From Public Finance to Higher Ed: How the Aguayo Brothers Manage Treasury Risks and Challenges

Foreign.

To this week's Treasury Career Corner podcast where I interview treasury professionals about their treasury careers. Each and every week I talk to treasurers about how they build their careers, where they are now, where they see both themselves and the treasury profession. Going to next. Let's get on with the show. This week's show I've got a bit of a treat for you because I'm delighted to be joined by my first ever twin brothers that I'm interviewing on the show who are both in treasury as well. I'm joined by twin brothers Arturo and Fidel Aguayo. Arturo is Assistant Treasurer, California Institute of Technology. So Caltech Institute of Technology is a world renowned science and engineering research education institution. 124 acre campus, Pasadena, California. I will get Arturo to talk a little bit more about Caltech, but Fidel is currently serving as Vice President of Treasury and Investment at Loyola Marymount University. They are Pacific Ocean and Downtown LA, 60 major programs, 55 undergrad degrees, everything else. But I'm going to get the guys to explain this. I actually found these guys through an amazing article which we'll put a link to in the show notes about how the both Fidel and Arturo had got into treasury is amazing. Both doing the similar things but different through a, an article dot com. So we'll put that in the show notes which is great but I'm going to hand over as always. And it's just great having two treasurers, the twin brothers. Yeah, I couldn't make this up. I will hand it to you guys. Arturo, the microphone is yours for now and then you can wrestle it later back to the Dell. It's over to you.

Yeah, thanks for having us Mike. One thing that I wanted to add was not only are we in treasury, but we're actually in the same space sector in the same industry. So we're both in public finance and we both ended up in higher education. My career really started with a summer program that the purpose of the program was to keep young people off the streets and get that work experience. And for me that what was initially a three month internship type of summer job actually ended up being eight year stay at the organization that I worked at the time was the city of Long Beach. And in Long beach is where I really got exposed to a lot of different things in Treasury. And I remember when I was asked to that summer program I had choices to work in different departments within the city. Working at the water department, working at the the oil department. And then I came across working for the city treasurer and at the Time, I had no idea what that meant, but it just sounded like gold or like a lot of jewelry or something. Where they do that kind of got me excited about learning about money and what the city did with their funds. And so I selected that specific job for the summer. And it was interesting because my life could have completely been a different route had I chosen another department. And I. So I started working there and I started learning a lot about how the city operates from a financial standpoint, working closely with the cfo, working with the city treasurer, and I started learning treasury operations, cash management, debt administration, investments, and also compliance. We financed the Aquarium of the Pacific and did a lot of different financing for the police station and other city big city projects within those three areas. I really fell in love with debt. I just was attracted to the bankers, would come in, do a sales pitch, and I just found it fascinating. When I graduate from college, I was working there part time while I was going to school. And so I graduated. And prior to graduating, I had already book it to a lot of people in the industry about what it. What the industry entailed and how to be successful in that industry. And through my network and having good people around us that were supportive, that were very interested in seeing us grow and do well and succeed in life, we were able to both land jobs and land jobs specifically in investment banking and public finance. I went to a small company based out of Chicago, and actually I stayed there for a couple of months training with the Southern training people, doing some training on different type of financing projects like the city of Chicago. And they're. They have a large school district, they have a large park district. And then I came back and they said, okay, now you're coming back to home, where we want you to create a presence in California for our firm. And there I was. And so I was at the time, I was like 25 years old. I had a company credit card, had. They got me a BlackBerry and off I went calling client. I was doing cold call, I was networking. I was doing all kinds of different things just to get my foot outdoor to meet clients. So that was an amazing experience for me because I was able to really learn how the industry worked and how to get to see clients and more importantly, how to get deals. How do you get into getting deals? Which is a very difficult thing about public finance, because you have to go through an RFP process and a lot of the clients already have their bankers. In 2009, where, as you recall, Mike, there was the economic meltdown. And in that, you Remember there was a lot of folks that were losing their jobs and there was uncertainty around companies profitability. I was worried about cause I was the newest member of the company that I worked for. So all along while I was working at this company, I every few months, several months, I would get calls from recruiters and different companies. And so at the time because of that uncertainty, I said I think I want to go into a company that's really stable right now. So I made a move to work for a consulting, public finance consulting company that did a compliance side of issuing debt. And that was also a great experience because I got to learn a lot of the legal aspect of public finance. I was doing a lot of reading on the trust indentures, the arbitrage certificate, all the different legal documents that go into doing a deal and. But it was very boring, right? It wasn't what they would admit it to you that it's not the sexiest thing to do. But after a couple years there, I again was recruited to go back into investment banking and did that for a little bit again. And then that company got bought out again. We're dealing with a lot of uncertainty and a lot of changes in the industry. There's acquisitions, the consolidation of companies. I got a call from a recruiter at the University of Southern California and that was very enticing to me because I thought to myself, this is great. Not only will I be working in what I like to do, I'll have some purpose helping the university grow and prosper. And then on top of that I get, if I wanted to, which I did, is go back to school. And so I was able to get my master's in business administration from the University of Southern California. Now this is a cool story. So the way it works when you're a staff member of the university, not all universities have this benefit, but USC did, they have a benefit where they cover you some educational expenses. And so now the coverage is a fixed percentage and the rest you have to find out to yourself it's not a hundred percent finance as a benefit. However, my chief or financial officer that that hired me covered the difference essentially to get my MBA. Now this is the interesting story. So one, I get a call one day from my CFO's office and his assistant said hey Arturo, we want to pay a tuition bill. And it was like some large amount of money.

And she said to me, our system.

Only allows for full numbers, but it's X amount plus change. Yeah, that's it. So I'm thinking, okay, what's what are you trying to tell me here? I'm so sorry to ask you, but can you please pay the 50 cents? We more longer pay the 50 cents for $150,000 education?

Yeah. You're like, you're okay. I'll stretch to that.

Yeah. So that was a big, I think it was a very big positive thing that happened in my life, right. Getting an entire education paid for. Because as you hear now with a lot of things going on in the United States with politics, the administration wants to forgive loans because it's a big issue. Right. It's very expensive and it continues to get more and more expensive every year. And so that to me that was just a life changing experience for me because I basically free school loans and that was an awesome experience as well. Learned a lot in school, met a lot of cool people through the program. Get the tram.

At the same time you were going into the listeners as well. You were working in the central treasury for the University of Southern California. So you weren't, you were studying. That was great. They were paying your tuition and that's great. But you're actually doing a Treasury role as well. And you talk there about purpose led treasury, which is quite an interesting one. Between that and corporate treasury, we've come onto this with Fidel as well a bit later on the show. But for you rejoining university, why was that so powerful to you? Did you feel that then or was it, hey, but it's all right, I'm getting my tuition or how did you feel about it?

That's a combination of all the above. One, it was a stable organization. USC is one of the largest universities in the country. They have probably 60,000 students plus they have a fairly large endowment of I think now close to 10 billion. And so it's a stability, the ability.

To go to school.

But also we are in public finance. We could have chose corporate finance. Looking back at it, maybe that would have been an interesting option too. But when we were growing up, because of our background, growing up in lower income community, we felt that it was important for us to somehow give back. And so this sector, public finance is one that allows you to be involved both in the community, the communities that you serve, as well as doing pretty well for yourself. I should say mention too that before we got into public finance, I was interested in politics again, it was all a combination of all those things. But public finance allowed us to stay in touch with, with our communities, with that as well.

And then you're a C for seven years and then bring this up Today because I want to give Fidel as well. Some of them are not too long, but just give us some of the time. But you then been with, you've been with Caltech nearly five years or how did you make that move? Or was it just a natural thing that you wanted to stay or how's it developed?

Yeah, after about seven and a half years at usc, I was in a place where I felt like I had done everything I could in my role. And at the same time there was a position that was available at Caltech. And Caltech is a world renowned research institution. Not only a promotional opportunity, but for me it was a role where I can continue to learn and grow. Because even though it's also an academic institution, it's in my opinion primarily a research institution. And so it gave me an opportunity to learn a different type of organization. And I've learned a lot of different things. We manage a lot of banks here and we have eight lines of credit. We have a swap in place. These are some of the things that I wanted continue to learn and or did not have exploitage before. I really enjoy my job here and it's a smaller organization than it was my prior institution. But with that I just have a lot more flexibility to streamline things opposed to like the layers of approvals when you work for larger organization.

And we're going to come back to those of you working within institutions like you do and your universities and things like that. And that's also of interest because just talking about some of the nuances there, but we're going to hand across to Fidel. Fidel, do you want to explain exactly?

First of all, thank you very much Mike for having us. We really appreciate your time. But it's very interesting. Yes, we're twins and we are very close and we're always talking about kind of career opportunities and how we want to continue to grow as people and as professionals. But really how I started in the business is it's very similar to Tudor. Coming out of high school, I ended up applying for a position with the city of Long beach as a recreation specialist. I started doing kind of recreational programs for the youth across various parts across the city. And during that time, Arturo, as he mentioned earlier, was working as an intern for the treasurer's office within the city of Long Beach. So he would come home and he would share a lot of his experience with me. He was saying how he was working on these multimillion dollar bond transactions. He was learning about cash management, he was learning about investments. And so I Was very fascinated by that. And after a few years of me serving as a recreation specialist, the city went into probably the biggest budget deficit in its history. I think it was something close to $100 million budget deficit. @ least that was the number that was being thrown around at the time. And what ended up happening is they started cutting my hours, right. So it started affecting my paycheck. I'm still, we're still at undergrad, trying to get school out of the way. So it's was really positions for us to survive while we were going to school. And so when that happened to me, I said to myself, I need to get into something that I can use whether I'm going to a private sector or the public sector. And I said, everybody needs their finance folks, regardless of sector. You need your finance folks. And so that with the combination of everything Arthur was learning, really led me and pushed me to pursue a career in finance. So that's the story behind it. And once we graduated from undergrad, Turo and I already knew, as he mentioned, that we wanted to pursue careers as investment bankers, specifically in public finance. Before we actually graduated, we were meeting with people from the city of Los Angeles, people who were very influential in the city. And the city of Los Angeles is a really a beast when it comes to finance. They issue billions and billions of dollars of debt every single year across various different credits. They had their wastewater, they had their water and power department, they have the general purpose within the city of Los Angeles, their lease revenue kind of bonds. And we started meeting people and they started introducing us to those of small to mid sized firms, investment firms. So by the time we graduated, we were already trying to line up a position within the industry. And true. And I would go back and forth, we would sit down and first opportunity.com I'm going to take it. And I told him I was going to take it because I didn't really have experience in finance. Okay. I had experience in when I was with the city after serving as rec, I also worked in their administration side working with accounting and budgets. But it's not the same thing as financing. Very two very different worlds. And we can talk a little bit about that as this conversation continues. That's how we got the opportunity to break into the industry. We through both actually through. And I both used to interview together for some of these small firms and we. I got the opportunity to join a firm. I started probably, I want to say two to three months after graduate from undergrad and then I probably took six to eight months and Then he joined an investment bank as well. So that's how our careers evolved into the finance financial world. And then I was with my, with the investment bank for almost 10 years. And then there was a big reorg within the organization. There was changes with the partners of the firm and it made me start thinking the organization was making a lot of changes. So it was really time for me to make a change. And so in that process I ended up, I too decided to go more to the client side. So you have the bankers who are the consultants, the professionals and then you. We serve obviously all state and local governments who are looking to raise capital for the, you know, large projects. And so I ended up being deputy for a smaller city within Southern California. I was there for a little under a year before the opportunity to go back to the city of Long beach presented itself. It was the position of the debt manager for the city of Long Beach. And so I applied, I got the job and then I was with the city for about six years in total. And then probably five years into it, I got promoted to city treasurer. Now, just to give you a little background about the city, so the city of Long beach happens to be the, I believe it's the seventh largest city, the state of California, second largest city in LA County. So when you talk about the amount excitement that's behind an organization, when you talk about the volume of bond transactions, the volume of cash transactions and their, the sophistication of their investment portfolio, it's pretty big. It's a large one. The, on the debt side, the city had about one point when I was there. It had about $1.8 billion worth of outstanding debt and they had probably something like 50 to 60 outstanding bond transactions. On the investment side, I think it was a 2 billion investment portfolio. So there was a lot going on within the city while I was there. I oversaw cash management, debt administration and the investments. And so every single kind of function within treasury has, is, it's challenges, but they're all connected, they all impact each other. You do something on one end, it's going to impact the other. So that's. So I was there for six years and then interesting thing occurred. Dulu and I would always go back and forth in terms of, and we would talk about this and I would ask him for advice whether I should continue to stay in, in a government setting or should I pursue a career in private higher ed. And so the longer I was with the city, the more I thought that it was probably a good thing for me to do is to join a private higher ed academic institution. And I, interestingly enough, I graduated from Leola Marymount about, I want to say, 12, 13 years ago. And so when the opportunity presented itself, I was telling Arturo, actually, we talked about it. Right. We always talked about it. We said, okay, if there's a couple positions out there that if they open up, we're going to apply for. And so Arturo always really thought that he would be treasurer of lmu. And so when we sat back and talked about it, I talked to, look, I graduated from you. I have history there. And it's a better opportunity for me because it opens it up for me to go into the private higher ed space. So when that opportunity presented itself, I said, I'm going to apply. You're not going to apply.

You stole his envelope away quick for that one. Yeah, yeah.

He was afraid of me applying because I probably would have been, I think.

I.

Pretty sure you would have. Who's going to say no to someone who had the background of usc? It's just such a big. It's such a big institution. It's known across. I don't. It's known across the nation and it's probably known across the world.

Yeah.

Because it's so big. A lot of times employers, what. They look at it.

They look.

They don't only look at what you do, they look at where you did it.

Yeah.

And so the bigger organization, the more exposure, the more experience you're going to have. So naturally, he would be a front runner, and he's already in that space. So I knew that if he applied for it, even though I felt that I was more experienced, he would probably get a position.

That's the payable mo. Yeah.

We'll cut this out in the end. So don't work.

So that's.

Glad you're not in the same room. There you go. You don't have to arm wrestle. I just want to dive in for a moment about. You went from city financing to education and hiring, and you both got that exposure. You both talk about it and everything else. How would you. If someone's listening today, how would you contrast them between city financing, big numbers and looking after lots of different projects versus education? How are they different? How do they differ in your mind?

I think, for me, obviously, is the service that you're providing is pretty much the big one. I would say the other thing that's very different is the way the organizations are ranked. And this is what I mean by it, at least within the academic institution here at Loyola Marymount, the Organization is ran a little more like a business opposed to a government setting where it's really politically sensitive, highly politically sensitive. And so the directives come from the governing bodies and the elected officials. They decide how the city should be ran, what projects should be financed, that type of thing. And so I think those are probably the biggest differences. They're not so much on the financing side. One of the things that I believe is treasury, regardless of where you do it, that's not going to change. The practices are the same, right? That's not going to change. It's more of how the organizations are ran. That's my opinion.

Yeah. In addition to what Pigad mentioned. So if you think about. If you don't mention the board members and the elected officials, you're really working with two way different types of governing bonds. One is politicians, elected officials, and the other one is the board of academic institutions are wealthy individuals that make millions of dollars of donations to the school. So you're talking about very successful wealthy individuals that a lot of them are business savvy, a lot of them have different companies versus an elected body that those are people that live in the city that are just. They run for elected office. Some may be business people, some may be in real estate, some may be in education more.

They tend to be focused more on the social.

Yeah, it's more of a social career.

Someone's listening today. They go, hang on, how did you. As you've gone through this and you've. Your. Your twin brothers. It was. This is why it came out. This must be really quite. It's quite cool because you can both talk about the crossover between your jobs and you've both got the same experiences. But also do you sometimes go, hang on, how do we end up here? Or what did you think as you were discussing it over the time?

Yeah, absolutely, absolutely. Sometimes I think back, I'm like, how do we end up here? Remember? Yeah, sure. I had three opportunities within the city, Right. One was for the water department, one was for oil properties, and then one was for the treasurer's office. So when you think about that, our both our lives would have been way different because the reason Fidel knew about finance was because of me. And if I don't get that, I don't choose that treasurer role within the city. Who knows where we would have ended up. I feel fortunate sometimes because not only did we get to learn finance, but also helps in our personal life. Right. How we manage our own funds. And so it's been a unbelievable career that I feel like We've had an unbelievable career so far. And the thing is we're still fairly young. Who knows where we'll be five years from now.

The other thing I would add to that as well is it's. It was a long journey, right? It was a journey of sacrifices. It was a journey of a lot of planning, a lot of discussion within our families and it was a lot of really strategic planning. When I shared that story about, okay, who's going to apply for that and why should you apply for it, opposed to me. So those type of discussions really made sure that we put, we felt either the, either one of us in front of an organization, right? We felt that it was either the right person, the best opportunity and depending also on how, what's going on within our current positions, right? And if you're in a great place, why leave a great place? You love it there. You work with great people. Me or on the other side, on the flip side of the coin, you could probably say, I don't know if this place is for me anymore. Maybe you're right. Maybe you're right, Arthur. Maybe you should go for it. So that type of thing. So it was, even though it was a very, what felt like a long journey, you, when you look back and you reflect on every single decision that we've made up to this point so far has really worked well for us. But don't get me wrong, there was a lot of disappointment in certain parts of the decision process that we made. But at the end of the day, Arturo said it best. You end up where you belong.

I want to come back to something as well. You talk there about public finance and the drivers behind it with that social purpose and everything else. And now you're both in higher education. You're was just making some notes there. So you're in essentially commercial organization. Even though they're in ed with their education, they're more correct. You've brought in a sense of rigor. You've done all that. They're not as they were 30, 40 years ago, for the greater good and everything. Now they're very much more. You've got, when you go through the article here, you've got multi million pound 500 million century bonds. You've got all those different things you've done, which that's not your typical university financing. These are big numbers, these are big ticket items. How do you guys feel about that? What are your thoughts? How do you see the sector changing and growing?

There's been so many different things that have made treasury and the industry overall, very complex. Some things have to do with technology, some things have to do with the general economy and how, what's going on in the economy. There's been a lot of things that have happened, power, life, that would be considered a once in a lifetime type of experience. Right. Like the mortgage crisis of the economic meltdown. Right. That never happened before 2008, 2009. So we experienced that as bankers. And so when you had clients calling you, hey, look, our variable rate debt has skyrocketed. It's. We budgeted 3% now it's like at 14, 15%. We got to get out of these variable debt and let's fix them out. So that was an experience, right? And then you have things like Covid, wow. Where the entire country shuts down for a week or two. It's whatever is going on in the world impacts a lot. Even, let's say this stuff that's going on internationally with Russia and China and the geopolitical environment that impacts not only treasury, but the schools. We have international students. And there's so many things that are outside our control that have changed the way that we manage Treasury. And then obviously technology. With technology comes a lot of automation, a lot of streamlining efficiencies. So those two things have that, that I can think of my head have really changed that. And I have also made it more complex in a lot of ways because it's not like you said before, I think you don't mention this. We don't work in a profession that is, let's just say, business as usual. It's a profession where you come in to work one day and you don't know what, what's going to be that day. I've had, I've been in organizations where I come into the office and I get a phone call from our CFO, Arturo. We need $150 million. We're going to purchase that building across the street. How do we do it? How do we finance it? We can finance it a couple of ways. You can do long term debt, which take longer to do. If you needed immediately, we can use some of our short term investments. We can do a bank loan, we can do a line of credit. There's multiple ways to do it. Right. But you have to do the analysis behind that. What's the best way to finance this? And then what's the long term goal then? I've been in organizations where our president has asked, do you want to grow? And the response is no, we want to get better. So that's a different way, a different strategy of managing your liquidity. One is you have to be ready for those calls that they may ask you for funds to acquire another company or purchase land or what have you. You have to have that liquidity available. And then on the other side is what we're not as aggressive growing. We can take some of our short term investments and really invest them a little out longer in the yield curve. Those are two different strategies. But you really have to understand the overall vision of our organization and that has to be communicated very well to, to the treasury folks. Those are all things that you have to really understand in order to really manage your treasury operations effectively.

Yeah. In addition to what Arturo just said, because he's absolutely right on, on every kind of point he mentioned, I would say some of the challenges I think that treasury is going to be facing in the future has to do a lot with fraud. A lot of people who kind of focus on trying to steal money from organizations have gone really sophisticated in their ways. Whether it's through email. Click on this link. You the email looks like it's coming from the President's office or the President himself. And they say, hey, click on this link. You need to send us a million dollars today. So that's one of the concerns that are right. These scammers are getting a lot more sophisticated. And also the other part of it is a part of visual intelligence. So now you have people, when you pick up the phone, somebody could be recording your voice and now they can use AI to translate your voice and probably write and try to get into your bank accounts. So that's another kind of challenge that I think treasury is going to be facing. I think that one's going to be something that people are going to need to start talking about more and certainly have to start addressing it because I think that's probably going to be one of the biggest ones. The other one that I think that a more current challenge that I think treasury is facing is certainly the economic conditions, specifically the high interest rate. As Arturo mentioned, part of what we do is we raise capital for projects. And in that process, the interest rate environment is so high right now that a lot of institutions, what they're doing is they're either holding off on projects that they were looking to finance or they're not doing their projects at all because it's too expensive to borrow money. Now it's not a good time to borrow money, but it's a great time to invest because now the on the investment side you have more opportunity to invest in private debt because a lot of organizations, their lines of credits are not being renewed because of the high interest rate that the banks are providing. So now there's opportunities for organizations to invest in private debt. I think those two are some of the challenges that are, that Trey is going to be facing in addition to what Arturo mentioned. And then there's also opportunity. Yeah, it's, that's generally how it works. There's a kind of indirect relationship with borrowing and investing. So if one costs more, if it costs more to borrow money, it's probably a good time to invest.

Yeah.

Generally speaking. Yeah.

I will add one more thing, Mike, if I can, on the challenges. I think one of the most challenging aspects of treasury is finding good talent. And you probably know this better than I do, Mike, finding people that have the critical thinking aspect, the analytical background. We work in a very highly technical field. And if you work for a bigger organization, you get more and more specialized. So like the big organization that you work for, the more specialized you get into like cash management or you get into a debt or you get into investments. And those are all highly technical. So finding good talent, finding people that have a certain level of experience is very, it could be challenging.

It's very easy to.

I, I want to add to this because I think after all, he's absolutely 100%. But here's the other question I want to pose to you, Mike. I don't know why for some reason every organization, when you look at their finance department, their treasury operations is usually very small. It's not as big as their accounting foe. It's not as big as their budget fold. Those two other functions within Finance, their staffing levels are significantly higher than treasury usually. Okay. From my experiences now, the question I would ask is why is that right? When you look at the level of responsibility of those functions within Treasury. Okay, I always share this with people. Not that I'm being biased, obviously I am in Treasury. But if I ask you, Mike, specifically, if I ask you, Mike, if you make a mistake in a when accounting and an entry, booking an entry, Mike, how do you fix that problem? Problem?

You go back and the thing is, sorry, just to go back and the answer to the question is, and in the nicest way, it's your fault. New treasurers, not the accounting entry that you.

That's about.

You can fix that. It's not a biggie. It's backwards. And everything else, if you get something wrong on, your effects can have a massive.

And that's exactly where I'm going With there. If you make a mistake, I've done this before.

Yeah.

So if you make a mistake in accounting, you're just gonna reverse the transaction.

Yeah. You can just back it out.

You make a mistake in budget, you'll do a budget adjustment. Okay. You make a mistake in treasury, there's chances that somebody's going to lose their job. Because we are doing, we are making real time decisions. We are actually moving cash in and out of the organization on a day to day basis. Millions of dollars. I remember when I was at the city of Long beach and this always made me very nervous. Come May and come November, we had the largest debt payment that we had to make. Imagine hitting enter to send $100 million out of your organization's bank account. $100 million. Okay. I don't understand why the staffing levels in treasury are always small.

I can answer it. So there are three points and I've had this before as well. Number one, you're a niche, because that's why this is niche podcast or niche as you might call it.

Correct.

Because it's a small niche, it's not as recognized, but it is becoming more recognized. So that recognition is growing. And actually that's one of the reasons why this podcast is popular, despite my good looks and everything else we know this airbrush can do. But actually taking forward the word of treasury going out there, doing the conferences, doing this, that's why the podcast has grown in its popularity. And it's not just me going, oh, look at this and everything else. 20 years ago we faced this situation where treasurers were, hey, look at us, we're the specialists. And they were getting an enhance the premium rate of their salary, which was higher. Maybe there's other people in treasury, other people in finance rather. And that was great. And they were like, yeah. But then they got put in the corner office. And I've seen For the past 20 years treasurers battling their way back out of the corner office to go, guys, we want to work with a business now. Whether you're in an FMCG or in education or wherever you might be, it's now slow. I would say that trend is reversing. I think AI coming back to that, I think that is an opportunity for a number of treasuries as well to do more with less. I think the role of treasurers is becoming more strategic. Everyone said, oh, all of the junior treasury guys, they're all going to be replaced by robots. They're not. All of the junior treasury guys are going to be replaced by Python programmers, they are being replaced, but they're going to supplement it as well because you're still going to need Treasury. Yeah, our treasury is going to slim down. No, but are they going to get more strategic and get more involved with the business? Yeah, that's exactly. And that's what I've seen, certainly. And I. So I totally agree with what you said and actually I'll make a point on AI, because when this comes out, we will have produced a feature episode on AI. What I did it for the Manufacturers Alliance Association a while ago, but actually we're bringing together lots of clips from different previous podcasts where different are implementing AI or using it. And I was. They were saying, oh, AI bots. And so it wasn't about that, it was about processing automation where people are actually using it. Dana from nasdaq, she they use it to scrape their FX exposures. A job that used to take people days now takes seconds and they can do it and they can iterate it and they're going to get it better and stuff like that. But I don't want to lose track and we're not that far off the end of the show because you guys are busy guys and things, but I wanted to come back to a talent that was brilliant. Both of you think I. I didn't even set them up, everyone. That was one of the cool things, attracting talent. I just wanted to ask both of you and go to LinkedIn profiles and yeah, we're not quite there yet, so attracting talent. Come and join us. We're an fmcg. We do really cool products. We're an Apple or something like that, or. And you can see it, you can touch it, you can feel it and everything else. With you guys and both being in education things now, maybe you could say your product is the safety, the progression of the university, the research, students, their progress, or how do each of you look at the jobs you do? Is it the mission to give back to the university and to grow it and to be custodians? Or how do you see each of your roles as treasurers within your organizations? Who wants to go with that?

One, the way that mine mine works is basically in three different things when it comes to my role near Treasury. One, how can I generate revenue? Two, how can I save costs? And three, how can we be more efficient? Those are the three, that's how I see my role here. But as far as the bigger picture, I would say we just have to do what's best for the business. And so whatever that strategy is that, that the executive leadership wants to implement. We have, we help them implement that vision in a way where it has to be what's best for the business. I deal with a lot of banks and banks we're constantly negotiating on different things, on pricing, on terms and conditions, on documents. And a lot of times you may have a relationship with a bank and you think to yourself, I would like to give you business. The truth is, when you look at the overall banking relationships, this bank over here doesn't have a lot of business, but they provide, let's say for example, credit. And credit is hard to come by at times. So during COVID credit got really tight. Banks just focused on their top tier clients. Right. That get a lot of business from them. And so credit has always been like a loss leader for banks. Generally speaking, that's what all the banks at least indicate to us. So a company like Caltech that has eight lines of credit, we gotta make sure that we partner up with the different banks outside of the credit so that they feel like it's a partnership.

Yeah. So they get some different parts of business.

It's spreading the wealth. It's very important. And having those relationships. That's one of the challenges I have here actually, because we're not like a super large organization. But trying to share the wealth and find different ways to partner with banks can sometimes get a little bit challenging. But at the end of the day, you do what's best for the business.

But when you're then trying to attract staff and you're talking there about talent and things like that, when you're bringing someone in, how are you then presenting why they would come and work for you guys because or work for the organization? Is it they're giving back or what are the reasons? And then we'll come to Fidelity.

I would say it's a combination of a couple of things. One is you get to be part of at least your cap tech. You get to be part an organization that is doing so many amazing things. We send robots to outer space. Okay. We do research on so many different things. You get to support, support researchers that are Nobel prize winners. And on top of that, it's also an academic institution. If you're looking for a place that is world renowned, recognized, and also gives you a very collaborative, teamwork type of environment, this is a good place for you. And on top of that, it's really stable. And when I first got here, I was being introduced to so many people and it was like, okay, how long have you been here? I've been here 25 years. I've been here 30 years. I've been here 35 years. So the stability here of the leadership and the people here is also an important thing.

When Arturo was referring to the, when the pandemic kind of started and how credit got tight, I think it's very important for people to understand that every bank that you talk to, when economic conditions are great, they're going to say that they can do every single thing that you need. Every single bank says that. Right, exactly. My philosophy for hiring banks, I don't hire banks to work during great economic conditions. I hire banks who are going to produce when things get tough. Okay. And so there's banks out there that say, oh, we have, our bank has $20 billion in capital. I can tell you that money is not going to be used for your organization. Okay. When things get tough. When things get tough, that $20 billion, $40 billion tends to $1 billion.

Yeah.

It's locked in the ship.

And that billion dollars, it's going to go to their top tier clients, as I mentioned. Okay. So that's important to mention.

Yeah.

In terms of talent, I will tell you that it is really difficult to find talent. I went through a process about five months ago of actually longer than that. I hired someone about five months ago, but it took me a year to find him.

Yeah.

Okay. Because of the skill set that we always look for and after touched on it, we are looking for someone who can adapt, someone who can take initiative, someone who's willing to work hard, someone who doesn't need someone to hold their hand in order to get things done. That's really part of, in terms of the soft skills, the technical skills, you want somebody who's really good on Excel, you want somebody who's going to know the banking online platforms because that's something that we use frequently. And then lastly, going back to soft skills, you want somebody who's really going to work well with others. Because our roles are really university wide. So we actually engage from everyone from the faculty member to the president's office and everybody in between is who we serve. So I think that's very important in terms of how I see the treasurer role. Not only in, in my prior experience and in my current experience, I would say that we are problem solvers. That's what I would say. We find ways to finance or raise capital or finance projects. That is what we do. And I can tell you that being in treasury for, I should say finance, because debt was always part of treasury for the better part of the last 20 plus years. People always come to treasury with their hands out. We're trying to find, we're trying to fund a program, we're trying to fund a project and all those things we certainly can raise money for. Sometimes people don't understand that if we fund one thing, we're not going to be able to fund another. Yeah, so that's the other second part that comes into play as a treasurer or an organization is the long term capital financing plan that you have to establish. Okay, give me a list of projects, give me the amount of those projects and tell me when you need the money and then get out of our way. We're going to make this happen. So that's what I would add.

Hello, it's Mike here from the treasury recruitment company. You've just been hearing my voice here talking to another amazing guest, but I just thought I'd jump in. I hope we're linked on LinkedIn at LinkedIn.com forward/mr. Treasury, Mr. Treasury to you and I. That means that then I can share our latest video blogs. I do them each and every week where I talk about how to get your next pay rise, how to improve your career, how to find your next role. If you're looking to recruit, I'm here to help. Connect to me on LinkedIn. I'll be looking forward to it. Just say Mike, heard your message on the podcast, thought we connect, let's get on with the show. So I just, and I want to come back often. We don't talk recruitment on the podcast, although it's up here and we, because we don't make it. That's not the be all and end of. It's one of the reasons I changed the outro which people are here in a minute that some people said, do you just do the podcast? I said, no, we're recruiters, we find people. So in a similar situation, you don't have to look for a year to find that person. But then people ask us a lot of the time, hang on, I can just go on LinkedIn. I'm good luck with that. Because they go on LinkedIn and they said, why does LinkedIn work? I said, LinkedIn does work for general jobs. It doesn't work. That's why I've been doing this 25 years. This is one of the bits. And again I was talking to two or three clients recently and they were like. And they said, look, you go on LinkedIn and what you will do is you'll get unhappy people. They said, oh, when I said no, they might have a happy demeanor. But I said that people are unhappy where they are. They're leaving a bad situation. They want to get out of their role. They don't care about your job. They're coming to join you. Maybe because they don't like their boss. Sometimes they don't like salary. But actually, salary is not down there. It's actually about progression. It's about balance of all that stuff. So that was one of the key things. And then people have said to me, how do you get them? I said, I'd get them through the podcast and get them through all the other things. That's why I go and do all the conferences. That's why I reach out to people like yourselves and connect. Because I'm talking to the pool of people that aren't necessarily actively seeking a role, but they'll find a role through me. That's where headhunters exist. That's where we exist by talking to amazing people like yourself. And then we bring your stories to life. And that's how we then expand the talent pool as well, which is where we talked about attracting people into the sector. You guys have been amazing, and I can't wait to see you. But what we're going to do as we wrap up each week's show, we're going to put your LinkedIn details in the show notes. So now I'm going to ask you for your takeaways. These are the people earlier on in their careers, maybe looking for the next role or looking. How do they develop themselves?

And.

Or maybe people like yourself, other treasurers, some of the advice you'd give to them as they listen to today, they're commuting or whatever, and literally we're in their ears now. Weird, actually, when you think about it. Arturo, what are you. What are the takeaways you're going to.

Get to the audience today when you work in Treasury? Obviously, we discussed it's a very technical field. Right. But I want to put that aside. That's already something that's a given. Right. We have. We know that treasury is a technical field and that you have to have certain skill set to be in this field. But I think I want to take a second to talk about leadership. And that's a very important thing for us. We've had people that have been very instrumental in our career that have helped us alive and lack. It's not often that we get a chance to recognize people. And I think I'm gonna. I'm gonna just go ahead and do it now, but I Wanna say that you come across certain people in life, in leadership role that really enjoy seeing other success. Those people are rare. And I think when you talk about leadership, it's a very important thing to also recognize that. And so I think for me, we came across one person who is that special person who really went out of his way to help us and really make sure that we were gonna succeed very early on where a lot of people did it.

So I'm gonna.

I wanna just do a shout out to someone and I wanna recognize this person and his name is Tony Cardenas, who is a U.S. congressman who really did that for us. And I want to recognize that because if not often, that we get a chance to recognize people that do so much good work for people and really support people. And like I said, leaders that enjoy seeing others succeed as much as they enjoy seeing their success. It's very rare. It's very rare. And so I just wanted to take.

A moment to make sure that we.

Recognize those people that do it again.

We'll put link to him in the show notes if you want to look at his background as well. I think as you say, it's important to shout about that as well.

Yeah. And Tommy, if you're listening, thank you for everything.

They will. And we'll send him a link to it. There you go.

How do I follow him after saying that?

Just say, all you need to do is say thank you to myself. I've been brilliant. I did my own. I made it all without the help of my brother.

Believe me, Mike, I've heard that plenty of times.

Believe me. You told me this before the show Torah, you said it was all about bananas. And now I feel like discussion.

What I would say is I obviously I also want to thank Tony for really taking the time to. To nurture us, for all his advice, for all his guidance, for all the introductions that he made when we were bankers to try to help us grow within our careers. Arturo is absolutely right. It's rare that you find good people that are willing to help you. Specifically in the area of finance. You don't find those type of individuals. Now he's not in finance. He was at the time, he was a council member for the city of Los Angeles. I certainly want to thank him for everything he's done for us. And so the other thing I would add to what we've just said is don't be afraid to take advantage of opportunities. What we do after mentioned early on, it's technical. It's very technical. And whether you're Talking about cash management, which is more on the operational side, and forecasting cash and so forth. Whether you're talking about investments, depending on the type of investments, that can be very technical as well, depending on the type of investments and the number of asset classes that you're investing in. Whether it's hedge funds, whether it's US equities, public equities, real estate, private debt, there's so many avenues in investing, or whether you're talking about debt, which is really what I think is probably the most difficult part of Treasury. And I say that because when you into, when you enter into a legal binding agreement, they will sometimes, most of the times there are covenants in those documents that reduce your financial flexibility for the next 30 years. When you're talking about that, you're really talking about the legal aspect and how the documents were put together. Very important. Having said that, the fact that it's, it is a very highly technical field. Don't be afraid of it. I would say find people within the industry that you can ask questions of, use them as resources and then work hard at learning as much as you can about every single function within Treasury. And it's not going to happen overnight, it's going to take many years because each single function within treasury has its processes and complications associated with them. I know we talk a lot about debt and that's because I truly do feel it's the most complicated part of Treasury. But when you look at issuing a long term bond and the number of things that go into it, from the financial analysis, the long term, financial planning and how that fits to your overall debt, how much is that going to increase your annual debt service payments? You look at rating agencies and then you look at the post compliance portion of it. Especially if you issue tax exempt bonds, there are IRS rules that you have to follow and ensure that you are in compliance or you would have to pay down bonds and depending on how much you issue, it could be a million or it could be 20 million. It just depends. Be resourceful, talk to people, ask questions and don't be afraid of the challenge.

Yeah, exactly as you said. That's what I was scribbling to hear the art for the challenge. And don't be afraid for it, embrace it. Yeah, and I think you guys both exemplify this. So amazing. We'll put your LinkedIn details in the show notes. You've both been superstars. Thank you very much for your loads of time there. It's brilliant. I know this will be a popular one and yeah, I can't wait to see you both when I met Next on the west coast as well.

All right, thank you very much, Michael.

So I hope you enjoyed that conversation with the Guerrero brothers. It was amazing talking to them. I remember recording on a Friday afternoon, having the best time with them, just talking treasury about their brotherly rivalry and everything else. And then I went to Nashville for the AFP conference and who was there? It was them. I caught up with them. We had a nice conversation. They actually came across to the stand was interesting. I tried to do a number of different interviews, but the audio just didn't come out as well as I managed to recover most of it. So apologies for the. The audio quality. It's not the best, but you get to hear me catching up and finally meeting face to face with Arturo and Fidel. Amazing treasurers, the two of them, in higher education and everything else that enjoy the rest of it. And yeah, again, I would love to have you on the podcast. If you want to be a guest, let me know. We're getting more and more amazing guests, so come and join us. Anyway, enjoy the rest of the episode and speak to you soon. I'm joined by the guy, my first ever interview with Twin with two guys that have made amazing careers. Just one of my funniest Friday afternoon here at the. At the afp. How's it been?

It's been a good experience. I really enjoyed it. I think what the AFP does is bring brings together people from all over the world, thousands of treasury professionals or related to treasury, and just being able to tap into their minds and learn about how they approach certain things and being able to really learn on how they also manage all their challenges as well. All very similar to what we're going through. Although there are different industries and different sectors, we have very similar challenges and so that's been really great.

I think that we were just talking then about and I was asked yesterday, they said how come you've managed to do 350 podcasts? And you guys were about 10 episodes ago. I've said this so many times that 10 treasurers here, right. They'll do the same job exactly the same way. No, different exactly that. Any similar experience to the conference?

I think it's a great experience.

I think the AFP creates the younger quality experts within our field and it's really good to hear from other people as well.

The speakers are top notch, I would say, from a technical perspective, from blinking perspective, I think the AFP has really brought together just a bunch of great.

People all around and When I talked earlier on in the podcast, Dan Ferguson, good mate, been on the podcast a few times. He said to me, I'll show you about AI, anything AI he was going to but it was also a gifting process. He said went to some of them, they were great. Some of them were a bit.

Yeah.

Is that applicable to us and things. Is that what you guys have been looking at or what are the things that were top of mind for you coming in?

I feature me like I said earlier, every single trade operation. Similar concept.

Yeah.

Depending on the industry in the sector, but everyone has similar challenges. For example, right now was really I enjoyed the session on cybersecurity and how that impact and the policies you can put in place and things you can do to really mitigate the risk. And so that is universal and all across all industries. So again, even though it's treasury, that's very similar across all industries and sectors for me.

I really enjoy the clarity portion of the session, really looking at how they.

Go about investing the short term.

I said this before in the podcast, right? We all do the same thing.

What I found is that in this case from short to mid to long.

Investing, they just label it a little differently but the principles are all generally all the same.

That's all I'm going to take for you guys. I get to meet you in real life.

Pleasure meeting you, mate.

I hope you enjoyed this week's episode just as much as I did recording it now. Don't forget to subscribe on your usual platform with that Spotify Apple podcast wherever you listen to your podcast so you never miss a future episode. Want to stay ahead in Treasury? Fantastic. Sign up for our newsletter. There's a link in the show notes. You'll get instant access to my pay review action plan for you treasury professionals. Free guide to help you prepare for salary negotiations. Maximize your salary at your next pay review. You'll also get early access to our 2025 Treasury Salary Trends white paper. And if you take part in our salary survey as well, @treasurysalary.com we can send you our January review of salaries as well. And by signing up to the newsletter, you'll get access to our cv, resume templates, career tips. What could be better? It's amazing. If you're looking for a role, go to the website treasuryrecruitment.com or maybe even join us at any of our 2025 events and conferences. We're right the way across. We're going from the US back through the UK right the way across Europe. Dublin. It's gonna be a great year in 2025, so looking forward to it. Go to our events page, treasurerecruitment.com forward/events and sign up. Meet us in New York in March or anywhere else you want to see us in the rest of the world. Thanks for listening. Until next week. See you soon.