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From Rice-a-Roni to Global Investing
Kenneth Reid, PhD 82, left Georgia in 1975 to earn his PhD in finance at Berkeley. Frances, his new wife, joined him a year later. After graduation, Reid co-founded Rosenberg Institutional Equity Management with Haas Professor Barr Rosenberg. The Orinda, Calif.-based firm was acquired by AXA Investment Managers in 1999 and became AXA Rosenberg, which today manages more than $70 billion in assets for approximately 300 clients. Reid currently serves as vice chairman.
Q: What was it like coming to Berkeley in the ’70s?
Kenneth: I’d never been west of Alabama. I really
felt like an adventurer in a little green
Volkswagen Beetle driving across the
country. The most fascinating part of the journey was the different terrain and scenery.
Frances: I arrived in January ’77 and
landed on College Avenue, which
was wonderful — close to
campus, close to Telegraph
Avenue, on the tail end of
the hippie era. It was fascinating
for someone who
had grown up in Georgia— I’d never crossed the
Q: Why Berkeley?
Kenneth: I saw California on television. It just felt like a place I wanted to be— a really interesting place. And UC Berkeley is a wellknown university.
Q: What did you see on TV?
Kenneth: Rice-a-Roni. The cable car. The Golden Gate Bridge. That was it.
Q: How did you decide to work in business rather than academia?
Kenneth: My original intent was to get a PhD and then teach. However, once I completed the program, I discovered that I was very interested in the way financial economics interacts with
investment decision-making, so I decided to pursue something
Q: How is your firm different from others?
Kenneth: We have systematized the approach that an investment analyst would take with stock evaluation with the objective of being more comprehensive and extending fundamentally based analysis to a broader set of companies.
Q: Has the economic crisis changed investing?
Kenneth: No, I think this crisis is not that different from others. The story line changes: This one is the financial crisis, the one before that was the dot-com crash, the one before that was the savings and loan crash. The names and the labels change over time, but the ingredients are the same: Investors get to where it’s easy to get financing so they invest and employ leverage in order to magnify the financial results.
Investors know it’s risky, but it doesn’t feel as if the risks are
really there, or the belief is that when the risks do emerge, they
will have time to move on to something else before the eceleration
phase kicks in.
Q: Is there a bright side?
Kenneth: Inside all of this, as always, are tremendous pportunities for a young person who is getting started in business. The opportunities are great because there is always the potential to find a better way of managing risks while also capturing opportunities.
When we got started in the investment business, no one was that interested in the stock market because real estate was king. That was ’67 through ’81. The thing that everyone was not talking about then — the stock market — became the big thing.
Q: Switching topics a little bit, what inspires you to give back to Berkeley?
Kenneth: The business school has changed dramatically. I benchmark it against what it was when I went through there. Back then, there wasn’t a community built around the business school. You would go to Barrows, take your classes, and then leave. I never would have imagined all the things that have happened. The business school feels like a community project. Entrepreneurship, educational programs for executives — all those different pieces are reaching out and serving different needs within this broad community. I like to see and support all those different onnections the school is making to various parts of the business community.
Frances: I didn’t go to Berkeley; I went to Georgia State. But the reason I like to give to the school is because it’s very important for me to see a wide socioeconomic base for the students. I don’t want to see students not able to get a stellar education because they or their parents can’t afford it. While Cal seems to be very committed to remaining as open as possible, I don’t think the university can do it, particularly now, without our help.