Illustration: R. Kikuo Johnson

Bloomberg Markets
Most Influential

They build companies and assemble fortunes. They 
run banks, or hope to disrupt them. They shape economies and spread ideas. They manage money and wield the clout that goes with the billions of dollars they invest. The 50 people in our fifth annual Most Influential ranking are a varied group but have in common extraordinary success in their chosen fields.

In selecting our influential elite, we favor recent accomplishments over lifetime achievements. Half the people here have never appeared on our list before. Tech executives and entrepreneurs and the venture capitalists who fund them are ascendant of late, and the list reflects that. China, for better or worse, is vital to global markets, and we have a bigger Asia cohort than ever.

To build our list each year, we start with a much larger universe of candidates, compiled with the help of Bloomberg News reporters and editors around the world. We also rely on the rankings, profiles, and cover stories we publish throughout the year in Bloomberg Markets. Then the magazine’s editors winnow it down, making the hard calls about who’s in and who’s out.

This year, for the first time, we enlisted the help of nine industry experts, who convened as the advisory board for our companion conference, the Bloomberg Markets Most Influential Summit. The panel consists of Cliff Asness, co-founder, AQR Capital Management; Brad Burnham, managing partner, Union Square Ventures; Marty Chavez, chief information officer, Goldman Sachs; Roger Ferguson, CEO, TIAA-CREF; Sonia Gardner, president, Avenue Capital Group; Alexandra Lebenthal, CEO, Lebenthal Holdings; Jeffrey Smith, CEO, Starboard Value; Paul Taubman, founding partner, PJT Partners; and Jeffrey Ubben, founder, ValueAct Capital Management.

Influence plays out in many ways. Our list this year includes the CEO who beat back an activist investor’s power grab, the African billionaire using his fortune to fight corruption, the economist who thinks economic models often don’t match reality, the money manager who has been publishing market analysis since he was 18, and the chairman of the world’s largest bank by assets—who will be paid less than $100,000 this year.

Robert S. Dieterich

The 50 Most Influential are spread across six different categories:

Next 3

Why Are You Influential?

The 50 Most Influential follow many paths to power. They sway economic policy, manage money, define banking, invent the future. Here's a glimpse at the varieties of influence that characterize the people who made this year's list.

Janet Yellen illustration


Janet Yellen

Chair, U.S. Federal Reserve
“There is no conceivable scenario in which it's going to be easy,” Alan Greenspan says of Yellen's task in guiding the Fed through liftoff.
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Illustration: R. Kikuo Johnson

Yellen’s Sway Over Rates Puts Her Atop Most Influential Ranking

On the bookshelf behind the sofa in Janet Yellen’s spacious office at 20th Street and Constitution Avenue in Washington sits a framed photograph her staff gave her when she was changing jobs five years ago. In it, she’s posed next to a poster she kept on her wall when she was president of the Federal Reserve Bank of San Francisco. It’s that poster, the now ubiquitous World War II slogan in plain type under a small British crown.

“Keep Calm and Carry On”—of course that’s Yellen’s motto. What’s more befitting a Fed chair who has yet to flinch in the face of withering criticism from right and left and especially from Congress, who is almost never off message, and who deftly manages an at times deeply divided policy-making committee?

Calmly carry on is what Yellen did on Sept. 17. Faced with a cacophony of advice from every corner and conflicting signals from a sturdy U.S. recovery and a faltering global economy, Yellen sifted the data, weighed the risks, and decided to put off the Fed’s first rate increase in nine years. But not for long. The rate-setting Federal Open Market Committee is still on course to lift rates from near zero later this year, she said at a press conference after the decision was announced.

“We have been receiving advice from a large number of economists and interested groups,” she said with an amused grin. “But look, at the end of the day, it’s the committee’s job to come together to analyze the data that we have on the economy,” she said, “and arrive at 
a committee judgment about the appropriate path of policy. And that’s what we did today.”

Janet Yellen
Photographer: Joe Pugliese

Yellen, 69, has spent her first year and a half atop the Fed positioning the central bank for liftoff—that first move up in rates that will bring Fed policy one step closer to normalcy after a period of extraordinary support for a weak economy in the U.S. and worldwide. She wound up the Fed’s bond-buying program a year ago and, save for one verbal misstep in her first press conference, deftly laid the groundwork for a shift to a tighter monetary stance. She has made subtle, carefully calibrated changes along the way in how she describes the central bank’s intentions.

Yellen’s colleagues seemed to be lining up behind a September rate hike—until the market swoon in late August, triggered by the rout in China’s stock market, the sudden devaluation of the yuan, and the growing concern that the Chinese government might be bungling its management of the economy. Yellen’s reaction? Let’s take a deep breath and some time to figure out what message the markets are sending about the global economy. But let’s not be scared into abandoning the plan for a rate hike this year.

“The Fed should not be responding to the ups and downs of the markets,” she said at the post-meeting presser. “But when there are significant financial developments, it’s incumbent on us to ask ourselves what is causing them.” So liftoff will wait a little longer. The Fed has meetings in October and December, and a hike is on the agenda for one of them.

“Discretion is the better part of valor,” says Ethan Harris, co-head of economic research at Bank of America. Not raising rates in September was a “tactical delay” to gather more evidence on the economy.

Already in the history books as the first woman to head the 101-year-old Fed, Yellen has the privilege, and the burden, of running the institution at a time when it has an unprecedented role in the global economy. During the financial crisis, the Fed bailed out lenders, shored up money market funds, and pumped trillions of dollars into the banking system. It effectively gave money away by keeping short-term interest rates pinned near zero. The odds may be long for Yellen to extricate the Fed from the easiest monetary policy it’s ever run without something going awry—stocks plunging, inflation getting out of control, deflation setting in, or another recession striking before many Americans feel the effects of the last one have been overcome.

Janet Yellen, Bill Clinton, and Robert Rubin
Yellen was an adviser to President Bill Clinton in the 1990s, when Robert Rubin, center, was at the Treasury.
Photographer: Stephen Jaffe/AFP/Getty Images

“There is no conceivable scenario in which it is going to be easy,” Alan Greenspan, Fed chairman from 1987 to 2006, said at a panel discussion in Washington on May 19.

The critics of Fed policy range from economist Paul Krugman and hedge fund manager Ray Dalio, who believe the central bank shouldn’t be raising rates at all, to people such as John Taylor of Stanford University, who says the rate hikes should have started about a year ago. “It’s overdue,” says Taylor, who would probably be a candidate for Yellen’s job should a Republican win the White House in 2016. 

Sniping from her fellow economists doesn’t particularly faze Yellen. She’s used to such vigorous debate, both inside the Fed and from her time as a professor.

“She had way more experience at the Fed than any other previous chairman,” says Bernanke.

What worries her more are attempts by lawmakers to impose new curbs on the Fed, arguing it overstepped the bounds during the financial crisis and is being reckless with its easy money now. Lawmakers, most notably Republican Senator Rand Paul, who is running for president, propose congressional audits of Fed monetary policy. And an odd-
couple alliance of liberal Massachusetts Democrat Elizabeth Warren and Tea Party Republican David Vitter of Louisiana champions a Senate bill further restricting the central bank’s power to lend money during financial emergencies—an ability that some Fed officials fear was already curbed too much by the Dodd-Frank law in 2010.

Yellen is vehement that central banks make the best monetary policy decisions when they have independence. 
“I feel very strongly about that,” she told reporters in March.

Janet Yellen at UC Berkeley
An old photo of Yellen is on an office wall at UC Berkeley.
Photographer: Jim Wilson/The New York Times/Redux

If all the external pressure isn’t enough, the economy itself is a puzzle, raising questions about the Fed’s ability to restore American prosperity on its own with little help from the lawmakers who control fiscal matters. The U.S. has grown just 2.2 percent per year since the end of the Great Recession in June 2009, well below the 3 percent pace of the decade prior to the financial crisis. Inflation has remained stubbornly below the Fed’s 2 percent goal. The Fed’s lax stance has proved to be a powerful tonic for financial markets, fanning fears that, to borrow a Greenspan phrase, irrational exuberance is boosting asset values.

So the diminutive, white-haired Yellen, who looks a bit like a kindly grandmother (though she doesn’t actually have grandkids), has to be the tough guy who will soon start raising rates, even as risks to the economy persist. At first blush, it seems paradoxical that Yellen has been cast in this role. She’s known as a dove who favors easy money to boost employment, putting her at the opposite end of the spectrum from the hawks who keep a sharp eye on inflation and raise rates more quickly.

Much of Yellen’s academic research focused on the labor market, and she traces her devotion to this topic in part to hearing members of an older generation tell of their struggles during the Great Depression. “I didn’t live through it, but my parents grew up during it,” she said in a 2011 interview with Bloomberg.

Still, colleagues say she recognizes there is just so much the Fed can do to help the less well off. She’s shown a willingness during her time at the Fed to tighten credit when she thought it was needed to keep inflation in check or, in monetary jargon, foster price stability.

“Every central banker I know treats price stability as a very central responsibility,” says Ben Bernanke, her predecessor as Fed chairman. “She’s no different in that respect.”

It was under Bernanke, in charge from 2006 to 2014, that the current era of central banker preeminence began. As financial markets froze and the global economy teetered on the brink of collapse, the Fed stretched the limits of the law to keep credit flowing. With President Barack Obama and the Republican-led Congress at loggerheads, the Fed found itself to be the only game in town in nurturing a hesitant recovery. It bought trillions of dollars of bonds, the strategy dubbed quantitative easing.

Conservatives condemned QE as back-door financing of Obama’s budget deficits. Liberals, while lauding the effort to foster growth and jobs, complained that the rich were getting richer as cheap Fed money inflated financial markets.

Janet Yellen and George Akerlof
Yellen and husband George Akerlof taught at UC Berkeley. In 2001, they celebrated his Nobel prize.
Photographer: Monica M. Davey/AFP/Getty Images

In fact, the bond buying has had far less economic impact than its supporters—or critics—expected. The current economic recovery has been the slowest since World War II, with growth consistently falling short of the Fed’s own projections. The almost complete lack of inflation, meanwhile, runs counter to some dire warnings. In 2010, two dozen prominent economists and money managers wrote in an open letter to Bernanke that QE must be abandoned to keep prices from getting out of control and avoid debasing the currency. In fact, inflation has been below the Fed’s target of 2 percent for 39 straight months.

What’s rising are deflation fears. Dalio, the founder of Bridgewater Associates, the world’s largest hedge fund firm, sees a threat of “deflationary contractions” worldwide. He predicts the Fed will have to flood the economy with more cash next year to protect the U.S. The dollar, defying the doomsayers of 2010, has soared.

One bright spot: the labor market. The U.S. jobless rate has fallen faster than Fed officials expected and, at 5.1 percent as of August, is roughly what many of them consider to be full employment. That’s a big reason some are itching to increase rates. But there’s an anomaly here, too. The improvement in the job market—unemployment cut almost in half in six years—hasn’t done anything for most workers’ wages.

In sum, nobody has ever faced a situation like this before. “There are a lot of uncertainties out there,” says Donald Kohn, who served as vice chairman of the Fed from 2006 to 2010. “We’re in uncharted waters as far as policy and the economy are concerned.”

The Fed interest rate graphic

Yellen’s long path to the top of the Fed began in Bay Ridge, Brooklyn, a working-class neighborhood where her father hung out his shingle as a young doctor during the Great Depression. Her mother, who taught elementary school until her own children arrived, handled the family finances and followed the stock market—traits Yellen has said probably spurred her interest in economics.

Yellen was a star student at Fort Hamilton High School, scooping up prizes in math, science, and English, and became class valedictorian. After graduating from Pembroke, Brown University’s women’s college, she earned a Ph.D. in economics at Yale University in 1971.

There, she studied under James Tobin, a towering figure in economics and strong advocate for government intervention in the economy. Tobin, who served as an adviser to President John F. Kennedy and was awarded the Nobel Prize in 1981, became Yellen’s most significant mentor.

Yellen was so meticulous in taking notes during Tobin’s macroeconomic class that they ended up as the unofficial textbook for future grad students. Such thoroughness is her hallmark to this day, so much so that one of her colleagues has gently ribbed her that she spends too much time preparing for public appearances. Her reply: That M.O. has served her well over the years, helping her keep calm and deal with the unexpected when it arrives.

In many ways, Yellen has been preparing to be Fed chair her entire career. Over a total of roughly 15 years starting in 1977, she held a variety of Fed posts: as an economist in Washington, as a governor, as president of the San Francisco Fed until 2010, and then as vice chair under Bernanke. She was chairman of President Bill Clinton’s Council of Economic Advisers in the late 1990s. She assumed the top Fed job in February 2014.

Bloomberg Markets
Featured in Bloomberg Markets, November 2015
Photographer: Joe Pugliese

“She had way more experience at the Fed than any other previous chairman,” says Bernanke.

It was during her first stint at the Fed that Yellen met economist and future Nobel laureate George Akerlof; they were married in 1978. The two ended up on the faculty of the University of California at Berkeley, where they collaborated on research that helped set the foundations for New Keynesian economics, a response to the New Classical ideas popular in the 1970s that questioned the efficacy of economic policies and championed unfettered markets. The New Keynesians put more emphasis on market failures and embraced 
a more important role for government in managing the business cycle; their ideas dominate central bank thinking today.

Yellen puts her experience to use in trying to forge a consensus within the central bank. Before every FOMC meeting, Yellen spends hours one-on-one, trying to understand fellow policy makers’ views. “She calls around beforehand, sometimes twice,” says Richard Fisher, who stepped down as Dallas Fed president in March after 10 years.

Yellen and the more hawkish Fisher didn’t see eye to eye on policy, but he says conversations with her were productive. She didn’t try to argue him over to her side. Hearing him out, she’d suggest other factors affecting the economy that he might consider. Fisher says there were times, as a result, when he did not dissent from the Fed’s decisions but instead sought to get the language of the accompanying statement more to his liking.

Yellen, as Bernanke did, lets other policy makers speak in an FOMC meeting before summing up their views and presenting her own. Fisher says she’s taken that tactic a step further, drawing on copious notes to summarize not only what’s been said but who’s said it.

Janet Yellen and Alan Greenspan
Yellen was a Fed governor under Alan Greenspan.
Photographer: Pablo Martinez Monsivais

“She’s very careful to listen to everybody, to take in everybody’s positions,” says Chicago Fed President Charles Evans.

When policy makers look at longer-term issues, such as changes to their communications strategy, Yellen lets discussions play out over 
a number of meetings. What at first seems like a passel of competing views is gradually boiled down to something most can either support or accept, says John Williams, who succeeded Yellen as president of the San Francisco Fed in 2010. “I think it’s a very effective strategy,” he says.

“You chew it over, you chew it over, and chew it over again until you can’t stand it anymore,” Charles Plosser says jokingly. He stepped down as president of the Philadelphia Fed in March. He cites as a case in point the long-running deliberations over the mechanics of managing a rate hike at a time when the banking system is awash in cash. “That discussion has been going on for two years at least,” he says.

And then there’s what Fisher refers to as Yellen’s “puckish sense of humor,” which helps her win people over. In March, in his last speech as head of the Dallas Fed, Fisher made a somewhat complicated comparison of Yellen to the early Hollywood sex symbol Mae West, who famously said, “I generally avoid temptation unless I can’t resist it.” His point was that the Fed must not succumb to temptation to put off that first rate hike. “I think I am safe in saying that Janet Yellen is no Mae West,” he said.

Rather than being offended, Yellen responded at a reception to mark Fisher’s leaving the Fed with her own famous Mae West line, saying Fisher should come up and see her sometime.

Yellen firmly believes the Fed functions best when all views are heard. “Listening to others, especially those with whom we disagree, tests our own ideas and beliefs,” she said in a May 2014 speech. Yellen declined to comment for this story.

“The Fed should not be responding to the ups and downs of the markets,” Yellen said.

Such openness, though, doesn’t mean Yellen is a pushover. She takes the lead in internal deliberations when necessary. “We all know that Janet Yellen is the chair of the Federal Reserve,” Williams says. “She’s the person clearly we’re looking to for direction and guidance on key issues and key strategies.”

Alan Blinder, a former Fed vice chair, describes her manner this way: “Janet has the important ability to disagree without being disagreeable.”

Her extensive experience has benefited Yellen in her public role as the Fed spokesperson, according to Bernanke. From the start, he says, “she knew how to talk to markets. She knew how to talk to the public. Her learning curve wasn’t quite as steep.” Bernanke is now a distinguished fellow with the Brookings Institution and an adviser to Chicago hedge fund firm Citadel.

Still, Yellen did make a slip early on when she suggested during her first press conference as chair that the Fed could begin raising rates around six months after ending its bond buying. The off-the-cuff remark spooked investors into thinking that liftoff might come in the first half of 2015, earlier than expected.

The Fed chief sought to undo the damage later in the month by promising in a speech to keep the Fed’s “extraordinary” support for the economy in place for “some time to come.” Coupled with reassuring comments by other policy makers, the Fed chair’s pledge succeeded in calming investor fears.

Under Bernanke, Yellen helped the Fed overhaul its communications strategy. Transparent explanation of monetary goals can itself be a policy tool, especially when rates are near zero and there’s no room for further cuts.

Yellen is no stranger to Fed credit-
tightening cycles. As a member of the FOMC, she played a role when the central bank raised interest rates in 1994 to 1995 and 2004 to 2006. Neither episode went as well as hoped for.

Janet Yellen and Ben Bernanke
In 2010, Ben Bernanke swore her in as his vice chair.
Photographer: Ho/Reuters/Corbis

While the 1994-to-1995 increase, which unfolded under Greenspan’s leadership, is viewed within the central bank as a success—it led to a soft landing of the economy, paving the way for six more years of growth—it nevertheless had costly side effects. There was carnage in the bond market as the Fed sporadically jacked rates higher. Seeking to avoid the turbulence of that period, Greenspan’s Fed adopted a different approach in 2004 to 2006, raising rates in carefully calibrated, quarter-point increases for 17 straight meetings. This approach did avoid roiling markets. Yet in retrospect, many Fed watchers think the plodding, predictable strategy led to excessive risk taking and contributed to the bubble in the housing market.

This time around, Fed officials have signaled they’ll try to strike a balance among the methods used in previous tightenings. They promise to let their decisions be driven by the economic and financial data. While steering clear of the metronomic rate increases of a decade ago, the Fed will attempt to provide investors with enough information that they’re not caught by surprise.

For now, the main point Yellen and her fellow policy makers have been trying to communicate is that rate hikes, once they begin, will be very gradual.

“She knew how to talk to markets. She knew how to talk to the public,” Bernanke says. “Her learning curve wasn’t quite as steep.”

Yellen and her colleagues have described what they’re trying to do this time as the “normalization” of monetary policy. But that bland phrase belies the difficulties and dangers that lie ahead.

For one thing, the Fed doesn’t have the same ability it’s had in the past to control the key interbank rate through which it promulgates its policies in the financial system and the economy. Banks have more than $2.5 trillion in excess reserves—funds beyond what they need to hold to meet regulatory minimums—parked at the Fed. So they have relatively little need to use the overnight interbank market. What’s more, some of the cash that QE pumped into the economy now sits in money market funds, where the interbank rate has no influence. The central bank has experimented with technical solutions designed to address this.

Also, the Fed is trying to tighten while much of the rest of the world is easing. Central bankers in the euro area, Japan, and China are seeking to boost their economies with monetary medicine. That complicates the Fed’s decisions by driving the dollar higher, which can hold down already-too-low U.S. inflation.

Yellen, though, seems determined to press ahead. One of the other times that Yellen appeared a bit amused at the Sept. 17 press conference came when a reporter asked if she worried that perhaps the Fed couldn’t escape from near-zero rates. After all, the September rate hike had been scuttled by global events, the questioner said. What if surprises keep coming? Yellen dismissed the idea as highly unlikely. “That’s not the way I see the outlook or the way the committee sees the outlook,” she said. So, it’s liftoff soon. How exactly the next era in Fed policy will play out is probably the better question.

NEXT: Xi Jinping 3

Xi Jinping illustration


Xi Jinping

President of China
After a summer of market turmoil, the financial world is waiting on Xi and his Communist Party colleagues to show they still have the right touch to run the second-biggest economy.
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Illustration: R. Kikuo Johnson

2 PREVIOUS: Janet Yellen | NEXT: Tim Cook 3

Tim Cook illustration


Tim Cook

CEO, Apple
Since Cook took over from the famous founder in 2011, the company’s market cap has doubled, profit has soared, cash has piled up, and Apple's influence has continued to accrue.
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Illustration: R. Kikuo Johnson

2 PREVIOUS: Xi Jinping | NEXT: Larry Fink 3

Larry Fink illustration


Larry Fink

Co-founder, BlackRock
His letter to CEOs in April on “the short-termist phenomenon” pushed Fink's views on activist investing to the fore, and his $4.7 trillion under management demands that people pay heed.
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Illustration: R. Kikuo Johnson

“I have enormous admiration for him,” says Steve Schwarzman, CEO and co-founder of Blackstone.

Related: “Blackstone and BlackRock Are Getting Into Each Other's Business”
Read the full story from Bloomberg Markets 3

(Correction: Steve Schwarzman is the CEO and co-founder of Blackstone, not BlackRock Group.)

2 PREVIOUS: Tim Cook | NEXT: Warren Buffett 3

Warren Buffett illustration


Warren Buffett

CEO, Berkshire Hathaway
He’s one of the world’s richest people and runs one of its most valuable companies without seeming to break a sweat. Buffett at 85 remains the investor everyone wants to emulate.
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Illustration: R. Kikuo Johnson

The Oracle of Omaha on Running a Lean Machine

The CEO of Berkshire Hathaway employs more than 300,000 people spread across more than 70 subsidiaries, including energy utilities, insurers, manufacturers, retailers, and a railroad.

“Most of our managers run very lean operations,” says Buffett, 85, who’s in his 50th year controlling Berkshire. “But it isn’t like they’re standing there with whips or anything like that. It’s just that they don’t have more people than they need.”

The same goes for Berkshire’s headquarters in Omaha, Nebraska, where you’ll find about only two dozen employees. “If you’ve got too many people,” says Buffett, “either you correct it or someone down the line will.”

2 PREVIOUS: Larry Fink | NEXT: Barack Obama 3

Barack Obama illustration


Barack Obama

President of the United States
Even as a lame duck, he has cut a deal with Iran that may open that nation to global business for the first time in a generation, and he's pushing ahead on his climate change agenda.
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Illustration: R. Kikuo Johnson

2 PREVIOUS: Warren Buffett | NEXT: Carl Icahn 3

Carl Icahn illustration


Carl Icahn

Chairman, Icahn Enterprises
All it takes is a tweet from Icahn that he has sold his Netflix stake (after he made at least $1.6 billion in the stock) to put the shares into a 2.7 percent intraday dive.
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Illustration: R. Kikuo Johnson

2 PREVIOUS: Barack Obama | NEXT: Lloyd Blankfein 3

Lloyd Blankfein illustration


Lloyd Blankfein

CEO, Goldman Sachs
With his firm extending its lead over key rivals, Blankfein is at the top of his game. Even with his recent revelation that he’s being treated for lymphoma, the CEO says he’ll continue to run the investment bank.
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Illustration: R. Kikuo Johnson

His Bank Leads the World in M&A This Year

Because Lloyd Blankfein came from the fixed-income-trading ranks, some investment bankers worried that his rise to the CEO job wouldn’t bode well for their part of the firm. Fast-forward a decade, and it’s clear that such fears were misplaced. Goldman Sachs has opened a historic lead on its investment banking rivals, advising on more than $760 billion of completed deals in the first eight months of this year, while its nearest competitor was under $500 billion. Goldman worked on six of the seven biggest deals that closed in that period. The bank generated $1.78 billion of advisory revenue in the first half, double Morgan Stanley’s total and more than quadruple that of Credit Suisse Group.

Blankfein, 61, has stayed committed to the trading, underwriting, and advisory of a full-service investment bank in the aftermath of the global financial crisis. His stay-the-course, think-long-term mantra has helped Goldman avoid the turmoil that has hobbled some large European banks that used to compete with him more aggressively. Goldman grabbed 30 percent of global merger advisory revenue in the first half of this year among the eight biggest banks, the largest share any firm has won in any six-month period since at least 2006, according to data from Bloomberg Intelligence. Investment banking dominance has helped Blankfein keep Goldman’s return on equity, which was 9.7 percent in the first half of this year, ahead of most global banks even as the trading business limps along, hurt by capital rules, regulatory changes, and lack of market volatility (at least until recently).

It may be risky to extrapolate, even with such a large lead, given how league table rankings can be swung by the timing of deals and client selection. And this year has brought the retirement of a handful of the top dealmakers who kept Goldman on a stable footing as it faced reputational issues in the aftermath of the financial crisis. Still, if the M&A boom has plenty of room to run—the firm’s executives and analysts say it does—is there another bank that’s likely to benefit more?

Blankfein deflects the issue of when he might leave, joking that he’s heard that question since day one. For now, he’s at the top of his game and seems to be enjoying the job as he leads the bank that made him a billionaire.

2 PREVIOUS: Carl Icahn | NEXT: Angela Merkel 3

Angela Merkel illustration


Angela Merkel

German Chancellor
Europe is a union with a leadership vacuum that’s being filled by Merkel, the powerful steward of the continent's largest economy. This was clear during the Greek debt crisis and, more recently, as she set the tenor of the debate about immigrants and refugees.
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Illustration: R. Kikuo Johnson

Mutti Matters Most in Europe

After 10 years in power, she can live with her nickname, Mutti, German for Mommy. And in this summer’s Greek bailout negotiations, she was the adult in the room, looked to for the final decision you would have to abide by, like it or not. On European issues, it’s her views that matter most, and others stake out their positions relative to what Merkel’s doing.

She’s Clever
“Angela Merkel 
is by far the most astute politician 
in Europe. There is 
no doubt about it.”
Yanis Varoufakis, former Greek Finance 

She’s generous
“To avoid risking 
a breakup with France, Angela Merkel had 
to give in. Tsipras got a pretty good deal out
 of that. These decisions show once and for all that the euro zone will turn into a ‘transfer union.’”
Hans-Werner Sinn, 
President, Ifo Institute 
for Economic Research

She’s stingy
“Europe, she declared, should emulate the famously thrifty Swabian housewife. 
This was a prescription for slow-motion disaster.”
Paul Krugman, New York Times columnist 

She’s smart
“She both understands the big picture and is very well versed in the minute detail. On top of that, she has been able to steer a Germany which has made a comeback economically and politically.”
Alexander Stubb, 
Finnish Finance Minister

2 PREVIOUS: Lloyd Blankfein | NEXT: Reid Hoffman 3

Reid Hoffman illustration


Reid Hoffman

Co-founder, LinkedIn
He’s helped build some of the tech world's most game-changing companies, including PayPal, LinkedIn, and Facebook, where he was an angel investor.
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Illustration: R. Kikuo Johnson

Billion Dollar Ideas Lurk in Hoffman's Silicon Valley Network

As far as high school bullies go, the one
 tormenting Reid Hoffman was pretty relentless. Nearly every day for a year at the Putney School in Vermont, the kid found new ways to persecute his victim: He took the hinges off Hoffman’s dorm room door, threw his clothes out the window, turned his bed upside down, and wrote nasty notes on his wall. Hoffman, a transplant from California who spent much of his time playing Dungeons & Dragons or working on a Commodore in the computer lab, probably seemed like an easy target—an outsider who wouldn’t put up much of a fight.

That may have been the last time anyone ever underestimated Reid Hoffman.

Taking his time, Hoffman sized up his harasser and took note of the cliques, dorm politics, hierarchies, and other high school dynamics. And then he figured out what to do. “I walked in to talk to him the first day of the next year, and I said, ‘Let me be clear. If one thing goes wrong in my room this year, I am going to presume it was you. I am not going to get evidence. I am going to presume it was you and break everything in your room.’” The kid was so taken aback by the unexpected show of force, he never touched Hoffman’s stuff again.

Reid Hoffman in office
Photographer: Robert Maxwell

Reid Hoffman—entrepreneur, executive, angel investor, venture capitalist, networker, power broker, and mediator—has built a career out of understanding how people act and react within social systems, everywhere from a New England prep school to, well, the entire professional world. For more than two decades, Hoffman, 48, has built some of the tech world’s most game-changing companies. As part of the founding team of PayPal (aka the PayPal Mafia), he tapped into people’s insecurities about sharing credit card information online to build a safe Internet payment empire that was the precursor to Apple Pay and other digital wallets. At LinkedIn, the company he co-founded in 2002, he seized on the motivations of millions of ambitious, career-minded professionals to connect with each other to get ahead. Two years later, as an angel investor, Hoffman foresaw how a young Harvard undergrad’s idea to digitize college “face books” could one day become a powerful tool for connecting far-flung friends and brokering new relationships. (Hoffman was among the first angel investors in Facebook. He put in $37,500 when the startup was valued at $5 million, according to TechCrunch. Today, its market capitalization is $260 billion.)

“He saw the future of social earlier than anybody else, how it would reorder how people would talk to each other, relate to each other,” says Herb Allen, CEO of Allen & Co., recalling an appearance by Hoffman nearly a decade ago at the investment bank’s annual conference in Sun Valley, Idaho. “It was like having Albert Einstein tell us about relativity.”

“He saw the future of social earlier than anybody else.”

To veterans such as Allen, Hoffman is part sage, part Cassandra, a guide who can help them understand the increasingly important technologies that have the potential to upend businesses and mint new fortunes. Now a venture capitalist at Greylock Partners, Hoffman gets a first look at pretty much any idea that could have an impact on corporations and citizens well beyond Silicon Valley, from Wall Street to Shenzhen. He and his partners at Greylock have backed some of the biggest game changers of the past decade, including Airbnb, Instagram, and enterprise software maker Workday. The firm is also betting on buzzy up-and-comers such as video app Meerkat, Docker (open-source platform), and Xapo, a major bitcoin bank.

Hoffman’s own network is one of the best in tech. He’s part of a handful of interlocking groups whose members frequently co-invest in startups, recommend employees to one another, sit on corporate and nonprofit boards together, and regularly gather at each others’ homes and private conferences to hash out ideas that could change the world. Hoffman’s speed dial includes Tesla Motors and SpaceX co-founder Elon Musk, fellow investor Marc Andreessen, Facebook COO Sheryl Sandberg, investor Peter Thiel, and New Jersey Senator and fellow Stanford alum Cory Booker.

But Hoffman’s golden Rolodex only partly explains his pull in Silicon Valley and beyond. In an industry full of big brains and big egos, Hoffman is one of the few people who can bring rivals or disparate views together. “He has the trust of all parties. He’s the guy people go to when they need someone to mediate a conflict,” says Joi Ito, co-founder of companies such as Digital Garage and Infoseek Japan and the head of MIT’s Media Lab. Adds Ito: “In Silicon Valley, Reid is the OG.” (For anyone who has not listened to a rap song over the past 20 years, that means “Original Gangster.”)

Reid Hoffman, Peter Thiel, Elon Musk,, and Bob Iger
Reid's world: Hoffman in conversations with, from left, investor Peter Thiel, inventor Elon Musk, and Disney chief executive Bob Iger.
Source: Greylock Partners

Five years ago, as a newly minted venture capitalist, Hoffman brought his partners at Greylock an idea that started a fight. Three young men had launched a site to help people rent out their spare rooms but had yet to attract many users. They were looking for funding. “There was a lot of skepticism, including from me—I thought it was glorified couch surfing,” says David Sze, Greylock’s senior managing partner, recalling how he openly clashed with Hoffman over the idea.

It takes a lot to persuade Greylock’s partners to back a company. The partners and associates see thousands of pitches a year, and they set a high bar. The firm has one of the best track records in the Valley, with about a dozen companies valued at more than $1 billion in its active portfolio. Its partners are legends in their own right. Aneel Bhusri, the firm’s advisory partner, was a top executive at PeopleSoft and co-founded Workday, where he continues to serve as full-time CEO. John Lilly was CEO of Mozilla. Managing partner Sze led Greylock’s investments in Facebook and LinkedIn.

Around Greylock, the battle over its investment in Airbnb is famous. Sze argued against it: Who would want to let some stranger found on the Internet into his home? Who would want to stay? The idea felt sketchy, unworkable. To Hoffman, however, it felt like a new economic system.

“For the vast majority of the middle class, the biggest asset they have is illiquid—their residence,” Hoffman says, recalling the argument he used to persuade his partners. He described how mobile phones and apps, digital cameras, and faster Internet connections could unlock billions of dollars pent up in people’s homes. He believed that this little “couch surfing” site could connect a global community of travelers and hosts, where online reputations mattered as much as in the real world. He argued that the financial incentives would motivate that community to monitor itself, to keep each other honest. “He was evocative of not getting stuck in what it looks like today, but what it could look like in the future,” Sze recalls. Hoffman ultimately won the debate. Greylock agreed to lead a $7 million round in Airbnb in 2010. Today Airbnb is valued at close to $25 billion.

Hoffman grew up the only child of two lawyers from Berkeley, California. His father worked with the Black Panthers. Family lore has him, at times, sleeping on the floor of its headquarters. His parents, who divorced when he was a year old, encouraged him intellectually and pushed him to be independent. He applied to boarding school without telling them, partly just to see what would happen. A top student, he spent a lot of time reading and playing the fantasy game RuneQuest with his roommate. He was close to his teachers. He still remembers one long, late-night talk with his biology teacher about whether humans are essentially advanced robots.

Still, it wasn’t until he got to Stanford in 1985 that Hoffman started figuring out where he fit in. He was surrounded by kids just like him—brainy, offbeat, ambitious. Walking the halls those days were future entrepreneurs such as Thiel and Jerry Yang, co-founder of Yahoo! Here, he met some of the most important people in his life, including his future wife, Michelle Yee. (The couple married in 2004.)

Reid Hoffman at Putney School
Hoffman as a child in California and at the Putney School in Vermont.
Source: Reid Hoffman

At Stanford, Hoffman was at the center of a group of students who opted for a new major called symbolic systems, which pulled together coursework from computer science, linguistics, philosophy, artificial intelligence, and other disciplines. It was tailor-made for Hoffman, who was not only hooked on technology but also interested in people and how they work within networks and systems. Hoffman was the eighth person to declare the major; it has since become to Silicon Valley what a Harvard MBA degree is to Wall Street. Symbolic systems alums include Yahoo CEO Marissa Mayer, Instagram co-founder Mike Krieger, and Scott Forstall, who helped build the iPhone.

During this time, Hoffman began to examine how humans and machines connect across a range of disciplines—from linguistics to artificial intelligence. Suddenly, what started out in high school—his navigating cliques and dorm dynamics—seemed to connect to bigger, broader social systems that existed all around the world. “I started thinking about the fact that what I was operating in was networks,” says Hoffman. He began contemplating how to use software and algorithms to accelerate or enhance what people do naturally—try to connect to one another.

After graduating from Stanford in 1990, Hoffman won a Marshall Scholarship to study at Oxford, where he spent three years studying philosophy. Silicon Valley drew him home. By the mid-1990s, the Internet era was heating up: Andreessen and Jim Clark were launching Netscape, and Larry Page and Sergey Brin were starting Google. (Andreessen went on to start Andreessen Horowitz, a leading venture firm in which Bloomberg LP, the parent of Bloomberg Markets, is an investor.)

Hoffman, after midlevel stints at Apple and Fujitsu, joined the entrepreneurial scrum. His idea: to use the Internet to connect buyers and sellers, people seeking roommates, and more, a sort of interactive classified ads section. The company, called SocialNet, failed, in part, Hoffman says, because users could remain anonymous, which undermined trust in the system. He would remember this lesson years later, when he launched LinkedIn. Hoffman says he left SocialNet after clashing with the board about strategic direction.

He wasn’t out of a gig for long. In 2000, as Hoffman was wrapping up at SocialNet, his friend and Stanford classmate Thiel asked him to join his startup, PayPal. The company had one big customer, EBay, which encouraged its buyers and sellers to use PayPal in lieu of credit card transactions. But EBay also had acquired Billpoint, a competing payment system. “Peter’s mission to me was, ‘Make sure EBay will not block us from the platform,’” recalls Hoffman.

Reid Hoffman at Stanford and at Oxford
Hoffman as a Stanford undergraduate and at Oxford on a Marshall Scholarship.
Source: Reid Hoffman

Hoffman says he remembers thinking about how EBay’s top sellers—who were using PayPal to run their auctions—could help apply pressure on EBay. He reached out to mom-and-pop auctioneers, many of whom made it clear that they would raise a riot over losing access to PayPal. EBay eventually nixed Billpoint and, in 2002, bought PayPal for $1.5 billion. EBay confirms Hoffman’s efforts to “rally the community effectively.”

Hoffman is, by all accounts, a master tactician. Friends say he’s almost unbeatable at Settlers of Catan—a board game popular in Silicon Valley in which players compete to build new societies within an imaginary world. Those who have worked closely with him say he has an uncanny way of reading people, figuring out what makes them tick. “You’d be in a meeting with Reid, and he would have this ability to X-ray the motives people have,” says Thiel.

In 2002, Hoffman assembled a team of ex–SocialNet and PayPal colleagues to start 
LinkedIn. The professional networking site was not an immediate success. At first, very few people were willing to post their résumés on an untested site. The company almost failed in its first year. But Hoffman had learned an important lesson from SocialNet. To survive, 
LinkedIn had to find ways to motivate users to post accurate information, to become what it now calls “the professional profile of record.” Hoffman understood that people would be willing to provide information about themselves in order to connect with peers, especially if it could lead to better jobs or professional advancement. LinkedIn now has over 380 million users globally. It is valued at $25 billion.

“You’d be in a meeting with Reid, and he would have this ability to X-ray the motives people have.”

How does a founder score a meeting with one of Silicon Valley’s most sought-after investors? By networking, of course. “The first meeting is always on reference,” says Hoffman, which means an entrepreneur needs to work his or her connections to find someone to broker an introduction.

Hoffman says he can quickly sort ideas and companies into a few buckets. In about 30 percent of cases, he muses, “you go, ‘This is interesting and I would like to know more.’” In another 30 percent of situations, it is harder to tell: “Kind of maybe this is useful, but I don’t have any good data. And then there is 30 where the answer is no.”

And in 10 percent of cases, Hoffman gets really excited. Last year, one of Hoffman’s partners suggested he meet an executive who’d just left his job at one of the world’s largest tech companies and was trying to figure out his next move. The two met for sushi, and, almost immediately, Hoffman sensed something big in the ambitious techie sitting across from him. “You could tell right away he was a huge talent,” says Hoffman. That dinner turned into more conversations and ultimately an idea for a new company. Hoffman acknowledges that the scheme could change the world or flame out, but Greylock is now incubating it in stealth mode (Silicon Valley speak for top secret) and can’t publicly discuss its details.

Hoffman spends almost all of his time, including evenings and weekends, meeting with entrepreneurs, other investors, professors, and politicians. Friends say he has boundless energy when it comes to learning about new people and ideas. He plans dinners and events around topics he’s interested in. Once, he arranged for a group of his friends, including Herb Allen and Jerry Yang, to spend the day at a genomics lab studying the DNA of different viruses. Another event he helps organize, dubbed “The Weekend (to be named later),” convenes an eclectic group. One year, Hoffman invited a prosecutor from the Jeffrey Dahmer trial who later left the law to become a Jesuit priest.

Observes Victor Koo, CEO of Youku Tudou and one of China’s most successful entrepreneurs: “In China, we talk about this concept called guanxi; it means building relationships—Reid is a master at it.” Koo says he got to know Hoffman nearly a decade ago, when his video site (think YouTube for China) was just getting off the ground. Long before most Silicon Valley investors began to poke around China’s startups, Hoffman struck up a friendship with Koo because he wanted to learn about China through other founders.

Back in his office in Menlo Park, Hoffman is trying to answer the question that everyone seems to ask him: What’s next? He closes his eyes, almost as though he’s trying to form a picture in his head. A moment later, he opens them and shakes his head. Today, he’s got nothing (or he’s not telling). But that could change at any moment. As he once wrote on his blog: “When I walk through an office, I see networks. I know that makes me sound like the kid from The Sixth Sense. But I don’t see dead people. I see networks.”

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Jamie Dimon

CEO, JPMorgan Chase
Analyst Mike Mayo at CLSA compares Dimon to LeBron James for his abilities on both offense (record profits in four of the past five years) and defense (guiding the bank through $36 billion in legal and regulatory payouts).
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Illustration: R. Kikuo Johnson

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Abigail Johnson

CEO, Fidelity Investments
She took over the family business a year ago. She also owns 24.5 percent of it, which is why she’s worth some $7.5 billion, according to the Bloomberg Billionaires index.
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Narendra Modi

Prime Minister of India
He won election in May 2014 by the widest margin in 30 years, giving him a shot at making some investment-friendly reforms that have faced stubborn resistance in the world’s largest democracy. India might grow faster than China this year.
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Illustration: R. Kikuo Johnson

“He wants to see himself as politically immortal,” says biographer Nilanjan Mukhopadhyay.

Related: “Narendra Modi: A Man Apart”
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Mario Draghi illustration


Mario Draghi

President, European Central Bank
As the Fed withdraws monetary support, investors in Europe are counting on Draghi and the ECB to step up with the stimulus Europe needs to keep a weak recovery going.
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Illustration: R. Kikuo Johnson

Mr. Whatever It Takes

At the height of the euro-zone crisis in July 2012, as sovereign bond yields soared, Draghi, the European Central Bank President, delivered the line that has become the ultimate proof of the power of a central banker’s words: “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.”

He was making the most of the fact that investors put great weight on monetary officials’ every utterance—something Janet Yellen, in her way, has done too. Where Draghi differs from his Fed counterpart is that he spoke off the cuff. The whatever-it-takes comment was impromptu, not part of a carefully calibrated communications strategy. No one can accuse Draghi of being too timid.

His boldness has won Draghi enemies. In Germany, in particular, opponents of easy monetary policy are lined up against him. But he nevertheless managed to push through Europe’s quantitative easing program, which began in March, after months of diplomacy and alliance building.

In January, after the meeting of his governing council that approved his QE plan, the modest Italian banker was spotted flying home in economy class, relaxing with a game on his iPad. Playing what? Chess, of course. 

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Jeff Bezos

With Amazon shares outperforming other large U.S. tech companies this year, Bezos has seen his fortune surge to some $45 billion (as of Sept. 29), topping the Google and Facebook founders.
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Ana Botín

Chairman, Banco Santander
She's the fourth-generation Botín to run Santander. The Madrid-based lender today has a greater market capitalization than Deutsche Bank and Société Générale combined.
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Jorge Paulo Lemann

Co-founder, 3G Capital
While avoiding the limelight, Brazil’s richest man has done some of the biggest deals ever in global food and beverage. His brands, ranging from Stella Artois to Velveeta, are well known even if his name is not.
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Illustration: R. Kikuo Johnson

The Brazilian Dealmaker Who Wowed Buffett is Reshaping the World

The Brazilian dealmaker reshaping the global food and beverage industry doesn’t have much to say for himself, at least not in public. Jorge Paulo Lemann orchestrated H.J. Heinz’s $46.7 billion merger with Kraft Foods Group in July, turned struggling Burger King into a lucrative bet for shareholders, and formed the world’s biggest beer company, Anheuser-Busch InBev, all without personally hosting a press conference on the deals. He values his privacy so much that he asks associates to keep mum about him. Yet one famous investor is eager to talk.

“I was hoping it was Jorge Paulo instead of you when the phone rang,” Warren Buffett quips in late August when asked about Lemann and his investment firm, 3G Capital, which was formed in 2004. “They’re already doing big things, but they’ll do even bigger things. They set extremely high standards for themselves, and then they exceed them.”

Lemann is wasting little time living up to that billing. AB InBev, which he controls with other Brazilian billionaires and wealthy Belgian families, said on Sept. 16 that it plans to make an offer for SABMiller, home to such brands as Peroni and Grolsch. A deal would unite the world’s top two brewers and create a company that generates about half of the industry’s profit.

Backed by more than $20 billion from Buffett’s Berkshire Hathaway, Lemann, a silver-haired former professional tennis player, has put his stamp on entire sections of the economy en route to becoming the richest person in Brazil—with a net worth of $23.6 billion on Sept. 30, according to the Bloomberg Billionaires Index. He’s a takeover artist who loves high-profile brands and hates companies with unnecessary costs—including people. Lemann, 76, forged a corporate culture based on merit and recruited aggressive managers to put his ideas into practice. His executive team has been so effective at boosting profits that competitors feel compelled to change how they do business—or risk becoming Lemann’s next target.

Lemann isn’t shy about showing off his ambitions behind closed doors. Just months after he formed Anheuser-Busch InBev in November 2008, Lemann and 3G’s other billionaire co-founders, Carlos Sicupira and Marcel Telles, met with staff at the investment firm’s midtown Manhattan office. Over a Cipriani-
catered lunch, someone asked Lemann what his dream acquisition would be. “We’d love to take a look at Coca-Cola,” he replied. In Lemann’s view, according to a person at the meeting who asked to remain anonymous, the soft-drink maker was ripe for new managers to eliminate costs—including most of Coke’s nearly 100,000 employees. “We could run it with 200 people,” Lemann said jokingly. Both he and 3G declined to comment for this story, as did a Coca-Cola spokesperson.

Lemann food and beverage brands

Lemann’s comment presaged his run of splashy takeovers—and the ensuing debate over his tactics. The next year, 3G paid $3.3 billion to buy Burger King from investors, including Goldman Sachs, TPG Capital, and Bain Capital. Lemann’s team sold all but 52 of the company-owned stores to franchisees, defying conventional wisdom that fast-food chains had to own their restaurants to understand customers. By the time Burger King announced its takeover of Canadian doughnut chain Tim Hortons in August 2014, growth in same-store sales at the Home of the Whopper was outstripping that at McDonald’s. “The turnaround on Burger King was brilliant,” says Luiz Cezar Fernandes, who co-founded investment bank Banco Garantia with Lemann in the 1970s. “I think Buffett was watching closely.”

He was. Buffett, 85, says he passed on getting involved with Burger King because of its rocky past. In 2013, Lemann orchestrated the $23 billion acquisition of ketchup maker Heinz. This time, Buffett was ready to join. He bought half of the common stock for $4.25 billion and preferred shares for $8 billion. 3G immediately installed its own managers. They slashed 7,000 jobs, shuttered five factories, and made departments justify expenses from scratch each year. Margins on adjusted earnings rose to 26 percent from 18 percent in the first year and a half, paving the way for Heinz to take over Kraft.

Now, Kraft plans to cut 2,500 workers to help reap $1.5 billion in annual savings by 2018. Even small perks are gone: The company yanked refrigerators stocked with free cheese sticks and other snacks after the deal closed. Buffett made out handsomely. When Kraft Heinz began trading in July, the market valued Berkshire’s stake at $24 billion, more than double what Berkshire had paid for the common stock and a special dividend to Kraft shareholders.

Lemann’s critics say his approach is harsh and that he and his partners benefit as others lose. The newly merged Kraft Heinz is pushing 15,000 retirees onto private health exchanges to reduce costs. Under 3G, Heinz’s presence in Pittsburgh is fading along with its local workforce—a complaint echoed in cities from Madison, Wisconsin, to Leamington, 
Ontario. “They’re cutting back the fat,” says Audrey Guskey, a marketing professor at Pittsburgh’s Duquesne University. “And Pittsburghers tend to be a part of that fat.”

Buffett says 3G makes changes quickly and is fair with severance packages. “I do not believe in seeing how long you can spend to take a tooth out,” he says.

3G’s Burger King strategy has endured its own bashing. After the chain acquired Tim Hortons, U.S. Senator Elizabeth Warren and others branded the move a tax dodge. The new holding company is based in Canada, where the corporate tax rate is lower than in the U.S. The company and Buffett, who put up $3 billion in financing, said taxes didn’t drive the deal. But the merger came as more U.S. companies were called out for moving abroad to lower their tax burden.

Competitors are scrambling to deal with 3G’s willingness to cut deeper than anyone else. 3G and Berkshire “have pulverized the food industry market, particularly in America, with serial acquisitions,” Nestlé Chairman Peter Brabeck-Letmathe said at the company’s annual meeting in April.

Jorge Paolo Lemann food illustration
Illustration: Matt Dartford/Flip CG

Still, CEOs can’t help but copy Lemann’s moves. Kellogg, Campbell Soup, and Mondelēz International, the snack foods company that was spun off from Kraft in 2012, are implementing versions of 3G’s budgeting approach.

Bill Ackman is betting he’ll benefit from the trend. The activist hedge fund manager amassed a $5.6 billion stake in Mondelēz this year after seeing what Lemann’s people could do. His Pershing Square Capital Management was among backers who put up $1.4 billion to help 3G take Burger King public in 2012. “They’re very long-term shareholders, incredibly disciplined,” Ackman said of Lemann’s team in August. “There is a lot to admire about them.”

Buffett, too, emphasizes that Lemann builds and holds companies. Lemann and his partners bought Brahma, a small Brazilian brewer, in the 1980s and used it to amass an empire that now includes Budweiser, Beck’s, and Stella Artois. “They started out with a nothing little brewery in Brazil, and in not many years, they’ve become probably the No. 1 beer operator in the world,” Buffett says.

Lemann has long avoided the spotlight, especially since a 1999 failed kidnapping attempt on his children in São Paulo. The children’s driver was shot in the arm and survived. Lemann now splits his time among a home base in Switzerland, his native Brazil, and the U.S. He keeps his wardrobe understated, favoring khakis and button-down shirts to suits.

Much of Lemann’s success stems from the loyal protégés—starting with Telles and Sicupira—whom he’s fostered over five decades. Lemann attracts new managers by funding scholarships to Harvard, Stanford, and other A-list universities. He paid for the schooling of Carlos Brito and Bernardo Hees—now the CEOs of AB InBev and Kraft Heinz, respectively. His family foundation, Fundação Lemann, is trying to revamp Brazil’s eduction system. It has sponsored 305 scholars for postgraduate degrees in public policy and plans to reach more Brazilians via methods such as online training. “I proposed to the board a goal of 1 million people by 2018,” says Denis Mizne, CEO of Fundação Lemann. “They came back with 30 million.”

Lemann’s life story, popular lore in Brazil, is a powerful recruiting tool. Born in 1939 in Rio to Swiss parents, Jorge Paulo was voted most likely to succeed at the American school where he honed his English. Even so, he spent much of his time catching waves on Arpoador, Rio’s famed surfing beach. He also excelled at tennis, playing in Wimbledon and twice competing in the Davis Cup, though he never won a match at either event.

Lemann’s father, who died when Jorge Paulo was a teenager, wanted to expand the family’s cheese business in Brazil. His mother had grander plans. She prodded her only son to apply to Harvard. His father “thought relatively small,” Lemann said at a videotaped event in April 2014.

At Harvard, Lemann never got used to the New England winters. He crammed using old exams he discovered in the library and got his economics degree in three years, according to a speech he gave on his experience. After stints at Brazilian and Swiss financial companies, Lemann joined a group of traders in 1971 to take over a small brokerage called Garantia. They turned it into the nation’s premier investment bank that soon was helping Philip Morris and Colgate-Palmolive expand in Latin America’s largest economy.

Lemann got to know Telles and Sicupira at the bank. Mostly staffed by men in their 20s, Garantia had the feel of a boys’ club. Potential hires were asked about their sex lives and drug habits to weed out recruits that might be easily rattled, says co-founder Fernandes. Telles and Sicupira, now Brazil’s third- and fourth-richest men, respectively, joined Lemann on spearfishing trips, according to a 2013 book called Sonho Grande (Dream Big). The trio sported their diving watches at work as emblems of a blossoming partnership.

Warren Buffett and Charles Munger Heinz bottles
Special ketchup and mustard bottles feature Warren Buffett and Charles Munger of Berkshire Hathaway, which worked with 3G to buy Heinz and later combine it with Kraft.
Photographer: Rick Wilking/Landov

Lemann honed his management philosophy by importing American-style meritocracy in the 1970s and 1980s. He and Sicupira visited Sam Walton and saw how Wal-Mart’s founder pinched suppliers and controlled inventories. They applied those lessons at Lojas Americanas, a retail chain they acquired in 1982 in Brazil’s first hostile takeover. At Garantia, they adopted the Goldman Sachs partnership model and bonus pay. From General Electric CEO Jack Welch, they borrowed the rule of rewarding the top 20 percent of workers, keeping another 70 percent, and firing the bottom 10 percent. “We grabbed the best practices of other places and packaged it into a thing that became our culture,” Lemann said in a video posted on YouTube in April 2014.

Lemann stood out for taking big risks when Brazil’s sky-high interest rates meant investors could make fat returns simply by parking money in fixed income. Before the Asian financial crisis in 1997, Garantia sold insurance against losses on Brazil’s government bonds. When the contagion spread, the bank lost hundreds of millions of dollars. Lemann’s reputation suffered.

“I don’t know how they sleep at night,” says Raul Boesel, a Brazilian race car driver. He lost about half of the $3 million he’d invested, according to Sonho Grande. After Boesel aired his grievances, Brahma, the beer company Lemann and his partners controlled, canceled his sponsorship.

The partners sold Garantia to Credit Suisse in 1998, moving on to GP Investments, a private equity firm Lemann had helped set up. They quickly learned it was easier to trim an ailing business that had brand recognition than to build a new one from scratch. Looking beyond Latin America, Lemann joined Gillette’s board in 1998. Buffett was a director at the razor maker—although his relationship with Lemann wouldn’t deepen until later. “I didn’t really get to know him that well until years after I should have,” Buffett says.

Bill Gantz, a board member at the time, recalls the meetings, which at one point included private equity titan Henry Kravis. There was potential for big egos, but it was a collegial group, Gantz says. While Buffett lit up the gatherings with banter, Lemann was more reserved. Even then, his ambition was apparent. “I thought at that time he was going to move the center of his business beyond Brazil,” Gantz says.

Corporate America got its first big taste of Lemann with Anheuser-Busch. Using a controlling stake in Belgian brewer InBev, he made an unsolicited, debt-fueled bid for the Budweiser brewer.

Lemann’s managers quickly found ways to scale back. Anheuser-Busch fired about 1,400 people, or roughly 6 percent of its U.S. workforce. Flights on corporate jets were out, as was free beer. Investors loved it. AB InBev’s stock has soared fivefold since the merger, giving the company a $171 billion market value as of Sept. 30.

On his home turf, business leaders view Lemann as a pioneer of American-inspired efficiency. But he isn’t above accepting some Brazilian-style corporate welfare. BNDES, the nation’s development bank, disclosed in June that AmBev, the Brazilian unit of AB InBev, received below-market rates on loans for 1.8 billion reais ($464 million) from 2012 to 2014. The bank’s biggest subsidized loans usually go to “national champions,” which take advantage of state subsidies to undercut competition.

“I love the idea of partners who are going to do big things,” Warren Buffett says of working with Lemann and 3G.

Like many of the champions, Lemann’s companies are close to the political establishment. AmBev was a top campaign 
financier to the ruling party and, along with Lojas Americanas, has sponsored Luiz Inácio Lula da Silva’s speaking engagements since he left the presidency. The bank faces a congressional inquiry 
focused on loans made during the era of Lula and his handpicked successor, Dilma Rousseff. The bank has denied any wrongdoing. Neither AmBev nor 3G has been implicated. AmBev said its campaign donations “follow the rules of Brazilian law; they are absolutely transparent.”

Some analysts question the limits of 
Lemann’s cost cutting. McKinsey & Co. estimated in February that AB InBev’s market share in the U.S. had slipped 2.4 percentage points from 2009 to 2014 as consumers embraced craft beers. Heinz’s share has dropped in 65 percent of its offerings, from bullion to frozen dinners. “You can’t cost cut your way to prosperity,” says Brian Yarbrough, an analyst at Edward Jones.

Lemann’s defenders say it takes time for cost reductions to open the way for sales growth. But he isn’t waiting around. Lemann faces “enormous pressure” to make room for the talent he’s cultivating, Garantia co-founder Fernandes says. Investors—Buffett among them—are betting he’s far from done buying businesses. In June, a Brazilian magazine reported Lemann was interested in London-based liquor giant Diageo. Its American depositary receipts surged 8 percent on the speculation. SABMiller’s shares shot up as much as 24 percent on Sept. 16 amid news of AB InBev’s interest.

As for Coca-Cola, Buffett rules out a 3G-led takeover. “That would be very unlikely,” he says. “I don’t think Coke is looking for a deal.” Berkshire is the soft-drink maker’s largest shareholder, so it would be hard to imagine a buyout without Buffett’s blessing.

Still, you can be sure that whenever Jorge Paulo calls, his buddy Warren Buffett will pick up the phone. “I love the idea of partners who are going to do big things,” Buffett says. “To find opportunities with people that more than deliver and are more than fair, that’s a real rarity.”

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Ray Dalio

Founder, Bridgewater Associates
His hedge fund firm is the world’s biggest, with $169 billion under management, and all that money lends weight to his views, including the opinion that central banks shouldn’t be tightening anytime soon.
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Elizabeth Warren illustration


Elizabeth Warren

U.S. Senator
She has a bully pulpit and bulldog tactics, credentials as a Harvard Law professor and is creator of the Consumer Financial Protection Bureau. Taken together, it makes her the go-to senator on banking regulation.
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Illustration: R. Kikuo Johnson

“More than any of the senators, she is making Wall Street nervous,” says Dick Durbin, a Democratic senator from Illinois.

Related: “Why Elizabeth Warren Makes Wall Street Tremble”
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Thomas Piketty illustration


Thomas Piketty

Professor, Paris School of Economics
He emerged in 2014 as the thought leader on income inequality, and this year entered the debate over Greek debt when he said in an interview with Die Zeit: “Germany is the country that has never repaid its debts.”
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2 PREVIOUS: Elizabeth Warren | NEXT: Jeffrey Gundlach 3

Jeffrey Gundlach illustration


Jeffrey Gundlach

Founder, DoubleLine Capital
With ex-Pimco supremo Bill Gross handling just $1.5 billion at Janus, Gundlach, whose firm manages $76 billion, gets to wear the bond king crown now.
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2 PREVIOUS: Thomas Piketty | NEXT: Fan Bao 3

Fan Bao illustration


Fan Bao

Founder, China Renaissance
The fast-talking Bao has the guanxi to arrange practically anything in China’s vibrant tech scene, such as the $6 billion merger of taxi app giants Didi Dache and Kuaidi Dache, China's biggest Internet M&A deal of 2015.
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Illustration: R. Kikuo Johnson

“The Internet has disrupted many industries, and it is pretty amazing that investment banking is the last man standing,” says Bao.

Related: “Searching for the Next Jack Ma”
Read the full story from Bloomberg Markets 3

2 PREVIOUS: Jeffrey Gundlach | NEXT: Tidjane Thiam 3

Tidjane Thiam illustration


Tidjane Thiam

CEO, Credit Suisse Group
Thiam’s success as CEO of Prudential in the U.K. earned him the top job at Zurich-based Credit Suisse, and he arrived promising to be “ruthlessly selective” as he prioritizes wealth management over investment banking.
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2 PREVIOUS: Fan Bao | NEXT: Ruth Porat 3

Ruth Porat illustration


Ruth Porat

CFO, Google
Porat decamped for Silicon Valley after more than 25 years on Wall Street, where she had become one of the most powerful women in the financial industry. Investors in Google quickly took notice of her arrival.
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The Search Giant Has Found Its Disciplinarian

About 30 seconds into her first earnings call as Google’s new chief financial officer in July, Ruth 
Porat proved why she’d landed the job. After unveiling second-
quarter results that topped analysts’ estimates, Porat, 57, quickly pointed to “ongoing operating expense discipline” that helped operating income jump 13 percent. All told, she used the word discipline six times on the call. The stock soared, adding more than $60 billion in market capitalization the next day.

Porat joined Google in May after more than 25 years on Wall Street, the past five of which she spent as CFO of Morgan Stanley, where she helped stabilize the investment bank after its near collapse 
in 2008. Porat is likely to help temper Google’s highflying, far-reaching ambitions with some old-fashioned budgeting. During the second quarter, operating expenses rose at the slowest pace since 2013. “To be clear, the priority is revenue growth,” she said during the analyst call. “But pursuing revenue growth is obviously not inconsistent with expense management.”

Less than a month after the quarterly report, Google announced a corporate shake-up that renamed the company 
Alphabet and separated future-
oriented projects, such as driverless cars, from the mainstream search business. While Porat must now grapple with the new corporate structure—she will be CFO of the overall Alphabet company and the core Google company—the arrangement should give investors 
a better idea of the performance of the emerging businesses, reflecting a promise Porat made in July to be “direct” with analysts.

“Thus far, Wall Street has a lot of respect for her,” says Victor Anthony, an analyst at Axiom Capital Management. “I think there’s more to come in terms of revenue growth, the expense growth deceleration, and the new clarity.”

2 PREVIOUS: Tidjane Thiam | NEXT: Elon Musk 3

Elon Musk illustration


Elon Musk

Founder, Tesla Motors
With his electric cars and rockets, Musk might as well wear a superhero costume. And when he appeared on the Late Show With Stephen Colbert in September, the host joked that he has supervillain tendencies. Musk had just said that Mars might be made more habitable by firing off thermonuclear weapons over the planet's poles.
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Illustration: R. Kikuo Johnson

“Elon Musk is our generation’s Thomas Edison.”

– Joseph Fath, fund manager at T. Rowe Price Group

Related: “Will Tesla Ever Make Money?”
Read the full story from Bloomberg Markets 3

2 PREVIOUS: Ruth Porat | NEXT: Paul Singer 3

Paul Singer illustration


Paul Singer

Founder, Elliott Management
Best known for poking Argentina in the eye over defaulted debt, Singer stirred controversy in another corner of the globe this year. He took on the Korean chaebol that controls Samsung, attempting (and failing) to block a merger of two of its affiliates.
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2 PREVIOUS: Elon Musk | NEXT: Marc Andreessen 3

Marc Andreessen illustration


Marc Andreessen

Co-founder, Andreessen Horowitz
He’s a font of big ideas about what technology can do–such as disrupt the banks. “Financial transactions are just numbers; it’s just information. You shouldn’t need 100,000 people and prime Manhattan real estate,” he once told Bloomberg Markets.
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Illustration: R. Kikuo Johnson

The startup investor is famous for his “tweetstorms.”

A sample:

Related: “Andreessen on Finance: 'We Can Reinvent the Entire Thing’”
Read the full story from Bloomberg Markets 3

Bloomberg LP, the parent of Bloomberg Markets, is an investor in Andreessen Horowitz.

2 PREVIOUS: Paul Singer | NEXT: Renaud Laplanche 3

Renaud Laplanche illustration


Renaud Laplanche

Founder, LendingClub
Growth in loan issuance is steep at Laplanche’s peer-to-peer company. LendingClub—with its all-star board including John Mack, Larry Summers, and Mary Meeker—facilitated more loans in the second quarter of 2015 than in all of 2013.
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2 PREVIOUS: Marc Andreessen | NEXT: Akio Toyoda 3

Akio Toyoda illustration


Akio Toyoda

President, Toyota Motor
Since taking over in 2009, the grandson of Toyota Motor’s founder has steered the company through a recall crisis and back to winning over consumers. Toyota’s $200 billion market cap makes it the world's most valuable automaker.
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2 PREVIOUS: Renaud Laplanche | NEXT: Paul Krugman 3

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Paul Krugman

Professor, City University of New York Graduate Center
He hoists the liberal economist flag on a lot of hot topics, as headlines from his blog make clear: “The China Debt Zombie,” “Jeb the Unready,” “Rate Hike Fever,” “Zombies Against Medicare,” “Eternal Greece.”
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2 PREVIOUS: Akio Toyoda | NEXT: Pope Francis 3

Pope Francis illustration


Pope Francis

Roman Catholic Church
His recent visit to the U.S. showed how he pushes issues ranging from poverty to immigration to the forefront. On climate, the moral argument he made in his encyclical may help reset a debate that’s been stuck in a political stalemate.
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Illustration: R. Kikuo Johnson

The Vatican’s Green Radical

Diplomatic soft power is the pope’s specialty.

Any pope’s. A bishop of Rome commands his own 2,000-year-old social media infrastructure. His word rolls out to 5,100 or so bishops, 415,000 priests, and, from there, the estimated 1.2 billion Roman Catholics. That’s 17 percent of the human population, scattered among 220,000 parishes. Such a following generates considerable sway that resonates far beyond the faithful.

Francis hopes to harness that sway to marshal people to his causes. By naming himself after nature-loving champion of the poor Saint Francis of Assisi, Argentine Cardinal Jorge Mario Bergoglio tacitly promised to light up the Vatican’s vast global network with ambition and urgency, particularly when it comes to the environment, poverty, and the intersection of the two. Take Pope Francis’s 184-page encyclical letter “Laudato Si’,” or “Praised Be to You,” which he dispatched to his bishops in June. “The violence present in our hearts, wounded by sin, is also reflected in the symptoms of sickness evident in the soil, in the water, in the air, and in all forms of life,” Francis wrote.

To Francis, climate change is a market failure, one stemming from the fact that the waste from fossil fuel combustion, carbon dioxide, imposes costs on society, such as heat, droughts, floods, and more-powerful storms, that aren’t reflected in prices over time. “What the pope is saying is the market economy needs to operate within a moral framework,” says Jeffrey Sachs, director of Columbia University’s Earth Institute. Francis is attempting to do what no environmentalist, politician, corporate sustainability officer, or, for that matter, pope has previously been able to achieve. That is, to make climate change personal, spiritual, and moral.

The views in Francis’s encyclical aren’t universally popular, nor have they yet had a measurable impact. A national poll conducted a month after the encyclical’s release found that fewer than a third of Americans knew about Francis’s climate push; just 40 percent of Catholics did, according to research by the Associated Press, the University of Chicago, and Yale. But Francis may be speaking up at the right moment, as more people acknowledge that climate change is caused by humans. Nearly half of Americans attribute the warming to human activity, and 74 percent say carbon dioxide should be regulated as a pollutant. While the public’s views may be evolving, the question is how much dominion Pope Francis’s moral argument will have on the world’s still-slow-moving leaders.

2 PREVIOUS: Paul Krugman | NEXT: Ellen Kullman 3

Ellen Kullman illustration


Ellen Kullman

CEO, DuPont
A native of Wilmington, Delaware–DuPont’s hometown–Kullman took out ads that urged local shareholders who own a lot of the company’s stock to reject the “value-destructive agenda” that investor Nelson Peltz put forward.
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She Went on the Attack Against an Activist—And Won

Most corporate chieftains bend—and try to cut a deal—when activist shareholders attack. Not DuPont’s Ellen Kullman. The 59-year-old mechanical engineer is the rare CEO to successfully fend off a proxy challenge. And she’s the only one to stymie Nelson Peltz’s Trian Fund Management, leaving him empty-handed for the first time since he co-founded the firm a decade ago.

Kullman won over DuPont investors with activism of her own. To defeat Peltz’s bid for four seats on the 12-member board in May, she traveled nationwide to lobby the chemical maker’s 50 largest institutional shareholders. Her pitch: A well-funded and integrated research and development program was key to success. It didn’t hurt that the stock had almost tripled since Kullman took over as CEO on Jan. 1, 2009.

Peltz, in contrast, sought $4 billion in cuts and wanted to split the company in two. “DuPont’s conglomerate structure is destroying value,” he wrote in a Sept. 16, 2014, letter to the board. He declined to comment for this story.

Some big shareholders, including the California Public Employees’ Retirement System, sided with Kullman in the May 13 vote. “We don’t want barbarians at the gate; we want owners at the gate,” says Anne Simpson, director of corporate governance for Calpers.

“We don’t want barbarians at the gate; we want owners at the gate,” says Anne Simpson, director of corporate governance for Calpers.

Other CEOs have accommodated activists. In January, PepsiCo CEO Indra Nooyi handed a Peltz adviser a seat on her company’s board after fighting Trian’s efforts to split the snacks and beverages unit. Dow Chemical gave two directorships to Daniel Loeb’s Third Point in November 2014.

Kullman’s approach may persuade companies to stand firm, says Jeffrey Sonnenfeld, a senior associate dean at the Yale School of Management. “Boards can now be more steadfast, and they won’t be so weak-kneed and capitulate,” he says.

Kullman says communicating her long-term vision made the difference. “That’s the part we had not done as well in the past,” she says.

The 27-year DuPont veteran also played to the hometown crowd. A native of Wilmington, Delaware, where the company is based, Kullman took out ads and urged local shareholders who hold much of Dupont’s stock to stop Trian’s “value-destructive agenda.”

Kullman scaled back after defeating Peltz. She spun off the performance chemicals business, renamed Chemours, and is cutting $1.3 billion in costs and buying back shares. Revenue is about 10 percent lower than when Kullman took over, and earnings in the recent quarter failed to meet her promises. She says DuPont is more focused.

Some see Peltz’s influence in the moves. “We are encouraged by the changes Trian Partners have driven,” says Anne Sheehan, director of corporate governance at the California State Teachers’ Retirement System.

The war may not be over. Peltz, the fifth-biggest investor, with a 2.7 percent stake, has kept his 24.6 million shares. Those shares are down 32 percent since Trian lost its fight. “We’re going to watch and wait,” he said after the vote.

(Update: Kullman on Oct. 5 announced she intends to step down, and the company cut its profit forecast. Related story: Kullman to Retire as DuPont Chairman, CEO.)

2 PREVIOUS: Pope Francis | NEXT: Wang Qishan 3

Wang Qishan illustration


Wang Qishan

Secretary, Central Commission for Discipline Inspection
Xi’s enforcer and troubleshooter, with a nickname that translates as “Captain of the Fire Brigade,” Wang has overseen the government’s corruption crackdown. Now he’s a key behind-the-scenes player in the effort to stabilize the economy and stock market.
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Illustration: R. Kikuo Johnson

Man Whispering in Xi’s Ear Once Shared a Cave With Future Boss

Once a refuge for Mao Zedong’s Red Army, the caves overlooking remote Yan’an City lure tourists who are mostly interested in 
reliving China’s revolutionary past. Search closer, though, and the pockmarked yellow hills hold clues to ties binding present-day China’s two most powerful men as they battle forces shaking their country and the world.

Locked away in a village compound, accessible only by climbing over a pigsty wall, stands a monument to 20,000 young people from elite families who, in 1969, were sent to labor here on Mao’s orders during the Great Proletarian Cultural Revolution. Like Mao a generation earlier, they lived in caves, sometimes huddling together for warmth.

Xi Jinping and Wang Qishan, who would have been students had schools not been shut down during that anarchic time, bonded in a cave a few meters from the monument; they even shared a quilt once. Today, they live and work among the pavilions and palaces of Zhongnanhai, the vermilion-walled leadership compound that abuts Beijing’s Forbidden City. Xi, now 62, needs no introduction. Increasingly seen as the most powerful leader since Mao, he has held center stage as Communist Party general secretary since 2012 and as China’s president since 2013. The less-well-known Wang, 67, is Xi’s most trusted enforcer—a troubleshooter who’s earned the nickname “Jiuhuo Duizhang,” or “Captain of the Fire Brigade.”

Wang Qishan and Barack Obama
In 2009, when China’s Yao Ming was a big name in U.S. basketball, Wang got a memento from President Barack Obama on a visit to Washington.
Photographer: Zhang Yan/Xinhua Press/Corbis

The versatile Wang—a historian-turned-banker with a taste for popular Western culture that runs to critiquing the various actors who’ve played Mr. Darcy in Pride and Prejudice adaptations—is now fighting wildfires on two fronts. For the past three years, he’s been the high-profile spearhead of the biggest anti-corruption purge in the 66-year history of the People’s Republic. And, as hard as it is to decipher China’s secretive leadership machinations, it seems Wang is also increasingly a key behind-the-scenes player in Xi’s efforts to stabilize the Chinese economy and end stock market upheavals that in August sparked global financial turmoil.

Normally, Wang’s graft-busting day job would be responsibility enough. Declaring that venality now threatens the party’s existence, Xi has staked his political legacy on conquering it. Such is the barely conceivable scale of corruption and theft of state assets that it could be costing as much as $500 billion a year, according to former U.S. Treasury Secretary and Goldman Sachs Chairman Henry Paulson in Dealing With China, his memoir published in April. Then there’s corruption’s human toll: In August, for example, at least 173 people died in explosions at a chemical warehouse in Tianjin; the official Xinhua news agency reported that one of the owners, a son of a former police chief, had used his connections to bypass safety regulations.

Wang has responded on a spectacular scale. Since assuming command of the Orwellian-sounding Central Commission for Discipline Inspection, Wang and his agents have swooped down on 100,000 party officials high and low—“tigers and flies,” as Xi calls them. The tigers include more than 100 top-level government officials, senior executives of state-owned companies, and military brass. In June, Wang bagged his biggest prey when Zhou Yongkang, 72, former head of the country’s vast security apparatus, was jailed for life after admitting he accepted bribes.

“Xi is the boss, but Wang is one of the very few in the leadership who really understand finance,” says Brookings’s Cheng Li.

“Xi Jinping believes that curbing corruption is essential for the survival of the Communist Party, so it shouldn’t be surprising to anyone that he has gone to Wang Qishan to drive this,” Paulson, who has known Wang for 20 years, says in an interview. “Wang is a first-rate politician in addition to being a reformer, someone who understands how to make a system work to get things done.” In his memoir, Paulson remembers talking to the “spotless” Wang about a spree of photos on social media that showed government officials wearing wristwatches worth many times their salaries. Wang showed Paulson his own watch—aging and nondescript. “He said he changed the battery every year, the band every two years, and he had replaced the crystal three times,” Paulson wrote.

On the financial front, as China’s economy falters and capital markets tremble, analysts such as Cheng Li, director of the John L. Thornton China Center at the Washington-based Brookings Institution, say Xi may also be tapping Wang’s financial expertise. Officially, Wang ranks sixth in seniority in China’s seven-member decision-making Politburo Standing Committee, well behind Premier Li Keqiang, the official No. 2. But in reality, Wang is second only to Xi, Cheng Li says. “People talk about a Xi-Li government, but it’s really Xi-Wang,” Li says. “That they are aligned is the most important factor in Chinese politics in recent years. Xi is the boss, but Wang is one of the very few in the leadership who really understand finance and the economy. Most of the people in the Finance Ministry and Central Bank are his protégés or his friends, so it is very natural that people will consult him.”

As Li suggests, that makes Wang one of the world’s most influential figures. Wang didn’t respond to requests to be interviewed for this article, but an analysis of Wang’s track record and interviews with his friends, including Paulson, suggest that Wang is a committed, iron-nerved market reformer. He seems unlikely to be panicked into urging more of the disastrous state intervention that exacerbated the summer stock market crash.

Wang Qishan and Xi Jinping
Wang, left, and Xi confer at the Great Hall of the People in Beijing earlier this year.
Photographer: China Daily/Reuters/Landov

In the 1990s, as executive chairman of China’s first investment bank, China International Capital Corp., Wang launched a wave of initial public offerings of state-owned companies. He surprised Western bankers with his bold decisions. Bypassing Morgan Stanley, then a major shareholder in CICC, he appointed Goldman Sachs to arrange the landmark share sale of China Telecom. Then, when the 1997 Asian currency crisis sent markets plunging, Wang ignored Goldman’s advice to lower the offer price and successfully held out for the $4.22 billion he had been seeking.

In 2003, Wang also displayed a measure of transparency uncommon in high party circles when the government parachuted him into Beijing as acting mayor to successfully fight a SARS outbreak his predecessor had covered up. He stayed on to oversee preparations for a flawlessly executed 2008 Summer Olympics. For five years after that, Wang served as vice premier in charge of the economy and finance; in the darkest days of the global financial meltdown, he headed Beijing’s delegation to the U.S.-China Strategic and Economic Dialogue. It makes sense that Xi would want Wang at his side now at “a time of near crisis,” says Willy Lam, a senior fellow at the Washington-based Jamestown Foundation. “He’s decisive and takes quick action.”

That hasn’t been a hallmark of China’s leadership this year. During previous economic upheavals, including the one in 2008, Wall Street applauded Beijing for acting decisively. This year, though, China’s leaders lost the confidence of international investors by appearing confused and unsure as stocks plunged the most since 1996. At the same time, government attempts to transform China’s economy from one driven by state investment and exports to a consumption-based model have stumbled, with growth dipping from an average of 9.9 percent annually from 1978 to 2014 to an estimated 6.6 percent in July.

Ironically, Wang’s anti-corruption campaign is, in the short term, a brake on growth. Government decision makers are so afraid of Wang that they’re avoiding awarding tenders for fear of coming under suspicion. Median estimates of a September 2014 Bloomberg survey of economists indicated that Xi’s crackdown would boost gross domestic product growth by as much as 0.5 percentage point—or about $70 billion—by 2020. But before that happens, the turmoil it’s causing among spooked Chinese bureaucrats could have shaved as much as 1.5 percent, or $150 billion, off 2014 GDP growth alone, Bank of America Merrill Lynch estimated in September.

Chinese cadres and the country’s new rich are also abandoning the economy-boosting conspicuous consumption they used to luxuriate in. On Aug. 31, the Chinese gambling enclave of Macau announced its GDP had contracted a massive 26.4 percent in the second quarter after Wang’s crackdown scared off high rollers who fear they’ll be accused of using the territory’s casinos to launder ill-gotten gains. On the mainland, luxury goods retailers and liquor manufacturers are feeling the pinch. And at Beijing’s Shunfeng Cantonese restaurant chain, where miniskirted waitresses once served government officials suckling pig at $130 a plate and sea cucumber at $70 a portion, business is far from brisk. “Business is so bad we have had to reduce prices by 30 percent,” one waitress confides.

For all that, the head of a technology firm in Beijing says corruption continues. Her company still pays about 100,000 yuan ($15,700) a year to officials, she says, “to get things done. Officials are used to taking money from me, so changes cannot happen overnight.”

According to Berlin-based Transparency International’s Corruption Perceptions Index, the Xi-Wang anti-graft drive is viewed by many as a sham. “The recent prosecutions in China are largely seen as efforts to clamp down on political opponents of the regime as opposed to genuine anti-corruption commitments,” the organization said last year after relegating China to 100th out of 175 places on the index, down from 80th in 2013. Brookings’s Li says the campaign can go only so far. “It is genuine, it is effective, but it is also highly selective,” he says.

Henry Paulson and Wang Qishan
Former U.S. Treasury Secretary Henry Paulson and then-Vice Premier Wang pose together at the U.S.-China Strategic and Economic Dialogue in Beijing in December 2008.
Photographer: Kyodo via AP Images

That may be, but Wang apparently believes that failing to address official corruption could imperil the very leadership of which he’s a part. Chinese state media have reported that after reading Alexis de Tocqueville’s The Old Regime and the Revolution, Wang instructed his underlings to read it, too, in order to understand how Louis XVI, one of the last kings of France, lost legitimacy (and his head) by allowing rampant inequality.

Wang, a slightly built figure with a gaunt, expressive face and a sometimes unruly comb-over, has spoken to some of his foreign contacts about the trials of being fireman-in-chief. In April, when he met with a small group of academics, he graphically described the task as difficult but doable, like surgically removing your own appendix without anesthesia, according to a transcript of the meeting posted on the Internet by one of the attendees.

People who have met Wang portray him as an enigmatic figure: fearless, puritanically incorruptible, yet warm and humorous. “He likes people, but it is more than that: He wants to understand what makes them tick, the cultural differences,” says Paulson, who’s now chairman of the Paulson Institute at the University of Chicago. “He is one of the few senior officials that you could actually become friends with,” says tycoon Ren Zhiqiang, a contemporary of Wang’s at Beijing No. 35 junior high school. Ren, founder of Beijing-based Huayuan Property, doubles as a social-media commentator with 30 million followers, often using his microblog to criticize government policy, including the anti-corruption campaign. Ren says Wang harbors no grudges: “He still invites classmates like me to Zhongnanhai because he wants to know the real thinking of ordinary people.”

“Wang is a first-rate politician in addition to being a reformer, someone who understands how to make a system work,” says Henry Paulson.

Wang himself is far from ordinary. His wife, Yao Mingshan, is the daughter of former Vice Premier Yao Yilin. Their 1976 marriage gained him admission to the so-called princeling circle, the elite that comprises children of former leaders. Xi Jinping, son of former Vice Premier Xi Zhongxun, is also a princeling, further cementing the Xi-Wang bond.

Wang was born in 1948, the year before Mao’s victory over the Nationalist government, whose leadership fled to Taiwan. He grew up in Beijing, where his father was a senior government engineer. At Beijing No. 35, Wang was already secretary of the Communist Party Youth League, says Ren. Then, in 1966, Mao unleashed the decade-long Cultural Revolution that purged intellectuals.

Wang’s father was forced to clean toilets, according to Paulson. Three years later, Wang joined the exodus to the countryside, where, along with his wife-to-be, he ended up at impoverished Kangping village outside Yan’an, in Shaanxi province, 1,000 kilometers (620 miles) west of Beijing. “The experience made me understand what the word hungry means,” he was quoted as saying years later by state media.

Xi Jinping pointing at cave
Xi, pointing, visits the cave dwelling in Yan’an where he spent part of the Cultural Revolution.
Photographer: Lan Hongguang/Xinhua Press/Corbis

Around the same time, Xi Jinping, then 16, was also dispatched to the countryside after his prominent father was jailed. Xi ended up at Liangjiahe, 50 kilometers from Kangping. Wang, who would have known of Xi’s father, became a de facto elder brother to Xi and the pair would swap books at a time when reading material was rare, according to Ren. In 1971, Wang wangled a job as a museum guide. He gained a history degree from Northwest University in Xi’an and then, in 1979, returned to Beijing as a researcher at the Chinese Academy of Social Sciences. A meteoric rise followed. By 1994, Wang was governor of China Construction Bank, which the following year formed a joint venture with Morgan Stanley to create CICC. Wang became executive chairman.

As Paulson says in his book, Wang was never just a banker. He was committed to reforming China’s money-losing state-owned enterprises and turning them into profitable, publicly listed companies. He invited Goldman to become CICC’s main international partner in China Telecom’s 1997 IPO.

What drives Wang, like Xi, is the preservation of the Communist Party above all else

Paulson speculates that Wang and Morgan Stanley fell out because they had approached the joint venture with different expectations. “Perhaps Morgan Stanley wanted to run a successful local operation pursuing domestic business that purely foreign banks couldn’t touch,” Paulson wrote in his memoir. “Wang Qishan had bigger game in mind: He wanted to modernize a country.” John Mack, who in 1997 was Morgan Stanley’s president before rising to become chairman and CEO, says the investment in CICC was a success and that Morgan Stanley won more than its share of deals in China; the most likely reason Wang chose Goldman for China Telecom was to spread the deals around. “No investment bank is allowed to dominate in China,” says Mack, who remains an adviser to Morgan Stanley—and a friend of Wang. “We worked together to create CICC,” says Mack.

Four months before the IPO, the Asian financial crisis struck. Hong Kong’s market plunged 50 percent. When Goldman wanted to lower the offer price, Wang insisted on HK$11.80 a share. Wang turned out to be right, Paulson acknowledges. The following year, again working in tandem with Goldman, Wang successfully cleaned up what was then the country’s largest bankruptcy by restructuring $6 billion owed to foreign creditors by state-owned Guangdong Enterprises Holdings.

But perhaps the most dramatic example of Wang’s firefighting came when the SARS virus appeared and Beijing became mainland China’s most affected city, with 191 fatalities. Instead of admitting the extent of the crisis, Beijing’s then-mayor attempted to conceal it, grossly underreporting cases.

Inevitably, the true scale of the calamity emerged. The mayor was sacked, and Wang flew in from China’s southernmost province, Hainan, where he had been party boss. “His straightforward, candid response saved the day,” Paulson writes. “He shut schools, quarantined thousands of people, released accurate case numbers, and designated new SARS-only hospitals.” One such facility was built in eight days. Two months later, the World Health Organization declared the epidemic in Beijing over.

Now, Wang faces the twin challenges of corruption and an unsteady economy. “He is bold, he is skillful, and he has a great sense of timing,” Li says. “But no one knows whether that will be enough because the challenges are extraordinary.”

What drives Wang, like Xi, is the preservation of the Communist Party above all else, which may explain why neither man has any interest in changing China’s political system. According to the transcript of Wang’s meeting with the academics in April, he dismissed the idea of creating a Western-style independent judiciary in China: “That is impossible. The judiciary has to be under the Communist Party.”

For Wang and Xi to hold such views is understandable, given their background, Ren says. “They are from revolutionary families, and they hold a similar belief that they must not ruin the regime founded by their fathers,” he says. A stern reminder of that belief confronts everyone entering the Zhongnanhai leadership compound through the main New China Gate. There, a giant slogan in red and white proclaims, “Long Live the Great Communist Party of China!” For now, the job of ensuring longevity is very much in the hands of the Captain of the Fire Brigade.

—With assistance from Ting Shi and Keith Zhai.

2 PREVIOUS: Ellen Kullman | NEXT: Jonathan Gray 3

Jonathan Gray illustration


Jonathan Gray

Global Head of Real Estate, Blackstone Group
He runs the formidable real estate portfolio that plays an ever-greater role at the biggest private equity shop. It’s a position that could lead to the firm's top job for Gray someday.
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Illustration: R. Kikuo Johnson

“I'd Like to Buy Some Houses and Hotels”

If you happen to find yourself in a hotel or office building in any major city, the roof overhead may very well belong to Blackstone, thanks to Jonathan Gray. The 45-year-old board member has helped the world’s largest alternative asset manager expand beyond private equity and hedge funds to become one of the biggest landlords around, with stakes in everything from Hilton Worldwide and Chicago’s Willis Tower to La Quinta. (He’s also made himself a potential heir to top dog Steve Schwarzman in the process.) Gray’s business, as these highlights attest, has been a major driver distancing Blackstone from its rivals.

Illustrator: Jason Lee

2 PREVIOUS: Wang Qishan | NEXT: Ken Griffin 3

Ken Griffin illustration


Ken Griffin

Founder, Citadel
The Chicago firm manages more money than ever—$26 billion—and now has former U.S. Federal Reserve Chairman Ben Bernanke on the payroll as an adviser.
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Illustration: R. Kikuo Johnson

2 PREVIOUS: Jonathan Gray | NEXT: John Stumpf 3

John Stumpf illustration


John Stumpf

CEO, Wells Fargo
Stumpf is sitting pretty atop the nation’s largest mortgage lender. His company is the most valuable U.S. bank ever, having surpassed the peak in market cap that Citigroup attained back in 2001.
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Illustration: R. Kikuo Johnson

2 PREVIOUS: Ken Griffin | NEXT: Wang Jianlin 3

Wang Jianlin illustration


Wang Jianlin

Founder, Dalian Wanda Group
Already mainland China’s richest man, with a $33 billion fortune, the property and movie mogul has even grander visions: “I give myself six more years to make Wanda a world-class company in the league of Microsoft and Wal-Mart.”
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Illustration: R. Kikuo Johnson

2 PREVIOUS: John Stumpf | NEXT: Christine Lagarde 3

Christine Lagarde illustration


Christine Lagarde

Managing Director, International Monetary Fund
The size of Greek government obligations persuaded Lagarde to try to talk sense into Europe’s leaders. Her ultimatum: We won’t throw money at the Greeks unless you’re prepared to offer debt relief.
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Illustration: R. Kikuo Johnson

2 PREVIOUS: Wang Jianlin | NEXT: Jiang Jianqing 3

Jiang Jianqing illustration


Jiang Jianqing

Chairman, Industrial & Commercial 
Bank of China
The total assets of his bank are a stunning $3.6 trillion, more than any other lender in the world, and still he’ll be paid less than $100,000 this year.
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Illustration: R. Kikuo Johnson

2 PREVIOUS: Christine Lagarde | NEXT: Jimmy Lai 3

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Jimmy Lai

Founder, Next Media
The pro-democracy tycoon is the founder of Next Media, the loudest voice of anti-Beijing protest in Hong Kong. Lai was on the front line during last year’s street protests, braving tear gas and pepper spray.
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Illustration: R. Kikuo Johnson

“Jimmy Lai is indispensable to the democracy movement in Hong Kong,” says Martin Lee, a co-founder of the main opposition Democratic Party.

Related: “Jimmy Lai Won’t Back Down”
Read the full story from Bloomberg Markets 3

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Aliko Dangote illustration


Aliko Dangote

Founder, Dangote Group
Africa’s most successful businessman built his fortune in sugar, textiles, and cement in his native Nigeria, where today he’s a political as well as a financial power broker. He’s expanding in other countries and may list his cement company in London.
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Illustration: R. Kikuo Johnson

Africa’s Richest Man Looks Abroad

He’s feted like royalty. He has businesses ranging from cement to sugar to energy in a dozen sub-Saharan countries. He’s a fixture at elite gatherings such as the World Economic Forum in Davos, Switzerland. No 
African has ridden the continent’s halting march out of poverty toward potential prosperity as spectacularly as its richest person, the Nigerian industrialist Aliko Dangote.

Dangote’s clout extends beyond the boardroom and the high-flier dinner circuit. In March, as votes were tallied in Nigeria’s presidential election, Dangote, 58, served as an intermediary between the camps of the incumbent, Goodluck Jonathan, and his ultimately victorious rival, Muhammadu Buhari. “There’s no question that he is quite an exceptional person—not only in Africa but globally,” says Mark Mobius, chairman of the emerging-markets group at Franklin Templeton Investments.

Today, Dangote is seeking to export his business empire and his influence beyond his terror-racked and corruption-riddled home country. Nigeria is responsible for about 85 percent of his fortune, which stood at $13.9 billion as of Sept. 9, according to the Bloomberg Billionaires Index. He’s planning new cement factories across Africa and as far afield as Nepal and Brazil. He’s considering taking Dangote Cement public on the London Stock Exchange and has even floated the idea of buying his beloved Arsenal, a top-ranking soccer club in the English Premier League. “I’m surprised I’m getting even four hours of sleep a day,” Dangote says. “We’re going ahead full steam.”

“I’m surprised I’m getting even four hours of sleep a day,” says Dangote.

The wealth Dangote has amassed is particularly conspicuous in a country as poor as Nigeria, which the International Monetary Fund ranked 122nd in the world in gross domestic product per capita last year. “You 
really see the inequalities,” then-president Jonathan said in May last year at a World Economic Forum conclave in Abuja, the Nigerian capital. Citing Dangote by name, Jonathan said, “Income distribution is skewed toward a few people.”

Dangote says his critics are being churlish. “Instead of studying how Dangote succeeded, they’re busy complaining,” he says. When he says that, he’s speaking above the thrum of his private jet as it makes its way back home to Lagos from Addis Ababa after an hourlong meeting with Ethiopian Prime Minister Hailemariam Desalegn. But compared with the lifestyles of some tycoons, Dangote’s is understated. Divorced from his wife, the mother of his three adult daughters, he lives on Lagos’s Victoria Island. It’s one of Africa’s most expensive neighborhoods, but the home is far from lavish. Adjacent to a Mitsubishi dealership, the house is sparsely decorated, with a modest half-moon-shaped swimming pool set in a small garden.

Dangote grew up in the city of Kano on the edge of the Sahara, raised by his maternal grandfather, a wealthy rice and commodities trader. In his early 20s, he left for Lagos in search of fat profits buying and selling sugar, textiles, and cement in the fast-growing city. Soon, he was earning enough “to buy a Mercedes 200 every day,” he says. These days, he’s fallen on what are for him hard times. His net worth has tumbled by some $10 billion in the past two years because of the crash in the price of crude and unrest in Nigeria. Even so, he remains characteristically upbeat. His setback? “An accident,” he says. “I’m very confident that in the next two years, you won’t even remember it.”

2 PREVIOUS: Jimmy Lai | NEXT: Michael Kim 3

Michael Kim illustration


Michael Kim

Founder, MBK Partners
Big-name private equity firms have lately turned their gaze to South Korea, but they’ll struggle to overcome Kim’s head start. He has a strong track record and unmatched connections on his home turf.
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Illustration: R. Kikuo Johnson

“I always thought Michael was the kind of young man who really deserves success,” says former Citigroup Co-Chairman Sanford “Sandy” Weill.

Related: “The Deal Chaser”
Read the full story from Bloomberg Markets 3

2 PREVIOUS: Aliko Dangote | NEXT: John Taylor 3

John Taylor illustration


John Taylor

Professor, Stanford University
Expect to hear his name as a possible successor to Janet Yellen at the Fed if a Republican wins the White House in 2016. Taylor already comes up in central bank deliberations as the namesake of a well-known monetary policy rule.
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Illustration: R. Kikuo Johnson

He Wrote the Rule the Fed Isn’t Following

The Stanford University professor is a brand name in the monetary policy world. In 1993, Taylor came up with a relatively simple equation relevant to central bank benchmark rate decisions. The formula describes the interrelation among inflation, an inflation target, and current economic output versus its potential. It’s known today as the Taylor rule.

Most central bankers talk up the utility of Taylor’s monetary tool; Yellen praised it as a sensible guide back in 1995, when she was a Fed governor under Alan Greenspan. But that’s not the same thing as strictly adhering to it.

Taylor himself reckons the benchmark federal funds rate should be as much as 1.5 percent today, though he doesn’t advocate moving there right away because it would shock the economy. Yellen argues that the U.S., still facing head winds stemming from the Great Recession, requires cheaper money.

2 PREVIOUS: Michael Kim | NEXT: Blythe Masters 3

Blythe Masters illustration


Blythe Masters

CEO, Digital Asset Holdings
When Masters says the blockchain has the potential to transform financial transactions, people listen. Her history as a former managing director and derivatives innovator at JPMorgan guarantees that.
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Illustration: R. Kikuo Johnson

“Blythe has about as much wrapped up in one brain as I’ve ever encountered in finance,” says John “Mac” McQuown, co-founder of KMV, a maker of widely used credit analysis tools.

Related: “Selling the Blockchain to Wall Street”
Read the full story from Bloomberg Markets 3

2 PREVIOUS: John Taylor | NEXT: George Osborne 3

George Osborne illustration


George Osborne

U.K. Chancellor of the Exchequer
Once ridiculed as a smug, noble-born pol, he’s talked about today as a possible successor to David Cameron as Conservative Party leader and as a future prime minister candidate, thanks to his handling of the U.K. economy.
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Illustration: R. Kikuo Johnson

2 PREVIOUS: Blythe Masters | NEXT: Richard Thaler 3

Richard Thaler illustration


Richard Thaler

Professor, University of Chicago
In his new book, Misbehaving, a folksy explanation of his brand of behavioral economics, the economist says he’s fascinated by “the myriad ways in which people depart from the fictional creatures that populate economic models.”
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Illustration: R. Kikuo Johnson

2 PREVIOUS: George Osborne | NEXT: Elizabeth Holmes 3

Elizabeth Holmes illustration


Elizabeth Holmes

Founder, Theranos
Her company’s inexpensive finger-prick blood-testing technology is a serious challenge to traditional providers of medical lab services, which is why this low-visibility startup is valued at some $10 billion.
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Illustration: R. Kikuo Johnson

2 PREVIOUS: Richard Thaler | NEXT: Mo Ibrahim 3

Mo Ibrahim illustration


Mo Ibrahim

Chairman, Mo Ibrahim Foundation
The Ibrahim Index of African Governance is an unequaled tool for assessing the investing environment on the second-most-populous continent. Those who use the index can gain a better grasp of the distinct qualities of the 52 nations it evaluates, Ibrahim says.
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Illustration: R. Kikuo Johnson

2 PREVIOUS: Elizabeth Holmes | NEXT: Jane Gladstone 3

Jane Gladstone illustration


Jane Gladstone

Senior Managing Director, Evercore Partners
In the world of exchanges and, increasingly, fintech, you want a seat at the table—specifically the table at Gladstone’s dinner in Boca Raton, Florida, during the annual Futures Industry Association confab.
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Illustration: R. Kikuo Johnson

2 PREVIOUS: Mo Ibrahim | NEXT: Ruchir Sharma 3

Ruchir Sharma illustration


Ruchir Sharma

Head of Emerging Markets and Global Macro, Morgan Stanley Investment Management
By the age of 18, Sharma was off and running on a career as a chronicler of emerging markets, penning a regular investing column for India’s largest business newspaper. Recently, he’s warned that China could push the world economy into its next recession.
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Illustration: R. Kikuo Johnson

He Sees Signs China Is ‘Out of Control’

It was 1991, the year India began opening its economy to outside investment. Ruchir Sharma had lived in Singapore, where his father held a diplomatic post and he went to school. His experience there, as the city-state was being transformed by extraordinary growth, sparked a passion for global economics and investing. Now, while waiting to enroll at Sri Ram College of Commerce in Delhi, Sharma wrote about what was on his mind and sent a piece to one of India’s business dailies, The Observer, which published it. The editors at the Economic Times, the country’s largest business paper, liked what they saw and asked him to contribute regularly. At 18 years old, Sharma was off and running on a career as a chronicler of—and investor in—emerging markets.

“The honest truth is that I did not reveal to the editors what my age was,” Sharma says, laughing. His newspaper columns got him noticed by Morgan Stanley, which hired him as a junior portfolio manager in Mumbai in 1996. Today, Sharma, 41, lives in New York and oversees $25 billion as head of emerging-markets equities for the firm’s money management arm. And he still writes frequently for global publications. In 2012, his Breakout Nations: In Pursuit of the Next Economic Miracles became an international best-seller.

Count Sharma among those who worry that China’s leaders have lost their grip on the $10 trillion economy. Their failure to keep an exuberant stock market from unraveling is worrisome, he says. “For the first time, you’ve got this sign that something is out of control.” China, he says, could push the world economy into its next recession.

For Sharma, a former competitive sprinter who still works out six days a week, one lesson learned over the years spent tracking emerging markets is that success is never permanent. Nations, he says, need to keep 
reinventing themselves. 

2 PREVIOUS: Jane Gladstone


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