Building Out Goldman Sachs’s Private-Equity Business

(Bloomberg Opinion) -- How does one build out the merchant-banking arm of a firm such as Goldman Sachs? If you are Henry Cornell, this week's guest on Masters in Business, you start in Asia. In the late 1980s, Japan was the hottest country in the world and Cornell went there to expand the firm’s local footprint. He hired hundreds of employees and helped establish Goldman’s reputation in the market as a savvy private-equity investor. From there, he moved to Hong Kong in the early 1990s, just as China was beginning to become a more market-based economy.

Returning to the U.S., he rose to become Goldman’s vice chairman before starting Cornell Capital in 2013. The firm now manages $3 billion in long-term investments in closely held companies.

Cornell co-invests with Goldman Sachs, Alibaba and a number of well-known private-equity funds. Because he knows literally hundreds of chief executive officers and their networks, the deal flow for private investments is a substantial advantage for the firm. Cornell explains how he developed an expertise in insurance, packaging and consumer-product companies, including KDC and Purell.

His favorite books are here; a transcript of our conversation is here.

You can stream and download our full conversation, including the podcast extras, on Apple iTunes, Spotify, Overcast, Google, Bloomberg and Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here.

Next week, we speak with Michael Lewis, author of "Moneyball," "The Big Short," and so many others. The second season of his podcast, "Against the Rules," focuses on coaching and not just in sports.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Barry Ritholtz is a Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”

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