Greg Kelly: On Friendship, Banking and Integrity (A Fireside Chat With Tom Matlack)

In this fireside chat, Tom Matlack talks with longtime friend and Merrill Lynch/BofA investment banker Greg Kelly about building a 35-year career on Wall Street—navigating IPOs like The Providence Journal, living through the financial crisis and 9/11, shifting from “working the hardest” to owning his career, and why integrity, teamwork, and attention to detail matter more than raw technical skills. They dig into how sports prepare you for the unfairness and politics of real life, what great analysts actually do day-to-day, how to build genuine long-term client relationships, and why education and curiosity still matter even at the top of finance. This conversation is part of Tom’s summer “Fireside Chats” series for his Wesleyan University course, created for first- and second-year college athletes who are beginning to imagine careers beyond sports; through candid stories with leaders like Greg, the series gives students a practical, unpolished look at entrepreneurship, leadership, and building a meaningful life after the games stop.

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Tom: All right. Awesome. Greg, it’s great to have you, man. So maybe to start with how we know each other. Do you remember the first time we met?

Greg: I don’t. I mean, yeah, you tell me. No, I don’t.

Tom: So Greg and I went to business school together. So it must have been 1989. We both graduated in ’91. And Greg was one of my best friends at business school.

He—just by the way, I don’t know if you knew—Greg’s actually the godfather of my son Sheamus. And Sheamus is getting married in August and going to Harvard Law School next fall.

Greg: Yeah. He, um, it didn’t take him long to overshadow you.

Tom: Exactly.

Greg: And I take my god-parenting as the principal driver in that.

Tom: Yeah, exactly.

Anyway, so what I like to do is try and ask some big questions—actually some kind of hard questions—and then kind of circle back to the origin story.

Greg: Yeah.

Tom: So, you know, by the way, I’ll just say for these guys a couple things. One is: you’re very lucky because Tom is truly one of the greats, and although I don’t remember the exact minute when I met him, I certainly remember a lot of our time together at business school and since then. And he’s as good as it gets. So hopefully you’ve figured that out by now, but if you haven’t, stay close to him.

Tom: I appreciate that.

So, one question that—I don’t know, like, I just turned 60, or last year I turned 60. So I’ve been doing a lot of reflecting. I’m sure you have too, because we’re kind of getting old.

Greg: Yeah.

Tom: You know, as you look back, what are you most proud of in your career or your life—either way?

Greg: Yeah. So it’s definitely life and not career, and it’s my kids. So it’s probably the same thing with you talking about Sheamus. But I’ll tell you, being a parent is one of those things that somehow everyone always figures out, but once it starts you feel completely unprepared for it, and then you spend the rest of your life trying to get better at it.

But like with Tom’s kids, my kids have done all right—not without ups and downs—but have done all right. And that’s probably the most important thing, but also the thing I’m most proud of.

Tom: Yeah. I’m getting this memory: we took the kids to a Yankee game when they were like really small and your son was screaming in the car and, you know, it was hell. I mean, it was hell. The kids were little and they all turned out all right. Like, I don’t know how that happened.

Greg: Exactly.

Tom: So, these guys are all freshman, sophomore athletes. They’re basketball, soccer, and rowers.

So if there’s one thing that you did wrong that you’d like to warn them not to repeat, what would that be?

Greg: That’s a good one. I think I… notwithstanding the fact that you and I have stayed in touch for a long time, I think earlier in my career I missed a lot of events because I “had to” work. And as I look back on it now, that was self-imposed.

I, at the time, told myself I had to work. It was probably that I was choosing to work. And although I didn’t know it at the time, in hindsight, it really didn’t matter. So I think maybe one of the things I regret, and one of the things I’ve gotten better at over time, is just balancing when you have to do something—work or otherwise.

And you guys probably see it in sports too. Obviously, there’s a lot of time. And by the way, for background, I have three kids, but one of them played club lacrosse, and my two daughters both played lacrosse at Colgate. And so I get the time commitment, sacrifices you make. But there are probably also times where you just have to make the right choices. Sometimes I didn’t.

Tom: So on the flip side, what’s the most fun you’ve had at work? Like, what was your best day?

Greg: Yeah. It’s… some of it, like announcing deals, is fun. So sometimes it’s been when something you’ve been working on for a long time is going to happen.

But the best things are—interestingly—days when I’ve gotten letters from people who are resigning, which is an odd thing. But in investment banking, a lot of people just come here almost like junior college. They come to work for two or three years and then go work at a hedge fund or a private equity firm.

And I’ve been lucky enough to work with some great people and get a letter from someone talking about the impact you’ve had on them. It’s probably related to the kid thing, but that again is about as good as it gets.

Tom: What’s like the coolest deal you worked on?

Greg: That was the last question. Come on, man.

Tom: Come on. Besides that—we’ll get to that in a second.

So, just for background for the guys: we graduated in ’91 and I’m really not sure how exactly it happened, but I ended up being CFO of The Providence Journal, which is this large media company in Providence, Rhode Island. We sold our cable business for a billion four and then we had 12 TV stations and a bunch of other stuff.

And after 175 years of being private, I convinced the board to go public. Like, I thought that was a good idea. And so part of what happens when you do that is you have what’s called a bake-off. So you basically… you know, a group of them from different banks come in and pitch their wares to take you public.

Part of that is their data on how good they are, who the banking team’s going to be, who the stock analyst is going to be, etc. And so I can kind of rig the deal, because I’m pretty much calling the shots and my friend Kell is working at Merrill Lynch. So, like, we’re not going to hire anyone else other than Merrill Lynch, for God’s sakes.

So it turns out that Kell gets to take our company public, which was one of the coolest things ever. And so, you know, we listed on the New York Stock Exchange. I got to go watch our stock open on the floor of the New York Stock Exchange, ring the bell on the New York Stock Exchange. Like, it was really pretty cool stuff for a 31-year-old.

So I guess I’m just wondering what you remember of all that, because it was a long time ago. It was 19… yeah, it was 1996. But what were your recollections of that deal and how it went down?

Greg: So I remember a couple things. One is your path to CFO. And you guys might not appreciate it now, but it doesn’t just happen that they decide to make someone CFO when he’s 31 years old. So Tom’s kind of always been remarkable, but that was incredible.

I remember you were in our offices together with the CEO, and I had this kind of senior old banker—who’s probably our age, but he seemed really old to me at the time—Barry Freeberg. And your CEO asked this question: “What do you think? Should we launch the IPO or not?” And I remember very clearly Barry said, “I’ve been around for a long time, and I’ve seen the markets go up and I’ve seen the markets go down, and I think you should launch your deal.”

And your CEO turned to me and said, “Wow, stick with that guy. He’s really insightful.” And I’m thinking, he just said nothing. And yet because he said it and he was so old, your CEO was like, “Wow, that guy’s really smart.”

Tom: Yeah.

So this is kind of interesting—I’m sure these guys don’t quite understand the dynamics. So what happens is, like, we heard about this from, we actually had the CEO of our technology group on earlier this week, and we talked about his road show and all that.

But what you do is you go out on the road and you pitch your company 10 times a day for three weeks. It’s exhausting, all over the world. And after you make all these visits, institutional investors put in their bids to buy your stock. And they often put in their bids at different price levels.

So you have a book of orders for your stock. Hopefully you have many times the amount of demand that you have supply. And then, you know, the banker like Kell comes back to you at the 11th hour and says, “Well, you think your company might be worth—in our case it was worth a billion dollars—but you think your company might be worth a billion two, and we might be able to float your stock at that level, but we think you should discount back so that on the first day of trading there’s a pop and we have momentum going forward.”

And so part of—I think I don’t know if that was the same conversation you’re talking about—but you do have this sensation at the very end like the banker is kind of squeezing you because, you know, basically the buy side who are buying your stock are also their clients. So they also want to make those people happy at the same time while you’re paying them millions of dollars of fees.

Greg: Right. That’s the way it works. So there—yeah, exactly. This is how the sausage is made.

Tom: So on that last little piece, when you’re pricing an IPO, how do you think about what the discount should be and how do you rationalize that to the company who you’re taking public?

Greg: Yeah. And by the way, Tom described it perfectly, but one way to think about it is: when you’re buying stock in a company, if you’re an investor, you can buy this new company that Tom’s out there pitching, or you can buy one that’s already traded that you own. You’re just thinking about how to make those investments.

And usually, because the new company has more risk, is a little uncertain, is not as well understood, usually investors say, “If it’s all fair-price equal, I’m going to buy what I know. And so if you want me to buy this new company that I don’t understand as well, give me something.” And usually when they say “give me something,” that’s money—let me buy it at a discount.

So you may look around and say, in the fullness of time, all these companies are going to be worth the equivalent of a billion two. But if you want them to buy this one, you have to sell it to them a little bit cheap. What you try to do is what Tom described: get enough demand that you can minimize that discount.

The other piece of it that gets a little bit complicated is, for both the company and for the bank, all demand’s not equal. And so blue-chip investors like Fidelity and T. Rowe have a little bit of a halo around them, and companies prefer to have them owning the shares versus ABC Hedge Fund.

Another client of mine in an IPO—we did the IPO for Valvoline, the oil change and motor oil company—in that case, we went through that exact same situation. We were oversubscribed at 20 bucks, where they wanted to sell. We could easily sell it. But we were telling them, “You should instead sell your company for 18 bucks a share so that we can get Fidelity and T. Rowe pricing.”

And he said, “You know, when I run an auction process and I’m selling something generic, like a share of stock, I sell it to the highest price. And you’re telling me you want me to sell it at a lower price so your friends can buy it and make two bucks tomorrow?”

I said, “That’s exactly the way it works.”

Tom: As a last comment on The Providence Journal, I have a very distinct memory of that day. So basically you price the night before, and then your stock becomes freely traded the next morning. And it was very cool to be on the floor of the New York Stock Exchange and watch my stock open.

But I remember—I’m going to get emotional now—but I remember after it was all over, we went and found Denise and the kids and we were on the playground, just hanging out. And I’m like, “Well, life didn’t really change that much.” Like, I actually remember that very well.

Greg: Yeah.

Tom: So I guess I’ll go to the end, which is: you’ve been doing this for so long. Like you said, for many people it’s kind of just an in-and-out. And if my math is right, you’ve been doing this for almost 35 years.

Greg: Yeah.

Tom: Like, how the hell do you survive that long?

Greg: Yeah. I love it. And, you know, it’s a job and I get that, but I think it’s incredibly interesting. I kind of spend my day looking at different situations, different problems, all the time.

I’ve also been able to stick around long enough that your clients go from people being like your parents’ age to being your friends. And so I have a lot of client relationships that are also friend relationships. And that, in a way, makes it fun, but it also increases the commitment to make sure you’re doing the right thing—because your client is your friend.

And, by the way, it also helps to be married to Denise, because she takes care of a lot of the other stuff. It’s not a 50–50 relationship at home… at times.

Tom: Yeah, I would concur with that.

So let’s go back to origin story a little bit. Where did you grow up and where did you go to college?

Greg: Yeah. So I grew up in western Maryland in a town called Cumberland. And—it’s a little bit of demographics and how things have changed—but in the 1950s, Cumberland was the second-largest city in Maryland behind Baltimore. But the population also peaked in the 1950s.

So it used to be a big industrial town, and all of those companies have left. And it’s—you know, for those of you who study economics, population growth and that stuff—it’s really important to preserving a community.

But I grew up there, went to Loyola College in Baltimore, and that’s where I met my wife, although I didn’t know she was going to be my wife at the time. And then after I graduated, I moved up to New York.

Tom: And so when you… I guess one question I’m kind of interested in is: do you recommend that your analysts now go to business school?

Greg: It depends. The one thing I strongly recommend is education—and more education. I feel like education’s a great luxury. It’s a luxury that most people, if they work here for two or three years, can then afford.

So my view is, whether it’s business school or law school or to get a master’s in history or American literature, for a lot of the people who work with me who are then kind of, say, 25 years old figuring out what to do, I think it’s a good time to take a break and learn more. It’s hard to do that when you’re 50 and you have a couple kids and say, “Oh, I’m going to take three years off and go study.”

So I’m a big advocate of graduate education for that reason.

On business school in particular: if you are in investment banking and you want to stay in finance—hedge fund or private equity or otherwise—business school is probably just a waste of time and money, because you can stay in that same career path and keep moving forward.

What I see is a lot of people use business school as a chance to pivot to a different career. They’re in one; it’s hard to get… like they’re working with us as analysts, they want to go work at, you know, Google, and business school gives them a chance to reposition themselves and interview there.

I know it’s a little bit complicated, but—

Tom: No, it’s good. That’s helpful.

So you started in munis, right?

Greg: Yeah.

Tom: And these guys might not even understand what the hell that is. So maybe explain what a muni is.

Greg: Yeah. So I didn’t either. But it was a job on Wall Street, so I took it. And quite frankly, when I took it, I didn’t understand how different it is than what I’m doing today, because I was just excited to get a job.

But governments—state and local governments, the state of Massachusetts, the city of New York—are big financial entities, and they can and do borrow money to build big projects like a road, airport, otherwise. And they can do that and offer the investors earnings on those bonds—dividends, coupon payments—on a tax-free basis.

So there’s a whole market that exists. It’s kind of like corporate finance for companies, but it’s instead for state and local governments. They issue a lot of debt to build hospitals, roads, bridges, tunnels. And that’s the part of the business that I started in.

Tom: So it’s muni bonds. There’s no equity. There’s no M&A.

Greg: Exactly.

Tom: And so you wanted—so I think I remember: what was your summer associate job in? Was it in corporate or was it in munis?

Greg: No, it was in derivatives. So I—

Tom: Yeah, go ahead.

Greg: —and so then you had to switch, then you had to convince somebody to switch over to corporate?

Tom: Yeah.

Greg: I would have, and I don’t know if I would have been able to make the argument. And this has happened to me many times in my life, but I got incredibly lucky. I happened to work on a… I was working on a derivatives deal for a company and, as it turns out, the CEO of Merrill Lynch was involved in the coverage and showed up at the meeting.

And the next day back, I get a call from the head of investment banking to come talk to him. I have no idea where it’s headed. I go up and meet with him and he says, “The CEO called me and told me you should work in investment banking.” And I said, “Oh, thanks. That’s interesting. Really appreciate it.”

And by the time I got back down to the trading desk, my boss said, “Wait, they’re moving your stuff. I heard you’re moving to investment banking.” So I didn’t know it was going to happen. It’s one of the best things that did happen to me, but it was completely random.

Tom: That’s wild. Well, there’s a moral to that story, right?

Greg: I guess so.

Tom: So your original—so explain how corporate finance is broken up by industry. I think that’d be interesting to people.

Greg: Yep. So—and I think most of the investment banks are organized the same way—it’s a little bit of a matrix of industry teams and product teams.

The industry teams are aligned with clients. So I run our industrial business, but there’s another business that is technology, another business that’s healthcare, real estate, consumer products. So we just kind of align people who then have relationships and expertise with those types of clients.

The other part of the matrix are people who specialize in products. So like equity and IPOs—we have people who just do IPOs all the time across industries. They know how to do an IPO whether it’s for a media company or a healthcare company or otherwise. Or they know how to do debt for those companies. Or they know the ins and outs in M&A.

As it turns out, most people end up in the middle: you have to know a little bit of everything to be successful. But there are specialists in industries and specialists in products.

Tom: So you started out in chemicals and then you kind of escalated up the food chain to industrials.

Greg: Yep. Although I still have about a third of my coverage responsibilities in chemicals—they’re the clients that I’ve known the longest. And my industrials role really started as a manager role. For us it’s kind of player-coach, but as a manager role running industrials.

And then what happens over time is you end up just kind of picking up accounts there.

Tom: I see. So, I’m watching the clock. I got a bunch of questions I still want to ask. But I remember meeting with you, having lunch during the financial crisis, when Merrill Lynch was kind of melting down and your future was pretty up in the air.

Greg: Yeah.

Tom: Can you explain a little bit about what that was like and what was going on and how it ultimately got resolved?

Greg: Yeah. It’s actually—for me it was this time of the year. But go back in that period of time: Bear Stearns went bankrupt in, let’s just say, the spring. And I naively thought that Bear Stearns was another big investment bank and I naively thought it was just kind of contained with Bear Stearns.

But I remember I was actually with Denise and the kids at Wimbledon, and I was working on a relatively big deal. It was a $21 billion acquisition. Dow was acquiring Rohm and Haas. And as part of that acquisition, there were three firms involved—ourselves, Morgan Stanley, and Citi—and we were each going to loan Dow $7 billion for the cash to buy the company.

I remember I stepped out of the match at Wimbledon and called into our capital commitment meeting, and they told me, “Oh, the CFO of Merrill just came into the room, he’s going to join the meeting.” And that just doesn’t happen. So I was kind of wondering what was going on. He asked me where I am, I tell him I’m at Wimbledon, and he says, “You know, we’re going to just stop this call. I’ll call you on your cell phone in five minutes when I get back to my office.”

And he tells me, “I don’t know if we have seven billion dollars.” And if I were smarter, I would have sold all my stock at that moment. But as it turns out, the contagion was broader than just Bear Stearns. And it impacted a bunch of firms.

Basically what happened is all of these firms had a lot of debt that was backed by agencies of the federal government, but not by the US government, and a bunch of mortgages. And the thinking at the time was, because the mortgages were diversified and in a big pool, something might happen to one or two, but it wouldn’t impact all of them. And that was just wrong, because something happened to a bunch of them.

And it forced a bunch of firms under, including Merrill. We were lucky in that BofA acquired us and they had a big balance sheet and they did not have a very big investment banking group. So we just folded into that. For the most part, the team I work with now is the same team I worked with at Merrill, but under the BofA umbrella.

Tom: It’s funny, you know, because we start talking and—I’m sorry for the students—but it just unlocks a lot of memories that we’ve shared. It just made me think, I remember talking to you on 9/11 and you’re on some golf course somewhere. And you were the first person I thought of. Just so you guys know, Merrill Lynch was like right there.

Greg: Yep.

Tom: And all your friends are people from… you know, people were at risk. And I was like, “Holy shit.”

Greg: Yeah, that was… that was not good. I was in many ways very lucky. You can’t work here or live where I do without knowing a bunch of people who died that day.

I was actually at Pebble Beach with a colleague and a number of clients and, again, we were very lucky to be there. But that was like a family reunion that lasts too long, because two of the guys with us had their own planes and kept thinking they were going to be able to take off and fly home. And it was a long time until we did that. But yeah—crazy days.

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Other Fireside Chats on The Good Men Project include:

Jeet Singh: Act Like a Rhino But Never Forget We

David Kohan on Being Inspired by the Mediocrity of Others

James Kline on Banking, PE, Pro Hockey, and Wedding Crashers

Gregg Stone on Relentless Optimism in VC and Olympics

Kalil Diaz on How to Break Through Limiting Beliefs

Jeff Stevens on Discovering Your Why

Will Thorndike on the Power of Compounding in Investments, Relationships and in Life

Juan de Dios Aguilar on How to Lead, Who to Trust, and Why to Love

Ian MacGregor on Pro Bike Racing, the Secret Drink Mix, Going All In, and Founding Scratch Labs

Tom Macejko on Hunting, Banking, Private Equity, Pulp Fiction and Fulfillment

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You can find the full series on YouTube here:
@FiresideChatsWithTom

Watch for future episodes featuring more leaders from across industries. They all have their own compelling stories and are happy to give advice to the next generation of students, athletes and future business leaders.

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