ANTHONY SCARAMUCCI: The president's strategy, unfortunately, has contributed to a global slowdown. When this thing blows, you'll have a great unwinding. It's the president's election to lose, and he's doing everything he can to lose it.
LARRY MCDONALD: Hi, my name is Larry McDonald with The Bear Traps Report. We focus on the intersection of public capital markets in Washington and Wall Street. And I'm thrilled today to bring you Anthony Scaramucci, whose career has been focused throughout Wall Street, Washington, and, in recent years, inside the White House. With a compelling take today, we're going to bring you inside, not just the White House, but back through his career, which has been so inspiring. Enjoy the segment.
Welcome to Real Vision. We're here with Anthony Scaramucci at his restaurant.
ANTHONY SCARAMUCCI: Real Vision.
LARRY MCDONALD: My god, his restaurant here, the Hunt & Fish Club.
ANTHONY SCARAMUCCI: Well, give a plug about the food at least. You've eaten here before.
LARRY MCDONALD: Oh, the food's great.
ANTHONY SCARAMUCCI: The food's great here, right?
LARRY MCDONALD: I love it. I love it. I've had dinner in this room as well as upstairs.
ANTHONY SCARAMUCCI: All right. Well, I'm happy because we keep the chef happy. The key to a successful restaurant is keeping the chef happy.
LARRY MCDONALD: And that's something we have to get into, how you rolled the dice right after the financial crisis and got into starting this place.
ANTHONY SCARAMUCCI: Well, I mean, I did a lot of things right after the event. We started the SALT Conference, which I think you've been to. I got myself on TV, which I didn't expect and then, obviously, went through a couple different iterations of political campaigns. But we started this restaurant because Elizabeth Warren, our good friend Elizabeth Warren that loves Wall Street so much, was railing on Wall Street. And I thought, OK, I want to put a restaurant together that celebrates all of the fun parts of Wall Street. And that's why there's all kinds of bourbon and steaks and seafood.
LARRY MCDONALD: Right.
ANTHONY SCARAMUCCI: And, of course, I'm Italian, so we have a closet-hidden Italian menu, too, that you can always ask for when you come here.
LARRY MCDONALD: See, the one thing I want to get into today-- because we've been friends, I'm a fan of your career, and such an inspiring career.
ANTHONY SCARAMUCCI: Well, you wrote an amazing book about Lehman Brothers, by the way.
LARRY MCDONALD: Thank you.
ANTHONY SCARAMUCCI: It was probably 10 years ago now, though, right? What was it, like 8, 9 years ago?
LARRY MCDONALD: It was about 11 years ago.
ANTHONY SCARAMUCCI: 11 years ago, yeah, it was a great book. You started as a frozen meat salesman, though, if I remember correctly from the book. Right? Yeah.
LARRY MCDONALD: Pork chops.
ANTHONY SCARAMUCCI: Pork chops yeah, I remember the whole thing. It was very good. You wrote a great book.
LARRY MCDONALD: When I was at SALT, you came up to me and said, I like those pork chops, Larry.
ANTHONY SCARAMUCCI: No, it was a great-- I mean, it's a story of human hustle, and it's a story of unbridled ambition.
LARRY MCDONALD: Thank you.
ANTHONY SCARAMUCCI: Keep yourself moving, and try to make some action for yourself.
LARRY MCDONALD: Yeah, I think that's why.
ANTHONY SCARAMUCCI: I love the book. And also, I love what you're doing now.
LARRY MCDONALD: And that's kind of why I had a connection with you, just the inspiration of how you came up. You make your way into Harvard, then get into the asset management side of the business. You sell your company.
ANTHONY SCARAMUCCI: Yeah, I sold my first company to Neuberger Berman.
LARRY MCDONALD: To Neuberger Berman. I mean, take us back to those days. What was driving you?
ANTHONY SCARAMUCCI: Well, I mean, I'll take you all the way back to the 100% polyester days. OK, so I walked into my Goldman interview. I was at the Harvard Law School. I had 100% poly on, a black poly suit, white poly shirt, black Guido 100% poly tie. I mean, I was fully flammable for the meeting. A match got struck, and the interview room would have exploded. So I was in there, and they were talking about the TED spread and interest rates and yield curves. And I was answering all the questions beautifully, and I get up. The guy walks out to say, you're the worst dressed person that we met at the Harvard Law School. I can't take you down to Goldman looking like this.
And I remember, oh, wow, because my mother thought I looked fantastic in that outfit. That was my best outfit. So I went out and used the credit card. I went to Brooks Brothers, and I bought some real fiber. And I went down to Goldman Sachs and hustled my way in there. But for me, I grew up in this blue-collar neighborhood. Everybody in my neighborhood had a trade. They were an electrician, a plumber. My dad was a heavy crane operator. There was a whole group of people doing different things, but nobody went to college. So my folks were super locked on, missile lock, on college.
So I went to Tufts, Harvard Law School, figured out I didn't want to practice law. When I got my job at Goldman and eventually found my way to the asset management area, I realized that I needed to start my own business. It was like that Sesame Street thing where like, which one of these is different from the other? Well, I was different from those guys. Not that they weren't great guys, but I had a different personality. It was probably a little bit more outspoken, a little sharper elbowed. And I said, you know what? I'm never going to fit in here. I'd either have to conform my personality and die of an ulcer or leave and be myself. And so, I chose leave and be myself.
And I think that's a lesson for your viewers. I mean, don't do what you think you're supposed to do. And if you're living your life in fear, you're actually stupid because Mel Brooks has the best line about life. You want to hear it?
LARRY MCDONALD: Sure.
ANTHONY SCARAMUCCI: "Relax. None of us are getting out of here alive. OK? So relax. What are you going to do, right?" So for me, I'm going to do what I think is right. I left, started my own company. It was reasonably to very successful. We sold it. I'm at Neuberger. They get bought by Lehman. Then, I had a great time at Lehman. I enjoyed Lehman. I saw Dick Fuld the other day, gave him a big hug. I thought he was a terrific guy. It was a bad break what happened to them. And you know, life moves on. But I was already out of Lehman. I started SkyBridge in '05.
LARRY MCDONALD: Yeah, take us back to the birth of SkyBridge. First of all, what was motivating you? Where did you come up with the idea?
ANTHONY SCARAMUCCI: I mean, I'm 41 years old. I'm a managing director at Lehman. I didn't grow up at Lehman, so I didn't really fit into the system. I was on the periphery. There was a lot of politics there. I'm not really a great politician, as we discovered in Washington. And so, I'm like, you know what, let me go start my own business. And so, I went to Dick Fuld and others. They helped me. They gave me balance sheet capital.
LARRY MCDONALD: So you went around the street raising capital to start.
ANTHONY SCARAMUCCI: Yeah, raising capital to start.
LARRY MCDONALD: And your vision for SkyBridge back then was?
ANTHONY SCARAMUCCI: I wanted to be in the hedge fund incubation business. I liked that idea.
LARRY MCDONALD: Yeah, fund of funds.
ANTHONY SCARAMUCCI: Yeah, exactly. So what I thought I would do is I would invest in about 15 funds, own a piece of the underlying fund for my clients. So they would get their returns on the fund. Plus, then, I would go out and market those funds to others and raise money for those funds. And then, therefore, my clients could participate in the equity owner. It was almost like a private equity VC-like element for hedge funds. Remember, that's '05, '06. Hedge funds were super hot. They got super cold going into the 2010 financial crisis. We, at that time, had backed 8 funds, one of which is still-
LARRY MCDONALD: So you had 8 funds in 2005 that you backed.
ANTHONY SCARAMUCCI: No, well, we got to work in 2005, closed our fund--
LARRY MCDONALD: Oh, I see. It's--
ANTHONY SCARAMUCCI: --at the end of 2005, deployed the capital in '06, '07, and the early part of '08. But now, we're reeling in the global financial crisis. I had never been on television before. And then, low and behold, I'm showing up on CNBC's Fast Money. I think that's where you and I met originally. And I'm promoting our business, and I'm promoting our conference that I'm launching. And then, I learned that Citibank has their fund of funds business up for sale. And then, I really bet the ranch on that.
LARRY MCDONALD: Think about how important that is for your career. Right?
ANTHONY SCARAMUCCI: Well, it was a game changer because it was touch and go with SkyBridge. I didn't know if SkyBridge was going to make it or not. But I went out--
LARRY MCDONALD: You needed the footing to start the SALT and build SALT, right?
ANTHONY SCARAMUCCI: Well, SALT, I figured out a way to sell funds. What I did was I went out and sold registrations. And pursuant to whatever registrations were coming in, I started booking guests and speakers pursuant to the registration. So SALT's always been roughly break even to make a little bit, but not much.
LARRY MCDONALD: Yeah, I see.
ANTHONY SCARAMUCCI: But the fund of funds meant I had to borrow every dollar. I took cash out of my life insurance. I took cash out of my house. I did everything I could to maximize the amount of capital I could put into it. And I bought Citibank's fund of funds business.
LARRY MCDONALD: You bought their fund to funds business in the hole.
ANTHONY SCARAMUCCI: Yeah, it was in the hole. Yeah.
LARRY MCDONALD: I mean, is that--
ANTHONY SCARAMUCCI: No one else wanted it, actually.
LARRY MCDONALD: --is screaming by.
ANTHONY SCARAMUCCI: It was 2009. The deal closed in the early part of 2010.
LARRY MCDONALD: So valuation, bottom line, it was down from the 2007 peak. It must have been down 50%, 60%, 70%.
ANTHONY SCARAMUCCI: Yeah, I mean, it was. But no one wanted it. So I mean, the reason why they didn't want it is that you're hit with that 2008 performance, and the fund was small. And we got very lucky, but we also had very good performance. The guys running that fund accelerated into '09, '10, '11, and that allowed us to raise a ton of capital in '12, '13, and '14. And then into '15, we did quite well as well. And then, the early part of '16, we started having a little bit of underperformance, but that was OK.
We saw this massive surge. We went from a billion under management to $12 billion in about 5 years. And so, that was great.
LARRY MCDONALD: $1 billion to $12 billion in five years.
ANTHONY SCARAMUCCI: Yeah. $1 billion to $12 billion in five years.
LARRY MCDONALD: That is something else.
ANTHONY SCARAMUCCI: We're at 10 now. I mean, we lost a little bit of capital because of my White House fiasco. I had the firm up for sale, because you have to do that when you go serve the government. And then, the CFIUS agency of treasury blocked the deal. They said it was a national security issue, whatever, so we let the deal crater. So I returned back to SkyBridge after my very extended stay in the White House. I went back to SkyBridge. And we're building it and growing it again.
LARRY MCDONALD: So many people have wondered, what was your first experience like in the White House in terms of relative to what you thought it would be going in?
ANTHONY SCARAMUCCI: Well, I mean, listen.
LARRY MCDONALD: What's your biggest message?
ANTHONY SCARAMUCCI: Now, you have to remember. I mean, these are very, very bad people. I mean, you have to remember that the people that work in American politics in Washington buying large are very bad people. And so that's the reason why the American people hate them, and that's the reason why they have such a low approval rating.
LARRY MCDONALD: But none of these people were from politics.
ANTHONY SCARAMUCCI: They're a bunch of cowards.
LARRY MCDONALD: These weren't politicians. What do you mean? Are you talking about how the House is?
ANTHONY SCARAMUCCI: No, no. I mean, no, what happened is Ryan Priebus staffed that White House. He flooded it with RNC people that hated Trump. And so now, there was a huge civil war going on between the Trump loyalists and the RNC people inside the White House. And so then, Priebus, as White House chief of staff, blocked my position into the Office of Public Liaison.
LARRY MCDONALD: Oh, I see. OK.
ANTHONY SCARAMUCCI: And then, I did something really stupid, which your viewers should learn from. I put my pride and ego into that. I said, OK, I gave that guy loads of money at the RNC, but he's just a political hack. He's now blocking me for no reason. And it turned out I shouldn't have taken it that personally. He was doing it to Christie and Giuliani and anybody, for that matter, that came from the New York area that had a relationship with Trump. So that's fine.
LARRY MCDONALD: That's a great