Mubadala gave Corient a faster route to private ownership

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 51:56

   And so we were buying and buying and buying and buying. So the notion of, back to your initial question of going private, was, so I was approached about two years ago right now, actually, by Mubadla Capital. In fact, we received an inbound call. And the message was, we love the business. We love the strategy. We understand exactly what you're doing and why you're buying the shares. We think it's going to take you about nine years to effectively buy the shares remaining that you ultimately want to buy.

2. 52:25

   Did you also think that? Yeah. Okay. So they said effectively, we think it's going to take about nine years. And we think along that journey, there's going to be trade-offs around your ability to execute the Corian strategy, just given the capital requirements on both sides. I had agreed with 100% of that. And so we really hit it off and had conversations from there was around how do we take this business out of the public markets, deliver a great return for the shareholders of the business, and then put the business in a private context where we could kind of own and operate it outside of a public company.

3. 52:58

   And I felt like CI never belonged, even before I showed up, like a Canadian mutual fund company never really belonged in the public markets anyway. And this just created a phenomenal opportunity for us to do it. The context by which we went private, I think, is also equally unique. So again, that was kind of the message. So we took ourselves private with no incremental debt on the business. There was actually deleveraging or an equity infusion tied to it.

4. 53:24

   There were no cost synergies, no change of strategic direction. In my opinion, I picked up the best strategic partner on the planet with an equal amount of ambition to see this thing forward. And I think from their standpoint, look, if you take a look at the Mubadala Capital or just Abu Dhabi, Inc. more broadly, it is an incredibly ambitious place, right? They have done a phenomenal job of creating wealth, building wealth, diversifying wealth.

5. 53:52

   And fortunately for me, the entire team at Mubatala saw what we saw from a business perspective, saw the end game, saw a lot of similarities, I think, in terms of how they were building Mubatala Capital. It was effectively started inside of Mubatala Investment Company, a sovereign, built it into this phenomenal business, and just saw, I guess, a lot of us in them strategically and ambition-wise. And it's been absolutely amazing.

6. 54:19

   So we took ourselves private. we announced it in November of 2024. We completed it in August. We completed it on August 12th of 2025. On September 3rd of 2025, September 2nd or September 3rd, we announced we were buying, on the same day, the largest ultra high net worth wealth manager in Europe and the second largest ultra high net worth wealth management business in Europe. And as an example, if we were still a public company, back to how people respond, in a public context, that would have been an impossible transaction to execute, just given a lot of the dynamics that you've mentioned.

7. 54:53

   In a private context, in my opinion, it was the best possible thing we could have done for the company. And the reason I say that... is everything that I said about the opportunity in U.S. ultra-high-net-worth wealth management is equally true in the rest of the world. I firmly believe that there are no global ultra-high-net-worth wealth managers that exist in the world today outside of Coriant. And to me, that was a tremendous opportunity for us to go capitalize on.

8. 55:19

   Why do you think no one else pursued that strategy? Because it seems obvious in hindsight. So I think people would potentially disagree with my statement and say, well, of course there are other ultra high net worth or global wealth managers that exist. My pushback would be they're not. There are a handful of multi-jurisdictional wealth managers that exist. By that, I mean banks that operate in multiple different jurisdictions. The reason I say multi-jurisdictional, not global, is if you think about it through a client lens. So let's just say you're a client of a firm that has offices in multiple different jurisdictions. You're one, Those are all a series of regional P&Ls, right?

9. 55:57

   So the client relationships get mapped into an underlying region. And the compensation system and the structures that people have in place create or limit or eliminate the ability to collaborate. So I'll just give an example. Let's just say there's a billion-dollar family that exists, and they have money across four different jurisdictions. And they happen to have those assets at one firm. And the family says, you know what?

10. 56:17

    I'm going to take all billion dollars, and I'm going to consolidate those assets in Miami. So what happens in practice internally is three of those P&Ls that are losing assets inside of those organizations are negatively impacted. One of the P&Ls is very positively impacted. And then at the individual advisor level, almost all of those people tend to be commission or revenue share generating advisors.

11. 56:39

    So three of them, pay goes to zero on serving the client. One person's pay probably quadruples on the back of serving the client. So the thought of saying that they are putting all of that aside and serving clients, regardless of those internal tensions or conflicts, you know, makes for an impossible situation. So, you know, a lot of the stuff that we touched on earlier, the private partnership that we initially built for the U.S. marketplace, we've globalized it.

12. 57:07

    Again, I have one compensation plan that is not only true for the U.S., it's everybody around the world, and one P&L. So instead of thinking about clients in terms of what regional silos do they access us, we think about clients. How do we serve them all around the world, anywhere? Okay, the way I think of you in my mind, tell me if you disagree, is like you're kind of obsessed with incentives. I'm obsessed with alignment.

13. 57:30

    Think about it this way. Again, it's very simple what we want to do. We want to be the best in the world at serving all Johanna Worth clients. I, in a human capital business, it is imperative that I have strategic, cultural, and financial alignment to achieve that. And so incentives are a huge component of that. Incentives drive a lot of behaviors, a tremendous amount of behaviors. Charlie Munger has this great language, like incentives rule everything around us.

14. 57:55

    Yeah. So then if you think about that, once you start to create fractures in the incentive, like I feel very strongly that every single client of Corian, regardless of where you live or how you've entered the business, should have the same opportunity for an equal elevated experience. So similar to clients, I want to make sure that all of our employees have the same opportunity regardless of how they've entered the firm.

15. 58:17

    So as an example, if you were entered via direct hire in Seattle or an acquisition in San Diego, I want to make sure that every single person here is treated fairly. And you need to make sure that in order to treat somebody fairly, you should be paid for what you are delivering for the business, not whatever historical entry point or position that you ultimately had. It's equally imperative that you are paying people for things that drive collaboration and better outcomes, as opposed to things that drive, you know, personal or independent or siloed behavior.

16. 58:48

    So we've been very, very adamant to ensure that, one, clients can always get the elevated experience. And in turn, every single employee of Corian is treated fairly. So by having one compensation plan, I can literally walk into any one of our offices in the world and every single person knows that for an equal level of performance, they're going to be treated exactly the same as all of their colleagues.