The best & brightest minds

I have worked in the creative industries, finance, property and technology. Of these the creative industries had by far the highest proportion of mediocre minds: dull blustering make-weights who added nothing. Finance, on the other hand, was almost constantly astonishing in the frequency with which one met truly surprising, interesting & razor-sharp people.

(Obviously there are some stellar talents in the creative space and they tend to rise fast and make serious headway - equally there are some shocking dullards in banking & investment. I make no claim for my own prowess other than to say I don't think I'm with some of the wannabe star-f*ckers of media and equally I'm no Goldman Sachs hotshot.)

But for a long time I have thought that it was a shame that the brightest minds our entire world produces all gravitate towards finance. Back in the 50's, at least in the US, the summa cum laude crowd were pushing the boundaries of space exploration. In the 60's & 70's chemicals and multi-national industrials pulled in the greats. But it's been pretty much all finance's way since the early 90's and perhaps before.

It doesn't much matter what country you were born in: if you have a first-class intellect the odds are that you will fetch up in an investment banking/management role pulling in millions per year. And so it seems that at least one popular VC, Fred Wilson, is of the same opinion:

"We have witnessed financial services (think asset management, hedge funds, buyout funds, private equity, and venture capital) grow as a percentage of GNP for the past thirty years. The best and brightest don't go into engineering, science, manufacturing, general management, or entrepreneurship, they go to wall street where they will get paid more."

This is an excerpt from a post where he suggests that his own crowd, VC's & private equity stars, should pay more tax on their "carry" - the investments that they are allocated in their funds which, as the funds mature, can become very valuable and therefore represent a significant & often majority stake of their overall career compensation.

When I left investment management I packed 4 years worth of papers into a bin liner, company reports, 10K filings, accounts - all carefully scribbled on with my (not very) perceptive comments gleaned from management. As each company's announcements have to be re-analysed with each quarter's results there wasn't a lot of value to these old snapshots. I was sad that I knew I'd never be able to drive past an edifice, a 'thing' of some sort that I had helped build - I had only helped push other people's money into one bucket or other and I wasn't really sure that I had made any difference at all to anyone's life. Fred Wilson points it more succinctly:

"If we force hedge funds and the like to compete for talent on a more level playing field, then maybe we'll see our best and brightest minds go to more productive activities than moving money around and taking a cut of the action."

I agree with Fred not because I don't like bankers or some other fashionable witch-hunt but because it would be great to see that awesome accumulated grey-matter actually creating something that would improve all our lives. [Before my brother complains about this post I do believe that private equity can create companies of benefit - and I would be sad to see his tax bill rise even further but my point remains!]