When he was a boy, Scott Beiser wanted to grow up to be a garbage truck driver – because he was fascinated by the workings of such a complex machine. Today, as chief executive of Century City investment bank Houlihan Lokey, he’s in charge of a different type of complex machine – the nation’s largest middle-market investment bank. Beiser joined the bank when it had 25 employees and just one office. Today, it has 900 employees at offices in 10 American cities and six foreign countries. Beiser, an L.A. native, started working at Houlihan Lokey right out of business school, and worked his way up to co-chief executive then started to run it solo last year. Houlihan Lokey advised on 119 M&A transactions with values under $3 billion, making it the No. 1 player in the middle market, above Goldman Sachs and Morgan Stanley in that niche. Beiser met with the Business Journal in his Century City office to talk about working his way up as a Houlihan Lokey lifer, what it takes to succeed in the competitive world of investment banking and how he views his role as a manger.
Question: Walk me through a typical day for you.
Answer: I wake up around 6-ish and get to the office around 7:30. I come in with 10 things that I want to get accomplished, and on a good day you get half of them done. I go home with another 10 that I still have to do. My day varies from strategic planning issues, directions we want the company to go, acquisitions, do we want to open up a new office, put more resources in a particular group or other area. Then there’s the litany of ongoing people issues, on what’s working and how you want to get more collaboration. I carry some of my project load as well; I’ll still do some work for clients. I leave somewhere about 6 or 7 p.m.
Tell me about your childhood.
I was born and raised in Gardena. My family moved to the San Fernando Valley, where I attended Cleveland High School. I’ve lived pretty much in the San Fernando Valley for the last 25 or so years. I wanted to be a garbage truck driver when I grew up. I was always fascinated by garbage trucks. I stayed local and went to college at Cal State Northridge. I got my undergraduate and graduate degrees in finance.
What was your first job out of school?
I was born and raised in Los Angeles and wanted to stay here. Initially, I worked for Transamerica, in their life insurance division here. When I got my master’s degree, I wanted to get into the securities business, and I ran into Houlihan Lokey. At that time, in 1984, they didn’t value securities – they valued companies. I thought it was close.
You didn’t go to Wharton or Harvard; you studied at Northridge.
Today, I probably couldn’t get hired by Houlihan Lokey. Back then, the firm was roughly 25 people; we’re a shade under 900 now. I’m coming up on my 30th anniversary next month. We have several people who have been here 20-plus years. When we’re recruiting now, we’re looking for people who obviously have a certain amount of raw intelligence and we use these business schools as a type of screening device, but it’s got to be a mix of both raw intelligence and common sense and a desire to want to be in finance. You work too many hours to be doing this if it’s something you don’t want to do.
What do you think is your most important job at Houlihan Lokey?
I think it’s really being the glue. It’s a people business. There are bright people, aggressive people, opinionated people. That’s probably the key to successfully managing a people business, knowing what everyone’s strengths and weaknesses are and keeping them going in the same direction.
How is your family life?
I met my wife going on 29 years ago. I’ve been married only once and I have two kids. We live in Encino. My home life is very stable.
What do you like to do for fun outside of the office?
I like traveling with my wife and family. I love nice weather like in Hawaii. I like touring and seeing different parts of the world, which we’ve done in Europe and Asia. I like the outdoors; I like skiing. I try to stay as healthy and physically fit as I can. I like exercise, whether it’s hiking or skiing or swimming or tennis.
What was the turning point in your career that started the trajectory that led to your current position?
When I was a junior staffer, you had to know the talents and nuances of the senior people. You had to know the skill set of the junior people. And you had to know something about every single project, which you were capable of doing 30 years ago when we were much smaller. It was really figuring out how to match the skill sets of the junior people with the senior people with what the client needs were. It gave me a chance to actually get to know the clients, the financial workings of the firm and all the people.
What interested you most?
I was and still am a number junkie. The way I describe it is if you looked at my college or high school notes, you’d see in the margins that there were number calculations. My wife is the opposite, she’s a designer by trade and so she’d be coloring things along the edges. I still enjoy solving an analytical puzzle but it was never any expectation, desire or dream to end up where I’ve ended up.
Did you get any of your number junkie qualities from your parents?
My dad was an accountant, so probably a little from him, but it’s probably just the way my brain works and what I enjoy doing.
What do you wish you had done differently at Houlihan Lokey?
I think you can always argue that maybe we should have attempted something quicker or tried to grow faster, but there’s not one or two things that I can think of as a big regret. We’ve stayed out of generally bad press. We’ve stayed out of harm’s way with inappropriate hirings or acquisitions.
How do you manage the workload?
I think the industry as well as our firm tries to recognize that if you burn people out, maybe you got that extra hour or weekend out of them, but you won’t get the ultimate value. It’s trying to make sure people can sit down with people at 10 in the morning and let them know what we need. To have that conversation at 10 in the morning instead of 6 at night.
When somebody you know has worked a really long day or week, try to not schedule him on some stuff that’s going to be as impactful in the next couple weeks. We all work in teams and hopefully people pitch in when they can. By no means is it a 40-hour workweek, but it goes back to if you love what you’re doing, you’re willing to put the time in.
How has work changed over time?
We all take more vacations than we used to, but we’re never alone anymore. We take our cellphones, we take our laptops. You always make yourself available anywhere you go. And that’s the trade-off. You can go away for the weekend and go skiing, but you’re probably bringing your cellphone on the chairlift. There’s probably fewer vacations people take to places without an Internet connection.
What advice would you give to a young person trying to get to where you are?
Do what you like, because you’ll always do better at it. Two, always be a better listener than a talker. You learn the most when you’re listening. On the other hand, in today’s world, you can’t be bashful. There are a lot of people who come out of school very talented but they don’t have the gift of gab or they don’t have the presence that maybe the previous generation did. Surround yourself with other good people.
Doesn’t everybody do that?
At some firms, if you’re a 10, you hire a 9 because you don’t want to be threatened by somebody and then that 9 hires an 8 and the 8 hires a 7 and pretty soon the firm isn’t where it needs to be.
What’s the best advice you’ve ever received?
One, listen to both sides of every story. Two, if you have to tell somebody you’re very good at something, you probably aren’t. Be modest about what you do and let your actions speak more than your talk.
What do you think your employees would say is the worst thing about working for you?
I’m less likely to go high-five people all the time for great job. On the flipside, I’m not going to go chew them out every time they do something wrong. But other people probably give more frequent positive feedback.
Best part of your job?
I’ve obviously had a great time here. I like the diversity of it and that there is never a known answer when you start a task. I got to see parts of the country and the world, and how things are made and work, that I would never ever have gotten to do. I’ve seen a lot of interesting things, and how America works, that I never would have had I worked for another company.
How would you illustrate success?
When I started – when the firm started – you would knock on somebody’s door and say, “Hi, I’m Scott Beiser from Houlihan Lokey,” and they’d say, “Who? What?” They didn’t know who you were and they didn’t know what the firm was. Furthermore, if you actually told them what you did for a living as “We value companies and do mergers and acquisitions,” they didn’t know anything. Now, almost anywhere we go, they’ll know at least one of the three. They’ll know who I am, they’ll know who the firm is or they’ll know what we do for a living. When you get somebody to know two or three of those, that’s probably when you’re at a successful level.
I think our firm could take some more aggressive actions to grow. We need to get bigger outside the United States. Right now, about 75 percent of our business is in the United States and 25 percent outside. I’d like to see that more balanced. The rest of the world is becoming more and more statistically important in the financial world. I think we need to push ourselves. In my mind, the risk that we have in our firm is not that we wake up one day and we find out we had some giant trading losses or are sued in some manner but what I call intellectual boredom. That if we don’t find new, interesting things for our bright, aggressive, young, exciting people to work on, they get bored and they either become less valuable or they’ll go across the street.
So you want to find new opportunities?
Yes, but I’m a big believer that it doesn’t come from one person. I basically encourage all of our employees to come up with ideas all the time. A lot of them we won’t go forward on, but I’ve basically said as long as it’s in the financial field, as long as it’s legal, as long as it’s something we have some unique reason to excel at, we’re open-minded. We encourage lots of people to come up with ideas all the time, and that’s how we’ve spawned into new areas. I believe you constantly need to come up with new ideas or you end up going backwards.
Title: Chief Executive
COMPANY: Houlihan Lokey
Born: Gardena; 1959.
Education: B.A., M.B.A., both from Cal State Northridge.
CAREER TURNING POINT: Becoming a “staffer” who distributed assignments at Houlihan Lokey.
MOST INFLUENTIAL PEOPLE: Parents and wife, Nancy.
PERSONAL: Lives with wife and children, Kyle, 23; Tara, 20, in Encino.
ACTIVITIES: Traveling, skiing, hiking, swimming, playing tennis.
For reprint and licensing requests for this article, CLICK HERE.