So, Robin, you are the CEO of Man Group, right? And you're not a man, right?
Well, since I last looked, yeah.
And you're the first woman to be the CEO of Man Group in 250 years or something like that?
Something like that, yep.
So, how did you get to that job?
Yeah, determination. How did I get to that job? One, I worked there for a decent amount of time. Two, I've held lots of different roles. And I've got lots of war wounds to show for it. And I was the best person for the job when it came open.
Okay. And the best person for the job always gets the job?
Okay. And Ken, your firm has been extraordinarily successful in everything it's touched, but in the Great Recession of '07-'08, you came very close to not being that successful. Were you ever worried that you weren't going to survive in the '07-'08 period?
So, '07, no. '07 was actually a phenomenal year for us. But there was a day in '08. I remember getting the elevator at home and saying, like literally, I hope when I come back, we're still in business. And CNBC had a van parked outside of our four walls trying to get that bankruptcy footage. So, it was a tough 16 weeks in 2008. The good news is history's written by the winners. We've had a great run since 2008, and that moment's largely become a footnote in our history, but one that I'll never forget.
Michael, you're identified as the CEO for a long time of Ryanair, but you didn't start Ryanair. Mr. Ryan started it. Had you not been working for him, do you think you would ever have wound up in some capacity like your job you have now? Because the personality you have now is a personality. Did you have that personality before, or did you grow it as you kind of were running this airline?
Yeah, did I always have a deformed personality? Probably. I was educated by Christian brothers and then Jesuits, so it was a miracle I survived that. Would I be in the airline industry? No, I would hopefully have gotten a job in a proper functioning industry where you could make money like Kenny. But unlike Robin, in my case, I got the job in Ryanair because nobody else wanted it. The Ryans had set up Ryanair to be at the start of EU deregulation back in 1987. They wanted to kind of compete with Aer Lingus on the Irish-UK routes, and they lost 20 million in 3 years, and the thing was going bust. I was this bright young guy coming out of college, had my accountancy degree. I was actually very quiet, reticent. I never wanted the publicity. And eventually, they ran out of chief executives. There was nobody left to run the bloody place. So, I was sent in to just staunch the losses, do whatever you want, and go wherever you want to do. My first recommendation was close this turkey. It's never going to make money. It's doomed to bloody fail. This industry is for the birds. And Tony, thankfully, sent me off to see Southwest in the States at the time when Herb Kelleher, who was doing what he did so well in Austin, in Texas, he was a legend, and he was the guy who kind of created the low-fare industry. And I was sent off to see him. And I have this legendary dinner with Herb Kelleher.
What do you remember at the dinner with Herb Kelleher?
Absolutely bloody nothing. He was at the time about 65. I was about 26. He drank me under the table before the starters had even got there. But I saw Southwest. I'd come from Europe. Oh, everything was slow. A plane would arrive and an hour and 15 minutes later would turn around because the pilots had to have a smoke, and the cabin crew had to have a winge, and everybody had to call their union to see whether they were feeling like going out on the next flight of the day. This thing arrived and was like a Formula 1 pit stop. Aircraft in, everybody on it. Aircraft out, gone. And it was pretty clear if you could turn planes around in 15 or 20 minutes instead of an hour and 15 minutes, you get two more, three more free flights per day per aircraft. So, that's where it all came from. So, it was a combination of Tony Ryan's stupidity in setting up an airline, but Herb Kelleher's vision in saying, 'You can actually run a very efficient airline,' which is the key to Ryanair's success.
Now, earlier, you mentioned a couple times safety as being an exception to some things, but sometimes, people would say, 'Well, if it's a low-cost airline, maybe they're going to skimp on safety.' How can you assure people you're not skimping on safety?
You can't, but ultimately, we've now been doing this for about 35 years. We have the youngest, newest fleet of aircraft in Europe. We have a fleet of 3650 Boeing 737s. We bought them all from new. We own them all. They're not owned by some bloody leasing company. So, you know, we own them all. Depreciation's our only charge. We have no debt on the balance sheet. We train all our own pilots. We have 16 simulator centers. We do all our own aircraft maintenance in-house, and we're about to take the engine maintenance in-house as well. So, the best you can do is you point to your record over 35 years. And certainly, in our first 15 or 20 years, it was, 'Well, it's a bit cheap, and you know, they don't do the maintenance.' I think that's kind of disappeared, but you're only as good as today. We do 3,500 flights today. We carry 700,000 people today. Today, we have to do everything safely. Tomorrow, we have to do everything safely. And it always makes me worry statistically, the bigger and bigger and bigger we get, I always worry statistically, you're likely to have a screw-up somewhere along the way. But so far, for 35 years, we've managed to avoid it.
Okay. Ken, many people don't realize you operate two big businesses. One is the most profitable hedge fund ever, Citadel, but you have a separate business, Citadel Securities. What is Citadel Securities, and why did you start that business when you already had a very profitable hedge fund?
So, Citadel Securities is one of the largest market makers in the world. In fact, we trade about 25% of the US equity turnover every day. And over the course of the last couple weeks, we've averaged about a trillion dollars a day in turnover. So, it is a firm that is at the center point of liquidity around the world. It is powered by world-class technology, great predictive analytics, and a really, really brilliant management team. So, it shares much of the same DNA as the hedge fund side of the house. Great people, great technology, great analytics. It's very much similar to what we do in the hedge fund in terms of the culture and ethos, but we do it with a very different commercial intent.
Now, there's a story that might be apocryphal. Many stories about people who are famous have apocryphal background stories. One of the apocryphal background stories about you is that when you were in college, you got Harvard University to allow you to set up an antenna that would receive stock quotes, so as a student, you could trade stock. Is that true?
So, it was a satellite dish, actually. You know, I was updating my Xbox with my son next to me, and he was about 13. He's 18 now. He looks at me and goes, 'Dad, you were alive before the internet.' And back in the '80s, there was no internet. There was no like stock quotes were actually hard to get. So, I had a satellite dish on top of the dorm room. The cable actually came through the fourth floor window, down an unused elevator shaft, and into my room. And that gave me access to real-time prices from the floor of the New York Stock Exchange. And it worked.
And if you hadn't done that, or if your early trades hadn't worked, would you be doing something more important like being a lawyer or something like that?
Right. Okay. Well, there's no higher calling than private equity, of course. Shouldn't be chasing girls around the college dorm.
So, Robin, can you explain delayed gratification, Michael? You're a publicly traded hedge fund. Most hedge funds are privately owned. Why are you publicly owned, and what's the advantage of being publicly owned in the hedge fund world?
Well, not my choice, by the way. So, I'm sat in that seat. So, 35 years roughly of listing. So, advantages. Everybody knows what's going on at Man Group. There is nothing to hide. And so, in those quarterly updates that we do that Michael looks so forward to doing, we are completely transparent. And clients like that. Institutionally, if you're going to be in a space where people are looking at you and saying, 'Hang on a second, are these people we want to do business with?' Sometimes, there's an advantage to having to tell everybody what's going on in your firm every quarter. So, that's an advantage.
Right. But you came to this firm largely as a lawyer and as a compliance officer. Usually, compliance officers are people who tell you you can't do this, you can't do that. How did you get to be the CEO?
Who said I was a good compliance officer?
People telling you you can't do this, you can't do that usually don't rise up to be the CEO. So, were you a not that good compliance officer?
I believe that sometimes, the best people to understand risk are the people who want to take the risk as well. If you sit me and my executive team, they'll probably sit down and tell you, perhaps the person with the highest risk tolerance in the organization is me. And that's something that either I've grown up on because I was a sort of a litigator, I guess, in American terms, or a barrister, if you go back into the UK. So, I'm an advocate. I understand risk. I've grown up in risk. I've run towards risks when sensible people have run away from them. And that makes my understanding of risk management, which is what we do all day, and what we deliver all day, quite acute. So, no, it's not usual. Was I a terrible compliance officer? I don't think I was terrible, but I understand risk.
Okay. Michael, long ago, you said that you wanted to charge people to go to the bathroom in your planes. Did that plan ever work, or why were so people so upset about that? Because couldn't they go for 45 minutes without going to the bathroom if they didn't want to pay?
It's one of the great free stories that keeps on giving. But I did an interview with some BBC news journalist about 25 years ago. I don't know what we were on about something else. I'm taking seats out and putting sand in cabins, and you know, like the tube in London, they'd be hanging onto the rails. And she said, 'What's next? You're going to charge for toilets?' And I said, 'Yeah, we have a team working on that at the moment.' And you know, if we could take out the two toilets at the back, we could put in six seats, and six seats would be 4% lower fares than the... And it still comes back every time. You're the guy who wants to charge for toilets on board planes. There is actually... We won't do it, but there is a theory in it. Actually, if you could take out two of the loos, only have one toilet left, and charge for the planes. You look at the extent to which people obsess about not paying for our baggage fees on board. You people packing over weighing their scale on the weigh scales in their bathrooms. 'I'm not going to pay bloody Ryanair for the bag.' They do the same thing with the toilets as well on board. We could put extra seats on the plane. And with extra seats, we'd be able to charge lower air fares. So, we're not going to do it.
You talked about once about charging extra for people overweight.
No, no, we were very good. We never did that one. One because it would make... Don't give them ideas. That was actually... that came out of the states, I think, where with respect to a lot of physically challenged people. The Europeans are a bit slimmer, although yes, because we're paying so much environmental, stupid environmental taxation over here. No, we never planned to. Aircraft weights are done on average weights for adults and children, so it make no difference anyway.
You have a good business in Europe, why don't you just take that business to the United States? Why don't you go to the United States?
Because that is where the culture starts to go wrong. You believe in your own... This works very well in Europe because we have pretty much incompetent competition in Europe. I love Lufthansa, Air France, KLM, and these guys are run by incompetent European government-owned airlines. The US airlines are a bit more aggressive. They are much stronger and much more well embedded. And the minute we and our management team says, 'This has worked great in Europe. Let's all go off to America, California, or Florida, and we can run an airline over there.' They'll all be out the door to go to sunshine. I mean, if you've spent any winter in Ireland, everybody wants to get the hell out of the place. So, that would be distraction. The other thing Kenny and I have demonstrated over many years and said that zealous focus on your business. Do not get distracted. And I don't want to go to Europe is a deregulated market. The only good thing about Europe is this is a deregulated market for air travel. So, thankfully, I get very little government interference. The minute I go outside of Europe to the Middle East, to Asia, to the US, it is hugely government regulated. And the states is already a reasonably well-run... Although, it's quite expensive. Now, it wouldn't work because... And it would undermine Ryanair because we'd all get distracted.
You trained as an accountant. But usually, the accountants I know are usually low-key people, very boring people. How did you get this personality as an accountant?
I mean, firstly, a lot of people question whether I was trained or even trainable. I did pass the exams, but only barely. You know, I grew up on a farm. So, I'm a farm boy. We learned how to work hard. I was always... I mean, if I came through accountancy, I wanted to be very kind of quiet and retired. I don't like the publicity. But I recognized when I got into Ryanair, we'd no money for advertising, so we had to do something. Branson at the time was running around getting all the cheap publicity. Herb was very good at it in the states as well. So, it was the obvious thing to do was okay, you can't be successful here if you're going to be quiet as a mouse accountant. So, let's reinvent. Now, and remember, the Irish are generally good at being brash bullshitters. So, there is a gene in all of us where we just talk a lot of rubbish. And we're very good at talking lots of rubbish. In fact, we've built generations...
Would you hire an accountant with your personality?
Would I hire an accountant? Thankfully, I have much more sensible people hiring accountants than the likes of me. I would hire people... I look at CVs like Kenny looks at CVs. He gets these soulless home loaders out of Harvard. I want people if they grew up on a farm, they're in the door straight away. And the thing I look for is not what your degree was. It's what summer jobs did you do during your holidays from school and from college. And if you worked hard, and you went out, you got part-time jobs, those are the people I want working in Ryanair. I want people who work hard. Brains, it's the airline industry. We don't need a lot of brains, and we don't need very bright intellects because it's a stupid industry anyway.
