was actually married to Geraldine Ferraro. And he was a building. And when I went to the building, I didn't even do any inspections on it because it would rain on the roof and it would be in the basement. It would just go

Starting point is 00:14:45 right through. It was an old sweatshop building, but it was beautiful. And I saw at the time I was working with Josh and Thrive and we were helping a lot of entrepreneurs. And I think the ethos behind what Josh was trying to do at Thrive was to say, how can I help entrepreneurs like I wish I was helped when he was an entrepreneur. One of the things I was doing was I was helping a lot of his companies with their real estate needs. And I realized how arrogant a lot of the landlords were and that they said, what are the needs of these tenants? They want a cool design building. They need to place for their bikes, they want fast Wi-Fi, and they just wanted simple interactivity. So I started realizing the places they wanted to be. They wanted to be in Soho. They want to be in Brooklyn. And they were

Starting point is 00:15:22 willing to pay more rent than what the market was currently asking if you can give them that package and make things simple for them. So this building, 200 Lafayette was a premier location and had all the bones of what it could be. I met with the owner. I was able to convince him to give me the deal. And then I thought about bringing in an institutional partner. But at the time, our family, had never dealt with an institutional partner before. So I went to a lot of the traditional funds. They all didn't want to do business with me at the time. And there was one fund that I went with a gentleman named Avi Shamesh at CIM. I remember walking through the building. And he asked me, said, well, how big are the floors? I said, they're 17,200 feet. He said, well, is that the right size for the tenants we're going

Starting point is 00:16:02 after? And I said, well, it's what we got. And he says, how fast will you renovate this building in? And I said, I'm going to do it in under a year. And he says, but most of my people are telling me you could do it in 18 months minimum. I said, I'm going to be here every day and I'm going to renovate in under a year and I believe I can do it. He looked at me on top of the roof and he said, Jared, I'm not going to invest in this building. I'm investing in you. And that was my first real institutional partnership in New York. And we bought the building. I worked it very, very hard. We got through Hurricane Sandy, was slowed us down. I think I did the full renovation about nine months, at least the whole building. We ended up selling it for about 160 million, about a year later.

Starting point is 00:16:36 It was a big success. And that really was the one that got me started with my whole next chapter of momentum in that regard. And in doing that too, I was dealing with the brokers, with retail guys, with all the different contractors. One of the best lessons I learned on that was, again, I was sewing the weeds on the construction. I had a great gentleman named Greg Cunio, who was an old Italian guy who was semi-retired at the time, but he liked me, so he was willing to work on my job with me. And I remember I was negotiating with the elevator guys very aggressively. And he looked at me and he said, give me an Italian term where he said, Jerry, just remember, everyone's got to eat. So if you negotiate with this guy too hard and you make too good of a deal, he's going to

Starting point is 00:17:12 prioritize your job last. So you don't want to get the best deal. You want to have the best person doing the work for you and you want to pay them a fair price. You don't want to get gouged, but you don't want to cut them too thin because you want them motivated to do an excellent job for you. And so all these little micro lessons were just very important in my early formation. But again, I really was always focused on being long-term greedy, doing the right thing.

Starting point is 00:17:34 And opportunities just started multiplying. And we developed a very nice franchise for understanding where the tech tenants wanted to be, buying old warehouse buildings and then designing them in a way that these tenants wanted and giving them the great modern infrastructure needed. And we started buying a lot of buildings and then creating a lot of value for my family and for the investors that partnered with us. Everyone's got to eat makes me wonder, how do New York real estate investors negotiate differently than others that you've dealt with?

Starting point is 00:18:03 if it's an especially cutthroat, hardcore place and asset class, anything stand out from your many negotiations with New York real estate specifically that seem distinctive and unique? I would say there's two different barbells on how people negotiated. And then I chose my style based on that because every negotiation I was in, I wasn't just negotiating. I was actually learning from how the people across the table negotiated with me. So you would have some people who overnegotiated every clause, every provision, like it was a nuclear code. And then I did one deal with. the developer who basically sent back the contract. And he said, I'll be okay with your whole contract. These are my three issues. And if you give me those three issues in the way I wanted, I'll just sign your

Starting point is 00:18:42 contract. And I was like, that made a lot more sense to me, because if you want to buy, then be a buyer. And a lot of these provisions didn't matter that much. So it was really a function of understanding what your objectives are and your priorities. And if you wanted to buy, make it as easy as possible for the seller to sell it to you. Don't let your lawyers overcomplicate it or jam them up with a lot of minutia that doesn't really matter. I'm not just asking about New York real estate now, but just across your entire life experience, what have you learned about the most effective way to figure out what's important to people and what they want? You just have to listen. If you listen to people, they tend to tell you what's important to them.

Starting point is 00:19:22 Why don't more people do that well? Probably insecurity. People generally either come with preconceived notions to different situations, perhaps it's ego. But I find that if you're trying to to do a transaction with somebody, it's not about trying to impose what you want. It's about trying to give them what they want while also getting what you want. And the type of transactions I always tried to do were not ones where I slice up a piece of pie. It was, how do you make the pie bigger? The good news is, I mean, you go on a plane and you fly out. There's a million buildings. You look down below. Somebody's always getting divorced. Somebody's getting old. Somebody's mismanaged. So there's a million things to buy. And over time, I really developed the discipline to know that you have to just walk away

Starting point is 00:20:03 from the deals that don't make sense. And if you don't have the right chemistry with a seller or you don't think you can make the returns, it's a lot of work to convert a building. It's a lot of work to manage a building. So you want to make sure you're making the fair deal to keep the upside for yourself and your investors, not giving it all away by overpaying to somebody you're never going to see again. So that was really a lot of the framework for the approach. But just if you listen to people, they'll tell you what they want. And I saw this in government as well, because in government, most of the people I dealt with had never really negotiated before. If you think about people who are technically experienced in government, they're experienced because they're more like historians or

Starting point is 00:20:39 subject matter experts. So a lot of them I'd say, well, what have you ever negotiated for? Do you own your house? Do you have a mortgage? And I was really shocked in government at the lack of sophistication that most people had in negotiating, which is unfortunate because the stakes in government could not be higher. They're way higher than a little bit of money that changes hands in a real estate transaction or a corporate deal, I think people would be much more theatrical in their negotiations where they would either see it in movies or read in books how to negotiate without realizing that it's just a human-to-human effort where you just have to sit together as people and try to figure out how to solve problems. And a lot of the relationships I made from the deals I made in government

Starting point is 00:21:20 or even in New York, most people will tell you that I was very fair to deal with. I was very honorable. I never tried to negotiate me against you. I would always say, let's sit on the same side of the table, let's identify what our common objectives are, and then let's work together to find solutions to accomplish those objectives. And at the end of the day, even when you go back to New York real estate, if the price is 100 that somebody wants, they can get that price from four or five different people, I always tried to be the one who they felt the best about and who built a reputation as when I say I'm going to do something, I do it, and somebody who's not going to play games, not going to jerk them around, and who's going to deliver. And that a reputation helped me out a lot

Starting point is 00:21:58 as I started growing more and more in the industry. Our mutual friend David Senra is fond of saying that relationships run the world. And I was interested in your book that there's this little butterfly flapping its wings moment when Rick Gerson made an introduction to you that maybe ultimately led to the Abraham Accords if you think about the butterfly flapping its wings. And I was really struck by that story in your book, which is the same story, basically, you just told that when you first went to the Middle East with really no foreign policy experience, you weren't a historian of the Middle East necessarily, that you went and

Starting point is 00:22:27 listened in maybe a unique way that they said was unique. Can you just tell that story to really drive home the power and the point of just going in with this orientation, even if you're not a huge subject matter expertise when you start? First of all, Rick is a special friend, really a special human being. And I think he's very genuine through and through. And that's why he's built so much trust. And I find that one of the things that makes me very rich in life is the fact that I'm blessed to have great friends like Rick and others who I really respect in every regard and who I value. That story was one when I went to UAE, and this was on one of my first trips overseas, I sat with MBZ, who's now the president of UAE at the time. He was the crown prince, but he was

Starting point is 00:23:08 the de facto ruler of the country. And I spent the first hour basically asking him as very simple question. So the goal during that meeting was to really bounce off of him my early framework for how I was going to approach the Palestinian issue and some of the broader regional issues with Iran and different challenges that we had. If you remember at the time in the Middle East, it was a total mess. So Syria was in a civil war where 500,000 people had been killed. Assad was using chemical weapons on the opposition. Libya was destabilized. Yemen was destabilized. Iran had just done the deal with Obama, where they now were flush with cash and on a glide path to a nuclear weapon. And ISIS was roaming around and had a caliphate the size of Ohio, where they were governing over

Starting point is 00:23:49 8 million people pretty ruthlessly. So it was a mess. And a lot of the U.S. allies felt betrayed by the deal that Obama had done with Iran. So it was probably about as bad a situation as we've seen in a long time. When I was sitting with MBZ, I basically was asking him one simple question, which was America has a lot of power. We have a lot of tools at our disposal. You are somebody who's been here for a long time, your thought to be one of the wisest leaders in the region and the world. If you were me, what would you do? And I could tell he was just like not getting the question. It took us several iterations till he finally started giving me answers. And it was a great discussion where I started sharing with him some of the initial thoughts that I had and then pulling thoughts out of him and getting

Starting point is 00:24:34 his responses to help me shape some of the different approaches I was thinking of taking. He said to me at the end of the conversation, it was like a two and a half hour meeting. He said, Jared, I think you're going to make peace in this region. And I said, well, why do you say that? And he says, well, the U.S. usually sends one of three different people to come see me. The first are people who come and they fall asleep in the meetings. The second type of person they send is somebody who comes and they read off note cards and transmit messages but have no authority or ability to actually engage and have a conversation. And the third are the senior people who they send who usually come to try to convince me to do things that aren't in my interest. He said, you're the first senior

Starting point is 00:25:12 person that's come from the U.S. that I can remember who actually ask questions. And at the the time, I was shocked by that statement, a little dismayed, but that was kind of the only way that I knew how to do it. And it wasn't because necessarily that was my approach. It was because I came with no subject matter expertise in the Middle East. I came with no experience in diplomacy. And so I did what I thought I should do, which is find the smartest people who have vested interests in the situation and start asking them their perspectives on what they think should be done. So this was not like, you need to be a nuclear physicist to think of this. It's like, this should be 101, but it was shocking to me at how rare that is. And I think that that approach really built for me

Starting point is 00:25:54 tremendous trust and understanding with a lot of the leaders in the region and ultimately led to a lot of the different breakthroughs that we were able to accomplish. And again, it goes through the same thing I was doing in New York real estate. When I was doing it in diplomacy, it was very simple. I was sitting with somebody. We were trying to get a mutual understanding of what the objectives were, what the challenges were, and identifying what we thought an end state was that was desirable, and then figuring out how do we move forward and get something done. And I think that the doctrine that I used in the Middle East, which I think was different than what was done previously, was that I was focused more on mutual future interests instead

Starting point is 00:26:35 of relitigating old problems. Because if you spend your time trying to figure out who wronged to 75 years ago, I mean, it's a very interesting intellectual exercise, but it's not going to make anyone's lives better. And a lot of the modern Middle East in particular was really constructed by generals and U.S. diplomats who were focused on strength and power as the way to create an equilibrium. But all that leads to is one creating strength and power, then the other trying to have more strength and power. And then it's a constant arms buildup and nobody trusts somebody if they're just constantly needing to have a stronger edge over the other. What I saw as somebody who'd come from the business world is that at the end of the day, if you want people to have better lives,

Starting point is 00:27:18 you need a foundation of security, but you need people to feel like they have the opportunity to live better lives. And that can only be done through economic investment and through economic ties and figuring out how people can have a paradigm where they can have better lives together. And that was my initial instinct. And that was what I really pursued over the course of the four years that I did it. And ultimately, that led to a lot of big breakthroughs. And I think that that's the right formula for people to be using going forward for diplomacy, not how do we outmilitarize each other. I think military is an important component to it. But to have an end state that's sustainable, you need to figure out how can people have a baseline of security,

Starting point is 00:27:58 but then the opportunity to live better lives and to let their children live better lives and they've lived. I have so many questions about the work you did in the Middle East, the Abraham Accords. It's been so fascinating to hear about from you, but also to read about independently. But my biggest overarching question is just about leadership. You had to deal with a very complicated situation, very talented, very different leaders across lots of different countries and interest groups, etc. Can you just say one click more about the role of leadership in affecting the sort of change that I think, I don't know many people that would disagree that they want peace and progress. I'm sure some people do.

Starting point is 00:28:34 I'm going to ask big questions about good versus evil and stuff later. But it does seem like most people kind of want the same basic things. And yet it's been incredibly hard to get those things done. It sounds to me like your approach is fundamentally a human one that is very focused on enabling and listening to other leaders and then working together as a group. Can you just riff on everything you learned about the role of leadership and affect change in situations that are extremely hard to change because of complex histories? It starts with understanding that all leaders are human beings. And I think maybe because the two

Starting point is 00:29:09 foremost leaders who were mentors to me was, number one, my father. I saw the way he led a business. And I saw the way that he was effective by setting examples and by showing people that he wouldn't ask people to work harder than he worked. And by basically saying, like, this is the North Star, we're going to get to and how we're going to get there. Then I saw. the way Donald would lead and manage. And that was also very inspiring to me. He had a very unconventional approach. But the thing I respected about my father-in-law was that he was very unafraid to go after hard challenges.

Starting point is 00:29:43 So like the Middle East, for example, was something that most leaders would set low expectations on and then try to navigate through. He was unafraid to go right after it. And North Korea, like, let's go meet with them, let's try. and he wasn't afraid to try, which I liked as well. What I would say about the leaders in the Middle East is that when I came in, it was a very chaotic situation. And they had a lot of fear for what Iran would do if they were allowed to stay on the glide path. And they realized that a lot of the old habits that the countries had taken were not necessarily

Starting point is 00:30:18 the right ones. So it was kind of the beginning of the realization that we needed an economic project and we needed to give our people hope and opportunity instead of just holding them back with more of a repressive nature as had been the case throughout the Middle East in the past. So if you think about the Arab Spring, that was really, I think, in some ways, a turning point where leaders realized that if they're not giving their people hope and opportunity, they needed to break out. And they needed to get them focused on economics instead of extremism. And that was the permeating undertone of what we thought was like a better chance. And I think because they'd seen the failure in the previous model,

Starting point is 00:30:52 there was more open-mindedness to the new approach. You had at the time entering the deputy crown prince in Saudi Arabia then, who's now the crown prince, Muhammad Ben Salman, also a former businessman, who really had big ambitious goals for what he wanted to do with his country. And then in Qatar, they had a new emir, Tamim, who and his foreign minister, Muhammad, who worked very closely with, who also wanted to modernize their countries and get to a different place. So I think there's a big revelation of, we've gotten to a great place, but we have so much more potential. And if we don't address these problems, it's not going to work. So there was a big fear at the time of change because most people in politics are very comfortable with their status quo and they

Starting point is 00:31:33 could tell you everything that's wrong with it, but there's risk to moving because if they change the status quo, then what it does is it creates uncertainty and they know how they can survive in the current state. They're not sure if they can survive in a different state. And so that becomes complex in that regard. So a lot of what we tried to do was figure out how to identify what the paradigms were that would be acceptable. And in some case with President Trump, he would just eliminate the status quo and then force people to try different status quo. And then we'd work with them to say, how do we create better status quoes and avoid the worst potential status quo? And once you create that impetus for change, then I found that

Starting point is 00:32:15 leaders had a lot of courage in order to get there. A lot of these leaders in particular, Middle East. For them, they had a real vision for what they wanted to do for their societies, but there was just a lot of old constructs that they had to fight through in order to get there. And I think what I was able to do was to be a sounding board for them in a trusting way. They knew that if our conversations, if they shared with me their desires and those conversations lead out, that would be very hard for them. They would have to deny that this is where they want to go because if your policy has been one thing for such a long time and then you're going to change that policy, you want to do it with an element of surprise and you want to do it

Starting point is 00:32:51 from a position of strength. And so I think just building trust with them, understanding what their true desires were, and then working hand-in-hand with them on how they could migrate their situations was a very critical element of what we were able to accomplish. I want to ask a lot today about the relationship between governments and the business communities in different countries around the world and the lessons that each can learn from either side. I think it demands that I start with a question, we're talking on a very interesting day, which is the day after Assad was run out of Damascus, just to put a timestamp on it. I would just love to hear what you think are the most interesting and important elements of the, I guess I'll call it the geopolitical map today,

Starting point is 00:33:30 late in December of 2024. As a stage for everything else that we can dive into and talk about, it's changing really, really fast. I understand that. So this may be stale quickly. But I'm so interested with your deep experience around the world, what you think are those most important and interesting elements today? I think there's several. I think that with President Trump coming back, I think the world is very excited. It appears to have real leadership. People know that Trump 2.0 is going to be different than the first time. He has way more knowledge of all the problems. There's not going to be as much learning on the job as there was last time. He's surrounded by a phenomenal team of people throughout the government in all areas. I was joking with Susie, how jealous I am of the fact that

Starting point is 00:34:14 She has so many, like, competent and functional people who she's working with. And I think it's going to be pretty extraordinary what they're going to be able to do. And I think through that end, the objectives are pretty clear. So if you think about from President Trump's perspective, number one, you absolutely need to secure your border, which is something that we were able to do in the first term at the end. And then the Biden administration just basically repealed all the different efforts we did. And it's been an absolute disaster what's occurred. So number one, you need to protect your homeland. And I think that's very critical. And I believe that there's a very good team and there'll be very strong actions to do that. When I was working government on that issue, I had some friends who said, you're on the wrong

Starting point is 00:34:52 side of the history because one of the jobs I got was to build the wall and work on figuring out how to secure the border. And I had some friends from New York who were very offended by that. I think there's been a massive shift in the sentiment on that issue. I think it's way more widely understood now. And I think people understand that it's a national security issue. I think it prevents a lot of human trafficking, a lot of the women who are brought over are abused. And I think it's a very important issue that will get straightened out very quickly. I think the geopolitical issues are probably number one Russia, Ukraine. I think that that, obviously when you have a nuclear power in a state of conflict, that creates risk to the world. And I think that a resolution to that is needed

Starting point is 00:35:28 very quickly. I think that also will stop Russia from playing games in different areas. Obviously, with the fall of Syria, it takes away some of their leverage in that region. But if you think about also with Iran, they've been massively degraded over the last six months, in particular, by the efforts that Israel's taken in Lebanon and in other areas. So I think you have the Russia-Ukraine issue, which I think needs to be resolved. You have the Iran situation, which last time when President Trump left, they were basically broke because of the sanctions he put in place. And then the Biden team was worried about the global oil prices. They stopped enforcing the sanctions. They've sold over 150 billion of oil, which has allowed them to refill their coffers, and then they've started

Starting point is 00:36:10 enriching uranium again since then. So that's a big issue that needs to be dealt with. But if the Ukraine-Russia situation is dealt with, I think the Iranian situation becomes much more manageable as well. You want to tie everything together with Saudi Israel. That was pretty much ready when President Trump was leaving office. It's a shame it didn't happen in the last years, but that's something that I believe President Trump could bring to fruition very quickly. And then you have the big issue with China and the U.S.-China relationship, which will be a function of, obviously, trade issues, but then there's some global competition issues that can be resolved. And I think there's areas where it's okay for us to compete, and then there's some areas where if American China overlaps and

Starting point is 00:36:49 cooperates, there could be big benefits. But I think the world generally is tired from conflict. I think the whole world could benefit from like a decade of rebuilding where people focus internally on building their countries and their societies and their infrastructure and their economies, focus on AI. I think a lot of these issues could be resolved pretty quickly and in a framework that could bring about, I think, a time of amazing prosperity if led correctly. If every football bounced the right direction and everything resolved itself in the way that would make you personally most excited about the stage being set for global prosperity, what would that mean? What are the most important couple balls in your mind to bounce the right

Starting point is 00:37:27 way to set that stage? I think that President Trump, what he wants is a fair global trading system, which I think is critical because sometimes when these things become imbalanced, they lead to tensions between countries that are unnecessary. So I think, number one, creating a set of rules for the world that everyone's going to follow and that they actually do follow. I think that's a very critical thing, figuring out how we can cooperate together and compete, but on a fair set of terms is very important. and then figure out how people can focus on mutual benefit instead of relitigating old problems. Again, these wars, the investments in bullets and bombs really don't benefit the citizens. I think a lot of these wars are negative in that regard, whereas if we can redirect those funds

Starting point is 00:38:13 and those intentions and these young boys I see fighting in these wars, let them go build products, let them build companies, let them do things that will advance humanity. that's just a much better framework. And it takes a strong leader. I learned this the hard way when I was in Washington that there's not really a big constituency for compromise. And these conflicts are very heated. You saw when Elon Musk put out an idea for how to navigate the situation in Ukraine, he got

Starting point is 00:38:38 blasted by a lot of people. But the truth is, is that if you want to be a leader and you want to end conflicts, you need to figure out how to create compromises so that these conflicts can end. And so net net, these conflicts don't benefit. the world, and I think that seeing a resolution to them would be very beneficial for everybody. Fair is such a key and important word. What do you think that means? How do we know what's fair and not as we think about such an interconnected world and such an interconnected set of economies? What is North Star for what fair means, do you think? I think just everyone operating on the same

Starting point is 00:39:13 set of rules and principles. So I think there's definitely some imbalances. I think a lot of the work that President Trump did with China in his first term was about having them acknowledged that they were not following the rules that were set in the global trading sphere. And so you could say, let's just go punish them and let's impose tariffs, which we did. There's probably more work that needs to be done. But ultimately, what I believe President Trump wants is he just wants a level playing field. And he says, as long as we're all competing on the same principles, then he has a lot of faith in American industry to be able to outcompete the rest of the world and to do very, very well.

Starting point is 00:39:48 By the way, he doesn't want the rest of the world to do bad. He just wants America to do great. And he's okay if other people do well in addition. You've been spending your last couple years as an investor, and I'd love to tell the long, detailed story of affinity and how you've settled on and continue to improve upon your thinking around strategy and where to invest and how to invest. And maybe the right way to start the conversation is just for you to tell us a model

Starting point is 00:40:11 for how we should think about affinity and who it is and what it is designed to do, like why it exists in the world. We spoke earlier about my time in New York real estate and we're also investing in some technology and companies. And so that was an amazing experience for me. I started out during a very troubled time. And then we had about seven amazing years where the company was growing tremendously and I really was enjoying it a lot. Then I got diverted into government, which also was very, very exciting. I saw on the campaign trail in 2016, actually 2015, I went with my father-in-law and started seeing what he was seeing in the country, and I was very inspired by it. I felt the country

Starting point is 00:40:48 really wanted change, and I worked with him very closely on that campaign, and then was very inspired by him to go work in Washington and go work on some very, very hard problems. And so being a businessman and going to Washington, I was able to see that if you bring a business perspective to global issues, you can create outcomes that people didn't think were possible necessarily. And when I left government, I had spent my time understanding the world. I was exposed to all these global trends, the way that business was done in different places. And I'd taken a regional company when I was in business and I'd taken it national in the country. But then I thought that taking the perspectives of somebody who'd done business and then who understood geopolitics and global

Starting point is 00:41:31 trends, taking that into the business world would be a very interesting adventure. Taking those learnings from my previous business and political experience into the global business world could create a very unique firm. So I set out to do something that I didn't think had been done before, where I was combining different expertise, both traditional business and investing expertise along with geopolitical and navigation expertise. And at the core of it was really our ability to do complex problem solving and understand global trends. And that was really the foundation of what I was trying to do. And so I wanted to build a firm that kind of aligned with the values of who I felt I was

Starting point is 00:42:13 and what was interesting to me. So some of them are, number one, always be curious, learn about the different things in the world and try to learn about things from a very base perspective. I saw my time in the White House that there's a lot of information asymmetry. I was in the most covered building in the world, yet most of what they wrote was not accurate about us. So I felt like that should probably be the same in the business press. So if you go out and you meet with people and you understand what they're working on, you could find some opportunities that are underappreciated.

Starting point is 00:42:43 So stay curious. Be very empirical in what you look for. So look for areas where you see things that the conventional thinking is different. Work to build trust. I think trust was a critical element of the success I had. in my previous two careers, both in my real estate business and in my government. And so if you become somebody who's trusted by CEOs, companies, they're willing to share with you what their dreams are and what their challenges are. And if you can be somebody who's going to brainstorm with

Starting point is 00:43:12 them and it's not going to lead to the press and you can come up with ideas and solutions and even connections for them that could help them achieve those objectives, that can make you a very compelling partner, being collaborative, working with other firms. Most of the deals we've done have been with other firms where I try to say with affinity that we're competitive to no one but collaborative with everyone and complementary. So we work with all the other top tier firms and we co-invest where they bring different skills that we don't have, but we bring different skills and relationships that they don't have. And one plus one, hopefully equals 11, as we like to say. So we work on that. We obviously try to be givers. We try to be problem solvers. And we try to be

Starting point is 00:43:52 collaborators. And I think those are the different elements that I brought to the firm as a base way. And so we started exploring the world. It was in 2021. But when I started, the world's a little bit different than what I expected. And it took us a while to get started. And that turned out to be a great thing. And I think one of the things that our investors really liked was the fact that we were so patient with the way that we approached our investing. Initially, we were doing mostly preferred equity deals. That was a time where people were paying crazy prices in 2021. I had a lot of of my friends who'd made billions of dollars sending me transactions to co-invest with them in. And they were explaining to me, Jared, this one's at 15 times revenue instead of 20 times revenue.

Starting point is 00:44:31 And I was saying, what the hell is a revenue multiple? And I didn't think they were necessarily wrong. I just thought that maybe I was not up to speed on how modern investing was done. But it turned out that that corrected pretty quickly. Then as that happened, we started seeing that the market shifted very quickly where everyone was very focused on not investing in anything that was losing money, that was cash flow negative. But then we found some amazing companies that were technically cash flow negative, but we're growing tremendously.

Starting point is 00:44:58 And we thought that with our investments, we could help them turn into profitable companies. And those were some of our best investments that we've made in that sphere. And then I think what we've come to, and it fits with our original thesis, is that we basically are looking for global platforms, global problem solvers, and looking for companies that we think can make a big difference over the long term and that we can be long-term investors. And I do think there's an amazing role for the private sector to play in bringing prosperity and progress in the world. So I saw this from my time in government that governments can set policy, but policy alone can't bring prosperity or progress. You need the private sector to come in and to figure out how to create the jobs,

Starting point is 00:45:40 create the companies, and execute the different businesses that need to be done in order to lift society. So that was really the foundational thinking that I had at the time. And we put together a very unique team and we've done some very unique investments. And it's been intellectually very stimulating. I've met a tremendous amount of new people, which has been great. And I'm very, proud of what we've been able to do so far. You told me this great line one time, which is that there are something like 10,000 publicly traded equities, companies. They're all pretty efficiently run. They're all sort of unified by this profit motive as the North Star. And then, then there are 250 some odd countries. They're all pretty inefficiently run. And the North Stars are all

Starting point is 00:46:21 very different. The interests are different. It's not necessarily a profit multiple. And that therein lies an interesting opportunity to sort of understand the latter and then work with the former to find and build unique investment opportunities, which certainly is unique relative to most investors I talk to. Maybe an example would bring the concept to life. I know you've been working on a big investment in Mexico for a long time. I'm curious for you to explain that one, just as a case. study of why this blend between like sovereign nations, businesses, people going global, and your unique experience might all come together for like an investment that other people wouldn't make or wouldn't be able to make.

Starting point is 00:46:58 So this one, we're in the final stages of. So I can't give all the information, but I can give generically what it is. We've been working on this now for about 18 months doing a participating preferred equity investment in one of the leading infrastructure companies in Mexico. And the thesis there at the time was that Mexico was benefiting through the near shoring. Obviously, a lot of manufacturing supply chains during COVID were disrupted. And I think there's a big desire in the U.S. to have a lot of the lower end labor products done closer to home versus in Asia overseas.

Starting point is 00:47:30 And there should be savings from that through less transportation costs, more reliability, if that could be accomplished. But in order of that to happen, Mexico is far behind on the infrastructure they need to deal with the rush of investment that's come into that country. So we identified an amazing opportunity there, a great company with a great sponsor. And that's one where we're at the final stages of. I think that with what could happen with President Trump, I think that the things that he's focused on, which is figuring out how to curtail the migration and curtail the power of the cartels, I see that only as a net positive for Mexico over time. So I think that actually will

Starting point is 00:48:06 strengthen the Mexico economy over time. If they work collaboratively with him, if they don't work, that could obviously hurt their economy tremendously. So that's obviously a risk factor right now. But what I see in Mexico is a market that a lot of businesses have been chased out of, but I think there's a big opportunity to invest there. And I think from America's interests, we want to have a strong Mexico because if they don't have a strong economy, then obviously a lot of illegal migration will come north. We want them to curtail their southern border so that the prosperity comes into Mexico. So having a balanced trading relationship, which is what we tried to create during the USMCA, and if both countries work collaboratively, there's a role for them to play to complement each other economically.

Starting point is 00:48:47 What are the most difficult parts of a deal like this? I'm curious about who you're talking to, you know, in a normal diligence cycle, you talk to the company, you talk to customers, maybe you talk to some industry experts or something. It strikes me that this probably requires that you spend a lot of time with all sorts of different people. and that there's lots of moving parts to making sure that it's a good asymmetric investment, as you said. Just talk to that a little bit. What you're learning are the hardest parts about this style of investing. I wouldn't say it's the hardest part. I'd say that's actually one of the most interesting parts. So like one of my partners is a gentleman Luis Vitigare,

Starting point is 00:49:20 who is the foreign minister and the finance minister of Mexico. And we negotiated together the USMCA trade deal. And afterwards, he went to MIT to be a professor in AI. And he's since joined our firm to help us with some of our AI efforts. But obviously, he has tremendous knowledge on global economies as a PhD economist. We also, Kevin Hassett, who is on our team, was now going to become the national economic advisor for President Trump. But by having these economic advisors, you're able to look at the macroeconomic trends and then look at the different elements in these countries that are either going to drive growth or not drive growth. So one of the most interesting projects I worked on when I was in government was we put together a business plan for the Palestinians

Starting point is 00:49:58 And in order to do that, we studied every economy post-World War II that basically had some form of industrial plans. So we looked at Singapore, South Korea, Japan. We looked at Poland. We looked at Ukraine. Ironically, Poland and Ukraine had very similar plans. The reason why Poland's been one of the phenomenal successes and Ukraine has not been is because Ukraine's just been plagued by corruption. So when you look at the different reforms and policies that are put in place by governments and then if they create the right incentives for the private sector to execute, you can kind of of see these trends ahead of others in terms of whether these countries are going in the right

Starting point is 00:50:33 direction or not. So for me, one of the things we've been doing at Affinity is looking at different markets around the world. We actually like the fact that we're global in that regard because it allowed us over the last years where we were less certain about America given what I saw as like not always rational economic policies put in place by the Biden administration. There was excessive regulation. They were working more towards social and environmental goals. versus pure free market economics. And so we would look for markets around the world where we thought the policy aligned with the products

Starting point is 00:51:07 that we were investing in. An example is we went to Brazil. And Brazil, we had two factors that led to an investment we made there. We bought, in partnership with Mubatala, all of the Burger Kings and Popeyes there. And then since then, we've bought out of bankruptcy, the subway, and we've bought the Starbucks out of bankruptcy as well. And at that point, the reason we were able to buy that at such an attractive price

Starting point is 00:51:27 was, first of all, after COVID, most of the units were in malls and the malls were shut down, so the cash flow dropped tremendously. So the company was valued a lot less than what we thought the future value of the company would be. And then second of all, we looked at the fact that the interest rates had gone from about 2% to 14% in Brazil, which also led a lot of investors to flee the country. So we basically thought through what would be the depreciation in the currency between the time of the investment and the time of our exit. And we used some pretty concerned estimates for that, but we still felt long term that these products were going to play in line with what the economic trends in the country would be. We used very little leverage. We bought just over

Starting point is 00:52:07 five times cash flow. We think over time, that's something that can continue to compound. And now that we have all this cash flow coming in, you can then allocate the capital towards all the different products you have that you think can continue to either buyback stores, invest in the different stores that you're making. And so there's not a lot of innovation in the business model, although it's funny, I would joke with my team that that's one of our few companies that has an AI moat. But then my lead on that deal pointed out that the management has figured out how to use AI and cameras and computer vision in order to figure out how to reduce the food waste by 35%, which has actually led to better margins for the company as well.

Starting point is 00:52:43 So even a company like that, we're finding ways to apply AI, which is quite interesting in this regard. So yeah, so we weren't afraid to go into Brazil. I think over time there'll be a phenomenal investment that we made there. Another example is we made a big investment in Israel, and we did that in the summertime right before the war in the north. And we invested in a company called Phoenix. We bought 4.9% and we took a fixed price option, 37.5 shekels. Today, it's trading over 50, and we had to buy another 4.9%.

Starting point is 00:53:15 We're going to own 10% of that company. That's about as blue chip as you can get in Israel. And there we thought the Israeli market at the time was very undervalued because of all the global hate that was going against Israel. But Israel is a very, very strong and resilient economy. This company is phenomenal. And I could talk about the company a little later. But just from a market perspective, we thought there was a high probability of a war in the North, which turned out to be true. But even despite that, we thought that that's why it was trading at such an attractive price, which gave us the opportunity to buy into something that since then has gone up a tremendous amount.

Starting point is 00:53:48 In each of those three investments, you hear a lot of mispricing amid an uncertain environment and change. And it makes me wonder, before going to some of the details on Phoenix specifically, just about like your overall emerging investment philosophy. It's so cool because you spend time in real estate. You joke, you know, what the hell is a 20 times revenue multiple. Real estate is very different in terms of how assets price. You need cash flow. You don't have cash flow. You can't pay a mortgage.

Starting point is 00:54:13 Our friend Alex Sloan has the pillow that says happiness is positive free cash. Then you spent a ton of time helping Josh, your brother, set up Thrive, and he's become one of the leaders in the world. Probably at the other end of the investing spectrum from real estate in betting on very fast-growing, primarily technology companies. And then it sounds like the style that's emerging out affinity is probably ingredients from all these different things that you've learned in your own new unique recipe. I'm curious if you could articulate your investment philosophy, having had all those separate. experiences, of course, thrown government as well. Because it sounds like pretty distinctive, like I hear some traces of value investing or mispricings that you're focused on, but also really big secular stories and big important countries. I'm curious how you think about just your own

Starting point is 00:55:02 investment philosophy with so many different aspects of the history. First of all, it continues to evolve. One of the coolest things about being an investor, it's very similar when I was in Washington. I went in and I just would read a ton from people who had been successful before me in investing, You have a lot of very rich successful people and they do podcasts like yours and they write books and they tell you all their secrets and they tell you why they were successful and you can learn from them. And so when I first started my business, Ray Dalio gave me some great advice. And one of the things he said to me was he said, Jared, what are your investing principles? And I said, well, actually don't have that specifically written down. So he says, well, as you look at every single deal, why don't you

Starting point is 00:55:42 start thinking through what is attractive to about this deal and what's not attractive to you about this deal. And I started writing those things down. And what we've come to, in terms of affinity, what we look to invest in. So the four principles that we use, and we have like nine principles, but the four first principles are, number one, we look for big macro trends. I learned when I was investing in real estate, I could buy an office building in New Jersey and I could buy an office building in New York. If I bought it in New York, I would have made a lot more money, but it's the same contract, the same work. Why? Because the market was a lot better. So we look for big macro trends that we think are going to lift a lot of the different industries we're going to be investing

Starting point is 00:56:22 in. Number two is people, which is you want to be backing phenomenal people and phenomenal teams. And what's interesting, I was with another investor recently who said, we don't in our firm. He's a very, very lean investment firm. And he said to me, if we have to go tell the management how to go run their business, we don't want to be investing in them. So I think that there's a lot to be said to investing in exceptional people and exceptional teams that if you do nothing and at no value, they should be able to do a great job without you. The hope is we do add value, but that to me is our second principle. Our third principle is really about what kind of modes or structural advantages to these businesses have. So you want to be investing in businesses that have done the

Starting point is 00:57:02 hard work to create a unique angle where you can just see something different about that business where they can do well for a long time because of advantages that they've created for themselves. So those are really the first three things we look at. Sometimes we'll over index on one versus the others, but we try to have those three. The fourth, which we've added recently, based on the conversation I had with a friend, was why us? Again, there's a lot of different things you can invest in. And I find that you do your best work when you're very interested in something, when you're very intrigued by it. And you have to be thinking, why are we doing this investment versus somebody else? And the way I look at it, this is there's over $100 trillion

Starting point is 00:57:38 in annual GDP in the world. We don't have that big of a fund, right? You just have to invest $1 billion a year or so. you can be very, very selective on where you put that money and who you put that money with. And so that's something that I think about. Then the rest of our principles are, do we have the right protections, the right price, the right governance, can we add value? But those are really the four things that we think about when we look at investments. And I keep it pretty broad because things change. The way we're thinking about AI today is much different than how we were thinking about it a year ago. We thought it was a big opportunity a year ago, but it wasn't as investable necessarily as it is We continue to work with other firms, and part of that is we get to hear from other firms what

Starting point is 00:58:19 they're most excited about, and they're looking for us to co-invest with them in the opportunities that they think we could add value to, which they think are their best opportunities for growth. There's this range in investing. You actually talked about this spectrum for Trump between pragmatism and ideology, which I think is like a really interesting stylistic difference, and you get people at different ends of that spectrum or along the spectrum. How do you think about your own activity where you tune on that dial between pragmatism, which is always changing. You're kind of facing the situation in front of you during the best you can. And a more fixed view of like how things are, how things should be. Do you think that that's a helpful dividing line that would help

Starting point is 00:58:56 describe your style as pragmatic in facing what the world needs and wants and trying to solve those problems for it through investing? I think the most important thing is just humility. Always be rechecking your assumptions and to always be asking yourself is what I believed yesterday, the same thing that I believe today. I read a great quote recently where somebody said, I wouldn't die for my beliefs because my beliefs might be wrong. And I think about that in the context of all the things that I believed at one point of my life. And I think that as human beings, when I went into Washington, I was look around that everyone, I'd be like, man, I'm jealous, how confident everyone is in everything. Like, I don't feel that way. And there's a couple things

Starting point is 00:59:36 that I've really studied and I feel like I've become expert on that I have high degrees of confidence on. But I think part of what I do is I'm always checking and rechecking and rechecking and then trying to look for other forms of challenges to my strongly held beliefs in order to make sure that I'm not missing something. And I think that's very critical. Another thing is an investor, which is, this is kind of a weird rule. But it's something actually that Scott Besant told me when we were together about a year ago, where he said to me, think about how you feel in your stomach before you make an investment.

Starting point is 01:00:06 Just remember that feeling. And then if things go better than you expect or worse than you expect or as you expect, you kind of always know before you're making that final sign off. And I thought that that was a very interesting notion that I've thought about a lot. And I think about the last four years of doing my own company and doing it in my name and really going in the directions that I want to go in. One of the things that's been very interesting is that I think the few times that I've made mistakes have been when I've made decisions quicker than I was ready to make decisions.

Starting point is 01:00:37 And so now I find that I'm tremendously disciplined on if I don't feel comfortable making a decision, if something feels to me like a 50-50 or a 60-40, I just try very hard not to make a decision and say, let me wait. And I think about it from an investing perspective. So we're looking at hundreds or thousands of deals a year. We have a team. We have all these different things coming in. The more we identify what we're looking for and more importantly, what we're not looking

Starting point is 01:01:04 for, that enables us to throw things out of the boat much quicker. There was this great line in the book about the Secret Service started calling you the mechanic. That's just a funny nickname. The story behind that was just like kind of always problem solving in the background. And for a long time in government, you chose, I think, to just be very quiet. And you talked a lot about making sure nothing ever leaked in the conversations you were having with your counterparties around the world. And I think you took great pride in that, that you were very quiet. I thought it was really funny that you said at one point you had the lowest approval rating of any Trump family member at 10%, but that still met 30 million people. You know, liked what you were doing? That was before I'd given any interviews or said anything. So I was impressed that even 10% like me. I didn't know why. There's no reason to.

Starting point is 01:01:45 I didn't say anything. But it's interesting to me because it seems to be a theme that, at least certainly in the episode in government, but also in some of the other stories that you wrote about, you're very willing for a long time to not say much to sort of listen and learn and figure out what's going on, figure out what people want, and then start to manufacture, to be a mechanic, to start coming up with solutions. How much do you think today, so far, in Affinity, the best deals you've done have been manufactured versus received? Sometimes I think about this deal flow pipeline.

Starting point is 01:02:15 Like there's deals and you can like go in and do one. Or there's deals that come because you insert yourself and start to shape the world around you. What do you think so far? Is it manufactured? Is it received? Is it some combination? Well, I think everything by definition is manufactured because you put yourself in the positions to receive things. So that's part of the system design that you create that things are being shown to you.

Starting point is 01:02:38 So I would say the last year and a half has been really we've hit an amazing stride. And it's been much different because I think we really feel like we know what we're looking for and we're able to project that to the world. We've built a tremendous amount of relationships, tremendous amount of trust and the quality of opportunities we're seeing. And it also may just be the market has gotten a lot better as well, are just phenomenal. And I think that we've earned the confidence from our partners by not blowing ourselves up early and being very cautious in the beginning. I think that gave us a lot of credibility.

Starting point is 01:03:12 And then the more we've gone, the more we basically say, like, our job is to make three good decisions a year. It's basically to you do a lot of meetings, you travel to a lot of places, you analyze a lot of things, you look at trends, you read a lot, you meet people. But at the end of the day, to be successful, I have to make three good decisions a year. And that's kind of how I think about it. And so when you simplify it to that level, I think that actually takes a lot of the pressure off in terms of what you're trying to accomplish. Everything you do is basically around how do I put myself in the position to make the best decisions possible and to be making those decisions on the best opportunities possible. That's kind of how I think about it is you almost want to

Starting point is 01:03:54 create the reverse vacuum where you explain to people what you do, what you are, what you're looking for what value you could add, why it's in their benefit to be working with you. And it took us a while to do that. But we've really had that manifest. And now the opportunities we're seeing are phenomenal. And we're very excited about it. What do you want that bat signal to be at maturity? Like, what are the conditions under which you want all the best counterparties to think of you and call you when they have something? I think that's happening naturally. In the sense that people who work with us have good experience with us, they realize we don't take a lot of their time. We get to answers very quickly. And when we're partners with them on deals, there's just things we're able to do

Starting point is 01:04:36 that if they have a unique problem or a unique opportunity they want to seize, they call us and we're pretty much able to figure things out. Obviously, this compounds on itself so it can become more and more true. But do you think most of that is just you just have a unique set of experiences between you and your team and relationships? And that in some ways, like the mechanic nickname is very apt, that you're just going to know how to solve certain kinds of problems. uniquely or better than others can. And that just grows over time. Like, is that a reputation that you hope you have as one of the primary things that people think about when they think about affinity? From very early age, I was thrown into a pool in the deep end. And I didn't necessarily know that I

Starting point is 01:05:17 had the skills or the ability to find my way through. And I was able to work my way through very complex problems. And then the reward for work is more work for whatever reason. Fate had it that I was thrown into several more deep ends of pools, and I have always found a way to get myself out of them and to achieve great results in all the different endeavors that I've been in. And I'm very proud of that. And so I know that I have the personal confidence that if given a unique challenge, I can solve it. And that gives me the ability to say at this point of my life, what are the challenges that I want to be working on?

Starting point is 01:05:51 And how do I look for those challenges in order to make sure that I'm working on things that I think are worthy of my time and exciting for me personally. Because when I'm excited, I'll do my best work in that regard. And so I think more and more people have come to recognize that we can be an exceptional partner. And you look at that real time by your current deal flow, which is a future indicator in the sense. And then ultimately, we'll be judged based on the returns of our fund, which is an objective metric business. And I believe over time that if we do this in the best way, we can achieve superior returns by putting together all these different elements. I want to learn more about this skill of you're in a very difficult situation. We've talked about some of them. We can talk about more. And you step by step work your way through them. There's a great line in the book, which I think your dad, maybe was the person that told you when you're running up a hill to not look up the hill, just look at your feet. For whatever reason, as I read the book, that's one of the lines that stuck out as defining you in some interesting ways that you seem to be very good at looking at your feet. But maybe say just a little bit,

Starting point is 01:06:54 more like you're in the hairiest problem you can imagine. What are the steps you're taking? What are your days like? What are things you find yourself doing over and over again that help you get through those? What are the footsteps, I guess, is what I'm trying to ask. Each situation is very different. So the story you talked about was in my book. I wrote when I was training for a marathon at 17 with my father. We were on the top end of Central Park at the hill. And I remember it was tough. And my father said to me in life, if you have a big challenge, don't look up at the top of the hill. Just look down at your feet and just take one step and the next step and the next step. And before you know it, you'll be at the top of the hill. And that's turned out to be very helpful advice that I've taken

Starting point is 01:07:32 to a lot of activities in life outside of running. I'd say one example of that was we were in the White House during COVID, which was probably the hardest challenge we faced, or one of the many hard challenges we faced. But the stakes in that were incredibly high because the whole world was relying on us and the consequences for not coming through was that people were going to die. And we were faced at a situation where the government was just very unprepared for what was occurring. And there'd been a lot of mistakes done by the CDC with the testing. And people were really saying that if you can't pull off these impossible problems that people would die. And I always say that when you have a problem, like the basic three constraints are number one

Starting point is 01:08:11 imagination, number two, money, and number three, gravity. And the truth is, is that we at the time did our best to figure out how to use as much imagination as possible, because you're the government, you have unlimited money, basically, in a time like that when there's a crisis. And the one that was probably the biggest constraint was just gravity. You had to literally make physical things appear at speeds and at scales that had not been conceived before in order to satiate these new demands that had real consequences to people if they were not able to happen. And so my brother gave me some great advice too. And I called a lot of my smartest friends. We brought in Adam Buller, Nat Turner, and Brett Smith, Admiral Jorwa, and we basically just camped out in the White

Starting point is 01:08:55 House and just started figuring out how do we just take these problems one by one. And miraculously, we came up with a lot of solutions to these things faster than we thought could have been done otherwise. You wrote in the book that that time, Operation Warpspeed, early COVID, was among maybe the top two most stressful times of your life. Maybe just zoom in on that time and maybe pick like the most stressful time. And just again, as an anecdote, describe one front of the other approach that you were taking. So like set the scene for us. What was happening? How are you receiving information? And then what did you do with that team of people that you just mentioned to try to make progress? Every day, just more and more problems would come. I remember the first day, the vice president

Starting point is 01:09:36 asked me to get involved with the task force. I was in the situation room and they were talking about testing and he says, well, Jared, what do you think? Is this the right message for us to put out? And I said, with all due respects, sir, you don't have a messaging problem. You have a fact problem. We really figured out then how to jump into speed to figure out what are the elements you need, what are the supplies we have, let's get inventory, let's get a fast cadence. And we just basically pushed all the bureaucrats out of the way and started figuring out how to make decisions as quickly as possible. One of the coolest things, which actually led to, I think, some of the success we had with Operation Warp Speed was, I got a call one night at about 10 o'clock from Ken Griffin,

Starting point is 01:10:14 who basically called and said, Jared, one of the best investments you could ever make is if you have some vaccines that are in phase three trial, start manufacturing all of them at the same time, because if one of them ends up passing, you'll be six months ahead on your manufacturing. At the time, I was still trying to figure out masks and testing. And so it wasn't really on my mind, but I kind of stored that away. And at the time, we were building out our testing. And we really had some great breakthroughs. So we brought our team in.

Starting point is 01:10:42 We found all the supplies. We were getting it going. We came up with this idea to say, how do we put all of the testing in CBS, Walgreens, Walmart? We said, look, that's what's in every community. Maybe we could have them do the testing for us. We used the private sector to do it. So we started cold calling the CEOs. They said, this is a crisis for our country.

Starting point is 01:11:01 do to step up, let us know. And so through that, we were actually making great progress where we basically were going to get about 400 testing sites up from nothing in about four or five days. So they all came into the White House to work on it. Remember the next day, one of the CEOs said, well, instead of doing it in our stores, can we do it in our parking lot? Because we don't want everyone to think that everyone with COVID's coming into our stores. We said, okay, that's a reasonable thing. Let's move into the parking lots. And we had the HHS health teams working on this. And then one of the CEOs asked us, he says, can we get some kind of liability? waiver from the government for this. I was like, you don't understand. I have no authority to give you this.

Starting point is 01:11:35 Like, I just need you guys to do this. And he said, well, then we're out. And Doug McMillan from Walmart at the time said, you know what? If our country's asking us to do this, we're going to do it. We'll take the liability. And because he said that, the other guys, I think, got a little guilted into going along with it, so they all went forward. So meanwhile, we're feeling great, literally. And maybe about 48 hours, we figured out how to get the FDA to approve the test. We figured out the locations. We have the manpower. We now have this distribution mechanism. And I'll never forget Bradsmith and Admiral Choir come into my office on a Saturday afternoon. And we were feeling great because we really thought that we'd turn this thing around.

Starting point is 01:12:07 And they said, we have a problem. I said, what's the problem? They said, we have 1.2 million swabs in the country. I said, okay, what does that mean? They said, that means we could do 37 testing sites. And so I was like, wow. So now we're going to be constrained because we don't have enough Q-tips, basically. And they're like, yes.

Starting point is 01:12:23 And so we ended up finding more Q-tips in factory in Italy. and we sent some C-17s from the military to pick them up before anyone noticed they were there. And so we were doing everything we could to get our hands on these things. But that was a big constraint. And it kind of made me realize that our biggest constraints were going to be

Starting point is 01:12:39 our lowest cost items. We're going to become our bottlenecks. And so between that and then the call I got from Ken Griffin, we then said, okay, let's get a whole separate task force together to go buy up or manufacture every single supply you could need for any kind of vaccine imaginable. And so we started that process very early, which gave us an amazing advantage over the rest of the world,

Starting point is 01:13:01 and then took those elements, and that's how we created warp speed, where we basically figured out how to do the manufacturing with the military. And the hardest part on that was figuring out we were going to do $12 billion, $2 billion a vaccine to manufacture. And the question was, which vaccines do you bet on? And there we basically were sourcing people to kind of lead that effort for us. And we did four finalists, and there was only one person we interviewed who said they could do an under a year, all the experts said it would take us two to three years to do it. It was a guy,

Starting point is 01:13:30 Dr. Montsef Slawe. He basically said, if we really get everyone out of the way, I think we can do this. And he'd created more vaccines than anyone alive. So I said, okay, well, you've got the job. And so we put him in charge. And I remember the media was attacking us. So, well, he's got conflicts. And I said, if we hired somebody who didn't have conflicts to do this job, then you should be mad at us. You know, you want somebody current. Max Conflicts. Who's focused on this. And so it ended up being an extraordinary experience. We were able to to work with the confines of an FDA that was an NIH that was basically working against President Trump trying to slow him down. But we passed every test of safety that they set out for us.

Starting point is 01:14:07 We worked at speeds that had never been done before. We basically made the bureaucracy move as quickly as possible. We did manufacturing at scale and at speeds that had never been done before for this type of medical supplies. And it was really a miracle we were able to accomplish. I think it became a lot more controversial when the Biden administration took the vaccines and started creating mandates. That was never the intention of what we want to do. The goal was to create the vaccines for whoever wanted them and then to figure out how to prioritize them towards the cohorts that were at the highest risk. But I think that was a tremendous effort that we made and it was something that, quite frankly, just came from just, we had a problem

Starting point is 01:14:43 and we just had to figure out step by step how to solve it. And if we spent time being panicked or focused on feeling bad for ourselves, we probably wouldn't have gotten anything done. There's an amazing Jeff Bezos idea of the two pizza team. It starts to get hard to get things done if you can't feed a team with two pieces or less, you just need small teams to make lots of progress. That story and lots of other ones in the book and that I've heard you tell is often, it's a relatively speaking small group of people that are working together intimately. There's not a lot of layers of communication and they're just trying to get things done. One of the areas that people seem most excited about post-election is Doche, the Department of Government Efficiency.

Starting point is 01:15:21 And of course, Elon is heavily involved and there's the famous story of him letting go of 80% of Twitter now X, and it kind of functions the same way. This question was sparked by your use of the word bureaucracy. And I'm curious when and if ever bureaucracy is good in your experience and how you think about the efficient way to get things done in government now in the next administration, but also just in general, bloat and bureaucracy and this sort of thing, which have taken on in my mind a very negative meaning. Is it ever good? Is it there for any good reason? Or do we really really need this two pizza mentality for most major projects to make real steady progress. I'm sure there are examples where it's good. I think with the government, what I found with

Starting point is 01:16:06 a lot of the career civil servants is there's actually a lot of incredible people there. But what happens is they're not really given a clear objective and they're not given empowerment to go and accomplish things. And nobody gets prizes for cutting costs or for trying to create more efficiency. So as a result, the incentive structure and there's a big risk aversion towards trying to do things that could cause problems or disruption. And so nobody takes on the hard challenges. I think that what Elon and Vivek will find at Doge is way more inefficiency than what he found at X. And I think the fact that they're building a lot of popular support for people to go in and find ways to make our government run more efficiently, I think there'll be some big

Starting point is 01:16:49 battles, but I think there'll be tremendous findings. And I think the fact that they're doing it so transparently, I think, will inform a lot of people how inefficiently our governments run. So this is a courageous effort. I will say that only a president as out of the box as Donald Trump would ever allow something like this to happen. It has happened, I think, during Bush and Reagan, where they did efficiency commissions. But those were done by proper people who did proper processes and then made proper recommendations. I get the sense this will be much more guerrilla style. I think it's going to be fascinating what it's going to uncover. And I think the benefits to our country in the long term will be incredible. And if you look at with Malay and Argentina,

Starting point is 01:17:28 what he's done, I mean, that's been one of the most exciting transformations to watch. I think America's not quite at the level where Argentina is from a rot perspective, but I think applying those same principles of cleaning up and simplifying and streamlining our government and really focusing on what's the purpose of our federal system and what should it be doing and where is it crypt to over time, that could lead to a revolutionary cleansing for our country that will make our economy, will make our citizens just way better off. So again, they're definitely going to make mistakes.

Starting point is 01:17:59 And if they're not making mistakes, that means they're not trying hard enough to find every bit of inefficiency that exists. But again, it goes to the businessman's mentality of, in business, we're rewarded for taking risks. And when I do a company, or if I'm backing a founder, or if I'm building a company myself, I want to be focused on things that might potentially fail

Starting point is 01:18:19 because we have big ambitious goals. In government, the goal is to figure out how not to fail. And so people often don't take on ambitious projects and it's just not celebrated in the way it is in the private sector. And one thing also that I loved about the first Trump administration, I think will be about 100x in the second Trump administration, is that Trump is a businessman and he was a pragmatist. And he brought a lot of businessmen with him to Washington. One of the reasons I wrote my book was because I wanted to inspire other people from the private sector to go and do their service. And my hope would be is that they would learn from the mistakes I made and the things that worked for me and figure out how to avoid my mistakes and 10X of things that worked well. But I'm seeing a tremendous amount of high caliber people looking to make big sacrifices.

Starting point is 01:19:02 Again, people talk about the financial sacrifice of going into government. I would tell people before I hired that. Yeah, I would tell people you're going to work hard than you've ever worked. You're going to make less money than you've ever made. You're going to be less appreciated than you've ever been. Are you in? And a lot of people love the country. They feel grateful.

Starting point is 01:19:17 So they went to do it. But the biggest personal sacrifice people make is just the way it becomes all encompassing and it takes you away from your children and your family. And so I have so much gratitude and respect for all the people who are raising their hand now to come into the government. And I think it's going to be an amazing group. And I think they're going to accomplish some incredible things over the next bit. Did you get any time off? I'm thinking about these two ends of the spectrum of government work. The phrase government work was classically like nine to four or whatever postal job or something, not to pick on them.

Starting point is 01:19:47 but not the hardest you're ever going to work. A lot of the government jobs might be thought of that way. When I've heard you describe your working government, it sounds like it didn't stop, and it was sort of like the sport of kings, if you will, different than business, more intense than even the craziest fastest growing businesses. Was that your experience that if you were to contrast the four years in government to, let's say, your four craziest most intense years in pure business, how do the two compare and contrast in terms of just how intense it was, how much time you,

Starting point is 01:20:17 had to be on, whether or not you got breaks, and sort of the feeling that it had doing the two different kinds of work. It's 100 or zero. First of all, it was the job and the responsibility that I had where I had some set responsibilities, but then a lot of my job was just there'd be a problem or unique opportunity, and it would come to me because it wasn't being solved. And because, you know, I worked for my father-in-law and I didn't want to see him fail. I was always getting in the middle of things that were blowing up and trying to figure out

Starting point is 01:20:46 how to get them to a better course. And so there's endless problems around the world. There's endless things happening. So there's always things that are pulling at your time. And then there's also the element of doing that under Donald Trump. And I remember, I think it was in the middle of the second year, he turned to me and he asked about John Kelly says, you think he's exhausted? And I said, sir, we're all exhausted. You're the only one who's not exhausted. He just works 24-7. He's got more energy than anyone I've ever worked with. And he just increases the metabolism of government tremendously. And I think that this time he's a lot more confidence. He knows what he wants to do. I think he'll have an exceptional team. So I think it's going to be really around the clock, nonstop effort

Starting point is 01:21:24 towards bringing transformational change. And so, yeah, when I was there, it was 24-7. And again, you miss a lot of time with your children. It's a big sacrifice to do that work. But I'm very, very proud of what we've done. And it was an absolutely amazing experience in that regard. But when I'm in my business now, again, I'm working very hard to do it. But I'm able to keep the prioritization of the time with my kids. I cook them breakfast every morning. They leave the house at 640, so it's not too difficult of a thing, but I get to spend the time with them then. I get to see them at night when I'm not traveling. And that's a very special luxury for me that I was not afforded when I was in government. And then when I'm with them, I'm able to be present with them, which I also wasn't

Starting point is 01:21:58 able to do when I was in government. We've talked about some hard things that you've been through when reading the book. One of the things that really stuck out to me was, I don't know how long it was into your time in government and at the White House, but it wasn't long. You were under investigation by special counsel, which is a very scary sounding term that I would not want to be on the receiving end of, about colluding with Russia. That must have been a tough and stressful episode of life, especially so early in your government career. What was that like? And what did that experience teach you? I try to laugh about it in retrospect, but it was quite a surreal experience. And I'll never forget, I was getting interviewed in some windowless conference

Starting point is 01:22:38 room. I had my two lawyers next to me. I had three FBI agents and three representatives of the special counsel sitting across the desk. And I kind of had like an outer body experience from like looking down on the room and I'm like, you're being interviewed by a special counsel investigating the president of the United States who happens to be your father-in-law? How the hell did you get here? You were a kid in New Jersey? What's going on? For me, it was just a massively surreal experience because we went through the campaign and we could barely collude with our team in Iowa. And on most days, I couldn't collude with Donald. And so the fact that they were saying we colluded with Russia was crazy. Initially, I didn't make much thought of it because I was like, we didn't do that. That's a crazy accusation. But then I saw all these

Starting point is 01:23:23 institutions that I had respected previously, like the New York Times and CNN and the Washington Post, breathlessly covering this thing, like this was the next Watergate scandal. I was just kind of surprised with how serious this was being taken by everybody, and everyone in Washington thought it was real. And so it was very stressful. And the thing that I felt very badly about was a lot of the great people in the White House who came in, again, they were taking very low salaries, leaving big opportunities to serve their country. And now they were being forced to hire lawyers. One guy who worked with me got shingles. He was so stressed from it. People were having legal bills and they had to then leave the government because they couldn't afford to pay them. So it was a brutal,

Starting point is 01:24:04 brutal situation in that regard. And, you know, I had one morning, two mornings, actually, where there were cameras outside my house. And I called my lawyer. I said, is anything going on? He says, I called the network. They think you're being arrested this morning. I said, for what? He said, I better get to the office quick. Luckily, that never happened. But it was definitely a high-stakes situation. But again, it goes back to what we discussed, which is just keep your eyes on your feet, go step by step and be very careful not to step on the line. And I think my biggest risk there was I knew I hadn't done anything wrong, but it was don't do anything in trying to get out of it where you step on a line or you perjure yourself or you do anything where then they can try to get you on a

Starting point is 01:24:43 technicality because it was a nasty game. And look, I was a player at the center of a lot of things and I think they wanted to take me off the board in order to not allow me to help on all the different efforts I was helping on. And it did take me off the board because it had spent half my time dealing with lawyers and testimonies and then it gave an excuse to my enemies. to push me aside on a lot of different issues. So it was a brutal time. It was two years of hell, but I not only was able to focus on that, I was able to focus on my different lines of effort, whether it was the trade relations with Mexico, the criminal justice reform, the Middle East efforts, and I just stayed focused somehow on doing it. And again, I give my wife Afonka a lot of credit

Starting point is 01:25:23 for keeping me strong and for being strong for me then, because it was a very lonely time for us, and somehow we survived it. But then I go back to where we are today in the world, and it's like people can accuse us of different things or call us different names. My view is, as long as I know I haven't done anything wrong, I just either ignore it or we kind of fight back, but I think it gives me a lot of confidence that we can navigate complex situations in that regard. And keep in mind, like for my service in government, which I volunteered for, I didn't take a salary, paid for my own health care. I've now done 33 hours of testimony between the House, the Senate, special counsel, grand jury, and I've paid

Starting point is 01:26:02 for all my legal fees myself, which is in the millions of dollars. My view is, is that's the nasty part of Washington. What do you learn about people when there's negative things written about you in the press? You learn about the people in your life? At this point, I think most people are just kind of immune to it. It's funny. I still have a couple senators and congressmen who every time there's a negative article pick me up and call me, just to say how crazy. these articles and accusations are, which is actually really nice. It does mean a lot to me. I feel badly that they have to make that call, but they do that. To be honest, we haven't had as much negative recently. I think what I started doing a year and a half ago was when the press would call,

Starting point is 01:26:41 I just would pick up the phone and talk to them and say, hey, I've got nothing to hide. This is what it is. When I started in Washington, I was involved in everything because we were figuring it out, and I didn't understand press, and I just thought it was something you can't deal with. And so I didn't speak to the press. I didn't know how to speak to the press. And then finally, after a couple of years, the White House said, no, you have to start being out there and giving interviews. And so I did a few of them, but I was never fully comfortable with it, mostly because I was working on things for other people. Now that I'm working for myself, I'm able to feel confident in all the things I'm doing and I'm willing to explain them. And I find that if you're just transparent about things, then let the truth be the truth.

Starting point is 01:27:19 I'm curious going back to Affinity now and thinking about the way you spend your hours, where you find yourself getting the most energy. So running an investment firm is lots of stuff you had to do. You got a lot of it before you meet a thousand people. You travel everywhere. You're learning about everything. You're building these relationships. If you just think of all of it and had to zoom in on the part that gives you personally the most energy, what is it? There's two parts to that answer.

Starting point is 01:27:44 The first part is the research part. I love meeting people, learning about what they're doing, and then seeing if I can believe that something's going to be different than people conventionally believe. For example, in Phoenix, I saw the business. It's something I've known for a long time, but I empirically believe that they were valuing it based on percentage of book. The way I saw them transforming the business, I felt like it should be valued as a multiple of earnings business.

Starting point is 01:28:10 And people would say, but Israeli insurance companies never go above book value. I said, well, I don't think this is actually an Israeli insurance company. And I think that if we told the story globally on what it was, I thought the valuation could go much higher on the company. And that was interesting to me. The company had just started translating their financials from Hebrew to English about a year ago. It was a very misunderstood company. It took us about a year to really understand it with deep research, talking to different experts,

Starting point is 01:28:35 spending a lot of time with company and management. And what I realize is, I mean, they manage over $150 billion. They're doing SMAs now with BlackRock and Ares and Apollo and many others. and they have a very strong position in the market, phenomenal management team, and several business lines that I think are poised for a tremendous long-term growth. So I looked at it, and I just thought that it was very attractively priced relative to what I thought it would be. And I think that's also the way I look at companies is I'm less concerned with what the current state of the company is. I'm way more focused on what do I think that company can be

Starting point is 01:29:07 in five years or seven years or ten years. And if I have a very strong conviction that it could become that, then you kind of have to make sure you're paying an okay price today, but the price today matters a lot less than what you think something's going to be. The second thing I love is I love manifesting things. So, for example, one of the iterations of affinity is we think that we're extraordinary problem solvers and navigators and manifesters. What we've actually started to realize is that we should be really trying to look to work with people like us. So one of the investments we made recently is with Brad Jacobs, who's been on your podcast, who's phenomenal. I actually first heard of him by listening to David Senra's podcast founders, the episode on Brad's book.

Starting point is 01:29:46 I was very, very impressed. And when we met, it was very flattering. He told me he read my book. I told him I read his book. And we just built a fast friendship. And he asked me to join his board, and we invested in it. And the investment's up a lot today. A lot.

Starting point is 01:29:59 Yeah. It's been a very good return, 70 or 80 percent in less than a year. But I'll be honest. Working with Brad, I think there's a lot that we can complement to what he does. But I'm learning a tremendous amount from him. I think he's even better than I expected. and it's going to be an extraordinary business that he's going to build. And so that I get a lot of excitement about because you basically start with a white sheet of paper

Starting point is 01:30:19 and you say these are all the different outcomes. And then what can we do together with our different skills and relationships to make things happen that are better than should happen otherwise? And so those are really the two things. And I find that I love working with great people. Some people don't like working with their friends. I try to only work with my friends because I find that I spend probably more time with the people I work with than I do with my family. So if I'm spending the time away from my family,

Starting point is 01:30:44 which I love, then it has to be with people I enjoy. So if I'm traveling, I'm traveling with my partners. And I love working with them. They're great people. They're great humans. And we keep a very good culture in that regard. And so those are the two things that I get most excited about. With Brad specifically, it makes me chuckle that here I am interviewing him and others covering him and you hear it and go make the actual investment with the guy. What have you learned from him so far? I know you've only known him a relatively short period of time, but I was with him recently, and he is just one of the most dynamic guys in terms of his energy and his excitement and his curiosity. But I've encountered in everything that I've done. What have you personally learned from watching him, seeing him operate?

Starting point is 01:31:24 What's interesting to you about him? He's incredibly charismatic. He has a very good vision. He's intellectually flexible, which is fun to be with because some of the things he's trying to do now. are different than what we initially discussed. And initially, I was saying, wait, didn't we think about one thing? But he said, no, I think this is a better pathway. And after a couple conversations, he was able to convince me that his strategy is the better strategy. But obviously, I have a lot of humility in that conversation because you're like, okay, why do I think something different than Brad

Starting point is 01:31:56 Jacobs thinks? But he was very generous to let me keep probing him in that regard. But I guess that's part of being an investor and a board member to do that. I love that he is a great commitment to excellence. I've learned more and more that from when I was at Kushner companies, the quality of your team matters. And if you surround yourself with exceptional people, you'll be able to just do exceptional things. And so he really keeps a very high bar for the people he hires. One of the signs that actually was an intriguing first reaction is he hired a general Michael hated from the White House, who was one of our most solid, quiet, get stuff done guys. And he hired Michael. I said, oh, Michael, you're working with Brad. And it was a sign that Brad found one of our best people and

Starting point is 01:32:34 brought him to go work with him. I've been exposed now to his whole management team. Exceptional people, very creative and thoughtful in the way they do things, very methodical, very detail-oriented. Obviously, it will change as they further progress in their business plan. But so far, I just like their commitment to exceptionalism and their desire to go for really big things. And so it's a company that I've been enjoying a lot. We're going to look to commit more capital to it over time if there an opportunity exists. It's just been very, very fun. I'd love to talk for some time about how and why you chose your capital partners and how that ties into a much bigger, interesting story that I'll call an open economic corridor in a key part of the world that you worked very hard through the Abraham Accords, which we still haven't gotten to, which I will get to because I'm so fascinated by it. But maybe tell us who your capital partners are and why you formed capital the way that you did and what it was about those partners that made you excited to do it this way. Because we're SEC registered, I can't disclose all, but I'll just talk about the ones that have been publicly confirmed.

Starting point is 01:33:37 My three biggest LPs are PIF from Saudi Arabia, Lunate from Abu Dhabi and QIA from Qatar. And those are three of the leading institutions in the world. I also have Terry Gao, who built Foxcon, who's one of the biggest manufacturing geniuses in the world, who I knew before my time in government. And then I have a couple other friends that I allowed to invest in the fund. And basically, I chose these partners because they are at the center of where I think a lot of the world is going in the future. So these are some of the most prestigious institutions. They each have different perspectives and styles. But what I saw coming out of government was that the Middle East was just one of the most exciting and rising parts of the world focused on how you can bring economic development to the world.

Starting point is 01:34:20 And they had very big ambitions. But they were way less known in the West. I think at the time, everyone was doing so well that all the pensions and all of the endowments were flush with cash. And I think that as that correction occurred over the last two years, I think people have realized what a phenomenal place the Middle East is and how exceptional these partners are. What I find from them that makes them very unique is, number one, they have tremendous information. So there's not a day that goes by where one of the top fund managers in the world isn't coming

Starting point is 01:34:49 through their dinner table. and so their information flow on trends and on what's happening around the world is probably second to none from an investment perspective. Number two, they're very long term in their orientation. So the type of stuff that appeals to me of figuring out how can you find exceptional companies with exceptional leaders where you think you can compound over the long haul is something that they're looking for as well. And then finally, through all their different operating nodes, they just have so much information and ability to add value to a little. to a lot of the different companies we're investing in. So, like, one thing we're doing now is we're looking at a lot of the AI companies in Silicon Valley. They're looking for customers. And these three countries are basically some of the advanced thinkers and how do we apply

Starting point is 01:35:34 AI into our industries and into our government? And so helping build a bridge and make a connectivity through American innovation to that region is something that we've been enjoying a lot. And we're finding it adds value to our partners, but it also adds value to these American companies that we think are at the forefront of a lot. lot of innovation. And so I would say that because we have such deep relationships with all of them, we have a tremendous amount of trust. And they know that when we come to them with a different company or a different idea, we're not looking to waste our time or their time. And so we're able

Starting point is 01:36:03 to be a validator of the entrepreneurs, of their character, that these are people that we would be willing to introduce to them. And then also that we found ways to validate their products. That's been extraordinary in that regard. One of the things I'm also proud of is, again, we were able to make some investments for all of them in Israel, which I think is very important. I think over time, it's inevitable. Again, I thought it would happen four years ago, but I'm pretty confident it will happen now that we'll have the Saudi-Israel normalization, hopefully, under President Trump. And I think that that will lead to a lot of the innovation from Israel spreading out to those regions,

Starting point is 01:36:34 but a lot of the advanced industries from that region will start spreading throughout that part of the world as well. So it's just a tremendously exciting part of the world. We made one investment in the UAE where we invest in a company called Dubizil, which is the leading online classified business there. It's a pretty well-known business model throughout the world, a phenomenal business model of the online classifieds. But we invested at the time where companies that were cash flow negative were out of vogue. And so we saw them about to convert. Now they're massively cash flow positive and growing and thinking potentially of an IPO in the future or some other strategic things.

Starting point is 01:37:07 But they're growing like wildfire in the region. But they've been very correlated to the real estate activity in the UAE, which has just been on fire. And now they're doing a lot of work in Saudi. They just opened an office. They have over 400 employees there. and doing very, very well. So that's part of the world where I think there's a lot

Starting point is 01:37:21 of great innovation and excitement. And just from a personal perspective, it makes me very happy when we were doing our peace to prosperity plan for the Palestinians. In 2019, we were having a hard time

Starting point is 01:37:33 finding entrepreneurs that were good examples for the young generation to look up to. And I was in Saudi about two years ago and I did a roundtable with about 30 young entrepreneurs

Starting point is 01:37:42 and I saw what they were building. What I'm seeing now in Saudi, the difference between 2017 when I first got to know them. And today, as the next generation, is really taking control, they're building things, they're investing in technology. And the younger generation really wants to go a different path that they didn't think was available to them times before. So I think it's very exciting to be a part of. I love the partnership with them. And we've done incredible things together. There's an anecdote in the book that really stood out, we could talk about for a long

Starting point is 01:38:11 time, I'm sure. I'll call it a gambit, a phone call gambit, a conversation you were brokering between to meme and MBS and that you just kind of went with your gut on something to try get things going in the right direction. Can you tell that specific story? Because again, as I read the book, that was one that, I don't know, it just seems so emblematic of so many things about you. That was actually one of the hardest deals that didn't get a lot of coverage because it happened really at the end of the Trump administration. And we got it signed on January 5th, which meant that it got overshadowed by other events. But basically, in our first year, Saudi Arabia, United Arab Emirates, Egypt and Bahrain, located Qatar. And it was a rift over differences that they had, but they basically stopped

Starting point is 01:38:51 anything going into the country. So, I mean, one of the extraordinary stories in Qatar is they had a bunch of businessmen who they couldn't get milk because they used to buy all the milk from Saudis. They literally flew cows in from America and then started a milk business. Now they have like a massive milk business there. But it was really dire and it was a very nasty conflict between the countries. And these guys are all close in that regard. But it was very, very nasty. And they were working at cross purposes, which really hurt our ability to make a lot of progress. The reason I got into it was basically because my conversations with Saudi, they said that they couldn't normalize with Israel until the issue with Qatar was resolved. And so I got into that very aggressively at the end.

Starting point is 01:39:28 I was with MBS when I was working with him to try and get his clearance for Bahrain to join the Abraham Accords. And at that meeting, I said, well, do we want to get this thing resolved with Qatar? And he says, yeah, absolutely. I really do. And I have a proposal that we're going to send to the Kuwaitis. I said, well, look, I'm going to see Timme tomorrow in Qatar. Why don't I just take it? Let me bring it to him. I'll save you the postage stamp. So he says, no problem. He gives me the proposal. He has them bring it to me. And I go over to see to me the next day. And I say, look, I have a proposal from MBS. I read it. I don't think it's perfect. There's a couple things I would change. But I think it's legit. I think we can get this thing done. And so Tameen very wisely said to me,

Starting point is 01:40:05 does MBS really want to do this or is this a game? And I said to him, I said, no, no, I promise you. He says, Jared, you know him better than anyone. Do you think he actually wants to get this done? yeah, I'm pretty confident he wants to get this done. And he really wants to bring a resolution here. So Tameem says to me, well, how do you propose we proceed? I said, well, should we just call him? Let's get him on the phone. He said, no, I don't want to call him. We spoke two years ago, and it didn't end very well. He put out a statement after that was conflicting with our statement. I'm in a very strong position now. I don't want to set it back and do that. So he said, but if there was a phone call and we agreed to proceed on this paper, how would you suggest doing it?

Starting point is 01:40:42 And I said, look, I think the real secret is we have to get his brother involved, a KBS, who's, I think, very, very talented. And if he would agree to have him involved, your foreign minister, Mohammed, who's now the prime minister, I think is one of the most talented diplomats I've ever worked with. I said, I think between them, I could moderate the channel, and I think we could get it done. So he says, will MBS do it? I said, well, let me call him. So I literally leave the royal room and I go into his conference room and I call MBS. And I said, look, are you okay if Khalid works on this channel with them? And he says, yeah, absolutely, no problem, whatever you think.

Starting point is 01:41:14 So I said, you know, just hold on one second. So I go back in, I say, to me, I literally have him on the phone. Let me just bring him in here. And he says, Jared, I said, just let me put him on the phone. He says, okay. So I go in, I take my iPhone, I put it on speaker. And I say, look, I've got two guys on the phone who really like each other a lot, but we have a little issue we've got to get over.

Starting point is 01:41:31 And then they start talking for like 10 minutes in Arabic. And it's on speaker phone, but I don't understand the word of Arabic. Timeme hangs up the phone after. And I said, well, was that a good call or a bad call? And he looks at me and he says, that was a great call. And he said, the reason this has been so hard is because we like each other so much. And it's a shame we brought our countries into this. And after that, we started negotiating back and forth on the agreement. And we had the whole bunch of roadblocks. I mean, this deal, I have 10 other stories is how it died, you know, a million times. And it was very high pace because a lot of people on both sides were just very afraid. And there was no trust. And so the only trust that existed was my trust with each side. And it's funny because at that point, I wasn't as close with the Qataris because they saw me as closer with the Saudis and the Emirates. But through that time, I mean, Sheikh Mohammed, who's now the prime minister, I spoke to him every day about three times a day for 100 days

Starting point is 01:42:21 straight straight. And I found him to be just an incredibly straight shooter, very creative. And he really was helpful towards trying to navigate through all the different challenges that everyone who didn't want to get the deal done was throwing at us. It was just one of these things where it was like old school dealmaking, which probably didn't follow any diplomatic protocol that I didn't know existed. But it led to that breakthrough and ultimately that got done. And it's funny because you leave government, you go into the private sector. I remember about a year and a half later, I was flying into Qatar to see some friends. And I landed and I saw a big Saudi plane there. I guess MBS was there having a meeting with Tamim. And I was kind of looking at it.

Starting point is 01:42:57 And I was like, you know what? That wouldn't have been here if I didn't do that call. It was just one of these things where you just feel good about the fact that the world is a little bit different because of the efforts you made. And today, the relationship between Saudi and Qatar is phenomenal. The relationship between Qatar and UAE is phenomenal. And all these countries, instead of working against each other, are now working in collaboration with each other on the things that matter. And I think that for the sake of the Middle East, that's such a critical element. And I think it's a big advantage for President Trump coming in because that block is about an economic project. They've kind of have reversed.

Starting point is 01:43:36 You look at Iran, you look at the Palestinians, they're on kind of the old grievance and victimization and radicalism project, which is proven not to work. You look at who's been a part of that project and it's led to any benefit for their citizens whatsoever. And, you know, I think if what's happened in Syria is any proof point, that just doesn't seem to work. And I think the Arab world has really woken up. And I think that that core engine that President Trump really helped bring about in the GCC, now that it's all united and they're working in the same. same direction towards stability and economic opportunity, that to me is going to be a battery that could help that whole region get to levels that it hasn't seen in a century. I think the history of that region, for those that haven't read it, is the most interesting

Starting point is 01:44:20 and underappreciated history. You could literally go country by country or ruler by ruler and never get bored. I'd love the opportunity, since I have you, to ask the same question for each of your three key partners, which is where public perception is most, you know, incorrect based on your experience of the countries, the people, the leaders, maybe starting with Saudi. What do you think the world gets the most wrong in its perception of the country and its history? So Saudi is interesting because they have a few big advantages. One is they have the biggest real estate. And I always say that the reason why they have the biggest real estate is because they were some of the best warriors back in the day. They have unbelievable natural resources. They obviously have the oil that everyone knows about.

Starting point is 01:45:02 but now they're exploring and finding minerals and natural gas and everything else. Their location is phenomenal. They're the custodian of the two holy mosques, which obviously, if we think about the destruction that radical Islam has done with people taking the religion and perverting it over the last years, the reversal that they've done as the leading authority in Islam has been a tremendous shift in history. That's been not a low-risk maneuver. It's one that if people would have asked me in 2017, if it was

Starting point is 01:45:32 possible. Everyone in the U.S. administration, every expert, expressed extreme skepticism that it could ever happen and that MBS would be able to be reformed towards that. And that alone has been a major gift to the world and I think a gift to Saudi Arabia and to Muslims everywhere. They also, as a market, have a massive consumption market. So I think they're almost a trillion in GDP and they have a big population and a robust population. So now they're building basically like six Dubai's at once. So it's a massive economic experiment. They're running a KPI. driven government. And I think that people for the next couple centuries will really study the economic turnaround that they're doing in their country. And it doesn't come without risk. I've mentioned before,

Starting point is 01:46:12 one of my favorite things, MBS said to me once. And I said, look, why are you taking on so many projects? This is a lot of risk for you. I said, most leaders set low bars and then exceed them. And he said, Jared, if I set five objectives and I achieve five things, in five years, I'll achieve five things. If I set 100 objectives and I fail at 50 of them in five years, I'll achieve 50 things. And he says, look, I only live once and I want to get as much done for my country as possible. And he's building a tremendous amount and doing a tremendous amount and pushing the limits on everything. And I think the amount of pride that I've seen in the Saudi people and embrace of his reforms and the way they're behind him is been unbelievable. And so it's very inspiring to see a country really shift in under a decade the way that that country shifted.

Starting point is 01:46:55 So that's just an extraordinary place to be a part of and amazing friends. And I think for him personally, like I hope over time he'll do even more long-form podcasts, being encouraging him to do it. I think that when people see the depth and the range on what he is able to talk about and the way he thinks about things, I think people will realize that he's truly going to be one of the great leaders of the world, I think for the next 30, 40, 50 years, God willing. So a very, very special place. UAE, they were ahead of everyone else.

Starting point is 01:47:26 They started doing their economic reforms and modernization a long time ago. What they built in Dubai was incredible. They have about 10 million people. So it's not as big of a consumption market, but they've tried to make themselves a major financial hub. They're a great tourism destination. They've become a place where a lot of people put their corporate offices. And I think they've taken advantage of all the different conflicts in the world to try to be like the new Switzerland, where they're trying not to take sides and just say, we want to do business. So their ethos has shifted to say, we just want to be an economic hub and we want to be a partner to all these places.

Starting point is 01:48:00 And they've also been really at the forefront on AI. Actually, the first person who actually spoke to me about AI was in 2018. I was doing a meeting in UAE with Sheikh Tuck Noon, who's their national security advisor. And he basically told me, says, Jared, I'm not meeting with you unless you spend two hours after with me to see what I'm doing in AI. And I said, I really have to focus on Gaza and these different things. I said, I don't know. I'm not meeting with you. I said, okay, let's do that.

Starting point is 01:48:23 And so he took me after to a conference room. And I joke with him because at the time, they couldn't get the sound to work with some of the guys zoomed in. And I said, before you figure out AI, you got to figure out AV. But they showed me some of the stuff they were doing at the time, which was very cutting edge in advance. And it's just been a fascination of theirs. And I think that the work that they've been doing is pretty extraordinary in that regard. And so they're very forward thinking. And they have a tremendous long-term approach to the way that they deal with their countries.

Starting point is 01:48:52 and their president, Muhammad bin Zayat, is really known to be the elder statesman of the region and is just incredibly wise. He's a tremendous leader. He's decisive. And I feel tremendous gratitude to that country based on the success we had with the Abraham Accords. I always say that they were the ones who took all the risk in that deal. But they measured, measured, measured, and they really wanted to make a statement to show the world that we need to all be together. We need to work together. And we need to respect all faiths in order to thrive and advance as a society. They've been very courageous, very long-term in their thinking, and I have just tremendous love and respect for the job that they've done. And it's an exciting place. And a lot of people are moving there. A lot of businesses are being based there.

Starting point is 01:49:34 It really is a great place. I have a lot of friends who've moved there. Qatar is different. It's a lot smaller. They have a much smaller population. And I think what they've really excelled at is being almost like a diplomatic hub. And I think that they obviously inherited a lot of things, like having the Taliban and Hamas, which were both offices that the U.S. asked them to keep, I think, under the Bush administration. But I think they now are looking and saying, wait a minute, why are we doing this? But they've just been tremendous diplomats in the world. And I think that under the current Emir, Tamim's leadership, he's really tried to take a much harder line about cutting out a lot of funding for extremists. The controversies you hear about them are around. They're funding a lot

Starting point is 01:50:15 of these colleges and universities. But from what I've looked into that, it shows that they're basically funding the universities that have built campuses in their country because they care a lot about getting Western education for their citizens. And then the other criticism is that they were helping fund Hamas and they have the office there. But the reality is that that was always done at the request of the U.S. government and the Israelis were working hand in hand with them in order to work that through. So they've been very pivotal in the recent efforts in the Middle East. I think they have very good geopolitical perspectives. And I think that they've started to really, because they did the World Cup, they really have almost no Kep-X that they need to put in their country. They built it

Starting point is 01:50:54 out probably for at least the next decade. So they're thinking through what are their different economic projects, but they're looking to deploy AI throughout their government, throughout their system. Obviously, they were a major player post the Ukraine war in helping Europe get LNG, which they're one of the biggest suppliers of LNG in the world. And I find generally they're just great stores of information and very pleasant people to deal with. The one other thing I'll say about these different places is I see the friendships I made with them when I was starting in government. We were all much younger and the Middle East was a mess. Now I see just how like in my third year, what would take me six minutes, took me six months to do in my first year. These leaders are

Starting point is 01:51:34 becoming more and more seasoned and they understand the flows of the world. And I think they're going to have a larger and larger impact in the diplomacy of the world and helping to shape outcomes and hopefully it'll be in the form of being a positive force towards getting people focused on the economic relationships and how do we create mutual investment to advance people and societies over the old way of really using military to do that. There's such an interesting balance between history, present, future. You're such a future-oriented person in this conversation and so much of this is not about relitigating the past, but describing what could be and how we could get from here to there. And I think some of the criticism of different countries in this region for different reasons would be, even as they make that progress, maybe the how is not as perfect as it should be, but they're all trying to make this same progress.

Starting point is 01:52:22 I'm curious, though, if you scan just all of your experience around the world now, and you think about your worldview, that it could be fundamentally tragic, it could be fundamentally that there's good and there's real evil, or it could even be like that old line of good and evil runs through each human heart or something. something like that. Where do you fall on that? What remains to be done? If I think about Iran, I would be most tempted to say maybe that's pure evil. Is that your view? Like, is that how you think about these sorts of things? How do you process that big question? Because you strike me as optimistic, incredibly hardworking. You did a lot of things in government that were probably low odds, but the Abraham Accords is a great example. I don't know many people that think that's a bad thing. How do you answer like that basic question about good, evil, who's doing the right thing? the wrong thing, how they're doing things, you know, envision, all in that big soup.

Starting point is 01:53:11 Maybe I'll start by saving a lot of your listeners a lot of time by saying that anyone who's going to prognosticate about the future in politics has no idea what they're talking about. At the end of the day, it's all based on the decisions of humans. And humans can have good days and bad days, make good decisions or bad decisions. We all experience that. And the leaders who are determining the course of the world are no different. Sometimes they act in their interests. Sometimes they act from emotions.

Starting point is 01:53:34 and it could lead to different outcomes. So one of my demystification benefits of having been through government is that all of these quote experts that I used to read about, that I used to read or solicit their opinions or I'd go to dinner parties in New York and listen to their every word, they all have no idea what the hell they're talking about. So the future will really be determined by the leaders who are in power and their ability to work hard to create the outcomes possible. One of the central lessons I took with me when I went to Washington was I remember I read a book called Guns of August about World War I.

Starting point is 01:54:10 And it talked about how World War I basically started where you had a series of treaties and everyone was just following these old written documents that were constructed long before the current situation developed and not with the current situation that was developing in mind. And I kept thinking as I was reading, it was like, man, just pick up the goddamn phone and just say, I know we have an agreement. and you think about how many millions of lives could have been saved if leaders would have been rational in that regard. So the way I think about it is that everyone ultimately acts on their interests. People are much more comfortable staying in their status quo. So what I find is the most important thing is to have strong relationships and understanding with people and then work with people to figure out how do we create a better paradigm. Sometimes it takes a disruptor like Donald Trump to come in and eliminate

Starting point is 01:54:59 the status quo. And when you do that, by definition, everyone's going to scream at you. One of the lessons I learned from the Middle East is that if people aren't screaming at you, you're not on the right track. Because everything I went in and said and did for the first three and a half years, everyone was screaming at me. And my view was, is they were screaming at me for doing things differently than they'd done it before. My view is if I did it the same way they did, then I probably would have achieved the same result they did, which was failure. And so even though it was an impossible task with a very low probability of succeeding. It was the job I was given, and I was going to give it everything I had, and I was going to study it meticulously, work my butt off to do it, and I was going to create

Starting point is 01:55:37 the most rational construct imaginable in order to give myself the highest probability chance of achieving a very low probability outcome. That's ultimately how we led to breakthroughs, that, and then constantly changing and changing and updating as I got more information and rechecking my premises and learning new things and trying different things and working with with people. So what I would say is that with Iran, they are weaker today than they have been a long time. Hezbollah was basically the gun that they had aimed at the hostage's head. The hostage was Israel. And what they would always say is that if you do something to us, then we will take out Israel. So basically, there was always a huge cost that could be imposed

Starting point is 01:56:18 for anything done there. Now they're tremendously paranoid because they don't know how deeply penetrated they are by Israeli intelligence, and from what I hear, it's pretty deeply penetrated. Number two, in the raid that Israel did in retaliation, they took out all of their air defenses and a lot of their long-range missile-making capability, which means they don't have the ability necessarily to sustain a long conflict. And with Trump coming in, there's a super high probability that their ability to sell oil in the future is going to go down. So to give you a sense, when Obama left office, they were selling 2.6 million barrels of oil a day. When Trump left office, they were selling about 100,000 barrels of oil a day. The Biden administration didn't enforce the

Starting point is 01:57:01 sanctions, and now they're selling over 2 million barrels of oil a day, which is crazy. So now they have more cash, which gives them more staying power, but they don't have enough cash to get through the next four years. They are very vulnerable, and so they're going to have some very tough decisions to make. Maybe they are pure evil. I don't know. I've never met them. But I would, would think that if there's a rational construct where they can say, why don't we change our program and focus on investing in our society and our people, maybe there's a way that something can be reached. But in order to do that, they can't do a fake deal like they did with Obama and Kerry, which is probably one of the dumbest deals ever because it was a temporary restriction on nuclear

Starting point is 01:57:41 and there was no inspection so they could basically do nuclear anyway. So if they were willing to do a real deal, I think there's tremendous investment and unlock that could go into their country. have a phenomenal population. The Persian people are amazing. They have a beautiful country. Every day that they stay focused on the old mentality, they're in like an old operating system from the 70s. They're falling further behind their neighbors. It's going to be a very interesting dynamic, but if they could figure out how to shift course, I think that they can prosper tremendously. So I see an outcome that's acceptable. The question is whether leadership is capable of

Starting point is 01:58:18 understanding that outcome, and then sometimes you have leadership that's capable of understanding an outcome, but they don't necessarily know how to achieve that outcome. So like one example I use is with North Korea, where I think President Trump did a great job of lowering the temperature with Kim Jong-un, and I was helpful to opening that channel with them during my time. I write about it in my book. He basically, I think, got him pretty excited about what a d'a-ton could look like. I mean, they have about $7 trillion was the number I heard of minerals in their countries. They could be a very wealthy population. But I think for him, it's just very uncertain. How do you do that transition from where he is today to opening up the population and allowing for things to change?

Starting point is 01:58:57 So, like, I hear that all the North Korean soldiers that are working with the Russians in Ukraine, like, what are those guys doing now that they're out of North Korea? I hear they're all, like, on the smartphones looking at porn. They've never seen anything like it before. So you think about how repressive of a society it is, and can he do that transformation? I think what I've seen with Western diplomats is they're saying, well, you have to denuclearize, you have to change. I think that that's the right outcome. The question is, can you be nimble and help build them a golden bridge? We have to eliminate all the escape routes, but help build them a golden bridge to do something that they've never done before so they don't end up like Gaddafi, which is what their biggest fear is.

Starting point is 01:59:33 So you've known for, I guess, almost a year now that there's a decent chance that Donald Trump would be president again. How have you taken action to prepare? yourself in the business for that potential outcome? It's hard to bet against Trump. So as he started doing well, I thought there was a pretty high probability. He could become president. And so the things we did to prepare the business, one is basically just keep our high compliance. We spend millions of dollars a year on compliance. We had our first exam from the SEC and we got a no action letter. And that's very important to me. I wouldn't do that because we're high profile. I just do that because in life, let the investing part of it be hard. Don't let any technical things make your life

Starting point is 02:00:14 hard. Number two is we were getting to the place at the end of our fund where we were going to have to raise more capital. So I spoke to my investors earlier this year in February and said something that we should talk about. If you're thinking of re-upping in the fund, let's do it sooner as opposed to later. They all agreed. And so over the last year, we closed a billion and a half extra capital and extended the investment period of the fund to 2009. My investors really liked that we went slow in the first two years, so adding an extra two years on the end was something that was easy for them to do. And increased in the capital we did from a lunating QIA. That gave us more firepower to be able to go forward. We closed all that before the election. They wanted to do that irrespective of what the outcome

Starting point is 02:00:57 was. And I made very clear to them that in the event that Trump was elected, that they should not expect anything from me for that. This is based on the initial investments they made in 2021, when at the time Trump didn't look political at all. We were in a position where we were starting a business for the future. It's been a tremendous relationship with them. We're very excited about what we've done. And I'm very honored that my partners have stayed committed to the platform. And I think that that will be very exciting going forward. So the framework that I'm going to use for the business over the next couple of years is, number one, we're going to follow all the laws and the rules. And that goes without saying. Number two is we're going to do what we think is right.

Starting point is 02:01:36 We're not going to make investments that we think we shouldn't make and we'll be investing in things that we think align with the values of the firm and that we think are appropriate to make. And finally, I'm not going to allow people like the media or these ethics experts who, quite frankly, don't have real jobs and get paid to try to find potential conflicts that don't exist to change what we think and what we're going to do. We're going to follow what we think is right. I think we're going to do good business in that regard. So that's kind of how we're thinking about it. So we preemptively tried to avoid any conflicts so we don't have to raise capital for the next four years. And we have a great team. We have an investment process. We have a great pipeline.

Starting point is 02:02:17 And we'll just continue to make investments as we see fit, invest in great companies, work with our portfolio companies, follow all the rules. And we'll do that in a great way. And so for us, that's something we're very excited about doing. I also know right before the election, you got a letter from some senators and guessed the side of the aisle, asking some questions about affinity. Anything you can share about that? Sure. So that was a letter I got right before the election from a Democrat senator and congressman. But number one is they haven't acknowledged that we've done anything wrong in our business. My sense of error is that these are not serious efforts. We've complied with all the laws and rules

Starting point is 02:02:55 and we'll continue to do so. We're just going to continue to do our business in that regard. And also, what was kind of funny was people like Bill Ackman wrote up long responses on Twitter showing how ignorant they were about private equity. They basically were saying why we hadn't returned any money yet after three years. And then in addition to that, they were saying, you're taking all these fees, but they don't realize that we have to pay back all of our fees with an 8% interest before we get our profits.

Starting point is 02:03:21 So their lack of understanding of private equity was silly in that regard. guard. And quite frankly, at the end of the day, they can write letters and the media sometimes could be their spokespeople and write stories about it. But there's nothing that they've even raised that we have any concern about because, like I said, we're running a very legitimate business. We're SEC regulated. And we're just going to continue to do good legitimate business with top-tier partners and great companies in the best way possible. They're going to be very disappointing when they start looking into Blackstone. I don't think they would understand how to read the financials of a company like Blackstone. You need to have our best and brightest. But thankfully,

Starting point is 02:03:58 Trump's bringing a lot of business people to Washington and maybe some of these business people could explain to them how finance works. If I'm in the seat of a business, an American business, the big technology businesses are especially interesting to me as an investor. And now those are such a huge percent of the global market cap. How would you give them advice on preparing for the next four years? Like, what are the sorts of things given what you know about how the world has changed and is changing, that you think are really important for businesses to nail their opportunities in the next four years. The thing about Trump that I think very few people took advantage of last time is that he's very accessible and very pragmatic. What happened last time is they made it so

Starting point is 02:04:40 tough for people to work with Trump because of the different narratives that they put about him that a lot of people were quicker to criticize than to kind of show up and work. What I found with Trump is that the people who reached out and when sat with him and shared their ideas, he always listened. And most of the time, they were able to achieve outcomes that were very good. And one example is criminal justice reform where we were able to kind of bring in Democrats in a very divided time. And when they sat with Trump and made their case and treated him respectfully, he listened. And he was willing to kind of do what was rational and pragmatic. Now he's coming in much more popular than last time, way more accepted than last time. So my advice to business leaders and to anyone who wants to engage with

Starting point is 02:05:21 the government is that he's very outcome oriented. And I think that this could be an incredibly productive government where if you have objectives you want to achieve, go and engage and do it respectfully. If you're going to go and criticize and say nasty things, they're not going to work with you and they don't have to. But if you actually care about the issues that you claim to care about, then show up, speak respectively, engage properly, and you'd be surprised at how many amazing things will be able to occur. And I think that that's kind of anathema to a lot of people who maybe have been fed so much propaganda about how bad Trump was or all these different things. And so for these people, maybe it's a little bit hard to process. My advice would be is focus on what your

Starting point is 02:06:08 core cares are and objectives, come up with ideas, and go engage. with the administration respectfully. And I think you'll find that this will be a time where incredible things can get done. What a lot of people have told me the last four years, even on the left, is that nothing was getting done because people were afraid to make decisions. Trump is not afraid to make decisions and he's not afraid to make bold decisions and he wants to just get things done. And so I think this could be a very productive time and a time where great progress is made. I'd love to switch gears and ask you about Josh and thrive. When I was talking to him this weekend, And he said something very sweet, which was, as he thinks back on the early days of Thrive,

Starting point is 02:06:46 that there was nobody beside you as impactful as a strategist and a support system to getting that business set up the right way and to its early success. It was two things, not just like the strategy and the thinking and the problem solving, but the sort of lent confidence to him. He was really young when he started Thrive. I think he was 24 or something crazy. You're four years older or something like that. He said that exact thing, like you lent him a certain degree.

Starting point is 02:07:11 of confidence early on. I'd love to just ask about that episode from your memory, like the early days of Thrive, maybe even like what you saw in Josh when he was really young that made you, I mean, obviously he's your brother, your bias, but what you saw that made you excited about the potential for that business and what you learned in that whole episode of being there in the early days. I think, first of all, what Josh has accomplished is extraordinary. I think what he's built is amazing. I can say I'm both surprised and not surprised by what Thrive has become. Surprised because my intention going into it was just how do I help my brother do what he wants to do. I never thought we were building a big business. I just thought I was helping my brother follow his passion.

Starting point is 02:07:56 Not surprised because everything I've seen Josh apply himself to, he finds a way to increase the scope of how you should be thinking about things and execute in an incredible way. So the early days of thrive. As I remember it was Josh was in business school or he was in college and he had started a technology company called Vostu. When he was raising venture capital, we would speak about all the different negotiations he was happening and all the different business building challenges and opportunities. And I was running companies and building companies at the time. I had the observers. I was in the media business. I had the real estate business. And so we would share experiences and I would try to help him as an older brother. And what Josh kept remarking to me is how all the people trying to invest in

Starting point is 02:08:39 Vostu were trying to rip their faces off and take advantage of them. And together, we negotiated our best to kind of make sure that they couldn't do that. And he had a phenomenal co-founder in Mario. What they were doing was extraordinary. So as Josh kind of matured to the next phase, he said, I want to start investing in technology companies, but I want to be a partner to them like I wish I had when I was an entrepreneur that really didn't know a lot about the world. So the ethos was is let's find great people doing great things and let's invest in them. And before I knew it, they were all showing us different opportunities. We were investing small checks, 25,000, 50,000. I'll never forget. Then Josh was diligenting a company called Kickstarter. He got into it. He spoke to a firm called General Catalyst, and they

Starting point is 02:09:22 basically called never said, how'd you get into that deal? And he says, I don't know, I just, I liked the guy. I thought we could help, very neat. And said, we want to meet you. So Josh had meeting with General Catalyst. And we were excited that, like a big firm wanted to even meet with us. And so Josh went there and he didn't call me. And so he calls me like five hours later. I said, Josh, why didn't you call me? He said, Jared, they kept me there for five hours. I said, well, what happened? He says, well, they offered me a job. I said, what did you tell me? I said, I told him, I don't want a job. And what happened was is they said, can we give you a million dollars to invest in companies that you're investing in with you? And so Josh said, I guess we have a fund now. And so we took some of the money we were investing. I was learning about where these

Starting point is 02:09:58 companies wanted to be. And I couldn't help them with their technology, but I could help them with their landlords and negotiations, how to get Wi-Fi. And even with different things, I ran in recently to Brian Chesky. And he said to me, Jared, you were so helpful to me when I was starting because he was having trouble in New York with all the things. And I guess Josh introduced him to me, came in and saw me and I helped. I made him some connections. I got him some people. But I'd forgotten about that. At the time, our ethos was just help everybody put good karma into the world and see what happens. Then as Josh got to fund too, he got some institutional investors. He was very lucky that a guy named Andy Golden really believed

Starting point is 02:10:31 in him and his vision. And really, they helped him think through how to start institutionalizing it into a different business. And Josh very naturally sees opportunities around him. And he started thinking just bigger every day about what was possible. And he was like a magnet. Entrepreneurs wanted to be with him. And he at his core felt like an entrepreneur and wanted to build something. And so he ended up starting Oscar, which was also a great experience. Then he started seed investing a lot of businesses. I remember we were investing in Warby Parker and Harry's and a whole bunch of other ones. He invested in Spotify. I'd sit with them on the investment committee for the first couple of funds. It was just extraordinary. He built a great team. He had a great attraction of talent. It had

Starting point is 02:11:10 ups and downs. We had different challenges that we probably don't talk about too much now, but not everything was as smooth as it could be. Every time I had friends, I introduced a lot of people to him who wanted to invest. And even people like John Winkle-Reed, who represented me at Goldman, he left Goldman, was looking for something to do. He came to invest with me in real estate. And I said, you should meet Josh and ended up working with Josh and a lot of others. I was just very happy to help him mostly as a brother, but also I found it to be very, very interesting. And if you would have asked me back then, would Thrive be today what it is? I would tell you it wasn't what my vision was for it then, but I'm not surprised that Josh has been able to build it into that. And I think that

Starting point is 02:11:50 it's funny, my time leaving into government, we used to talk 10 times a day beforehand about every decision in his life and my life. And so we really were very close. We knew everyone's deals and had a structure and had negotiated. But I think it was also good because I think I saw the growth in him over the last years of doing that himself. And now there's a lot of things that I call him for advice on. And I'm just so impressed with the businessman that he's become and the way he's kept himself grounded through this process. And it's an extraordinary platform that he's built. And most importantly, I think it resembles him and who he is, which is when you build these firms, you want them to represent your values and you want them to be vehicles to help you live the life you want to live.

Starting point is 02:12:29 So I think that when I think about affinity, I want to be meeting with interesting people. I want to be researching interesting problems and that I want to be helping to apply my skills to the problems that I think are both interesting and worthy that can achieve great outcomes for my investors. And I think Josh has done the very similar thing in Thrive, where he's able to create a flywheel that attracts great entrepreneurs, great companies, and then take all the information. that he's getting from different stages of the cycle and apply it to investing in different areas. And I'm very, very proud of the job he's done. In recent years, what has he most taught you? I'd say the best part

Starting point is 02:13:06 what Josh has been when I run my investments by him. I kind of know how he's going to react to them. If there's certain things I'm looking at, I'm like, I kind of don't want to go tell this to Josh, then I kind of have like a sense that it's one that's not going to fit the criteria. What do you think that is? Like, what is he recognizing and the ones that are wrong? I think that he sees me maybe better than I see myself. And I think that he believes that I should only be investing in people and platforms that are worthy of his older brother, if that makes sense. He loved the Phoenix deal and the QXO deal from the very beginning when I was talking with him about them because he thought that that was the right company for affinity to be keeping.

Starting point is 02:13:42 He pushes me more and more to use my creativity because when I started out, I was probably doing more conventional things. I wanted downside protection. I was doing more conventional. And because what I was trying to build with affinity hadn't been done before, putting those elements together, there was no off-the-shelf model to just show up and find those types of deals. So it's taken me really two years to start manifesting and creating those deals. And I think Josh always pushed me to say, no, you have this vision for what this can be. You have unique talents, unique skills, unique perspective. Make sure you're really giving yourself the chance to follow that through and don't get stuck

Starting point is 02:14:17 in conventional investing, really figure out how to build something that's unique. unique to you where you can enjoy it and when you're enjoying it, you'll do your best work over time. And I'd say that's probably where he's pushed me the most. I'd love to ask a similar set of questions about your dad. There was a line in the book that was really powerful. He said in life sometimes we get so powerful that we start to think that we are dealers of our own fate, but we are not. That line, just again, I'm trying to pick the things in the book that really just hit me

Starting point is 02:14:44 the hardest. Maybe with that as a jump off point, just tell me about your dad, the kind of person he is, the experiences you've been through with him and the impact. that he's had on you. So my dad is an extraordinary person. He's a very raw entrepreneur in the sense that he grew up in a very poor neighborhood in Elizabeth. His father was a carpenter who then became a home builder. So he really watched his parents work 24-7, very family-oriented. And he went to law school and then business school and then worked as an accountant and a lawyer and then started his own business. So he brought us up seeing both his highs and his lows. And he didn't hide from us his problems.

Starting point is 02:15:21 Again, building his business, it had some early bumps along the way. And he didn't hide that from his family. So he always believed the reason why he was working to build the business was to provide for his family. And he wanted us to just have full transparency into that. He treated Josh and I like we were adults. He never treated us like we were children. He wasn't talking to us about sports. If we want to go a baseball game, we'd go with our uncle or somebody else. That's why we became Mets fans. So my dad's a Yankee fan, which not sure if that's a good thing or a bad thing, but we always say we got our humility from being Mets fans and it's really given us a lot in life. But I do tell my daughter that she should marry a Mets fan because they're very loyal. He would have us reading financial statements by the time

Starting point is 02:16:00 we were 10 years old and he would be taking us to properties with him on Sunday when we had a day off from school. He'd take us to work. So he just trained us to work. And he taught us about problem solving, entrepreneurialism. And he really just instilled in us the values of hard work, of leadership. And of saying you always have to live in the lane of going the extra mile, just have to put everything into it and anything you're going to do compete to do it the best you can do. One of my favorite stories with my father is he, I guess we talk about self-responsibility. I remember I was going for an internship interview and he says, what time are you leaving? I said, I'll leave in eight. He says, why? The interview's at nine. He says, well, what if there's traffic? I said, there's not traffic.

Starting point is 02:16:35 I've done this tribe a million times. So what if there's an accident? I said, I don't control that. He said, no, no, no, Jared. The only excuse for not being on time is that you didn't leave early enough. And that was just kind of the mentality that he instilled in us, which is take responsibility for what you do and always try to do things the right way. My father made a big mistake in his life. He got into a sibling rivalry, and that led to some legal issues. They were fighting mostly over money, which is, and probably ego, which was stupid. And I think that our siblings, we've all internalized that. And I think that money and ego is something that doesn't come between us, which is important. But through that experience, my father, I'd say we all gained a lot.

Starting point is 02:17:12 of grounding. And I think it definitely changed my relationship with my father because he went to prison for a year and that forced me to take a lot more responsibility in the business at, I think I was 23 or 24 at the time. And I was in law school and business school then. I almost dropped out. My dad didn't want me to do that. So I basically would take four of the days of the week off and I would drive into the office at 5 a.m. And I would come in and my friends would joke that if my law professors wanted to fail me, they would just have to give me a multiple choice test with five pictures and say circle who your professor is, but I had to really run a lot of his affairs for him while he was gone, and I had to be a father to my siblings and really a support for my mother.

Starting point is 02:17:50 So that changed our relationship. But my father, through that experience, I saw a guy who was at the top of the world who then went to prison, where you learned that in prison they could take in this world everything from you. You could lose friendships, you could lose money, you could lose your freedom. And it really taught me what to value and what not to value in life. And then don't value the things that could be taken away and try to spend as much time on the things that are real and don't pursue things for the wrong reasons. And I think that that also has anchored me through all the different challenges in my life as well. And so my father came out and didn't run from his experience. And he just said, I made a mistake. And he took full responsibility. And he's done a lot of

Starting point is 02:18:29 charity work. He's volunteered in prisons. He's mentored inmates. He started a second chance program in his company where a lot of people come out of prison, get jobs at Kushner, and I think that it was something we're very, very proud of. And he's just an extraordinary businessman. I've learned a lot from him, amazing working with him when I was in Kushner companies. I'm very proud of him. He just got nominated to be ambassador for France. He loves Donald. They always had a very close relationship. Actually, when Donald ran the first time, I think he sent Donald his first check because he says, look, I don't know if this thing's going anywhere, but he's, I love him. So I got to just support him. And he did the same this time. And I think he'll do a great job. He always instill.

Starting point is 02:19:04 in us a strong sense of public service, of wanting to do right for your country, of being grateful for being in America. Our grandparents came over as refugees after the Holocaust, and they would always say what a great country this is. He would always support politicians. And I think now him having the opportunity to serve his country and to do it in a way in France, which is a lot of issues with anti-Semitism and trade, I think he'll do an extraordinary job. And I'm very, very proud for him and very, very excited for him to have this shift in life. And he's built an extraordinary company. And I keep telling my dad, for what end at this point? You don't need more money. And you now have trained the next generation and how to do this. So it's a great time from doing it in life.

Starting point is 02:19:43 He's a hard worker. He's in great shape. And I think he's going to do a great job. So he's a very, very special person. And Josh and I and our sister's Darren Nicky feel very lucky to have him as a father. And I'll say just the same is our mother's also extraordinary. She's the most selfless, elegant, quiet person. I think a lot of our values of family. family and keeping us grounded. I think a lot of that comes from our mom who's also been just an extraordinary person in our lives. Selfless, elegant, and quiet. If you had to think of the same three variables, like you imagine your grandkids sitting on your knee one day and you get three adjectives to describe each of them, what would the three be? Kind, impactful, and loving.

Starting point is 02:20:29 Do you care about legacy? Not really. I thought about this a lot recently. The thing that I've thought about the most in terms of legacy is not to do things so that others will think of you or remember you in a certain way. I think about now with my children just living my life in a way and making decisions to make sure that I could be a good role model for my children. And I think that that's probably the foundational question I ask myself all the time when I have a tough dilemma, which is how would you want to be as a role model for your children and act that way. And so I think that's really what's important. I think that I've had an unusual life with a lots of twists and turns. It feels like now it's going to turn again. It's going to turn

Starting point is 02:21:17 again. But that's just what it is. For whatever reason, these are the pathways that God laid out for me in life. I have a lot of faith. I feel extraordinarily grateful. I wake up every morning. I have an amazing wife. Ivanka is one of the most brilliant, kind, curious people I've ever met. She's She's an amazing partner. We don't go out that much because we like being together. We like going for walks every night after dinner. She's always exposing me to new and interesting things. She's a voracious consumer of information.

Starting point is 02:21:46 And I'm very grateful that over the last couple of years, she's really pushed herself into helping me build my business and to helping us raise our family after four years in Washington. I think that that's very important. I could accomplish amazing things in life, but if I don't have a good relationship with my children, and if I don't feel like I've done everything possible to raise them in the best way, then what good is it to have been successful in business or in politics or anything else?

Starting point is 02:22:13 So that's kind of where my head is right now in the world. I'm proud of what I've done in all these different areas, and I have a lot of confidence because I see all the different challenges I've been thrown into. I know I've been able to find ways through them. But at this phase in life, I look at the current situation, and I basically am of the mindset of let me continue to do what I'm doing. Let me help all the people who are going into serve. And I've really been spending a lot of time helping people get up to speed who are going

Starting point is 02:22:45 into the incoming administration on all of the challenges that we face so they can avoid those challenges on any advice they call for to figure out how in the files that I worked on, they could start where we left off or more advanced that they don't have to go through all the learning phases, and then we'll continue to be a resource and a helper to all of them to help them be successful for the country and for my father-in-law. So that's really what's most important to me right now. What investors, I'm sure you've met basically all of them, what characteristics are shared in common amongst the investors that you respect the most? I think number one is they take the time to research and think. So I think there's a difference

Starting point is 02:23:26 between a manager and an investor. And I've been trying very much to be more of an investor than a manager. So the time to think, research, the way they gather information, process information, curiosity, and then I think the humility to always be rechecking your premises, if that makes sense. So I think those are the things that I keep trying to do. And again, right now in our firm, we're recruiting for another senior partner. And what's interesting is that we created a hybrid in our firm of people with geopolitical expertise and people who have, conventional private equity and growth investing skills. And what's happened over the last years is that the people who are investors are becoming better at geopolitics and the people who are at geopolitics are

Starting point is 02:24:05 becoming better investors. And so this merging is happening as we try to create this type of firm that we think could persist over the long run. And what I'm finding is, is that we have to hire somebody who's great at one or the other that has to fit our criteria of being a phenomenal person that can merge very well into the culture of what we had. So I think that safeguarding our culture and making sure we're working with people who we really enjoy and care about and can learn from is just a very critical element as well. So we have a very flat team. Like when we do our Cs, everyone's at our I see. I want everyone to be learning from our problems. I want everyone to be learning from opportunities. I want everyone to be learning from our arguments. And I want everyone to see when we

Starting point is 02:24:47 agree. And so that's something that's very important to me because I find the best talent often is grown more than it is hired. And so having a transparent organization will enable us to really build something that I think will be more enduring and vibrant over the long run. What have you learned about Trump? His strengths, his weaknesses. You spent a lot of time with him. He's now the most focused on person in the world. You have the benefit of knowing him personally not from the media. What have you learned about him and from him? So I worked for him for six years, but I've known him now for 16 years, obviously, as my father-in-law. I would say I've really grown to understand him and the way he operates.

Starting point is 02:25:30 I learned a tremendous amount from him when I was working for him in the way he communicates, which I think is unique to him. He's a very good processing mechanism in the sense that he can process a lot of complex situations and simplify them very quickly. He's an unbelievable negotiator. He's an amazing reader of people. So for him, a lot of what he's able to do is to kind of determine if people are lying to him or not, and he knows how to ask the right questions to throw people off their game.

Starting point is 02:25:57 And he just has a very pragmatic perspective on a lot of issues. The more I went through the campaign, the more I was agreeing with him on the issues, on trade or immigration. And people would criticize me for that, but I was like, I just think he's pragmatic in the things he would say. Like, I remember in the campaign, he would say, let's put America first. And people are saying, that's a racist slogan. I was like, I don't know if you're running for president of America. You want to put America first? That seems like that's a good ground to have.

Starting point is 02:26:24 He was just very pragmatic in the way he approaches things. Very open-minded. He will change his mind if he gets a better argument, which is, I think, very unusual. He's quick to throw out statements on things that don't matter, very careful with the things that really do matter. Like when I would see him make decisions on things like bombing or big military things, he was incredibly, deliberate and thoughtful and meticulous about his process, and he processed these things with the seriousness and intentionality that you would want a leader to process them with. And he's pretty transparent. One of the things with him is you don't have to guess what he thinks on most things,

Starting point is 02:27:04 because he'll either tell to you directly or he'll tweet it out publicly. He's a very unusual leader. What I'm finding is that now that he's been gone for a couple of years, people are way more used to his style, and they're excited to have him back. Like his tweets on Mexico and Canada, if we did that in 2017, everyone would have been saying, oh, this is terrible. And then the senators would have been coming out saying, well, we're going to stop him from doing this. Now everyone's saying, oh, he's back. The message he put out on the hostages, which was very strong, people were loving it. I think he's more refined. People are more used to him now. He has great knowledge of the situations. He's a very big and out-of-the-box thinker. And I think he's going to do some very disruptive things

Starting point is 02:27:44 in the world, and look, some things may not go perfectly, but I think a lot of things will go very, very well. So I think he's a historic figure, an unusual figure, and somebody who I've been very, very lucky to learn a lot about. And then I also get to see the way he is with my children. So like my little kid, Theo, just when we're in the summer together, just follows him around all day. He sits with him in the golf car. We'll go sit with him at dinner when he's out with other people. I was with him the other day and the phone starts ringing. It's Theo. I said, Theo calls me. He says, oh, yeah, he calls me like three, four times a week. And he's very funny when he is with his grandkids. There's a realness. And I find that he appreciates how unique the situations are,

Starting point is 02:28:24 but he's also willing to be very disruptive in that regard. So very excited to see what he's going to do and very, very proud of the job he's done. I think he's changed the discourse in the world. I think he's changed people's minds on a lot of issues. And I think he's going to change our country, hopefully, for the better, in a very substantial way. If I think about the things that would cause your intensity, your personal intensity to ramp up? What are the most common triggers for you to feel that intensity rise? Either identifying a problem or an opportunity. I'm a big believer in that work shouldn't be distributed. What you should be doing is when you find either a big problem or an opportunity, then you go all in on that thing. That means you need the right organizational structure

Starting point is 02:29:04 to enable you to not be bogged down to a fixed schedule or fixed responsibilities. So over the last year in particular, I've been building a lot of the resiliency in the firm of the personnel. Now, I may have a little bit of a setback because a lot of our good people are getting recruited into the government now, and that's an amazing thing. And obviously, I encourage that because I believe in service. And I think that it's a beautiful thing for people to leave the private sector and go do their service. But building that resiliency where the business functions can really run themselves and that I can be involved in focusing on looking for the big opportunities and getting involved in the biggest areas that will hopefully create the biggest outcomes for us.

Starting point is 02:29:46 If you think about the things that you don't know anything about in the world that you most would love to learn about what comes most immediately to mind. I think right now we're doing it. So we started a company recently with Elad Gill, who's one of the top investors in Silicon Valley in the AI space. As we were looking at AI and how it was going to impact the world, when I started, it was really software, but I didn't really see any competitive advantages for us in software. When AI became real in people's minds, it restarted the race a little bit.

Starting point is 02:30:21 And so we kind of broke it down into four categories. One was the infrastructure, which is data centers and energy, and we actually have a bunch of investments we're making in that phase, but that's long-term, probably, I think, strong, safe returns, which will be great. Then you look at the LLMs, which are big capital needs and really a big boys game. And the competition is incredibly, incredibly fierce. One thing I've been able to do with a lot of these companies is help be a bridge for them to the Middle East and introduce them to the different Middle East investors because for the first time, a lot of these companies have KAPX needs that they never had before.

Starting point is 02:30:56 So a lot of them have reached out to me and I've introduced them to my partners in the Middle East to look at partnerships. And that's been very interesting. Then you have the consumer products, which are fascinating because we use them all the time and they're able to make our lives more efficient and there's just no bounds for where they can't impact our lives in a positive way. And then finally, you have the way that AI is being applied to corporates and big industries. That's something that is, in my mind, a massive inevitability. And if you think about AI, it's basically going to create a lot of efficiency. And as it creates

Starting point is 02:31:34 efficiency, it should create a lot of value. And so we started a company with some of our portfolio companies and partners and different companies who I'm trusted by to say, how do we bring phenomenal engineers from Silicon Valley into these companies to start looking at ways to use their data to create unique products, to create efficiencies for them, solve problems, and then ultimately product ties some of the different tools that we're able to create by being first in some of these bigger companies. And so the real arbitrage is between getting A plus talent, which we've been able to attract. Our team is over 25 people now. And major corporations, which we are now working with four of and getting them all to work together and then see what

Starting point is 02:32:21 you're able to create out of that. And so far, it's been fascinating because that puts you on the front lines of what the AI is going to be able to do in the real world to create efficiencies in these companies. So the real purpose of doing this initially was to learn from the best talent, how this is being applied, they add value to people in my partner's network. And then ultimately, I believe the company will be very, very successful by doing that. And so that gives us a good lens into everything we're investing in because we're constantly thinking about how AI is going to either enhance or disrupt any company we look at. And we look at that in a very real sense now. So that to me is just the most fascinating thing from a business perspective to be looking at.

Starting point is 02:33:03 And then obviously, you know, I have a lot of passion on the Middle East and the geopolitics there. And I've been working closely with Steve Wyckoff, who's the envoy for President Trump, helping him with the transition, getting him up to speed. He's a good friend for a long time. We've been talking for this now for almost a year when he told me he was interested in doing this, which I was very excited about. And really helping Steve get up to speed, talking through with him what to do and being a resource to him for whatever he calls to make sure that he's able to hit the ground running. so that him and President Trump are able to really finish the work that we started in the first term, which I think is very, very achievable now. What are you most proud of from the Abraham Accords?

Starting point is 02:33:45 And what is that work that's still left unfinished? The work I'm actually most proud of my time in government is the criminal justice reform, because that was something that I know what it's like to be a family member of people in prison. What that did for a lot of people to give them hope and make them feel cared about and to give them an opportunity is something that I think was just an extraordinary achievement. And it just brings so much satisfaction to me to know that I've impacted so many people's lives who are going through a period of being helpless in that regard. And I think that under President Trump, Pam Bondi's a good friend who's going to be the Attorney General. She was very helpful to us with

Starting point is 02:34:20 the prison reform efforts. Ironically, Biden has done nothing with the first step back. They have not implemented it the way that it should be, and I'm pretty confident that under President Trump and Pam Bondi, they'll actually implement a lot of the skills training programs in prison that will help people leave prison, get jobs, and then not become return customers. That's something I'm incredibly proud of, probably my most proud of thing for my time in government. And just to follow up on that, for those that don't know what you did, what is the important learning and so what of improving the system that you affected? To give you an idea, there was just a study that came out on the program we put in place, which basically is bringing skills training,

Starting point is 02:34:59 alcohol training, and allowing inmates to earn earlier release by taking these courses. What it did was there was the people who got out who didn't use these programs had about a 45% recidivism rate, and the people who did take the programs had a recidivism rate, I think, in like 12% or so, or something in the teens. And so basically showing that the people who went through these programs were not going back to prison with the same frequency as people who are leaving. And again, a lot of times people leave prison. They have a criminal record. They don't really have places to go back to. Often they have addiction issues. They don't have modern skills. And so what do they do? They go back to commit crimes

Starting point is 02:35:35 from a public safety perspective and from like a human perspective, giving these people the ability to learn these skills while they're in prison. I mean, it's called Department of Corrections. You're supposed to be helping correct people. It's really more of like a warehouse for human trash is the way they do it now, helping people who have made mistakes during that time and helping them build the tools and create a framework to live a more productive life is a very important thing to do. And I think that that's something that can make a big difference. And we modeled it off of what's happened in a lot of states like Texas and Georgia and Kentucky. So we really took reforms that have proven over time to be successful. And it just seems like a very basic thing to do because it reduces crime. And I had all

Starting point is 02:36:16 the police groups, the Sheriff's Association, the FOP, everyone supported the reforms, and I think that they'll make a big difference over time. But to your question on the Abraham Accords, I think we got it started. We got five deals done. Then we got the GCC deal done, which was critical towards getting Saudi. When I met with the Biden team and the transition, I basically told them, you guys can get a deal done with Saudi in three to six months. And that's what they were telling me the Biden team that spent the first two years criticizing Saudi. And then finally, after two years, started adopting our policies and then figured out they did it so public and clumsy and they didn't deal with the Iran issue and the Palestinian issue properly

Starting point is 02:36:56 that October 7th happened and it's just been difficult for them to get that done. So I think that's a very doable issue. I think President Trump has the different skill and relationships in order to make that happen. I think getting Saudi done will be key because there's another 10 countries that will happen right after that, whether it's Pakistan and Donisha. We had a whole bunch of countries that really wanted to go. And I think there's a lot more work to do there, which just gets rid of that issue. I think there's still work to do on the Palestinian issue. I think the Iran issue is key. Syria now is a whole different mess. But I think the incoming team between Rubio, Waltz, Wittkoff, they have a really good team. And I think they'll be able to achieve

Starting point is 02:37:34 some incredible outcomes. And most importantly, again, President Trump now knows the terrain and the players. And I think he has a pretty strong perspective on how to get these things done. I've seen you talk about Germany and Japan and the relationship we have with them now, X number of decades after World War II. What is the promise of all this in the Mideast? What gets you excited about the potential different state of things 20, 30 years hence? I think if you get all these deals done and you integrate the countries, the vision we had was to integrate from the port of Haifa and Israel to Muscat and Oman and to get one economic block where people can trade across, they can bring technology across, they can do investment across, And these regions are some of the highest per GDP spenders on military. But if they can convert that money into bridges and education, they have very young populations.

Starting point is 02:38:23 I think that that will raise that region, which will raise a lot of Africa as well. And you're seeing a lot of the Islamists that got kicked out of the Middle East. I mean, they've gone mostly to Africa. Some have gone to Europe and the U.S., which is crazy that we let these people in. But that's something that I think will just make a big difference in the center of the world and getting these guys focused on, how do we advance humanity together and not have these religious divides, I think that'll be a massive shift. And like I said earlier, it's already a massive shift of not having all of the Islamic extremism that was as prevalent in 2017 based on the reforms

Starting point is 02:38:57 that MBS worked on with President Trump on his first visit to Saudi Arabia then. If you think about the next four years, what do you think are the most important things that the administration could or might do. Right now, there's a lot of discussion about the hot issues around the world, whether it's the war in Ukraine with Russia, the issues in the Middle East with Iran and the opportunities with Israel and Saudi and now with Syria and with Lebanon being changed. I think that will be a very fertile ground for great progress in the U.S. People are very excited about Doge and hopefully we can create a much more competitive environment in our country with taking down regulations and creating much more efficient government.

Starting point is 02:39:43 We have deficits in debt that need to be dealt with as well, in addition to the southern border, which is a key issue that I think they'll be very fast action on. But ultimately, I think the topic that will probably be the most impactful of the next four years will be how President Trump deals with artificial intelligence and what could be AGI or superintelligence and how this is coming very rapidly. And there's a lot of different outcomes that could come from that. I think the Biden administration put in place an EO that was really intended to stifle a lot of American innovation.

Starting point is 02:40:19 And I think under President Trump, hopefully America can lead the world into creating the most advanced superintelligence and making sure that it's done in an ethical way and in a way that advance U.S. interests. And it's going to be permeated throughout the economy. It's going to be permeated throughout militaries, and it's going to be very interesting to make sure that it's done in a responsible and thoughtful way where America's values are the ones that rule the day. If you think about your own future, you said the thing that gets your intensity up is problems and opportunities, and those are unpredictable and ever changing. Is there any grander agenda or vision that you think about beyond the things you've talked about? Anything else that you really want to happen from this point forward?

Starting point is 02:41:03 I really think about this a lot. My wife told me a statistic, which is by the time your kids are 18, you'll have spent like 80% of the time with them that you're going to spend with them in their lives. And I think almost because I was so detached from our kids when I was working in government the first time mentally, because I was just so consumed by my job, it's made me appreciate spending time with my family that much more. I think that there'll be plenty of time in life for me to do different things in different iterations. but right now the thing that my wife and I have said is just not something we would compromise on is keeping our family unit in a really amazing place and being amazing parents to our children. And I travel a lot for work and my kids do beat me up on it, but at least when I'm home,

Starting point is 02:41:47 I'm able to be with them and I'm able to create the balance that I want to create, which is not like a balance balance. It's like extreme with them and extreme on my work, but I'm able to make it work in a way that works well. And so far, that's what it is. And what I would say is that every plan I've ever made in my life, God's had different plans and nothing in my life has gone according to plans. So I'll keep making plans and then I'll keep navigating the different storms and summers that come and really look to have interesting adventures

Starting point is 02:42:16 and enjoy it with amazing people and keep trying to challenge myself learning, get better along the way. You told me once that if you want to make bad decisions, ask for advice. That's interesting line. You have a really interesting way of processing these kinds of decisions, that being one of them, but I know instead of asking for advice, you're sort of just very good at calling around and getting people's perspectives, let's say. What are the other key steps that you've learned in just making these decisions around these problems, around these opportunities? I think the number one thing you always have to ask yourself is what do you want? And then number two is always what are you actually solving for? And I think that those are the two

Starting point is 02:42:51 fundamental questions that people forget to ask. And I think that as long as you're in touch with those questions, then sometimes that brings a lot more clarity in between. I've obviously read a lot as I've been an investor the last year is from Charlie Munker. I've read almost everything he's put out. And one of the things I love he says is that when you're making decisions, sometimes it's helpful to figure out what you don't want on your way to figuring out what you do want. So sometimes you can eliminate a lot of the potential options by figuring out what you absolutely don't want. And I find that's also a very helpful mechanism. But ultimately, it goes back to what I said. trust your stomach, don't make decisions before you have to or before you're comfortable making

Starting point is 02:43:32 them and get perspective from the different places. And I am very blessed with a very good network of friends. I know what I don't know, but I also know how to find the people who I think are experts or whose opinions I'll trust on different things. And I find that is an amazingly efficient way for me to form points of view. And people, I think because maybe I've been so generous to people with my time and my advice and my willingness to put things in the world. I find that the more I have things where I'm calling on people, people are very willing and able to do a lot to help me as well. As we come close to a wind down here, I have a selfish question.

Starting point is 02:44:10 On the New York Observer, you spent time in media, you've thought about media a lot. You gave me this book that I read in the last couple days called The Man That Time forgot about the founding of time, which was amazing. Like basically two guys, one guy started fortune and time and life and all these, sports illustrated. like all these different things at a moment in time, you posed an interesting question to me, which was if you were starting, let's say, fortune today from scratch, how would you do it? And so same question back to you. What have you learned about media as an owner of a very well-known media brand and as just an observer

Starting point is 02:44:41 of the landscape? What would you say about the current state of it and observations that you would have for me? A couple thoughts on this. One is my experience at the observer was I went into a prestigious old world. model. And then I tried to convince journalists that there was this thing called the internet coming and we need to do transformation of the business plan. And I was called all kinds of names for trying to do that. It was an unbelievable experience. I learned a lot along the way. Running a newspaper is a crappy business. So you really have to learn how to take the nickel

Starting point is 02:45:12 off the dollar. So just as a pure operator, I learned a lot about how to run a business. I learned a lot about dealing with journalists. And what I would say is that the business has changed a lot since then. When we were in the White House, we would have some reporters and we would say, well, why can't you write positive stories about the things we're doing in the White House? And what they basically said to us is that if we do, we're going to get killed on Twitter from our friends. And I think the ecosystem was so negative that social media became like the assignment editors for a lot of these reporters over time. And I think that that's largely broken down. If I was going to do something today from scratch. I think the most powerful form of media is the podcast. I think that's

Starting point is 02:45:54 clearly in its early stages of what it's going to be. And if you think about the news business, X has become so powerful that I was looking last night for updates on Syria and I was getting all of my news up to speed on X from what I was looking to find. So what was interesting was X has almost become the raw material of the news. And then if you think about what journalists do, they basically pick and choose from raw material and which opinions and which quotes to do. And they're almost a form of editing whether they like it or not and imposing their viewpoint of how you should process this news based on the sources they choose, the quotes they choose, the experts they choose to quote.

Starting point is 02:46:34 And it's becoming, I think, a very arcane method of being informed. And then what I find is that now people with social media have the ability to give their replies as well. So it's one of these things where you can't write one of these news articles about somebody now and then have the full word because if you go too crazy, people can then respond and actually get a lot more press and it becomes a little degrading to the reporters. So if you're in the print news business, I think that's a very, very challenging business right now. I think the podcast is very interesting. It's funny. Like we were talking about that book was about Britt Haddon, who was partners with Henry Luce.

Starting point is 02:47:12 It's funny, time was created for the person who didn't have time, right? It was supposed to be a digest for people. And then over time, it became a little bit more high end in terms of what it tried to be. If I was to kind of recut time today, I would make time for the person who has time. And I think that what you're finding is that with podcasts, people want to be informed. And if they are interested in something, there's now this free market of information. available and if you're somewhat interested and motivated, you can learn about almost anything very quickly. And now with AI, that's going to change even more so. So I would almost say that finding a way

Starting point is 02:47:50 to help people navigate the amounts of high quality information that's out there and synthesizing it for them to say, if you're somebody looking to learn about these topics or you want to find out about events of this week, these are the places that will give you real information. And I think that people should think about like I consume my news now mostly on X and then through podcasts. And occasionally I'll look at the Wall Street Journal to go through it. The post is still the post. I love the post, the New York Post that is. But a lot of the other stuff is just very much you're getting their perspectives. You go to the columnists and it's just a bunch of angry people yelling about the world who don't know anything anyway. Again, I saw this when I was in government. These were

Starting point is 02:48:31 the people telling me that everything I was doing was wrong and then couldn't acknowledge when we got something right. And I was just like, forget about these people. Like, who needs their approvals? who cares what they say. But I think that podcasts are a very powerful medium. And if you were doing media, I think it's about more how do you give people high quality information for people who are looking for it instead of just a news digest. This has been so much fun. Tons and tons of ground covered. I can't believe the amount of things that you've done in 43, 44 years. And I think you know my traditional closing question, what is the kindest thing that anyone's ever done for you? I know this may sound really strange, but when my father was in prison, he had a friend who just called and took me to lunch and said,

Starting point is 02:49:17 how are you doing? At the time, it was very challenging for our family, very challenging emotionally. We had a lot of issues in the company because banks couldn't do business with somebody who had a criminal record, so we were dealing with a lot of problems. And just the fact that people were willing to go out of their way to say, how can I help you at that time just meant the world to me? And I think that that's probably been a foundational thing in terms of how I approach people, which is I try to be a friend to the people who I care about in a way that I appreciated the way people were to me during my most vulnerable time. Just being there for people when no one else is there, that means the world. Around that time, there was a subway ride that you took, I think, for hours

Starting point is 02:50:05 around New York City. Can you just close by describing that what you learned at the end of So at the time, I was working at the Manhattan District Attorney's Office. I wanted to be a prosecutor. I was at NYU Law School. I remember my first day back in work. It was obviously a little humiliated, and I didn't know what to take, but my team there was really awesome. It was an amazing place to work, the district attorney's office back then under Morgan Thau.

Starting point is 02:50:28 At the end of the day, I went home. I took the subway stop from, I think, Canal Street, up to Aster, where I was living at the time. I got to my stop, and I just didn't get up, and I just stayed on the train. and I just didn't want to go out of the subway. And I just was sitting there watching people and I was looking at their faces and I was kind of creating a story for each person. And so I remember I saw somebody, a young person, I said, maybe they just found out their parent has cancer. Or I saw another woman. I said, maybe this woman doesn't have food to eat tonight and she's going to be hungry.

Starting point is 02:51:00 And I kind of thought to myself, you know what? I have my problems now. Nobody knows on this subway what I'm going through. everyone here could have their own problems that they're holding inside of them as well. And so my view was is just give everyone the benefit of the doubt. You never know what people are going through in a moment. And just simple acts of kindness and being good to people can go a long way. And again, I think if you look at the criticism that I've had over the last years, people ask me why it doesn't bother me that much.

Starting point is 02:51:30 And what I say is because it's mostly from people who have never met me, who don't know me. and so I'm not going to let them impact how I feel about myself or impact my mood or really take much space in my brain. I feel like as long as you can be kind to the people you interact with and treat people well, then you can do a lot of good in the world. A wonderful place to close. Thank you so much for your time. Thank you. If you enjoy this episode, check out join colossus.com. There you'll find every episode of this podcast complete with transcripts, show notes, and resources to keep learning.

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Invest Like the Best with Patrick O'Shaughnessy - Jared Kushner - The Mechanic - [Invest Like the Best, EP.403]

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