Talent

SARAH GREEN: ... before we move on, have a clarifying questions. When you’re talking about the talent, in this case, being a very small percentage and extracting a high rate of return, it sounds like you’re not talking about creative talent in the terms of like a choreographer or an advertising executive or even a CEO. It sounds like you’re actually really talking about a specific kind of financial manager. Is that a fair assumption to make?

ROGER MARTIN: No, no, no. It’s a good question, Sarah. No. I would say that choreographer is in the realm of the talent world. There’s, of course, all sorts of talent and all kinds of levels of talent.

I think what’s most conspicuous these days is the earnings power of financial management talent, hedge fund managers being the most obvious example. And they’re the group that, if you look in the Forbes 400 list of the 400 richest Americans, the biggest growth category by far is hedge fund managers, one category. They’ve gone from a tiny participation in that list in 2000 to being second highest to high tech, high tech entrepreneurs like Zuckerberg or Gates or Ellison.

So they’re the most conspicuous version, but in many of these fields– so in choreography, there isn’t as much money in general. There isn’t as much capital to extract value from. You see, that’s talent’s game. What talent’s game is in the modern world is attach yourself to pools of capital, use those pools of capital, and try and make sure capital gets the least possible and you get the most possible.