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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.

In this week's show, I'm joined by Tom Hendry, the senior vice president and treasurer for New York Life Insurance Company. New York Life is a mutual life insurance company and the largest in the United States. For 180 years plus, they have been putting policy owners at the center of everything they do by offering a wide range of insurance investment products and services, including life insurance annuities, investment management company known for its strong financial stability and high credit ratings. But we're going to get into that later on in the show and Tom can explain a bit more. But Tom, if you would take us back to the beginning of your career and how you first got started in Treasury. Over to you, sir.

Good morning, Mike. I'm really delighted to be here and talk to your podcast audience. I have had a bit of a long career that's taken a lot of twists and turns along the way. Coming out of undergraduate school, I went to work for an investment banking firm that's no longer in existence called Drexel Burnham Lambert, where I started off in a kind of a trade operations role in support of the bank. I got a dose of reality because Drexel Burn, for those who have been around long enough, went bankrupt back during the Michael Milken days and big insider trading on Wall Street. So I was there and they shut the doors after I was sort of on the ground just for two years, tossed out to the street looking for another job. I've had two different careers at Prudential Financial, one right after Drexel Burnham Limbert, supporting the investment management business, I had an opportunity to go into the asset liability management side of Prudential where they're trying to put an investment portfolio to defeat the liabilities that they're underwriting. And it was great experience for me. From there I went on to the commercial mortgage lending business at Prudential and again, fortuitous timing. I went into the commercial mortgage lending, that is thinking I was going to do loan originations, but the real estate market, especially in New York in the early 90s, collapsed. Yeah, I found myself doing workouts as opposed to working out, which is, to be honest, which one of the messages I want to get to at some point is you learn the most when you're working in stressful environments in times of not smooth economic conditions, but turbulence.

Yeah, just on that. What So I know what a workout is. Can you explain for the audience? There might. Some will not understand, some might not. What's a workout?

Sure. So I'll start with. You've got the company. At that time, Prudential Financial made a mortgage loan on a commercial office property, let's say in Manhattan.

Yeah.

And it goes into workout because let's say the building isn't fully leased so the borrower can no longer service the debt. So Prudential goes in, tries to work with the borrower. It doesn't want to necessarily foreclose on the property. It wants to work something out where you extend, restructure the loan. Worst case scenario, if you have to as a lender, you will take possession of the property and it becomes an asset and then you liquidate it in order to satisfy the debt. So that's what it worked out. And you're working with the lawyers and bankers and the borrower. It's a lot of, like I said, good, really good experience. At that point I'd made a decision. I wanted to go back and get my graduate degree. So I went back to NYU here in the city, got a degree in finance because I wanted to make a career in financial services and I wanted to get my mba. Interesting. As part of that journey I came out and I really didn't want to go back into hardcore investment banking. I ended up going into consulting and it was really, I worked for PwC which they had a program where I spent half my time doing consulting work and half my time doing what's called the audit or assurance practice. I will say the most interesting aspect of the consulting, I was on the financial side where we were advisors on M and A transactions and I specialized in company valuations, spent a few years doing that. But consulting is really tough on a family life. So we made the sort of a family based decision to go back into the private sector. And I found myself going back to Prudential Financial because at that time they were taking the company public, they had a brand new CEO and I was like, wow, that could be a lot of fun. Take a $30 billion mutual insurance company to the public sector. And that was great experience. And while I was at Prudential I had the opportunity to move around. I went back into the ALM business, our asset liability management. I went to then from there to their, what's now called pgm, which is their global investment management business. Then had an opportunity to work on a Big M and a trade for Prudential bought Cigna's retirement services business. And as a result of that, I joined that business and began to specialize in what's now called pension risk transfer. So, Mike, it was interesting while I was in that business, so I was no longer in finance, I went into the business. We did what were called longevity swap trades with firms in the uk. Right. So the UK was going through what I'll call privatization of the pension businesses that were on public balance sheets. And the way they approached it were they looked for an investment solution and then somebody to take the longevity risk associated with pension plans. So we underwrote those types of trades as well as focusing on the US market, which was a little different. So that was really fascinating. Then I made the career decision to get back into finance and join Prudential's treasurer department and I became the treasurer of their life insurance businesses doing capital related transactions as well as partnering with the business on trying to improve the return on equity associated with their operations.

You touched on the fact, you said, now I understand this. Some of the first roles I ever recruited when I got into treasury recruitment was, right, we need a head of ALM Asset Liability Management, which is the internal resources of a bank of group risk. And you're looking at that bank or insurance company. And then, so that's like the Treasury Department. And then people said, do you do banking? We do, I do some ALM and group treasurers. But you'd gone into the group treasury of the life insurance or the insurance group. What was that like for you? That was your first mainstream treasury role as such. What was it like then?

It was really great. Like they brought me in to again, sort of look at the balance sheet and the capital position and say, we're trying because the business is trying to increase their return on capital.

Right.

So is there a way you could free up capital or look at reinsurance transactions or other types of structures that get capital relief and transfer some of that risk? So I spent a lot of time looking at opportunities, partnering with banks and structuring deals to do that aspect of it.

What was treasury like at the time? Were they well established or were you new or what was it like?

Yeah, it was. Well, Prudential was still in its early years of sort of being a public company and attacking the capital and the balance sheet from an efficiency perspective. So they brought in some people like myself to really be creative, right, to think outside of the box. They wanted to go beyond what had been traditionally treasury operations and the mainstream Cash movement, negotiating, lending facilities and the like to doing something a little bit more creative and bring in new ideas and a willingness to partner. So really evolved from what, I'll say a cost center to what we would call a profit center.

Yeah.

You brought in a commercial orientation, Mike, is some of the terms I like to use as opposed to an internal orientation.

Yeah. Making profit in that way. And as you say, it's a commercial operation rather than just right, save cash and the money off to Treasury. They invest it. Thanks very much. And that's it. Fire and forget. It's like.

Yeah.

And then how did your role then evolve? Because again, when I looked at my notes, it sort of. It did change. It wasn't just do Treasury. That's it.

So I had the opportunity then to come to New York Life.

Yeah.

To be the treasurer of the entire enterprise. And the role, at least here at New York Life was much more expansive. Yes. You were the treasurer of the company. We're a mutual company, so we don't have a traditional investor relations group that a public company has when you deal with analysts. So the treasurer here, we also had an IR hat for investor relations. I ran the company's corporate financial planning and strategy teams in addition to the treasury operations. So it was a really fulsome job that quite frankly, over my close to 13 years here, Mike, has continued to change. Like I just recently in the last 18 months picked up the asset liability management function as well, which used to be kind of a separate and distinct. But there's a natural home under the treasurer's organization to do all of those things. So it's really been a very enriching job.

Then part of that role, as you and I talked about on our pre call, is handling relationships, just as you say, with rating agencies, with regulators who are coming at it from different angles as much as anything. How do you approach those? Let's separate them for a moment. What are your conversations like with. I know the rating agents might watch this, so we got to be careful with regulate. But you know, how do you approach those conversations when the market's going all over the place and everything else? And then we'll do the regulator bit as well. Which. Whichever order you want to take in.

Sure. There. There are some similar themes, Mike, sort of answering that question. And quite frankly, it even extends to businesses. It's just. It is managing like a good open lines of communication.

Right.

Do you. You really got to establish trust with these partners, whether it's the regulators, the rating agencies, the banks or anybody else. Each One's got a different orientation. So you really just need to understand where they're coming from, what they're interested in, what their role is and it's engaging them proactively.

Right.

Nobody wants regulators and rating agencies don't want to be surprised.

No surprise.

They're considered insiders so you can share material, non public information with these groups.

Right.

So establishing deep relationships, always picking up the phone. They'll pick up the phone when I call them and I always make a point of picking up the phone when they call me.

Right.

Because it's great, it's easy when times are smooth dealing with both those. But when you're in turbulent markets, they've got a lot of questions.

Right.

Because they're concerned about your rating.

Yeah.

So we want to be able to engage proactively, allay whatever concerns that they might have with regarding our balance sheet or our business operating model and how we're sort of working. That is the key to managing those two relationships. On the flip side. Oh, go ahead.

Oh, no, go. No, go ahead.

I was going to say on the flip side, dealing with the banks is a little bit different.

Right.

They're there to help us, but they're also trying to make profits at the same time.

Yeah.

But again we have a need to engage. They extend credit to us, which is very important and then they bring certain expertise when we're looking to do certain types of transactions.

And going back to that conversation piece with the regulators with ratings and stuff, if someone's new to their role, they walked in the door. They're like they're just being handled. Maybe they've handled it at previous companies and things like that. What questions do you need to prepare for? What's your checklist, if you like, of.

Right.

This is what they're going to ask first. Is it liquidity? I know that you're talking about that later on today, but what are you getting ready for?

Yeah, usually it does come down to what, I'll use a banking term. They're concerned about safety and soundness of the insurance industry. Having dealt with the regulators for a long time, had an idea of what sort of their hot points are. They want to make sure that we have a strong balance sheet, that we are going to be there comfortably to be able to make good on the promises that we're underwriting both in the near term and in the long term and that we have sufficient for the regulators, that we have sufficient reserves. And reserves in an insurance company are the liabilities on the balance sheet that are sufficient. To back the obligation that I'm making. Because just again, for your audience, we are writing promises, some that are three and five year in nature, but some of them are 30 and 40 years out into the future. Yeah, right. And they want to make sure we're going to be around to make that payment in 40 years. Right. So it's liquidity, it's capital adequacy, it's what's going on in my investment portfolio. What sort of risks are you taking? How are you mitigating those risks? Those are the things that they'll engage on and then they're going to ask questions about do you stress your balance sheet to ensure that you can survive certain scenarios? And that's one of the critical underpinnings of some of our risk management. And that's what they're interested in. And quite frankly, the regulators as well as the rating agencies are both interested in those two types of things.

And has that been this was going to nicely segues into, has that been the biggest learning for yourself or what's been the learning curve? Because you had this experience, experience. You went out, then you came back in and you were given the number one. What's been the learning curve for you? Again, someone's listening today, they're experienced treasurer. Strap yourself in. This is the stuff you've got to get ready for.

So, Mike, I would say over my 30 plus year career.

Yeah.

You know, the first 20 of it were related to investments.

Right.

So when I started covering Prudential, the insurance businesses, Mike, I had to learn what these insurance products were and learn sort of the reserve. So. So, Mike, I spent a ton of time with the actuaries who really understand these types of things. To understand what are the features that we were writing, how do these things play out in the long term? But fundamentally, one of the things that's helped is with that investment career, everything can be boiled down to a series of cash flows, Mike. And understanding the cash flows and the variability of these cash flows really help you understand the business and the liabilities. But maybe to put a finer point on the question yet, you have to spend time learning it. You have to go to school on the subject matter and then once you learn it, you can engage fluently on the topic. But that takes time and energy and effort.

Right.

Which is kind of at some point we'll talk about sort of words of advice or career type things orientation. But that that lifelong learning approach, intellectual curiosity are some of the things that I think separate individuals. A successful career trajectory versus ones that don't does that answer your question?

It's brilliant answer. That's what I'm seeing here and absorbing it. That's why I've done 370 of these things. Each one has been different. But also every time you walk away with nuggets just with little bits of gold from different treasurers. Now with yourself as well, this is one of the things we had Dana Laidhold on the show, great treasurer from Nasdaq and remember she has a number of coaches and that help her and she's talked about openly on the show that she was in New York where we did our live event a year and a half ago, whatever and been back. One of the key things she talked about was managing upwards and herself and how she presents herself for, as you say, to different parties with yourself. How's that been? Because you, you're, as you say, you're an experienced treasury. You're used to a lot of these things. But again, for someone else, that's perhaps not. Should they prepare for or what are the tips you give there?

Sure. I would start with always with saying know your audience.

Right.

Right.

So whether you're dealing with the board of directors or one of the subcommittees that you might have to report to or the senior management of the firm, understand what their sort of as it relates to the board, what's their fiduciary obligation? How are they going to approach this? What do you need to tell them in order for them to be able to do their job effectively? You approach the C suite the exact same way.

Right.

And then you approach, I approach my peers, CFOs of the businesses in a similar way. Know the audience, what are they interested in? How can you help them? And then how do you manage the organization writ large your direct reports down into the organization and you have to tailor your, I'm not going to say communication style, but you have to tailor the level of content and how you're delivering the message differently. Sometimes with the board you're in education mode because. Right. You've got a group of individuals who are in, they're engaging with the company six times a year versus the C suite who really know the business.

Yeah.

And then if you have to toggle down where as part of your role as leader is teacher, you have to educate your organization on certain things and bring them along. So, so before you walk into those forms knowing that audience makes all the.

Difference and without are there any missteps or any places you've not gone wrong, but you've gone a direction and then thought afterwards. Oh yeah, I should have gone this way or that would have been better.

Yeah. Listen, I've had times where I've thought there was a general level of understanding of a subject matter and gone too fast.

Yeah.

But you know, you can. I'm not going to say as a someone delivering a message, there's two forms of feedback. There's the overt feedback where someone stops you and tells you like, listen, Tom, I have no idea what you're talking about me. The 101.

Yeah.

Or you're looking at them and their eyes are just. They're lost. So you've got to be able to read those cues. So listen, I've. Everybody sort of made those mistakes. I've made those and as well as sort of same thing as I'm sort of educating people. But you try to pick up on it and if you don't, you try to invite those questions along the way. So.

And we'll soon, we'll get to the future treasury, but I don't want to do go there yet. What I want to do is go back to think back over your treasury career. How has it evolved sort of thing. And certainly for me, when I first started in Treasury, I think was his own worst anyone state pushed itself in the corner. Look, we're the specialists, look at us. And then it's like battling his way back out. I've talked about that a number of times. It's like want to be part of the mainstream of finance, which I think it's done now and it's certainly much better than it used to be. What have you seen over your time?

Yeah, at my. That's exactly what I have seen. It has gone from an area that had been at times thought about more as a back office type operation necessary to a value added business partner for the enterprise. Part of the strategic conversation, which is required a retooling of some of the skill sets associated with it. And quite frankly that journey, Mike, has made it a much more enriching job and role and invited a whole host of new people into the career who probably never thought of it that way. And that's just what I'll call the approach to Treasury. Then if you overlay that, technology advancements, right. The capital market solutions, right. Sophisticated solutions which again have added value but have required a stepping up of the skill sets of the treasurer of the company and the treasurer staff that operates the function on behalf of the company. And I don't see that slowing down at all, which is one of the reasons why people have to keep up to what's going on in the world in the industry.

Right.

Because there's a couple functions. While I focused a lot on the value add and strategic aspect of treasury, there is also a very important, what I'll call stewardship or risk management role that you have on behalf of if you're at a public company, your shareholders or if at a mutual companies like ours are policyholders. They're counting on me to execute my job in a prudent fashion where we're not taking undue risks.

Yeah, yeah.

And with skill sets as well. Where have you seen the evolution of that? I just wanted to hone in again. I've seen it firsthand when I'm recruiting, when I'm hiring and the things I'm asked for now very different to like well five years ago. But how have you seen that from your position as the trader?

Yeah. We're looking for talent that can do multiple things.

Right.

I'm going to come back to do people have a good understanding of business.

Right.

Are they commercial, commercially orientated? Are they capable of doing a bunch of different things and learning? Those are the foundational skills that we are looking for when we're hiring into organization. I don't want somebody who's just coming in to do wire transfers or reconcile bank accounts. Mike. We can do a lot of that in an automated fashion these days and much more of it's getting automated as we go further. I want people who can learn to read a balance sheet but they could do lots of different things.

Right.

So multiple tools, willing to learn things but again partnering and then the ability to work with others and partner Mike is a really important skill.

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You and I spoke just briefly before and we talked about it the other day that technology marches and it doesn't slow down. If anything accelerates and you're probably getting even yourself. I'm getting deluged with AI. This AI, this technology, this machine learning, this, all the different areas and people talk about it's how you use them, not actually not going to be replaced by them, Although some of the processes will be replaced by that. You touched on it before that. When people are hiring, they need to think about this. How are you guys doing it and what are you thinking externally as well?

Yeah. So New York Life, like a lot of companies are trying to figure this out. Right? It is. We know it is going to be very impactful and work five years from now is going to be dramatically different than it is today. So we're in. I'm going to say we're embracing AI as opposed to. We're not trying to be scared of it.

Right.

And we're trying to figure out good use cases for it. And we're. And as a result of that, were saying, I want to empower all levels of the organization, including myself, to come in and try to do things every day that I didn't do with AI before. Can I do it with AI today?

Right.

But Mike, exploration and giving people time, space and training to do that. And if we talk in a year from now, I bet you I would have a bunch of test cases where we're seeing good use for it.

Right.

And it's also. It was only, what, two, three years old? It was like.

Yeah.

Appeared and it was like, suddenly everyone's doing it. And then I did an episode for an association where we took lots of the AI snippets from lots of previous podcasts and it was. It was becoming more and more prevalent and now we talk about it on every episode, but we just. It's not the be all and end or it's an element, just as it has been with treasures and exposure management and all the other things. But when we did this session and I. The funny bit was there was one of the guys there who said, I don't believe in it. I think this is it. I'm thinking, good luck with that. And actually I was thinking if you're just going to be a naysayer that you've got to. But treasurers generally, like yourself, a great translators and users of these tools. And it seems like, as you say, you're definitely seeing the benefit.

Yeah, I. One, one thing I will share, though, is like, I am an optimist at heart.

Yep.

So I'm looking for the positive in it.

Right.

And how can we use it? Being conscious of where can it be problematic? We know these things can hallucinate if you're not doing it, but understanding the risks, but embracing the power of it. And Mike, I'll tell you this. If you have to do that to Survive because your peers are going to go straight past you.

Yeah.

If you just play the wait and see game. And that's going to be a bad place for some public to be because it's going to be hard to catch up.

And you've touched on it a little bit overall, and I want to do this before we get towards the end of the show, but the skills that you had before and if you know what do you think that you've seen a difference with tomorrow's treasurer, that they weren't even on the radar when you started out, if you like. Now you're looking at this. We've touched on technology. That's obviously a key one. Other areas I've certainly seen that treasurers. It was never about communication. It was less of are you technically strong? And everything else. Now it's moved further and further up the job description. Can you. Exactly as you said about, can you talk to your shareholders? Can you talk to the rating agencies? That used to be about fifth on the list and it was third and now it's usually first or second. But I'm recruiting at the senior level. For yourself, what would you say?

Yeah, I think you are 100% on point at the most senior levels of the treasury organization. Your ability to communicate effectively across lots of different audiences within the company. The other skill that I would put at a very high level, the key to success, is your ability to partner with business leaders and meet them where they are. This is where, if you're going to walk in, I'm going to talk to the head of the insurance business or the head of the annuities business. They want to know that I know their business, I know how they make money, I know how they distribute their products, I know what their pain points are and how can treasury bring value to their organization? How can it. How can we make their products more competitive in the marketplace? Now, I can't make their operations and their servicing more competitive, but we can deliver things to their investment portfolio that help them win business every day. So that is another really critical function. And I'll do that in conjunction with the business unit, CFOs. So communication, business understanding and business partnership. If you want to be an effective treasurer at a Fortune 100 company, you have to have those in spades. Now, whether I have them or not is somebody else to decide.

But I've got to say, I think you're doing pretty well. We've got it here on the. We've got it on tape. So I think, yeah, you're doing pretty well now. So it's fine.

Thank you. That's great.

Okay, I know you're off to a speaking session soon, so what I wanted to do was as I talked about, we'll put your LinkedIn details in the show notes. But before we do that, so with yourself, advice for those guys and actually we'll probably split up three ways. So junior guys getting into this, we have those listeners that are getting their CTP credits and wanting to learn and things like that. Then the mid levels and then the more senior, some of your peers. How would you give sort of advice to each of those groups if you like, or how you've been thinking about a few days?

Yeah, let me sort of maybe just I'm going to bundle a little bit of the early career and mid career people today. I'm going to start off and you shared something in a prior call, Mike, that really resonated with me. But it's you own your own career, right? You've got to, you've got to take it by the reins and manage it actively. No one's going to do it for you.

Right.

If you don't do that, you're just going to meander through your career life. Be open to doing different things in your career. The treasury function for some deliver on some of the skills that I shared earlier. I worked in a lot of jobs in a lot of places. I pretty much, if somebody asked me to go do something, I said yes.

Right.

And I looked for the good in those roles. Some of them weren't the sexiest roles or the most exciting, but foundationally they built a bedrock that has helped my career trajectory in the long run. So. And you're in it for the long game, you're not playing the short game, you're playing the long game.

Right.

Keep those things in mind and it'll help.

Right.

And then lastly, I would say bring a positive orientation to everything you do. People want to be around people with positive energy, not negative energy and solutions oriented. You problem solve, help people solve their problems as well as your own. That's my advice sort of for the entry and sort of mid level. At the higher level, it's investing. Be commercial, be business orientated. Do you work, understand your audience, understand what businesses your company is in, how it makes money, how it distributes products, how it prices products, how it manufactures its products. Know those things because then you can execute your job or your craft with much more authority. And ultimately if you do those things, you're going to earn the respect of the business leaders. Mike, I'LL tell you a funny side story. I was just at a meeting where I was in the room and I'm going to say the traditional finance people, the business unit, CFR company, cf, we were all sitting on one side of the table and the business guys were on the other side. And one of the business guys looked at me and said, tom, what are you sitting over there for? And the CFO of the business said, well, Tom's part of the finance organization. He's like, no, he's not. He's part of the business. And I was like, wow, that just made me feel really good. Anyway, so if you can get somebody to say that on the business side, you're doing okay.

So, yeah, that's the aim. I think it's great. And we're going to put a link to Emily Howell in the show notes. Be the CEO of your own treasury career. I want to, I want to own that myself. I want to take it by Khan. You know, she, she did that as well. But no, as you say with your story, if you can be sitting, maybe if it's a big table of that you're sitting at the end, not the chair membership, but you know, between the two of them, you said, look, I'll help you guys. Let's get you guys together. That's a great place to be.

Yeah, yeah, absolutely. That's where you add value. Mike, at the end of the day.

Tom, amazing. Thank you. I knew it would be like this. Thank you very much for your time, sir. And again, you shouldn't have addressed that for the show, but I'm glad I'm going to make that address code for the future that people have to get a suit and tie on. I mean, that's it. It's great.

Let's try to set a standard over here.

Oh, exactly. I love it. Thank you very much, sir.

Thanks. It's been wonderful experience. Thanks for your time.

Thank you.

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