Grant Hill’s Wall Street Whirlpool Chats Pave Way to John Mack

Dec. 5 (Bloomberg) -- Former professional basketball player Grant Hill talks with Bloomberg's Scott Soshnick about his interest in business and finance and the Wall Street connections he made during his career. Hill retired this year after 18 seasons and is now managing principal of Orlando, Florida-based investment firm Penta Mezzanine. (Source: Bloomberg)

Grant Hill spent much of his tenure with the Orlando Magic in the trainer’s room, where to the chagrin of him and teammate Pat Garrity, control of the television remote was governed by majority rule.

“Most of the guys wanted to watch SportsCenter or the Cartoon Network,” said Garrity, a former players’ union treasurer who earned a Master of Business Administration from the Fuqua School of Business at Duke University, Hill’s alma mater, after retiring from the National Basketball Association in 2008. “Everyone would leave the room and then we could switch to CNBC.”

Hill, whose 18-year injury-saddled career ended after last season, had an insatiable appetite for learning, particularly about finance, Garrity said in a telephone interview. Their whirlpool chit-chat often focused on hedge funds and private equity.

“That was one of the things that set Grant apart -- the level he wanted to dig to understand,” said Garrity, now a client adviser at a Connecticut-based hedge fund.

While Hill, 41, is finished playing professional basketball, the managing principal of Orlando, Florida-based investment firm Penta Mezzanine isn’t anywhere near done asking questions. Only now, armed with fame, fortune, a Duke diploma, a zealous alumni network, influential parents and a pristine brand, Hill’s questions are aimed at -- and welcomed by -- some of the most powerful people on Wall Street.

“Even at a very young age he was more inquisitive, broader than a guy who was totally focused on his sport,” Guggenheim Partners LLC Chairman Alan Schwartz, a 1972 Duke graduate, said in a telephone interview, noting that their relationship began when Hill arrived on campus in Durham, North Carolina, in 1990. “It was clear that basketball was only one component of what made Grant special.”

Penta Mezzanine

About two months ago, Hill met with Schwartz in his New York office to deliver an update on Penta Mezzanine, which provides as much as $15 million in growth capital to profitable, lower-middle-market companies, according to its website.

Shortly thereafter, Schwartz said, he ran into someone who was looking for a loan of that size.

“I said, ‘I know somebody you can contact,’” Schwartz said without offering specifics.

Schwartz isn’t the only Wall Street titan to grant Hill both access and assistance. Oaktree Capital Management President Bruce Karsh, former Morgan Stanley (MS) Chairman John Mack, Carlyle Group (CG) co-founder David Rubenstein and Blackstone Group LP (BX) Chief Executive Officer Stephen Schwarzman are among those who have opened their arms, ears and Rolodexes to help make the seven-time All-Star even more successful in finance than athletics.

“It’s pretty cool to be able to pick these people’s brains,” Hill, the owner of a Subway franchise in the Washington, D.C., area, said in a telephone interview from Orlando. “There’s a wealth of information and knowledge you can gain from sitting down with people who are successful.”

Duke Trustees

Schwartz, Karsh and Rubenstein, as chairman, are members of Duke’s Board of Trustees. So is Hill’s mother, Janet, a Wellesley College graduate who holds a master of arts in mathematics from the University of Chicago.

Hill’s father, Calvin, a Yale University graduate, played for the National Football League’s Dallas Cowboys and remains a consultant to the franchise. Cowboys hall-of-fame quarterback Roger Staubach named Janet and Calvin's only child after his own grandmother, whose maiden name was Grant, when the new parents couldn’t decide on one.

On Wall Street, Hill’s name stands for more than just athletic excellence.

“I trust him,” Mack, a 1968 Duke graduate, said in a telephone interview. “He’s dead serious in trying to manage not only his assets, but assets given to him by others.”

Inspires Envy

Hill’s connections and access make even an established finance professional like Blackstone Senior Managing Director David Blitzer envious.

“I would like to be Grant Hill,” said Blitzer, a limited partner in the NBA’s Philadelphia 76ers who about two months ago had dinner with Hill in New York. “He can open any door he wants. I would love to do some business with Grant.”

Hill’s classmates have become contacts, confidants and, in some cases, co-investors.

He’s remained close to and done business with some Duke contemporaries. They include Kareem Cook, managing director at private equity firm Towerview Capital Management; Kevin Marchetti, a former basketball team manager who is now managing director at investment firm Bay Grove Capital; Ashok Varadhan, global head of macro trading at Goldman Sachs Group Inc. (GS), and Mark Williams, a managing director at Bank of America Corp.’s Merrill Lynch unit.

Understanding Finance

“At Goldman, part of what I do is evaluate people,” Varadhan, a former Duke basketball manager, said in a telephone interview from New York. “People who demonstrate intuition as opposed to memorization is something you look for. When I talk to Grant, he’s not speaking from a place of memorization but of understanding. That’s remarkable. We recruit people from Harvard and Princeton. I’m telling you it’s rare.”

Even more rare is that Hill recognized the value of an all-around Duke education, said his college coach, hall-of-famer Mike Krzyzewski. Even as an underclassman, Hill understood that his education extended beyond the court or classroom and included getting to know other students, the coach said.

“He didn’t want to live in just a sports world,” said Krzyzewski, who won two of his four national championships during Hill’s stay on campus. “He killed it here at Duke.”

Learning Aptitude

Towerview Capital’s Cook, who met Hill the first day of his freshman year, laughs at the notion that his friend’s success comes from his family’s connections or sports notoriety, as if any well-known athlete could become Magic Johnson, who is part owner of baseball’s Los Angeles Dodgers, or Michael Jordan, majority owner of basketball’s Charlotte Bobcats.

“Because he shows the aptitude to learn, he gets invited to the table. People then take two steps toward him, make him a partner in deals,” Cook said in a telephone interview, pointing out that he, Hill and other Dukies, as the university’s students are known, have invested together. “Once there, he doesn’t just occupy a seat, he gets involved.”

Retirement has been anything but relaxing for Hill, who has two daughters -- ages 11 and 6 -- with his wife, Tamia, a Grammy-nominated singer and songwriter. Besides the investment firm, Hill is a compensated public speaker and serves as co-host of the basketball-themed show “Inside the NBA,” which offers a platform for him to improve his broadcasting skills.

Lifetime Planning

Hill says he benefited from having a father with professional athlete friends, some of whom struggled with life after their careers ended. Dinnertime conversation growing up occasionally centered on the importance of outside interests and post-career planning.

“I tried to make a point of doing things outside the box, of not having basketball consume me,” said Hill, who plays the piano and who, inspired by his father, has amassed a collection of African-American art, featuring pieces from Romare Bearden, Elizabeth Catlett and Hughie Lee Smith. “I was keenly aware when I was drafted, when I signed my first contract, immediately I was thinking about the end.”

Even home decor played a role in Hill’s transition to a life after basketball, said his mother, the architect and enforcer of what was known around the family’s Reston, Virginia, home as the “Janet Rule,” which states that her pro-athlete spouse wasn’t allowed to display any photos, trophies or memorabilia from his football career.

Controlling Ego

“You cannot play at a high level unless you have some ego. The question is: Can you control it when you’re off the court?” Janet Hill, a member of the Carlyle board, said in a telephone interview. “Part of that is once you walk in the house you have to be a normal family and take out the garbage. We cannot have Calvin in his football uniform in the living room.”

Grant Hill said he doesn’t display memorabilia from his basketball career around his house, either, even though his wife doesn’t object to it.

The existence of a Janet Rule drew a chuckle from Carlyle’s Rubenstein, who said Janet Hill has always been involved in her son’s undertakings.

“Grant is feeling his way as a non-basketball player,” Rubenstein said in a telephone interview. “I’m open to anything I can do to help him.”

Janet Hill also taught her son the value of a dollar, albeit unconventionally. As a 5- or 6-year-old, he was so rough on his toys that they would frequently break. Repeated admonitions didn’t change the behavior, so Janet Hill took action in what she described as “not one of my great moments.”

Retread Toys

One Christmas she had her son’s toys repaired, repackaged and placed under the tree.

“He was shocked,” she said. “But he took care of his toys after that.”

While Calvin Hill says the family lived below its means, he did allow himself one or two extravagances, including a German sports car for his 40th birthday. They also had a Beetle convertible.

“Grant wanted to get driven in that,” Calvin Hill said. “He didn’t want to feel different or separate himself.”

There were plenty of how-to-retire-from-sports role models around the Hill household, too. Among them were three hall-of famers: Staubach, executive chairman of the Americas at Jones Lang LaSalle Inc. (JLL), the second-largest commercial real estate broker; Ken Houston, who became a guidance counselor after football, and Ozzie Newsome, who now is an executive with the NFL’s Baltimore Ravens. Hill said he and Staubach have invested in some deals together.

Spending Time

“He has done it the right way, put the time in,” Staubach said in an interview when asked about Grant Hill, the financier.

Former Citigroup Inc. Chairman and Time Warner Inc. (TWX) Chief Executive Officer Dick Parsons, now a senior adviser at Providence Equity Partners, said Hill had clearly been preparing for his post-basketball life for a long time.

“He worked this thing,” Parsons said in a telephone interview. “Obviously, he had an eye on life after basketball.”

Preparation is a Hill hallmark, said Seth Ellis, the managing principal at Penta Mezzanine Fund. He said it’s a mistake for anyone to assume that Hill is just a famous face who shows up when it suits him. Hill even attends the 12-member company’s softball games, he said. Moreover, Ellis says Hill’s athletic experience and intuition about teamwork play an integral role in determining which management groups are worthy of doing business with the firm that’s raised about $70 million.

“That can’t be taught,” Ellis said.

Learning Opportunity

When it came to sports and business, whatever could be taught, Hill wanted to learn, says Adam Silver, a 1984 Duke graduate who’ll replace David Stern as NBA commissioner in February.

Silver said Hill, like hall-of-famers Johnson, Jordan and David Robinson, the co-founder of Admiral Capital Group, was among the first NBA players to leverage the intellectual capital available at the league, its teams and business partners.

Silver recalled a Hill-requested dinner during the NBA Finals in 2004. Because Hill had missed that entire season with an ankle injury that developed a near-fatal infection, Silver said he presumed their discussion would center on post-retirement opportunities in broadcasting. First Hill told Silver that he intended to resume his playing career, and then he inquired about opportunities to network with NBA officials and executives with league sponsors.

Basketball Return

“The last thing I thought he was going to tell me was he was coming back. He beat all odds. He’s a special person,” Silver said in a telephone interview. “Grant was one of those guys who took advantage of every opportunity afforded to him.”

Calvin Hill said his son has always been inquisitive, asking how and why, again and again, over and over, until he was satisfied. He recalled the time the younger Hill asked why ice forms on a pond, which led to a discussion -- and more questions -- about why the seasons change.

“He’s always trying to figure out how things are connected -- and why,” the elder Hill said.

Merrill Lynch’s Williams said Hill’s success in finance will stem as much from his brand as his brain.

“Grant stands for integrity,” said Williams, who attended the Nov. 12 Kansas-Duke game in Chicago with Hill. “People want to model themselves after Grant.”

Duke Return

Rubenstein, of Carlyle, said he hoped Hill would get more involved at Duke, perhaps by joining the trustees. Mack said he should consider counseling professional athletes in money matters, while Schwartz sees a parallel with former U.S. Senator Bill Bradley, who entered politics after a hall-of-fame basketball career with the New York Knicks.

Calvin Hill said that when it comes to his son he’s learned that trying to guess the future is senseless. He recalled Grant’s 18th birthday party, held at a hibachi restaurant near the Duke campus and where the guests included Blue Devils players and friends.

One of the guests asked the others at the table, including Varadhan, what they would do with a million dollars.

“They all said there would be no need to work -- that would be it,” Calvin Hill said.

$16 Million Apartment

Varadhan worked well past his first million. In 2008 he paid $16 million for his apartment at 15 Central Park West, the Roger A.M. Stern-designed building whose residents have included Goldman CEO Lloyd Blankfein and former Citigroup Chairman Sanford Weill.

Calvin Hill, having three times been part of a group that unsuccessfully tried to buy a professional sports franchise, did say that perhaps his son would make his way to the owner’s suite.

“I wouldn’t be surprised,” he said. “I always tell young people if you want to have power in sports, understand finance.”

To contact the reporter on this story: Scott Soshnick in New York at ssoshnick@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net

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