The choice of Michael Klowden to run the Milken Institute think tank initially seemed like an odd fit – even to Klowden. A lawyer-turned investment banking executive, Klowden isn’t an economist and had no experience working at non-profits. But in the 10 years since taking the helm, Klowden has helped raise the institute’s profile, turned its signature Global Conference into a major international business forum and made considerable headway in turning the institute into a self-sustaining organization. During a break from his busy international travel schedule, Klowden sat down to talk with the Business Journal at the institute’s Santa Monica headquarters about his goals for the institute, working with Michael Milken and how he was affected by 9/11.

Question: How did you make the move from law to investment banking?

Answer: After nearly 17 years growing Morgan Lewis’ L.A. office and rising to one of four senior partners in one of the largest firms in the nation, I realized there wasn’t much more I could do there. So I began looking around to do something else. I had been on the board at (the investment banking company) Jefferies Group, and the CEO at the time, Frank Baxter, offered me the job as president of the company. I was a bit skeptical at first.


Because the previous presidents had lasted only a matter of months. But Frank wanted to bring someone in to transition the firm from a trading house that just placed share orders for clients to a full-service investment bank. As part of the transition, they had brought in some people from Drexel Burnham, but these people were not being integrated into the firm.

So that’s how you met Michael Milken?

Actually, no. I didn’t meet him until much later, when Jefferies became a sponsor of the Milken Institute.

You’d been president of Jefferies about six years when Frank Baxter asked you to replace him as chief executive. Yet you chose to leave instead. Why?

Several reasons. First, I was burned out. We were moving the operations to New York from Los Angeles, which meant I was putting 250,000 frequent-flier miles on each year. My family was out here, though. And then I got hit with a whole host of family health problems that caused me to reconsider my priorities. In the meantime, it looked like a battle was shaping up over who would become CEO, so I decided to bow out and left the company a year later in mid-2001.

Those family health problems sound pretty severe. What happened?

In a space of about three months, my wife became ill, my daughter became ill, my brother had a heart attack and my mother had age-related health issues that were rapidly getting worse. I sort of joked that I was feeling like Job.

How did you get through it?

I tried to put on a brave face and not let it get to me. In the end, everyone turned out OK except for my mother, who passed away. It wasn’t until after this crisis period that I realized how deeply I had been affected and how much my attention had been diverted from Jefferies. I realized I couldn’t continue to spend so much time away from my family, that I wanted to be able to take vacations with them while there was still time.

So you weren’t in New York on 9/11?

But I didn’t escape its effects. Some of the people I had fired while I was at Jefferies went to work at Cantor Fitzgerald and perished on 9/11. Intellectually I know I wasn’t responsible for their deaths, but with the anniversary this month, it’s really been tough emotionally.

So how did you end up as chief executive at the Milken Institute?

I stayed on at Jefferies after bowing out of the CEO race. But I was bored out of my mind and started looking for something else. Frank (Baxter) knew that the Milken Institute was planning to go in a different direction and arranged to have me meet with Mike Milken to see whether I should be the next chief executive. I had met Mike informally at some of the events we had sponsored, but this was my first real face-to-face meeting with him. I didn’t think I was the right person for the job – I was not an economist and I didn’t know the institute well – but I agreed to go.

What changed your mind?

Well, Mike is a good salesman. He reassured me that if I would take the job, he wouldn’t be running things, that I would have a good deal of independence. Mike wanted the institute to go in a different direction. It was starting to become a vanity venture for him and he decided he wanted other people to support the institute, that it should try to become more self-sustaining. He felt the way to do this was to supplement the institute’s academic focus with a broader mission of promoting the spread of capital markets and capital formation around the globe.

Did you have any concerns about working for someone who was imprisoned and whose reputation had clearly taken a beating?

Yes, briefly at first I had some of these concerns. I guess everyone has those concerns initially when dealing with Mike. But for me, those concerns vanished when he said he would let me run the institute. Frankly, my bigger concern was on the fundraising side: How was I going to convince people to give to an institute that was named after a billionaire?

Is Milken a tough boss?

Well, he’s bright, he can be very charming and he’s egoless. By egoless I mean he feels his ego is not on the line with every decision. He’s not imperious. He listens, and he throws out ideas forcefully and he’ll try to convince you he’s right.

We’ve heard he calls his staff members at any hour of the day or night?

Well, I can say that’s not happened to me. But I don’t work for Mike, I work with him. He has given me the latitude to run the institute and has lived up to his word about not stepping in and trying to run things. As long as I listen to his views and take them into consideration, he’s all right with that. He and I agree on most things, but not everything. As for calls in the middle of the night, I haven’t had those. But there have been times when he’s asked me to join a conference call at 5:30 in the morning. If I’m available, I do it; if not, I don’t and he’s fine with that.

Ten years later, what are your main goals now as chief executive?

First and foremost, to keep doing well what we’ve always done well: our reputation for objective research. We want to keep and expand our reputation of being a highly objective source that all viewpoints can turn to – whether on the left or the right. Towards that end, we are expanding our presence in Washington, to be more of a resource on the great economic and financial issues confronting the nation.

What else?

Increasing our events. When I started, the Global Conference was one day and had just 27 panelists. It has since developed a life of its own and now we have hundreds of panelists. We bring in the big names in business, economic policy and finance from all over the globe. While that remains our signature conference, we’re adding new events all the time – next month, for example, we have a medical conference at a retreat in Lake Tahoe.

Anything else?

Our mission is to spread capital markets and promote capital formation around the world. We’re working on projects in Israel, in Eastern Europe, and on several other continents. I’m going to Asia next week and one of the things I will be doing is talking to governments and other institutions there about the research we could be providing.

Your son, Kevin, is on staff at the Milken Institute as managing economist. Did you encourage him to join?

Actually, Kevin interviewed here completely behind my back. I knew nothing about it until he had been hired. Once I got over that, I was glad to have him on board.

With so much travel abroad related to the institute, do you still find time to take personal vacations with your family?

Yes, definitely. I’m much freer now to take those vacations than I was while I was working for Jefferies. We love to go to Africa and Europe. We’ve also traveled to Russia, China, Japan, South America, and even on a cruise to Antarctica, which we really enjoyed.

What’s your favorite travel destination?

My favorite place to go is on safari in Africa. There’s no feeling like being on the veldt in Botswana watching all those magnificent animals go by. That’s one of my favorite places in the world.

How did you meet your wife?

We met in college. She was dating someone else, but I knew he had a girlfriend already. So I asked her out on a date. That first date was a disaster and it took me about four months to get her to go out with me again. But I was persistent and she was worth it. We still celebrate the anniversary of that first date every year; we’re coming up on the 46th anniversary now.

What was your youth like growing up in Chicago?

My father was an executive with a women’s shoe company. So I was selling shoes through high school. I probably learned more about dealing with people through this experience than anything else I’ve done since.

What types of books do you enjoy?

I really enjoy science fiction and fantasy, anything that’s escapist literature. I’m a huge fan of the “Harry Potter” novels and of “The Lord of the Rings.” That goes hand in hand with my love for fantasy films.

Speaking of “Lord of the Rings,” how did you end up with a sculpture of the Gollum character in your office conference room?

Several years ago, I had a client in the entertainment industry. They wanted to give me a gift for my service to them and asked me what I wanted. I told them I really loved fantasy films and then this sculpture of Gollum shows up in my office. It originally talked with Gollum’s voice, but I haven’t had a chance to get that fixed again.

What are you reading now?

I’m reading Doris Kearns Goodwin’s “Team of Rivals,” about Abraham Lincoln and his Cabinet.

What’s the best piece of advice you’ve been given?

My father told me I could do anything I set my mind to. My wife tells me not to sweat the small stuff. But I think the best piece of advice I’ve seen was given long ago: “I’m normally a pessimist, then when things don’t turn out so bad, I’m in a state of pleasant surprise.”

Any other life lessons?

When I was trying out for the baseball team at the University of Chicago, the coach pulled me aside and praised my determination. He said, “If we had just three more guys with your drive, we’d win every game. It’s a shame you’re such a lousy ballplayer.” I didn’t make the team, but it convinced me that you have to stretch beyond your comfort zone.


Title: Chief Executive

Organization: Milken Institute

Born: Chicago; 1945

Education: Bachelor’s degree in sociology from University of Chicago; J.D. from Harvard Law School.

Career Turning Points: Decision to interview with Mitchell Silberberg & Knupp law firm LLP; taking chief executive post at Jefferies Group Inc.; interviewing with Michael Milken at Milken Institute.

Most Influential People: Sherwyn Samuels, senior corporate partner, Mitchell Silberberg & Knupp; his father; his wife, Patricia.

Personal: Lives in Santa Monica with wife, a painter. His son is an economist at Milken Institute; his daughter co-owns art gallery and manages art shows. Five grandchildren.

Activities: Traveling; reading fantasy novels; films, especially fantasy films such as “The Lord of the Rings” trilogy.

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