The Art of Sandwich Eating
A glimpse into the world of high finance.
(This essay was originally written in 2019)
Last summer, I was an intern at a mid-sized mutual fund; one of the perks of this internship was the opportunity to sit in on meetings between portfolio managers and public company executives. These meetings provided an interesting perspective on the types of people that rise to the top at certain companies.
Different industries tend to value different things in their leaders. Sometimes this is just domain experience—for instance, many Silicon Valley executives were software engineers at one point in their careers. But oftentimes, the things that are valued are intangible or seem to be less directly relevant. In the case of one financial institution my old firm evaluated as an investment, a key qualification for the C-Suite appeared to be the skill of eating a sandwich.
Here is the anecdote which inspired this article: During my internship, a Prestigious Private Equity Firm1 was looking to improve its stock price/shareholder base. So a delegation of higher-ups (the COO/CFO/Head of IR/Head of Legal) went around pitching their stock to institutions that they thought might be interested in buying and holding it for a long time. These sorts of meetings were a fairly common occurrence at my old firm—we’d have perhaps an average of three or four a week—and would sometimes be catered.
The meeting with PPEF was catered. The meal seemed like an almost-intentional2 selection of food items that are difficult to consume in a professional setting—sandwiches with way too much mayo, kettle-cooked potato chips (the extra crunchy kind), and chocolate chip cookies that crumbled if you bit them. There were napkins, but there were not enough napkins.
The people from my firm almost uniformly avoided the food. A few nibbled carefully on the cookies; only one—a portfolio manager with a fierce intellect and a lack of regard for what others might think of his presentation—dared eat a sandwich. Much like any normal human would3, he went through several napkins and looked rather undignified at times. (Though this was unimportant, because he was the one who would decide if PPEF would get the investment it wanted.) I of course ate nothing, because I was an intern focused on taking good notes and not appearing overly intimidated.
All four PPEF delegates ate every food item we provided—to do otherwise might have been rude. What’s more, they did it with a shocking amount of grace. Chips seemed not to crunch; any filling that threatened to escape a sandwich was carefully corralled. Napkins were almost unnecessary and were fastidiously refolded if used. In their manners and mannerisms, the PPEF delegates were precise and uniform. None of this appeared to take any attention. It all looked as natural as breathing. In fact, though food was surely being eaten, it almost seemed that they were not eating at all. When they later typed on their iPads—while making frequent eye contact with everyone across the table—their fingers did not so much as smudge the glass.
This is the sort of skill set that by its very nature deflects conscious observation. The sheen of polished people tends to run together—and so it is often quite difficult to differentiate between 90th percentile polish and 99th percentile polish and the polish of a percentile given by some longer more absurd string of nines with a decimal.
Here it is worth mentioning that the PPEF delegation was not the only group of executives confronted with this meal (though they were the only executives who work in high finance). This was in fact my employer’s standard catering choice for such events. And while corporate leaders are a fairly well-mannered bunch—perhaps a standard deviation better than the general population—no other executives came close to matching those of PPEF. Had I not seen several CEOs of multibillion-dollar companies struggle moderately-to-slightly with that potent combination of mayo and rye, I would not have appreciated the extent of PPEF’s prowess. It might have escaped my attention entirely.
This might all sound trivial—financial executives tend to have a certain savoir faire, news at eleven—but if it does, I haven’t made my point clear. The executives at PPEF were not just poised or otherwise skilled at chewing and swallowing—their social grace/sandwich eating skills were finely developed enough to make other executives look uncouth in comparison. This was 99.9th percentile comportment—at least.
This is not something that happens as a coincidence. Rather, it implies at least one of two things: either the process of becoming an executive at PPEF strongly selects for those individuals who are stark outliers in this way, or the state of being a PPEF executive over time inculcates new and rare patterns of behavior. Surely it is a bit of both—but in general, people of “executive age” are difficult to change, which implies the former is the main causal mechanism. I also suspect that while PPEF executives are outliers with respect to corporate America as a whole, they are probably a fairly representative sample of the leaders of the most pedigreed and “elite” parts of finance4. This includes investment banks, other private equity funds, and certain types of hedge funds—a collection of institutions that represent a good deal of systemic risk in our economy.
Now suppose one were to make a list of all the traits that are desirable in the leaders of such institutions. It might depend a bit on who is making the list—for instance, shareholders are likely more appreciative of creativity than regulators—but something resembling a consensus ought to be possible. A financial sector that is stable, resilient, and at least moderately profitable seems like a good goal from most reasonable points of view. Sandwich eating—and social grace more broadly—would likely make a list written with this goal in mind, but would hardly be the top consideration. Traits like prudence, integrity, intelligence, and the ability to form well-calibrated beliefs about the world all seem at least as important to profitably running a complex institution upon which society depends.
Is it possible to select for all these things at once? Sort of, but not really. Many of these traits are correlated—ethical people tend to be more cautious, intelligent people tend to be more rational, people from upper-class backgrounds tend to be both more intelligent and better-mannered—but these correlations are far from sufficient to wholly eliminate trade-offs5
What this means is that if one selects for polish, there is necessarily a limit on how much one can select for other things. And if one does not select for polish, or selects weakly in an attempt to balance many competing considerations, then it is very unlikely that each individual selected will be able to gracefully eat a difficult meal. One might wonder about the selection criteria of PPEF and the firms cast in its image. One might ponder whether certain executives—those who assume so much risk on society’s behalf—are the best men and women for their jobs. One might make inferences.
My boss’s boss—the portfolio manager who was sharp and cerebral and hungry at a meeting—passed on the investment.
I won’t name the firm in question, but I will say that you could probably get it in three guesses. That should narrow it down to about three guesses.
And really, who’s to say it wasn’t?
An astute reader might notice the possibility of a green jelly bean problem here. One could argue that my experience sampled leaders from many different sectors, and it is less surprising than it would seem at first glance for one sector out of N to have a sample of leaders who are shockingly good at eating sandwiches. This is a case where one’s priors sharply inform the conclusions that one ought to draw—if you shared my prior belief that private equity selects for sandwich-eating-and-adjacent-skills more strongly than other industries, then this is as if the XKCD scientists immediately thought of green jelly beans upon hearing that only one color of the candy were responsible for acne. But I’ll admit that without this prior, these conclusions do look more likely to be spurious.
Technically, the total elimination of trade-offs would require a correlation matrix of ones.