Bill Connell of Connell Limited Partnership
A seminal moment in Paul Tierney’s life occurred one evening in 1964 when he saw a light burning in the living quarters of Father Ted Hesburgh, then president of Notre Dame and a priest noted for accessibility to his students. Tierney called up Hesburgh, was invited over, and poured out his heart. Though a philosophy major, he had applied to Harvard Business School, Yale Law school, and yet another college seeking to do political science. In short he was confused about his career path.
Hesburgh suggested he take some time off, join the Peace Corps, and view his life from a different perspective. That conversation changed Paul Tierney’s life, as did his two-year stint in Chile, working with poor farmers assembling the first cooperative and credit union movement under then elected Christian Democrat president Frei.
That confused young man has since become one of the top earners on Wall Street, chairman of a $3.5 billion company, a major shareholder and board member of United Airlines, and a player in some of the biggest Wall Street deals of the past decade. In between he has also remained true to the progressive social vision and sense of caring which manifested itself at Notre Dame, and which was a staple of his early family life growing up in New York and later Chicago.
Among other activities, he is chairman of the board of Technoserve, an economic development organization which specializes in aid to the Third World, and which employs over 200 people, all natives of the countries where Technoserve provides vital strategic investment and business planning services.
Little wonder that Tierney won the title “Half Mother Teresa, half Robber Baron” in a recent magazine article. Tierney himself, however, sees little conflict between his two roles. “I grew up with an ethic of social responsibility, ” he says: “just because you work on Wall Street doesn’t mean that you lose sight of that.” His grandparents came over from County Kerry sometime in the last century, and his father was employed by General Foods for most of his life. Born in 1943, Tierney remembers his Brooklyn childhood as intensely ethnic and Irish, and when he moved to a Chicago suburb at age 12 he found that the ethnic bonds were far looser.
Still Notre Dame was a logical choice for a bright Irish Catholic boy. The proximity of the college to the Chicago suburb clinched the attraction.
Tierney studied philosophy, seemingly leaning towards a career in the arts or law, with a possibility of social work or politics thrown in. That all changed after the eye-opening experience of the Peace Corps.
Those years saw Tierney develop a practical business sense as he helped the rural workers take their first tentative steps towards self-reliance. He also saw an abundance of theory from the dedicated workers at the U.S. AID government program, but little practical analysis of how to help.
Harvard Business School was a logical step on his return. It was the ‘sixties, and the Peace Corps volunteer joined at a time when business was becoming a dirty word.
Tierney himself states that after the Peace Corps it was “difficult” to take the “can’t wait to make my first million” types seriously. Nevertheless, he graduated as a Baker Scholar, one of the top in the class, specializing in organizational behavior and business and government relations.
Soon after, he became a management consultant, postponing indefinitely his Phd. thesis, and started a company aimed at helping minority businesses get going.
Then, from 1972 to 1974, he was one of the prime movers behind establishing a merchant bank in London, at a time when the movement of capital around the world was becoming much more widespread In 1974, he became director of financial programs for the heavily indebted United States Railway Association, the almost bankrupt government body which oversaw most of the nation’s rail freight. He helped establish the far more efficient and now profitable Conrail.
Back on Wall Street he became a senior vice president at White Weld investment bank. While working there, he became friendly with fellow banker Keith Gollust and the two decided to start their own firm. (A third partner, Gus Oliver, joined later.)
The two were unconventional Wall Street lycoons. Both were fitness buffs who loved to take long bicycle rides and talk about new ideas. Both were interested in making money but as Tierney says, “without slave labor.” And neither wanted to be shoehorned into the typically frenetic Wall Street lifestyle, which leaves little room for outside pursuits. Still, there was the problem of what the company would actually do. “Our first day with just one employee we looked at each other and said, ‘What do we do next?'” Tierney recalls.
What they did have was some good ideas. One was the leasing of transportation equipment, such as aircraft and, more extensively, railroad rolling stock to interested parties, which paid off handsomely.
Another was to take large stakes in closed-end mutual funds that investors could not sell except at restricted times, and open them up, allowing investors to sell their stocks at any time at far greater profits.
From those ideas sprang Coniston Partners and other investment vehicles. Coniston soon became one of the most famous and feared names on Wall Street, taking significant stock positions in several large companies and insisting on better management and returns for the shareholders.
The most famous Coniston involvement was with Allegheny, then the parent company of United Airlines, Hertz car rental, and several other subsidiaries. Coniston took a 15 percent share, and with the assent of a majority of shareholders, forced the inefficient parent to reorganize, which resulted in United Airlines splitting off into its own entity. Other companies Coniston took positions in included Gillette and T.W. services, a $3.5 billion food company of which Tierney is currently chairman of the board.
The new partnership did well. In 1990 Financial World reckoned they had earned $25 million each from their activities, making them among the top earners on Wall Street that year.
Tierney eschews much of the trappings of the Wall Street success story. Thin, ascetic-looking, he is a fitness fanatic who still plays soccer with an over 30 team (he is on the U.S. World Cup ’94 committee).
Last year he and one of his two sons went on a cycling tour of Ireland. Wife Susan, his high school sweetheart, works in a soup kitchen once a week, while his daughter Patricia, a Notre Dame graduate, has worked with the underprivileged.
Tierney puts in his hours with TechnoServe, and shortly after our interview was leaving for a world trip with other business and government leaders to assess the effectiveness of United Nations peacekeeping forces in world trouble spots.
Tierney believes Wall Street gets a bad rap on social responsibility, saying that few other industries are as scrutinized, and most would be found wanting if they were.
He is somewhat of an exception, though, a tribute to a sense of values inculcated many years ago that he has never lost sight of.
Editor’s Note: This article was originally published in the October 1992 issue of Irish America. ♦
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