Hamilton Lane, which has been all over the pages of Private Funds CFO in recent weeks as it forges ahead with new tech partnerships and platforms, appointed Atul Varma in early January to succeed 22-year firm veteran Randy Stilman as CFO. Varma, who comes from BNY Mellon, where he was head of business strategy and CFO of wealth management, is just getting his feet wet in private markets, but he took time to speak with us about the transition and his initial priorities, as well as his take on the impact of a potential downturn and the prospects for retail investment in private funds.
What are the most important aspects, from your point of view as a new hire, in the succession planning/transition process for CFOs?
We are going through a transition. In my experience, whether it’s with BNY Mellon or Bank of America, I’ve always had to approach everything from a dual lens.
I’m still brand new here, so I’m in a phase where I’m just trying to learn as much as I can. But that’s an ongoing process. I’ve been fortunate in my career to have spent a lot of time in winning cultures, at BNY Mellon and Bank of America, and I’m excited to be at Hamilton Lane, which has its own award-winning culture of high employee performance, winning and collaboration.
You were both head of business strategy and CFO and BNY Mellon WM. Was part of your hire with an eye to help shape/reinforce HL’s strategy? If so, how will you do that? And who outside of the finance department will you work most closely with?
From my view, all senior leaders should be thinking about strategy. I’ve only been here a short period of time, but from what I can see from attending meetings and throughout the interview process, there’s a culture here where senior colleagues share that view – that we’re all helping to shape strategy to make the company better. My focus is on the strategy and finance side and I’d like to bring that perspective to help shape that discussion and help the company grow.
As head of strategy for BNY Mellon, I was focused on growth and M&A, as well as CRM [customer relationship management] technologies and tech strategy. On top of that, I took the viewpoint of, “How do we expand a footprint? How do we help customers and clients to achieve their goals?” As I begin here and transition from a firm whose offerings were in the public markets to the private markets, one of my early goals is to make sure that our financial policies are rock solid and that the decisions we make are backed by unparalleled data and analytics. Also, as a firm, we have a mission of enriching lives and safeguarding futures, and my priorities are going to be in line with that strategy.
What are your priorities as you settle in and for 2020 as a whole?
There is a lot I’m learning in terms of how things are done, the nuances of our large, global client base, and what they need to succeed. Because when they succeed, we succeed.
Is there anything you’ve learned from the previous CFO while moving into this new role?
Randy has done a phenomenal job building a strong team here, and he continues to be a great resource for me. I’ve gotten some great external validation as well. As a whole, I feel excellent about what we have done so far and what I’m inheriting.
How will potential recession and political uncertainty affect the finance division, and what can you do to prepare for it?
One of the positive things about our business and private markets industry is that we’re positioned to be more resilient during periods of volatility and uncertainty. We are in a long-term asset class and we believe our business is built to withstand recessions and downturns. Our data shows that even in down markets, private markets have performed pretty well. I think the company is well positioned should be there be a recession.
Within the finance function, it’s not going to be any different. If, for instance, we go through turmoil, then our client side will be impacted, because our clients themselves will be impacted. Should that occur, we’re going to be busier than ever before supporting them and the firm.
What are your thoughts on the potential for retail investment in PE?
We’re seeing an increased interest in offerings that are focused on the retail and high-net-worth segment. That’s the evolution of where we are. Historically, we’ve focused on institutional clients, but that is starting to evolve. Generally, the money is moving from defined benefit plans to defined contribution plans – that shift has been happening for quite some time and we think it will continue. There are many important regulatory, compliance and structural issues to consider, but we are focused on the retail component and hope to see that to grow.