Russ: Welcome back to The BusinessMakers Show, brought to you by Comcast Business, built for business. My guest today, Bill Rankin, CEO of Kanaly Trust; Bill, welcome to The BusinessMakers Show.

Bill: Good to see you, good to be here.

Russ: You bet, tell us about Kanaly Trust.

Bill: Kanaly Trust is a great Texas story; it was founded by Dean Kanaly back in 1975. He had a mission and a vision of how to serve families better in terms of managing their wealth and advising them and he built it up over 30 or 40 years to what it is today. We work with 500 or so families managing $2 billion + of capital and get involved in all kinds of aspects of helping simplify and help them manage their lives.

Russ: Okay, and are these families all over the country, all over the world, predominantly Texas?

Bill: They have scattered quite a bit. They are heavily here in the Houston area but a number of these families are now second generation, third generation families so they have moved to other parts of the country. So they are around the country and even outside the country, but heavily around this part of Texas.

Russ: So I imagine a lot of our audience has seen Kanaly Trust ads even in the Wall Street Journal and Houston Business Journal, you’re talking about family trusts and so forth, I would assume this is the upper end of a lot of the wealth around this part of the world would be a perfect prospect or client for you?

Bill: Yes. The families we serve run from 2 to $10 million, 10 to $20 million and much higher. Most of them have other assets in their family balance sheets if you want to put it that way. So we have some very large families who also have some oil and gas interests and real estate interests. Probably the biggest sweet spot is probably in that 2 to $25 million range.

Russ: Okay. And you keep referring to it as families, if an individual happened to come to you without much of a family, I mean would they be a good candidate?

Bill: Oh sure, sure but everyone is part of a family at some point somehow and so yes, we do have some individual clients, but almost everyone has some kind of a family that’s connected to it. That’s usually a part of what we’re trying to help them with.

Russ: Okay. And when you’re managing their portfolio do you specialize in a particular type of investment recommending a particular type of investment or is the whole field in play?

Bill: What we really emphasize is comprehensive. The passion of Kanaly going back to its very beginning was that families, oftentimes individuals, need to do a better job helping to plan and organize their financial lives and then once it’s planned and organized think about that as a roadmap in implementation side of how the money is invested and how it’s managed thereafter sort of falls out, so we do all of that. But the magic oftentimes is that front end work of understanding goals, objectives, situations – organizing it and then beginning to manage the capital. When we manage the capital in most cases it’s very broad-based, very diversified; equities, fixed income, alternative strategies – customized to what their different needs are and very broad based.

Russ: Okay. I suspect, and you know you mentioned a second, third generation, I suspect that sometimes there’s some difficult spots as the matriarch or patriarch – both – kind of are handing off – maybe sometimes they don’t hand off – but is that part of your service as well, to help manage and guide and make suggestions.

Bill: It is. It’s part of the learning process and we’ve seen it go well with families and sometimes go not so well. Quite often the first generation wealth creator, who could be a business entrepreneur or could be a very successful corporate executive, oftentimes tends to be a little bit more do it yourselfers – doing it themselves – and they don’t really want to bring in someone like us. But they oftentimes get to a point in their lives where they realize either they don’t have time for it or they’re getting to a later state in their life and they realize how’s this going to work when I’m no longer here and that’s oftentimes when they bring us in; because they want us to be able to take care of their spouses, help their children, grandchildren when they get to the point where they either don’t have the time to do it or no longer – or won’t be around to do it. So there’s a transition for when they’re ready for it and when they’re not.

Russ: Okay, cool. Now as you know, we have a business audience here, probably an audience of a lot of makers and doers out there too and they’re probably curious how you spend your day, I mean or your staff. I mean, are you sitting there watching computers and watching trades all day long and that sort of thing? Or are you reading reports; how do you spend your day?

Bill: Well the days tend to be – we try to organize them and we have pans about what we’re trying to do but we tend to – oftentimes things come up and families have emergencies, questions come up and they call us and we respond to that pretty quickly. But we do have a regular pattern of kind of how often we’re trying to see them when they want to see us, either in person or by a telephone call or by visiting them or by them visiting us, and so those are planned, but there’s a lot of unplanned things that come up. So we are on their speed dialers typically for all kinds of different things. In the investment area we have gone down the path of being very multi manager, multi strategy oriented, so we spend our time thinking about strategy and policy and in looking for and finding the best managers to implement that. And so we’re following the markets all the time, and we’re following those managers, but we don’t have trading desks of people trying to buy and sell securities or options or derivatives.

Russ: Okay. It seems to me like it’s extraordinary times – turbulent times – the geopolitical situation is kind of rocky; I’m sure some of your clients have major oil and gas holdings and those prices have just plummeted. I mean do you just treat that all like business as usual?

Bill: No we do not. There is a time frequently when some clients actually are fairly relaxed about all that and they’re just focused on other parts of their lives. And sometimes we have to kind of pull them in to kind of encourage them to do something or to help authorize us to do something. But we do in turbulent times get more phone calls, more meetings and we’ll be proactive about it too, reaching out to them. And so that’s what they look for us for; we’re there as that point of comfort. The biggest thing they’re looking for from us isn’t to generate another 1 or 2 basis points of return necessarily, what they’re really looking to for us is to help simplify their lives and give them peace of mind.

Russ: Okay.

Bill: Because families worry about that greatly and so we were there to kind of give them that peace of mind and what they want from us to get to that varies, but what we’re trying to do is respond to that the way they want it.

Russ: That makes sense. So, but I’m curious about you, I know you’ve got some years now in this business; share with our audience your background.

Bill: Well I started off as a young person kind of learning how to be a scientist and an engineer, then I thought I’d go to business school for a while and just get some training and then my one point in all this is if you would have asked me 40 years ago or 30 years ago would I be doing today what I’m doing today then I would say it would never have occurred to me.

Russ: Right, okay.

Bill: So my one piece of advice to young people and the younger generations in our firm is keep concentrating on learning and growing because the world and the business changes and what you’re doing today is probably not what you’re going to be doing 10, 20 years from now. And so learning how to grow and develop is a big part of it. And that was true for me.

Russ: That’s great advice, that’s great. So did you change direction several times?

Bill: I did, I did. I had a couple significant changes, all of which I look back on were perfectly logical at the time but I would never have been able to map them out.

Russ: Right.

Bill: I spent about 13 years in the banking business, which at that time was the corporate banking business. So I then decided to leave that world in the late 80s and move into the investment business. And I really learned the investment business at a firm called Prudential, big insurance company; spent about 5 years, most of it overseas, 3 of it in Tokyo learning all about global investments. Came back, was kind of bored by coming back, loved global investments and I decided that I wanted to go to the Rockefeller family office; not because it was a family office, I didn’t really even know what a family office was.

Russ: Right.

Bill: But it was the global approach to managing capital. Then from that point on all of my work has been in the wealth management industry, the family office business, which I never could have predicted. A lot of what I had learned in the banking business and a lot of what I learned in the institutionalized advantage business were things that I could carry over that helped my work in the wealth management business. So it’s been a journey that was surprising but very helpful along the way.

Russ: Well and now your position as CEO of Kanaly Trust, I mean that’s somewhat recent and brought you to a new position geographically. A position that you’ve been at before, correct?

Bill: It did, it did, it did. I first became a CEO back in the late 1990. I was running a private client business that was headquartered in Chicago called Stein Roe. It was about a $8 billion firm, we had a big office in Chicago, a big office in New York and a big office in San Francisco. When I took over the business one of the first things we wanted to do was to do a management buyout. And so I found the capital to help us finance the buyout, we had a very successful experience with that, sold the business 4 years later and the private equity firm who worked with me on that I have now known and invested with for about 15 years.

Russ: Okay.

Bill: So I’ve been a friend of the firm as well as an investor with the firm as well as the CEO of one of their portfolio companies. So they came to me about 3 years ago with an idea for an investment that has ultimately led us into making the investment in Kanaly Trust which we completed about 2 years ago. So the idea that they came to me with about 3 years ago came to fruition about a year later and we had no idea where we might find that corner stone firm because we have a longer term plan, but we need to find a corner stone firm and by sheer serendipity we found it in Houston. Which was for us a pleasant surprise in the sense that one, if you’re to do what we’re doing Houston is probably a perfect place to be. Moreover my wife and I were here 30 years ago in our early family days and it’s really where our daughter was born and so it’s kind of going full circle coming back to Houston.

Russ: Wow, that’s a great story. Well I really appreciate you sharing the story of Kanaly Trust and yourself and thank you for being a guest on The BusinessMakers Show.

Bill: Thank you Russ, appreciate it.

Russ: You bet, you bet. And that wraps up my discussion with Bill Rankin, the CEO of Kanaly Trust. And this is The BusinessMakers Show, brought to you by Comcast Business, built for business.