Regional Oral History Office University of California The Bancroft Library Berkeley, California Richard C. Blum Conversations with Richard C. Blum: Businessman, Philanthropist, President Emeritus Board of Regents University of California Interviews conducted by Victor Geraci, Ann Lage, and Lisa Rubens 2010-2014 Copyright © 2015 by The Regents of the University of California Since 1954 the Regional Oral History Office has been interviewing leading participants in or well-placed witnesses to major events in the development of Northern California, the West, and the nation. Oral History is a method of collecting historical information through tape-recorded interviews between a narrator with firsthand knowledge of historically significant events and a well-informed interviewer, with the goal of preserving substantive additions to the historical record. The tape recording is transcribed, lightly edited for continuity and clarity, and reviewed by the interviewee. 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Blum: Businessman, Philanthropist, President Emeritus Board of Regents University of California conducted by Victor Geraci, Ann Lage, and Lisa Rubens 2010-2014, Regional Oral History Office, The Bancroft Library, University of California, Berkeley, 2015. v Table of Contents Foreword by Mark Yudof xi Interview History by Lisa Rubens xiii Interview 1: May 19, 2009, Blum Capital, San Francisco Audio File 1 1 Family background — Birth 1936 and growing up in San Francisco — Personal values —Reflections on the political culture of San Francisco — Attending UC the city: a semester abroad in Vienna; advancing interest in finance and foreign marketing — Working as an analyst at Sutro and Company while pursuing a PhD in business at Cal — Assesses the social/cultural landscape of San Francisco brokerage houses — Becomes youngest partner at Sutro — Overseeing a company in Vietnam; questioning U.S. foreign policy and honing a social conscience — Reflections on the changing world of finance in the late ’60s and early ’70s — Forming Blum Capital in 1968, a private equity firm — Taking risks and investing in Asia — First trek in Nepal: dedication to alleviating poverty and establishing relief programs in Nepal; formalizes efforts by establishing the American Himalayan Foundation, 1981 — Lessons learned about international assistance leads to establishing the Brookings Institute Global Policy Reduction Initiative (2003) and the Blum Center for Developing Economies at UC Berkeley (2009) — Diplomatic efforts in China Interview 2: September 1, 2009, Blum Capital, San Francisco Audio File 2 19 Recapping interest in foreign travel and marketing — The role of large trading groups before companies invested directly in Asia — Seemingly menial research assignment at Sutro leads to wealth of knowledge about and success in investments — First marriage to Andrea Schwartz — Role of brokerage houses and adaptation to new growth opportunities — Importance of hard work and motivation — Perspective on 100 years of U.S. economic development — History of Sutro and Company; influence of senior partner Alistair “Shorty” Hall on Blum; importance of one’s word in business — Driven by unquenchable curiosity — On being a risk taker and forming long-lasting programs, friendships, investments — Distrust of bankers Audio File 3 34 Learning all aspects of business at Sutro; working closely with companies as well as philanthropic organizations — Seeing investment opportunities in Japan and Hong Kong — Early interest in politics: pro-bono work for Walter Mondale; hosting fund raisers for John Burton; creating a fiscal advisory committee for George Moscone — Meeting Dianne Feinstein — Discusses his children and grandchildren vi Interview 3: September 18, 2009, Blum Capital, San Francisco Audio File 4 47 More on the landscape of San Francisco brokerages: Sutro one of a handful of Jewish firms — Issues of discrimination: Reflections on President Obama’s election and the persistence of racism — San Francisco as a bastion of liberalism — Assessing causes of the financial collapse of 2008 and effect on Blum Capital: belief in a behavioral economic model; global effect of economic depressions — Attracted to building businesses in a variety of sectors and taking them public — Investment philosophy — Buying and selling Ringling Brothers; making first million dollars Audio File 5 60 Argues for changing business practices at Sutro: ending fixed commissions; investing in Asian markets; targeting money management — Running Blum Capital: Perfecting a business strategy; shifting from individual to institutional investors — Personal interests — Genesis of involvement in the Himalayas Interview 4: October 1, 2009, Blum Capital, San Francisco Audio File 6 67 First major deal with Blum Capital: Investing in an engineering service that becomes URS Corporation — Expanding capital base in the l980s: Finding undervalued companies within a particular niche — Buying Northwest Airlines and DHL — Close friendships with key businessmen Interview 5: March 2, 2010, Blum Capital, San Francisco Audio File 7 85 Further reflections on upbringing: absence of father figure; role of mother and grandmother; effect of family’s diminishing resources; stepfather’s negative influence; tenuous attachment to his Jewish heritage — Attending San Rafael Military Academy and meeting Warren Hellman — Remembering years at Lowell High School — Alastair “Shorty” Hall, mentor at Sutro & Co. — Reaction to anti-Semitism — First year at Cal 1954: dislike of segregated fraternity system; arrest for fraternity prank — Growing interest in academics; influence of Andrea and philosopher Stephen Pepper — Choosing business as a major, a practical decision — Reflecting on San Francisco in the 1950s — Interest in foreign trade and deciding on a career in finance — Distinguishing Jewish vs. WASP investment firms vii Interview 6: March 10, 2010, The Bancroft Library Audio File 8 107 Recalling influential professors in the business school: C. West Churchman, Choh-Ming Li — On business school dean, Ewald T. Grether: a role model; Grether’s advice not to pursue a PhD — Early misjudgments in business and lessons learned — Later involvement with the Haas School of Business: Initiating a night/weekend MBA program; raising faculty salaries — Service on boards of Japanese companies, a cultural divide on governance — The transformative effect of his UC Berkeley education and of the year abroad in Vienna — Reasons for wanting to be on the UC Board of Regents — Selling interest in URS after Los Alamos lab competition; dealing with appearances of conflicts of interest — Assessing his strengths in strategy and finance, not day-to-day management — Appointment by Gray Davis to Board of Regents 2002 — Relationship of Governors Davis and Arnold Schwarzenegger to the Board of Regents; reflecting on their appointments to the board — Thoughts on diversity and admissions policies — On the complicated culture of the university Audio File 9 126 An aside on sports at Cal — Seeing the university as a hopeless bureaucracy — Taking issue with limits on debt capacity; removing capital expenditure caps — The use of tuition to pay back capital debt incurred for new buildings — Dissatisfaction as a regent with President Dynes and Vice President Larry Hershman Interview 7: April 21, 2010, The Bancroft Library Audio File 10 135 First impressions as a regent; UC an unwieldy bureaucracy — Critique of UC president Robert Dynes — Asking for Dynes’s resignation; a straw vote of seven regents and Blum’s understanding of the Academic Senate position on Dynes — Choosing Rory Hume as COO and putting limits on Dynes’s authority — Taking charge of the search for a new president; seeking and hiring Mark Yudof, 2008 — Issues of compensation and the importance of market-based salaries for university executives — Selection of Yudof by full search committee and Board of Regents — Restructuring and cutting personnel from UCOP; urging chancellors to bring in consultants on campuses — Building the Blum Center at UCB; overcoming obstacles Audio File 11 153 Thoughts on the role of the Board of Regents and