Nassos Michas became chief executive officer, managing director and chairman of the executive committee of Weiss, Peck & Greer in March 2001. Prior to that he spent 27 years at Merrill Lynch & Co., holding a variety of positions, most recently as chairman of Merrill Lynch Banks USA. Weiss, Peck & Greer, owned by the Robeco Group of the Netherlands, was a partnership, with $20 billion in assets under management when Mr. Michas joined it. Coming from the corporate culture of Merrill Lynch to the partnership culture of Weiss, Peck & Greer was a big change for Mr. Michas, who also had to deal with a foreign parent company that wanted to see the firm move at least partly away from the partnership way of thinking. The Greek-born Mr. Michas faced a formidable challenge. Mr. Michas remains connected to his Greek roots, including owning a home on the Greek island of Patmos, where he vacations every summer. He loves being surrounded by water and enjoys sailing and fishing on vacation. He also has a home on Mason's Island in Connecticut. He discussed his plans for Weiss, Peck & Greer with reporter Phyllis Feinberg.
Q What differences did you find in the partnership culture at Weiss, Peck & Greer from the corporate culture at Merrill Lynch?
A The partnership culture is much more entrepreneurial and less bureaucratic. There is much more of an idea-generation atmosphere. Different types of people are attracted to work in a place like this than who work at Goldman (Sachs) or Merrill (Lynch). The different cultures have different types of processes they have to deal with. They (big corporations) have not only size to deal with but more constituencies, being a public company. They are more visible in the public marketplace, at a place like Merrill. When I was at Merrill, I was part of making that culture work. Here it's an entrepreneurial culture.
Q What changes do you want to make in the culture at Weiss, Peck & Greer?
A I'm aiming to modify it, not to make it like Merrill, but closer to where I came from and distinctly modified. The first goal is not to lose the energy and excitement of the entrepreneurial side, and the compensation structure is important to that. In general, the compensation structure in an entrepreneurial firm is more aggressive and performance-driven. The compensation approach has not changed and the perception of people has not changed. I made changes in the management process and decision-making, making it more typical of the process of a subsidiary of a large organization, with a five-year plan, risk controls and people development - all of which are aimed at stability and continuity, in which the ultimate goal is building value for the clients and the owner. I've made changes through my leadership style. The first step is to make everyone who's here believe in what I do. We've got more of an institutionalized culture vs. a laissez faire culture here now. I didn't have this formula in mind. I had significant experience working with disparate business units at different stages of development. Merrill gave me tremendous experience to look over an organization and make a marketing plan, taking into account the needs of the parent and what the market wants, and what are the strengths and weaknesses. And then put it together and make money out of it.
Q What do clients think about the changes?
A What I hear from clients is basically two things that almost sound contradictory. Institutional clients said they want an entrepreneurial environment with new ideas, cutting-edge activities and the human touch. They also said they want stability, commitment, low turnover and continuity, things that are very typical of a large organization. They want the career-path stability of a large organization and the spirit of a small shop, a boutique. It's a tall task to maintain the advantages of a boutique and a large firm and be a midsized firm. You have to be able to provide a product line combining the best of an entrepreneurial firm with the best of a large institution. That's what we're trying to put together here. We've been successful so far.
Q How do you want the firm to grow?
A I want the firm to grow to have between $40 billion and $50 billion in total assets in five years. But we're not just aiming to gather assets. We want to take our one-off relationships and make core relationships out of them. My definition of core is where you have multiple products with individual clients. It's a virtuous circle. Initially you focus on the product, then you focus on the process and the individual and get a comprehensive relationship. I value relationships beyond products. If a client perceives value in a core relationship he may drop one product and pick up another one. It has significant ramifications on profitability. Clients appreciate it. It's a much more efficient and profitable relationship.
Q What is your relationship with Robeco?
A My experience with Robeco has been excellent. I have international experience and was born and raised in Europe, which I think is one of the reasons they hired me. They liked my background. I can understand the needs of Robeco and translate them. Robeco wanted to manage and build the firm without micromanaging it across the ocean. I have the freedom to build the organization without someone micromanaging it, but at the same time I have the resources of the parent company to draw on.
Q How much are you involved in the investment area?
A I do not get involved in the investment process directly. I claim I have the ability to assess the capabilities of investment professionals and make a judgment on what they're capable of doing separate from their (investment) results of the last three years. There are people in the last three or four years who have an excellent track record and mediocre capability and some with mediocre results and good capabilities. I focus on the investment capability side of the business. I don't drive the product. I view myself as a very well-trained investment person but I don't get involved in the investment process. I get intimately involved in assessing the capabilities of people. I get colleagues' opinions, but I rely on my own judgment quite a bit. I am intimately involved in what's going on on the investment side without interfering. Maybe somebody had a tough time in the last year in terms of performance. But do they have the possibility of being the best in class or not - in that I make an independent judgment.
