John Phelan, co-managing partner and co-founder of MSD Capital, revealed the one question he uses every time he interviews someone for a job.The question comes from legendary dealmaker Richard Rainwater, who is known for helping turn around Disney in the 1980s.
When Phelan was in business school he wrote Rainwater a letter for a summer internship. Rainwater returned his letter with a phone call.
During their conversation, Rainwater asked a question that Phelan now he uses to this day when someone tries to get a job with MSD Capital, the $10 billion family office hedge fund of Michael Dell.
“He asked me a question which to this day I still use in interviews, which was ‘Of all the businesses you’ve looked at what’s the best one and why?’ It’s a really tough question if you think about it,” Phelan said on CNBC’s “Squawk Box.”
Here’s his answer.
“My answer — what I said to him was, I think a great business, (though) I haven’t spent lot of time looking at it would be parking garages in New York City because you have a fixed asset, not a lot of capital intensity and you got future development.”