Jonathan Gray (Blackstone), Keynote Speaker | Wharton MBA Graduation 2019

now I get to cede the podium to John Gray John Gray joined a small investment firm in New York called Blackstone in 1992 straight out of his two degrees his Wharton and Penn degrees he's now the president and chief operating officer of Blackstone the largest private equity firm in the world that actively manages five hundred billion dollars in assets John single-handedly built and then led Blackstone's world leading real estate division he's made iconic acquisitions including Hilton international and GE Capital both of which transactions were valued at over 25 billion dollars with his wife Mindy Johnson incredible philanthropists including endowing naming the Vassar Center for Braca the bracket gene mutation at the Abraham Cancer Center at Penn which is focused on the prevention and treatment of cancer for people with the Braca mutation in addition to that John and Mindy have invested incredible efforts in New York kids rise with a goal of lifting lifting up the life chances of disadvantaged people in New York City an incredible commitment and with incredible results no surprise that John has received many honors he's been on Vanity's Vanity Fair's new establishment list he was on Forbes top 50 givers list Forbes 40 under 40 he's been the commercial property executive of the year and he's also been the private equity real estate figure of the year John is very proud of his Wharton degree he's also especially proud of his English degree at the Wharton School among other things because that's how he met his wife please join me in welcoming John Gray Thank You Dean Garrett for the warm introduction hello and congratulations Wharton class of 2019 I know it has been an arduous journey to get here but you made it well done as for me it's an incredible honor to be here with you on this special day before jumping in one vital message thank you mom I say that I say that not only because my mom is here with us today but also because she told me that I should thank her in any notable speech and I listened to my mom in fact she gave me the most important advice of my career when she dropped me off at the train station for my first suit-and-tie summer job as I was getting out of the car she grabbed my arm paused look me in the eye and said John be sure to keep your desk neat and that Wharton graduates is all you need to know for the road ahead the truth is she was an extraordinary working mom and like my father and my step parents and all of your parents here today deserve enormous thanks for the gifts selflessly bestowed upon us they have made our successes possible now the last time I was at a Penn graduation was May 1992 I recently found this photo of that memorable day that's me and my then-girlfriend fellow Penn grad and future life partner Mindy you might notice you might notice that I have a dangling earpiece that's because I was engrossed in an epic Bulls versus Knicks Eastern Conference championship game rather than listening intently to the ceremony a few thoughts come to mind when I look at that photo first what the heck happened to me second what the heck happened to the polls and Knicks and third thank goodness the Warriors games tomorrow speaking of basketball being here in the hallowed Palestra is a dream come true I played and watch basketball my entire childhood including the historic 1979 NCAA Final Four with Magic Johnson Larry Bird and the Cinderella Quakers of Penn yes Penn my own basketball career was not quite as magical sophomore year I was cut from the team but the varsity coach in a stroke of mercy chose me and two other kids to be on the practice squad where we earned the patronising nickname the puppies junior year our varsity team had an awe-inspiring one and 23 record and I was sitting on the bench it doesn't get much lower than that in my defense I developed late really late one of my more memorable moments occurred on my 16th birthday I had just received my driver's license the pinnacle of coming of age in Highland Park Illinois in 1986 I drove straight to McDonald's and ordered a celebratory Big Mac and fries at the drive-thru the attendant politely responded thank you ma'am please pull around let me amend my previous statement it doesn't get much lower than that so the question is how does one go from a high-pitched insecure benchwarmer with a messy desk to standing in front of you today the answer comes from a biblical parable I recently heard I know not what you were expecting it goes like this there once was a king who had two favored subjects before he left on a lengthy journey he gave each of them a bushel of wheat and several stalks of flax when the King returned months later the first subject showed him that he had meticulously stored the wheat and the flax they remained untouched in pristine condition and the king gently nodded his thanks then he visited the second subject who had done something quite different he had transformed his wheat and flax into a beautiful loaf of bread beneath an elegantly crafted cloth and the King smiled broadly ate the tasty bread admired the splendid fabric and made the second subject hand of the king that's not really how the story ends but my daughter said a game of Thrones reference would make me seem much cooler what is the lesson here well you should stay awake during religious sermons they can provide moral guidance plus material for a future commencement speech but the real lesson is this we are all given gifts in life some like a Wharton degree and the opportunity it offers are obvious but others we can't see clearly at the time these hidden gifts and what we do with them make all the difference they certainly have for me that suboptimal high school athletic career fueled an insane competitive Drive and a constant desire to prove myself failure and humiliation led me to prepare intensely for everything I do the key to so much of my success unfortunately my success in the dating arena was even lower than my three-point shooting percentage I was no ladies man shocker I know in December 1991 a few blocks from here at Van Pelt library I chanced upon an intelligent and beautiful young woman from English class were searching her final essay I had noticed her from afar the whole semester sitting in the front row always making insightful comments in a highly uncharacteristic move I convinced myself in that instant that I had to just do it ask her out as the Barry Sanders Nike poster in my dorm room boldly demanded so I did she responded by chuckling and saying sure I'm always up for new experiences [Applause] translation I've never gone out with a loser before this should be interesting I actually threw her a number out after I left the library completely deflated thankfully fate intervened that same young woman appeared in my romantic poetry class next semester you can't make this stuff up it took me six more weeks but eventually I gathered the courage for another tribe we went to a Valentine's party February 13 1992 and nothing in my life has ever been the same just a month later we saw the remake of father of the bride and walking home together after the movie I declared that I plan to spend the rest of my life with her a gutsy move for a shy somewhat awkward young man but it paid off here's my point had I been more confident and successful would I have acted in this way I doubt it I couldn't believe this girl liked me and I wasn't going to let her get away that fierce urgency the hidden gift born of repeated rejection provided the foundation for my entire life Mindy and I have shared an unbelievable journey together with lots of new experiences and have raised four incredibly special daughters all here today Mindy has been instrumental in my career as my sounding board and pick me up when things go awry she gave me the courage to believe in my instincts during the financial crisis when our investment results told me otherwise and so I offer a slightly unconventional piece of advice find the right partner when you can life is often unforgiving having someone you love to share it with is invaluable I know today it's hip to swipe left and right but there's nothing like having that perfect partner to make everything better hold tight if you find them a few weeks after my first date with Mindy I got a job working for a small financial firm in New York City with less than a hundred employees Blackstone I started that summer as an analyst working in M&A and private equity and I quickly figured out my role run the models make pitch books and be sure to order dinner for everyone by 6:30 p.m. it was not an easy job but I enjoyed it particularly learning about investing and eating New York City Chinese food about a year into the job the real estate industry was coming out of a huge downturn and the visionary founders of Blackstone Steve Schwarzman and Pete Peterson saw that there were lots of inexpensive properties to acquire they partnered with my future mentor John Schreiber to lead the effort but they needed some junior resources I was asked if I wanted to move into this startup division with no people or dedicated capital in a decidedly less prestigious industry again a hidden gift an abundance of wheat and flax joining the real estate businessmen I was stuck I wasn't stuck in a cube anymore I was meeting people evaluating properties and negotiating deals learning about investing and seeing the country the transactions were tiny in retrospect a six million dollar Virginia Shopping Center an 11 million dollar Colorado Springs hotel but I was gaining confidence in skills I loved it all we delivered terrific returns for our investors and the business grew swiftly but then the music stopped I got caught up in the dot-com mania of the late 90s buying a few crummy office buildings in Northern California well above their intrinsic value the largest one had a memorable tenant paying insanely high rent go Bosch comm aka go big or stay home I should have stayed home when the bubble popped in 2001 I received a searing lesson and you guessed it a hidden gift a reminder to never lose sight of fundamental value in fact while I wouldn't wish to repeat the bust of the dot-com bubble an accompanying recession I realize now that it came with other hidden gifts as well we almost lost our investment in the Savoy group a portfolio of London luxury hotels following the tragedy of 9/11 in the ensuing global global travel downturn that experience taught me these importance of staying power having sufficient liquidity and limited financial covenants so you could hold great assets through a recession it taught me that even those fancy British club sandwiches with the ends cut off are hard to swallow if you're at risk of losing your investors capital but more than anything else it taught me to always keep your wits about you when things look most dire flash forward to 2007 we acquire Hilton Worldwide for twenty six billion dollars we're in the big leagues now buying the world's largest hotel company unbeknownst to us it was the worst time major investment ever less than a year let later the global economy collapsed a cyclical lodging investment rated made at the wrong time using twenty billion dollars of debt we call that a career shortening moment fortunately those hidden gifts from the previous downturn gave Hilton a structure to ride through the storm and gave me faith in fundamental value with sufficient time extraordinary work by Krishna seda and the Hilton Management team and an additional investment by us we came out the other side having greatly expanded the business and producing a fourteen billion dollar gain for our investors not too shabby from this harrowing experience I may have received the greatest hidden gift of investing maintaining conviction even when the world think differently everyone was convinced that Hilton was heading to bankruptcy but we saw the strength of the underlying business Hampton Inns and Hilton Gardens could conquer the world and global travel would recover as the economy healed so high conviction investing became my mantra post crisis and led us to buy 50,000 homes before the US housing market recovered and to acquire over fifty billion dollars of warehouses globally based on the explosive growth of online sales having conviction going all-in in business investing and in life has underpinned so much of my good fortune of course no story is all about good fortune some of the gifts we receive in life come painfully at unspeakable cost back in 2002 Mindy's magnificent sister faith pastor died from a BRCA related ovarian cancer the BRCA mutation leads to greatly increased risk of certain cancers particularly breast and ovarian faiths heartbreaking loss ultimately led us to partner with Penn medicine to create the basilar Center for BRCA our goal was to establish a beacon of hope for families in the fight against this insidious mutation the team and leadership at basser and the progress they're making in early detection and vaccine development inspire us every day again and again throughout my life in career I have found it has been those hidden gifts that have made the difference they have given me the opportunity to lead an amazing company with hard-working talented and caring people they've given me an incredible family that brings me unending joy most of the time and they have made me optimistic that something positive can emerge even from life's toughest moments Wharton class of 2019 I offer you my heartfelt congratulations I promise you two will be given an abundance of wheat and flax on your journey just remember it's what you do with these gifts that matters thank you all go warden [Applause]

Channel: Wharton School

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Keywords: Wharton, The Wharton School, blackstone, graduation, commencement, speech, jonathan gray, jon gray

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Length: 18min 48sec (1128 seconds)

Published: Wed May 22 2019