On January 19, 2017, Jack Lew wandered out of the Treasury Building and gazed into the bright cold of a winter's day. He felt unmoored. The Obama era was over, and with it his career in public service. Everything in his life up to this point – other than his penmanship – reached its logical conclusion when the name Jacob J. Lew first appeared on a crisp 20-dollar bill. Now some other guy was taking his place at the helm of the Treasury Department and Lew had nowhere to go. His future was a void.
But deep in the hollows of his soul the former Citigroup exec felt some inscrutable impulse stirring to life. He couldn't rationalize it, but neither could he dismiss it. A spiritual force seemed to be crying out from a dimension beyond our own. On that January day all Lew felt was a twinge in the back of his reptile brain, but over the coming months the feeling grew into an irresistible urge. And like a salmon finding its way back to the river where it was spawned or a fledgling arctic tern taking wing for its first transoceanic migration, Lew found himself inexorably drawn by the customs of his forebears into the warm embrace of a private equity partnership:
Jacob Lew is becoming a partner at private equity firm Lindsay Goldberg, which means six of the last seven U.S. Treasury heads have gone on to land roles at multibillion-dollar financial houses.
Secretaries past have made the same hallowed journey: Geithner to Warburg Pincus, Snow to Cerberus, O'Neill to Blackstone. Summers and Rubin ended up somewhat adjacent to private equity, at D.E. Shaw and Centerview Partners (post-Citigroup), respectively.
So what is it about private equity that so appeals to former Treasury chiefs? Here's what the Goldberg of Lindsay Goldberg had to say:
We are honored to have Jack join Lindsay Goldberg and look forward to his playing a key role across all facets of our firm. His reputation for integrity, along with his global perspective on business, nuanced knowledge of industry and decades of experience in senior leadership roles are unparalleled. He will contribute greatly to our firm and we are delighted to welcome him to our team.
He brings a history of strong leadership, a deep understanding of economies and markets, and a truly global perspective. These attributes will be of tremendous value to our firm in this increasingly interconnected world.
Knowledge, leadership, global perspective. It seems the office makes the man, rather than vice versa. Moreover, perhaps there's something about having been the most important financial regulator in the developed world that makes financial firms lick their chops.
What's not clear is why private equity would be the most desirous of good political connections, which would seem to benefit any type of investment company. Perhaps it's just that having a large rolodex brings the highest return on investment in private equity.
Whatever it is that's brought so many Treasury secretaries into private equity, we should get a powerful test of the dynamic in the person of the current guy.