Putnam Investments CEO talks about Brexit, the presidential election and Deflategate.
Bob Reynolds is the chairman of Putnam Investments, one of the nation’s largest mutual funds, which manages over $147 billion. Prior to taking over Putnam, Reynolds was the president of Fidelity Investments. He and his family have been summer residents of the island for many years. They are active in numerous local nonprofits such as Nantucket Historical Association and the Nantucket Cottage Hospital and serve on the boards of the West Virginia University Foundation, Concord Museum and Dana-Farber Cancer Institute. N Magazine sat down with Reynolds just days after the Brexit vote for a wide-ranging conversation.
N MAGAZINE: When did you and your wife first come to Nantucket?
REYNOLDS: Over twenty-five years ago. At the time we were dating. We had heard about it, but I hadn’t come here before. I had spent more time in the Cape and things like that. And we just started coming over and fell in love with it.
N MAGAZINE: What are your primary activities here?
REYNOLDS: Golf, first and foremost. Then boating. But we enjoy the whole island: the restaurants, the nightlife, everything
about it. There’s great people here, which makes it even more special.
N MAGAZINE: So, let’s go back to your football years.
REYNOLDS: I played all through high school, and I officiated college football for fourteen years.
N MAGAZINE: Weren’t you considered for the job of NFL commissioner?
REYNOLDS: Robert [Kraft] called me and said, “Would you be interested in being the NFL commissioner? Would you meet with the head hunters?” So I met with them at the Four Seasons in Boston, and they laid out that they had interviewed all thirty owners, and twenty-two of them said they wanted to go outside of the NFL for the next commissioner, because they wanted someone with business experience outside the US. I think they had 180 to 200 candidates, and they narrowed it to eleven. The eleven of us went to Detroit to Ford headquarters, and they went from eleven to five. I was one of the final five. The first ballot there was no winner. Second ballot, third ballot, fourth ballot… and then on the fifth ballot, they selected Roger Goodell.
N MAGAZINE: Do you think in hindsight they regret their decision?
REYNOLDS: I think some of the owners may. In fairness, Roger had spent twenty years with the NFL working his way up.
N MAGAZINE: What is your take on the concussion issue relative to how the NFL is handling it and what it means for the future of football?
REYNOLDS: It’s a very serious issue that I think needs to be addressed or you’ll start losing your supply [of players]. Which may already be happening because parents are saying “my son is not playing football.” There needs to be a very active program in which there is even more about testing for concussions that happen during the game and out of the game. But if we can build equipment for a lot of things in life, we should be able to build a safe helmet.
N MAGAZINE: Another NFL issue that hits home is Deflategate. What is your take on it?
REYNOLDS: Having officiated and been around football a long time, I think it never should have happened. It’s absurd that they want to penalize Tom Brady, who to me epitomizes what you want the NFL to stand for. Missing a quarter of the season doesn’t make any sense. Tom Brady is a family guy, he’s devoted to football, he’s done nothing but good things for the community and for the league. I really don’t get it.
N MAGAZINE: If Goodell were to shorten his tenure as commissioner, would you consider taking the job?
REYNOLDS: The answer is yes, but I think they want someone younger.
N MAGAZINE: Let’s move on to your leadership at Fidelity and Putnam. You are known by your employees as a good guy, but you are also incredibly effective. Are they one in the same? Is that your management style?
REYNOLDS: Yes, I think “good guy” is definitional. I would argue that “good guy” means “fair.” Or a “good guy” could mean he would never ask me to do something that he wouldn’t do himself, which is exactly what I believe. So, I take it as a compliment, but I think it has many definitions [like] not being soft or anything. It means being fair, being straightforward, being honest and all those things you want in leadership.
N MAGAZINE: Let’s get a little specific in terms of the financial world itself. Clearly, Brexit has caught the financial world largely off guard. How does this impact the United States?
REYNOLDS: I think it has huge ramifications for the world. Number one is this so-called nationalism fervor that is taking place in a lot of countries, including the United States [seen] not only by the amazing run of Donald Trump. If I told you a year ago Bernie Sanders, a seventy-six-year-old Socialist from Vermont, was going to take Hillary Clinton to the finish line, you would’ve said you’re crazy. I think they’re all playing into the same thing: nationalism and protectionism. To take Brexit as a one-off thing would be a huge mistake for everyone. It’s real, and it’s something we’re going to be working through for the next year, or two to three years. This thing has legs.
N MAGAZINE: Will it have a prolonged dampening effect on the US stock market?
REYNOLDS: It should not have a long term effect on the US stock market. The UK itself is 5 percent of US trade. The EU is 16–20 percent. It shouldn’t have a long term effect. The greater effect is a psychological effect. Since 2008, the uncertainty in the market place has been the dominant theme. The biggest thing markets hate is uncertainty. Now you have more [uncertainty] than ever, and it’s bad for the market in that respect.
N MAGAZINE: On the flipside, does it make the US even more of the world’s safe haven?
REYNOLDS: It does from a currency standpoint. The US Treasury may be one of the only major world companies that doesn’t have negative interest rates, so we are seeing flows coming into the US fixed income market because of that. I think it certainly makes the US a safe haven right now.
N MAGAZINE: So if the EU falls apart, does the lack of a unified entity weaken the resolve or the ability to combat terrorism?
REYNOLDS: That’s a great question. In a time when stability would be what you would want, in that respect it does weaken. But you almost have to wait and see how this plays out. The total impact, no one knows.
N MAGAZINE: Let’s talk about the election. The choices are somewhat extreme. Are you willing to talk about your preference?
REYNOLDS: I’m willing to say that I’ve been a lifelong Republican. I’m for a smaller government, lower taxes, pro-business. But I’m socially liberal, which is somewhat different. The Republican Party is much different than it was a year ago, certainly four years ago.
N MAGAZINE: In which way?
REYNOLDS: It has gone farther left.
N MAGAZINE: Have you had any personal interactions with Donald Trump?
REYNOLDS: I’ve met him several times, and he’s a very nice guy. The interesting thing is people that know him well speak highly of him. I think his campaign has been the opposite of what people have told me he’s like. At this point, it’s almost a coin toss.
N MAGAZINE: What about the US economy excites you?
REYNOLDS: One is innovation/technology. As an innovation society, there is no one even close to us. The fact that we are on the verge of being self-dependent from an energy standpoint excites me. The point that we have the strongest banks in the world, by far, excites me. Even though that liquidity is being challenged by some of the regulations right now, we still have the most capital liquid markets in the world. It is a phenomenal growth story, but there needs to be impetus for not just monitoring policy. We need fiscal policy to go along with that to make this thing really take off.
N MAGAZINE: Is there something that keeps you up at night?
REYNOLDS: There’s really not. We’ve been dealing with uncertainty for eight years. Is there uncertainty out there? Yeah. Look at what’s going on around the world. But we’ve been pretty resilient, and we will continue being resilient. I would love to see the US in a real growth mode. I think it will change everything.
N MAGAZINE: Are you still bullish on America?
REYNOLDS: Always. I’m more bullish now than ever. This political situation, some people may think oh what’s this coming to? You have to get through things to get to the other side. We need this. We need to awaken America. There’s been a large majority of Americans that have gone a generation with no rise in standard of living. That is unacceptable in this country — unheard of and unacceptable. It’s not who we are. So we have to get that going again. If we get that going again, America’s greatest days are ahead. I’m convinced.
