Secrets of success: Northern Trust’s Evans on tools for the C-Suite, manager diversity

There was a moment in my discussion with Northern Trust’s Kimberly Evans that I was reminded this was the conversation C-Suite executives should be having with their Black leadership.

The story is so much more than how she arrived within the financial services industry. There was a lot of what she said that I can empathize with in my own career, so I definitely got it.

Evans is executive vice president at Northern Trust Alternative Fund Services. She joined Northern Trust 10 years ago and is North America Head of Private Capital Fund Services, leading a team working with private capital firms, general partners, their funds and their investors.

What follows is another snippet of our conversation and follows a previous interview published earlier.

Smith: I loved your story.  I loved the way that you’re thinking around the way that you were perceived, how you navigated that and let me ask you quickly, do you think that that was in the beginning because I know it’s intuitive now.  You know, now you go into a boardroom, you know, you can do it with your eyes closed, but was it intuitive back then or was it something that started out as being something you were doing consciously and then became intuitive?  

Evans:  So, Blair, you’re asking me to share my secret weapon from all these years. 

Smith – That’s what journalists do.

Evans:  So and this is the way I’ve thought about this and I’ve even had some, executives play this back to me, but I’ve always thought about it this way.  So I grew up on the South Side of Chicago and when I say South Side of Chicago I don’t mean a southern suburb or I don’t mean Hyde Park and Kenwood.  

Smith: No, I know Chicago a little bit.  I got a pretty good idea what you’re talking about.  Parts of that aren’t even there anymore, but if you’re talking about where I think you’re talking about then, yeah, you can drive through there now.  You couldn’t drive through there back then.

Evans: Right, and so to make it plain, going to school, going to work, going to the grocery store, whatever it was, I grew up with my head on a swivel.  I grew up reading situations not because it was going to be good for a business deal, but I grew up reading situations and reading people because it could absolutely mean danger for me or my brothers or my family or my mom.  

So that level of street sense, if you will, really did become a tool in business. I won’t say I’m perfect at it, but I will say that being able to read situations, being able to understand where the power is in the room, being able to understand where there might be some danger in the room, I did get some very, very early exposure to that and I have been able to use that in business. And again, I’ve had executives play this back to me like, your intelligence helps you, but it really is a combination of your book smarts and street smarts that has helped you get to where you are because that ability to read a room is critical for business.

And so again, I still wouldn’t say I’m perfect at it, but I have mentored people and people will tell me situations that they’re going to be in and I’ll give some advice or thoughts about how they navigate and they’ll come back and they’ll say how did you know that?  So I think it has served me well.  That’s a part of my secret sauce, Blair. 

Smith:  Well, you know what?  I will try to write this in a way that doesn’t give away the whole recipe. Essentially, it’s a combination of book smarts and street smarts.  

Evans: Yes, I mean it’s fair and it’s real. 

Smith: There’s a great book called “The Alpha Masters” by Maneet Ahuja and it talks about successful CEOs, some of whom grew up in difficult circumstances, succeeding, failing and then came back. So, you have a special type of combination upbringing that you should, never shy away from. Never hold back from sharing that (…) I loved your story.  

Evans: Thank you, I appreciate that.  And I think, you know, there is more I can do. There is more I want to do, like I’m not there yet. I do realize how far I’ve come, but we’re not there yet. We’ve got more work to do. 

As long as there’s breath, pulsing through these lungs, there’s more work to do, but sometimes I hear people say like, ‘oh, you have the courage now to tell this part of your story, you know, about how hard it was and the times that almost broke me and could have broken me.  You have the courage to tell it now.’  

[The truth is I’ve been telling it the whole time. I’ve always wanted to tell my story because I’ve always felt like I had a story, my family had a story. My mom had a story worth telling, but I’ve continued to live the story according to how I wanted it to be told and how I wanted it to impact people and so, yes, resilience is a major part of that story — being broken, being disappointed, being discouraged, having evil, mean things happen.

I mentioned, having career success before I came into this role. And when I came into this role, I remember going to a conference, and feeling how this part of the financial services industry can be intimidating. So, I remember having some background, but not a lot, and honestly I’d walk up to shake people’s hands at conferences and I’ve had people turn their back to me without shaking my hand. And this wasn’t 15 years ago, this was two years ago. 

That courage, that strength, being able to rebound, being able to do it in a way that, keeps everybody’s self-esteem intact, including mine, you have to learn how to do that. I mean it’s not lost on me that I’ve had a lot of help, but that personal strength and courage that you have to find in those moments where nobody’s going to save you. You know, people saw these things happening and they were not equipped to save me and there are times where I thought like I wish somebody would say something right now because that was just rude. That was really crazy and nobody did. And I had to figure out, for myself how to maneuver that situation and move on to the next thing and still have everything intact with my relationships, with everybody who was around me.  

So it is those moments that help you move along. And so if there’s anything I would say around, what keeps me going, it’s the tough times, like when you know that you’ve overcome that past thing.  At one point in my career I was in a very, very bad car accident and all I wanted to do was work because for me that was a sense of value where I could impact people.  I could impact business and I couldn’t work.  And the thought of living like that for the rest of my life was unacceptable to me.  So fighting through how to get back to work, was – absolutely necessary.

Smith:  So that’s an additional hurdle.  So that’s two hurdles that you’ve referenced one physical and one career — they don’t teach you that (real life) in a cubicle in business school.  So now I’m going to take it back to the industry.  I want you to pull out your crystal ball.  We’ve had a lot of change over the last several weeks.  We started out with the middle of this year in addition to the pandemic, we’ve had a lot of economic and social dislocation in one year, all the events.  Wall Street is sort of pricing in the results of what’s occurred over the last couple of weeks.  So I’d like to get your outlook on what you think that means for your space in particular.  Are you optimistic?  Do you see, you know, unlimited upside?  Do you see any headwinds?  What are your general thoughts?

Evans: Our business specifically respects capital. It respects expertise or experts and it respects decision makers, those who have the ability and the power to make decisions on their behalf or on behalf of the industry or the capital, right?  So I would say, from a capital perspective I still think we struggle a little bit, because those who decide to put capital with let’s just say emerging managers or women-owned firms or minority-owned firms, I think we’re still challenged there.  We really have to figure out how to, show the results, because we see the results.  

The investment results from emerging managers or minority or women-owned asset management firms are actually really good and there’s a lot to say about the experience that they’ve had to get there, the courage, the risk-taking that they’ve already survived in their career to produce those results. But those who actually will make the investments and who will, place capital, I think we still have to bridge that divide. That is still, in my mind something that I see just the natural inclination to think that if we place money with minority or women-owned firms that we’re doing it because there’s a moral obligation, but I don’t really expect that much of return.

This has to change. If return is what we seek, then every asset management firm wants to be evaluated based on their returns, not just on the principle of having small allocations with diverse emerging managers.

But where I am most hopeful and see the greatest opportunity for minorities, let’s just make it plain again, women, black professionals, Latinos are growing in this industry, growing their expertise and decision rights. We see women rising to different levels in this industry to be able to manage and make decisions. We see now — which was different when I was coming up – there are whole programs directing our youth into this industry. So the ability to develop expertise, to get exposure to this part of the business early on in their careers will have a big impact on the industry. This will create the biggest impact in the short term until we can close some of those gaps around where investors place their capital and how they look at their allocations and investments long-term. ESG is of growing interest which also helps. So those are the three tenets in how I look at this business and I think we’ve got two out of the three that can be very, very strong, in the short term and then the longer-term goal of access to capital, we’ll just got to continue to work on it.  

Smith:  Let me ask you this. A few years ago, there was like the top 10 emerging managers you could point at and there was a growing list that you could easily point to and say, okay, these are the guys who are on their way up. Something that is consistently shared with me by people in the industry is, that pipeline is not as visible as it used to be. Without naming names: Are there 10 emerging managers on your radar screen?

Evans: I don’t have 20 on my radar, mostly because that is not the frame from which I operate.  However, I do have some relationships on my radar that show promise for being the next stars. 

I want to be realistic and pragmatic about how firms are established in the alternatives space. You have to have capital that you’re willing to put at risk and access to capital to be able to move forward in this business and again because the economic disparities are most evident in our communities, people with the smarts, the know-how may not be in a position to take that risk with capital. 

So realistically speaking, I don’t think we’re at a shortage of Blacks or Latinos or women who can run successful asset management firms. I don’t think that’s what we face at all, but what we might be lacking in is the ability to put our own capital at risk at the same level as our counterparts or attract capital at the same level. And so until we can start to change that and see the needle move on where investors place their capital and the paces they want to put these managers through before they’re willing to place significant capital with them, I think that’s going to be our challenge. But we’re not at a loss of people who know how. I think you’ve got to face the reality that, you know, capital and taking risk with your capital to actually start firms and become an emerging manager, that’s a pretty significant decision and hurdle.  

I do see from a venture capital perspective some specific efforts around black-owned or Latino-owned asset management firms in this space that are focused on middle market development, economic development and business development in those communities that I think are going to be wildly successful because I do see some very conscious efforts to place investments and capital there.

So, you know, I don’t have the crystal ball on how it’s all going to work out, but I do see some very strong interest and some very intentional moves around focusing on those specific things, (closing) that gap for taking that risk with capital.

Smith:  I’m starting to see the same thing both within the alternative space and beyond into the credit space and the lending space and when you get into the world of CDFIs you see this paradigm shift into, you know, how do we reinvigorate these communities that have been neglected for too long.  This has been an amazing conversation. Thank you so much, Kimberly, for your time, I think we got a lot of what we needed and I’m looking forward to staying connected.  Thank you again. 

Evans: Thank you, Blair!

Blair Smith

Blair C. Smith is the former chief investment officer for the Upper Manhattan Empowerment Zone Development Corporation. His responsibilities included providing leadership in structuring, negotiating and closing of loans and investments, and oversight of credit policies. In addition, Blair identified market opportunities and developed new finance strategies in furtherance of UMEZ’s mission. Blair is also the Founder and CEO of Promethean AB Strategies LLC, a strategic consultancy focused on helping diverse Asset Managers and investors achieve their goals. Prior to founding Promethean AB Strategies, Blair was responsible for co-managing a $5.2 billion Emerging Manager investment portfolio, within the State of New York Common Retirement Fund. The program spans both traditional and alternative asset class strategies (real estate, private equity, public equity, hedge funds and opportunistic).

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