Contributed by: Show Editorial Team
David Rubenstein, Co-Founder of the Carlyle Group, interviews Chuck Davis, CEO of Stone Point Capital at Greenwich Economic Forum (Greenwich, CT)
Ever thought of a career in the investment banking industry? If your answer is no, you are not the only one. It’s a narrow path that few choose to go down.
Take Chuck Davis for example, prior to becoming an acclaimed investment banker at Goldman Sachs, Chuck Davis flunked out of college. Twice. Davis, now the CEO of Stone Point Capital, eventually graduated from The University of Vermont—with a degree in physical education. Not exactly the pedigree of most Wall Street executives.
In fact, when he somehow found his way to Columbia Business School, his background made for a pretty memorable moment. Each student had to stand and introduce him or herself, and most people mentioned their bachelor’s from Harvard, Yale and other Ivy League schools.
“I stood up and said ‘Chuck Davis, physical education, University of Vermont.’ The entire class laughed.”
Davis shared this anecdote during the 2019 Greenwich Economic Forum, where he was interviewed by Carlyle Group Co-Founder David Rubenstein. Davis’ somewhat unconventional path, marked by professional hurdles and personal heartache, has shaped his work in the investment banking and private equity worlds and has provided him with unique perspective on what matters most.
In college, Davis played three varsity sports—soccer, basketball and tennis. “The game was wonderful,” Davis told Rubenstein. “I loved the team bus, I loved the locker room, I loved the huddle. But when I ran out of athletic eligibility, and there weren’t any pro contracts heading my way, I looked for another game to play.”
Davis had always been good with numbers, and since finance is about numbers, he soon migrated to that arena.
Still, even after graduating from Columbia and being hired at Goldman, Davis struggled. About two months after starting at Goldman, he was ostracized by the man who hired him. “The man decided that he had made a mistake, and he started campaigning to have me fired. So that was a tough first year.”
But Davis wasn’t fired. In fact, he would go on to spend nearly two decades at Goldman, working with hundreds of companies all over the world and even earning the friendship of the man who tried to oust him. This experience proved to be a strong foundation for his career.
“The great thing about investment banking is in your early 20s you get to sit in boardrooms and watch them make decisions on the most important things companies do,” Davis said. “You get a lot of time with CEOs on important issues. From very early in your career, you get enormous amount of exposure. So having 20 years of that was a great education.”
After leaving Goldman, Davis shifted from investment banking to private equity, where he said he was energized to put his efforts behind businesses that he believed in rather than having to constantly keep a furious pace.
“Investment banking is a factory. It’s all about volume. The person who does the most deals wins,” he said. “In private equity, the most important word is no. The hardest word is yes, so it’s a real mind shift in terms of the way you look at things.”
At Stone Point Capital, he’s backed ventures ranging from insurance companies to community banks to cloud-based computing firms. But he said the best deal is always the most recent. At the time of the forum, the firm had just negotiated the sale of an insurance company to Tokio Marine Holdings for $3.3 billion.
Clearly, like a team that faces an early deficit, Davis turned around an inauspicious start in finance. But in 2008 personal tragedy rocked his world and shifted some of his focus. His son Tucker, who had never so much as spent a night in the hospital, went to the emergency room because of severe leg pain. That pain turned out to be a blood clot brought on by a rare form of cancer. Tucker was diagnosed with Stage 4 fibrolamellar hepatocellular carcinoma and battled for 19 months when the prognosis was only a month or two. During his fight, he established the Fibrolamellar Cancer Foundation.
“He set up a foundation, and he said to his mom and I, ‘If we can’t cure this for me, I want you to cure it for everyone else,’” Davis said. “We’ll never forget him saying that.”
The foundation raises awareness, connects patients and families, and provides grants to researchers working on a cure. This funding has helped scientists discover the gene that mutates and causes the cancer—a huge breakthrough, Davis said.
In addition to philanthropy, the devastating loss of his son has perhaps influenced some of Davis’ business strategies. For instance, he said Stone Point Capital has invested in several countercyclical businesses—companies specializing in things like bankruptcy software and consumer debt consolidation—which are set up to do well during hard times. It’s a wise financial move, yes, but it’s also hard not to separate the strategy from a man who has dealt with the most difficult situation anyone can imagine.
Losing Tucker also seems to have grounded Davis. When asked by Rubenstein to reflect on his greatest accomplishments, Davis didn’t tout any big moneymaking deals. Instead, he talked about diversity and inclusion, specifically the fact that two companies he is involved with—Hershey’s and Progressive—are run by brilliant, dynamic women.
He explained that movies like The Big Short have portrayed anomalous behavior by private equity firms, thus tainting the reputation of the industry. “But the fact of the matter is the everyday business of private equity is a good business. It’s done by credible, hardworking, solid, high-integrity people,” he said. “Diversity and inclusion is something we have focused on a lot. I’m proud of the environment we work in. It’s very collegial and cooperative,” said the former physical education major. “Much like a sports team.”
(Written by Andrew Waite; Editing and revisions by Nicole Liddy)