A Legend Returns—But to a Different World

Last week I wrote about politics and technology; this week, the two subjects came together once again when one of modern fintech's original giants, Michael Bloomberg, announced—in something of a turnabout—that he'll return to the financial information giant's leadership at year's endm and do so full-time, after more than a decade in New York City politics and tending to global philanthropic causes.

Change of Guard
A change of guard at a shop the size of Bloomberg should always be huge news, and yet the intrigue behind this one is unusual, a little strange even. Doubtless, the former mayor's return should serve to further invigorate financial technology as it has begun to pick up steam in the last year or so, post-crisis and (mostly) post-crisis-regulatory-wrangling.

In many ways, Bloomberg is the outsized personality fintech needs. Few influential providers in the industry still bear their founder's name these days, and once most executives step back from their firm, they tend to stay away. 

It isn't always the case, obviously; one need only look at Bloomberg's clients on the buy side. Fund managers often get an itch to return to the game, in some cases the instant they've left; in others, years later.

The best example of that came a couple years ago, when Bridgewater founder Ray Dalio began quietly but forcefully reasserting control over his hedge fund, still the largest in the world, and reinstituted the firm's practice of "radical transparency" for which he is personally famed (and which, to be fair, is also sometimes derided as a bizarre, cultish credo).

Just what drives a Dalio or Bloomberg or Steve Jobs back to the helm is something that fascinates me, and is probably a matter best investigated by psychologists and historians.

To my mind, though, all three seem to share an innate feel for the uncertainty—or perhaps opportunity—created by a change in the nature of competition. The hedge fund industry has evolved: returns have slipped while fees mostly have not, and institutional investors now allocate differently. Likewise, the primacy of Bloomberg's terminal and messaging services has gradually eroded, challenged by entrants like Markit and at times by the company's own public missteps.

And everyone knows the shape Apple was in when Jobs rejoined it in 1997.

Willingness to Transform
So the question is: what will Bloomberg (the CEO) now do? This week, I was speaking with a young staff member of the provider's news information arm, who spends 85 percent of his time working on its "super-fast", immediately tradeable news, a popular service that began with equities and has since fleshed out across FX, some fixed income and, more recently, energy.

But that came second to what he's been doing with the remaining 15 percent: developing an app that analytically sources the most 'in' restaurants popping up, or closing down, that are popular with traders in New York. He did admit it probably wasn't a portable concept outside one or two of the largest financial markets, but his enthusiasm was palpable. Obviously, this wasn't exactly something one would find on the terminal in 1999.

With so much time and technical innovation past by since the CEO's departure, it's fair to wonder what's in store, and whether those tiny side projects—so dear to young programmers and seemingly so many degrees away from the C-suite—will survive, or in fact thrive. On that level, Bloomberg's return actually creates more mystery than another CEO would who is switching into the industry from elsewhere, or jumping from a competitor.

Bloomberg LP is already known as a tightly-run shop, and tea leaves from his management style in government, and willingness to be transformative if also controversial during that time, suggest more change will come.

In December 2000, shortly before Bloomberg decided to pursue an office in City Hall, Inside Market Data's Don-Taze Champagnie wrote, 

"While the future of Bloomberg, the company, might be well scripted in the status quo, Mr. Bloomberg's future in [New York City] remains unwritten."

Some things just can't help but come full circle—little wonder that he's decided to come back, even if the fintech world he enters today must seem almost uncannily different.