Chris Temple is settling in nicely to the Seattle lifestyle since his arrival last year from Manhattan, relishing views of the mountains and enjoying a four bedroom house in the tony Madison Park neighborhood. It all sounds rather idyllic.
But Temple -- who was just named president of Microsoft co-founder Paul Allen's Vulcan Capital -- has other things on his mind too. After all, managing billions of dollars on behalf of one of the world's richest men is a pressure cooker job, especially considering the high level of scrutiny that some of Allen's past investments have drawn.
Temple, a Harvard MBA and University of Texas grad who previously worked at New York-based Tailwind Capital, admitted that he's not accustomed to talking to reporters. But we caught up with the 41-year-old father of two this morning to chat about the economy, the firm's interest in venture capital and what it's really like working for Allen.
What's your vision for managing Vulcan Capital?
"I wish I had something more dramatic to say or report. But I think we are going to continue to extend the stuff that has been going on since the firm re-orged in 2003 or 2004 when Vulcan Capital became kind of a separate entity. The primary focus has been to broaden and diversify Paul's investments."
On the diversification strategy:
"(Vulcan) previously had been sort of heavily focused on media and technology. We will still have an interest in investments in that space, but broaden it into stuff like energy and health care and additionally add some sort of indirect investments. Historically, a fair bit of this stuff had been done in-house and leveraging some of the expertise we can get from third party managers and other asset management firms and individuals. Hopefully, we will keep doing more of the same and continue the success that we've had, and do that against the backdrop of a pretty choppy economy. So, it is easier said than done, but we are working through it."
What are you seeing in the economy and how are you trying to weather it?
"Certainly, no crystal ball. We don't try to forecast that stuff. That's a bit of a folly. But generally speaking, I think we are still pretty cautious. There's been a little bit of bounce in the stock market recently, but not sure that is supported by the underlying economic facts. We are taking a pretty cautious and defensive posture for the rest of the year. We've spent a lot of time internally on the portfolio and making sure the companies are prepared for a leaner demand environment. We are still looking at new stuff, but pretty selective. You know, it is harder to underwrite businesses and growth plans and projections in an environment like what we are in now."
Are you seeing an opportunities because you can get good deals?
"There certainly are sectors of the economy that continue to grow... Trying to find those and get good deals on those is part of the job. I think frankly -- and I hate to say this -- but we probably haven't seen as much of a discount in some of those situations ... as we might like. We are still monitoring things, and we think there will be some good deals to come. But there is no silver bullet that we've been able to identify to pick those companies up."
What about the venture capital space?
"The valuations are actually coming down, which is good for investors because you get more of the company when you put your money in and it makes it easier to make investments. The complicating factor is that is against an uncertain demand environment. So you, kind of mix all those things up. But we still think it is a productive venture investing world and some of the valuations that entrepreneurs have in mind are more reasonable."
You've been at Vulcan now 11 months, what's it been like given all the scrutiny of Paul Allen's investments over the years? Is it a pressure job?
"Fair question. My wife asks me some of the same things sometimes. It is obviously a high-profile job. I usually don't spend my Friday mornings talking to reporters. People do have an interest in Paul's activities, investment and otherwise and I can understand that. It is actually kind of challenging and exciting... I am not scared of it or overwhelmed by it, it is just sort of a different dimension to the job."
On past investments:
"Hopefully, like I said, we can extend the successes that we've had. The diversification efforts that we started back in 2003-04 have yielded some great investments, you know we have a big public investment in Plains All American Pipeline.... The failures tend to get a lot of press. There are some big companies and high-profile stuff, but we also have some stuff that is chugging along and doing quite well. So, I would be happy to continue the success that the guys have had and just protect and grow Paul's wealth, and service a pretty diverse set of charitable and philanthropic and other activities."
What about Charter Communications? What's that failed investment doing to the Vulcan portfolio?
"I need to be a little bit cautious there because it is a public company and it is in bankruptcy court... It is obviously a big investment and one that Paul has been involved in for a long time, and the dramatic change in the economy last fall and then through the beginning of this year kind of washed out what was a pretty good operational turnaround effort.... They took a really good shot at getting the company integrated and pulled together, but the balance sheet that they had inherited was pretty tough.
Frankly, most of that economic pain had already been absorbed in Vulcan's portfolio by late last year. It is always difficult to put a company into bankruptcy ... but from the standpoint of where we sit we are still going to have an ownership stake. We will have a 35 percent voting shareholder and have a minority interest. It will still be a portfolio holding and we have good feelings toward the management team, but it won't be as big of commitment or a time investment as it had been in the past."
Why did you want to work for Paul Allen?
"It is a new challenge, and it has a several different dimensions to it, different asset classes and different life cycles. (Outgoing president) Lance Conn was a personal friend of mine and he recruited me to the firm and I enjoyed working for him, and I've enjoyed working for Paul and (Vulcan CEO) Jody (Patton). It is a super dynamic and challenging job."
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