In celebration of Black History Month, our guest for today is Eric T. McKissack. Eric is a graduate of the Berkeley-Columbia Executive MBA program. Currently, he is an Investment Executive and Independent Board Director at different companies and nonprofits, including FlexShares Funds and Morgan Stanley Pathway Funds. He is also a Board Member of McKissack & McKissack, a privately-held, family business that is a national architectural, engineering, and program and construction management firm.

Even though he is an only child, Eric grew up in a large extended family of business leaders and entrepreneurs who had a strong family identity. In fact, his grandfather and great uncle were the first Black registered architects in the US. 

Because of the influence of the family business, Eric went to MIT for architecture but ended up in Sloan to pursue his own interests in business. He started in banking but then worked many years in investment management before starting Channing with his partners. He shares his journey from that pivotal moment, getting his executive MBA while founding an investment firm, how they overcame the challenges along the way, and how one can succeed in this space. 

This episode is valuable for people who aspire to start their own investment firms or join the board of directors as Eric shares his wealth of experiences and motivations to be in the boardroom of successful organizations.

Episode Quotes:

On starting his own investment firm

“Another pivotal moment in my career, I got to a point where I felt that either I would stay where I was indefinitely, and that would be the duration of my career and be my experiences, or I could have the experience of starting a firm of my own. While I had joined Ariel early on, I was not a founder. And so, it was like a fork in the road kind of opportunity in my mind, and I took it.”

On Channing, his investment firm, surviving the great recession

“Certainly, starting a firm is challenging at any time and place. But also, the industry had changed a lot from early in my career. It wasn't long before the Great Recession hit, so there were a lot of challenges. Nevertheless, we were able to survive those. I always say that we got through that period, and Lehman and Bear Stearns didn't. So, we felt we had something to be proud of, to get through the great recession. And the firm continues on with my partners.”

On investment markets being all about human nature

“Sometimes, periods of overvaluation and undervaluation can last very long, longer than the patience of your clients. Clients may not be patient enough to recognize that there's a bubble brewing and want to go where they think the grass is greener, to another manager, or do a reallocation. Ultimately, markets are still about human nature no matter how much technology is introduced into the process. And human nature can sometimes lead to business outcomes that are not favorable even for the most talented investment managers.”

On raising capital for their first fund as a minority-owned firm

“There are always challenges raising money in any business or any investment entity. And I can't say that the challenges were strictly based on pure discrimination. But I think what often happens is that certain types of resumes get more of a path or more of a benefit of the doubt than others. That's not to say that doesn't happen for some diverse candidates, that they have the same kind of resumes, but that wasn't the background that I had.

I came out of a minority-owned firm to launch another minority firm. And while that firm had a great track or reputation, I don't think we necessarily got the same benefit of the doubt. It was more like, "Okay, well, let's see what you can do in this new environment. And then we'll give you money if we like what we see."

Who succeeds in founding their own investment firm and why

“The people who are most successful at it are those that have been able to develop track records through prior experience and have the kind of blue-chip backgrounds. But very often too, it takes a certain person to decide they want to do that because if you're at a successful firm and you have a great track record, then a lot of people are very comfortable staying there because they are very often making very high compensation. There may be golden handcuffs. There are all kinds of reasons why starting a business is something you have to be highly motivated about.”

Show Links:

• Eric on LinkedIn
• Harlem Shuffle by Colson Whitehead 
• Isabel Wilkerson

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