SEANA SMITH: Yeah, Ellie, you certainly [INAUDIBLE] about what makes yourself tick. And I think that that's something [INAUDIBLE]. We'll talk about that a little bit more in just a second. But, David, I want to ask you first just-- Ellie has certainly learned a lot from you. We just heard that. But I also have a feeling that you've learned a lot from Ellie as well. I'm curious just how Ellie has influenced your way of thinking about potential investments over the years.

DAVID RUBENSTEIN: Well, she's convinced me that healthy food is probably going to make me live longer, that I should exercise more, that I should, you know, probably invest more in her fund, that I should realize that healthy food is the wave of the future. And I think I've learned a lot, so it's a symbiotic relationship. She may have learned some things from me, but I think I'm now learning much more from her.

SEANA SMITH: There certainly is so much to learn, especially when it comes to the health and importance here of food. And, Ellie, I just want to ask you just about the COVID-19 pandemic, because that certainly brought health and well-being here to the forefront.

And you're on a mission, like you were saying before, just to make food options healthier, to make them more accessible, to make the supply chain more transparent. The coronavirus has really exposed the vulnerabilities, I think, of food supply chains. How are you working to address these issues, especially in light of what we're seeing today during the pandemic?

ELLIE RUBENSTEIN: It's a very interesting question, and I think most people don't truly recognize the connection of nutrition and-- and link to health. So let's set the stage by this. Unfortunately in the US, only half of the population is actually considered healthy. That is a staggering statistic. And if you think about that, over half of the population in the US is actually in-- considered in the diabetes or pre-diabetes phase.

It gets more diring when you think about, according to Dr. Dariush Mozaffarian, who's one of our mentors and advisors, only 12% of the US is metabolically healthy. And these were things that-- that existed before COVID, so what COVID has done is shine light on the link of nutrition to poor health. And so our firm is trying to change the way that private equity dollars actually can improve health. So, yes, we can have good returns, but how-- how can we have good returns and get people healthy?

And so if you look at, for example, diabetes, in the US alone in one year, health care costs are actually $160 billion, and that is trying to solve diabetes. And what we're trying to say is, why not invest in companies that are at scale, that are healthy for you, that are essentially vertically integrated so that the supply chain disruption is not as big as what, you know, you might have seen in other industries?

And that way, we can actually improve the health of the environment and the health of the food, and also the health of the companies, to make sure that we can keep feeding people healthy during a pandemic.

DAVID RUBENSTEIN: Let me just add to that, that one of the reasons that there is a reasonably high fatality rate-- or there was-- of our people that got COVID were that the fatalities were often occurring in people who were overweight or had medical issues that could have been prevented. So if you-- you know, obviously some things are genetic and inherited. But if you can do a better job of exercising, eating healthier food, you're probably going to live longer, and probably you'll be able to resist COVID much better.

ELLIE RUBENSTEIN: Dad, does that mean you're going to start exercising and eating healthy food?

DAVID RUBENSTEIN: Well, it's impossible. But-- and my big problem is that somebody is sneaking into my house every night and moving my scale and either putting a new scale in or making it have 10 pounds more than it did the-- the day before, at least to 10 pounds more than I think it should be. So I've got to find out why that scale keeps moving.

SEANA SMITH: Well, we certainly have a lot of time here to figure that out because it seems like, at least at this point in the pandemic, we certainly have many more months of these stay-at-home type of behaviors here ahead.

And with that in mind, David, I'm curious just as we try to, I guess, pinpoint or really realize how many changes we have seen because of the pandemic, and then also the extent of those changes just in terms of how dramatic some of these long-lasting changes will be, how are you viewing that just in terms of some of the short-term versus the more permanent changes, and then, of course, what that means for future investments?

DAVID RUBENSTEIN: Whenever you go through a complicated part of history, people always say, the world's going to change. And sometimes it doesn't really change. On the other hand, there is a curse in China that is along the lines of "may you be condemned to live in a time of transition." Well, we're obviously living in a time of transition right now because people used to go to work in their offices or their factory plants, whatever they are doing. Now, we're not. They're-- they're like me, they're sitting at home. And it's an interesting phenomena how quickly the world has changed.

Think about this. The Industrial Revolution took about 100 years, the internet revolution maybe 20 years, the smartphone revolution maybe five to seven years. Now in less than one year, we have basically said, we're going to do things on the equivalent of what we're doing now, Zoom or the-- the Zoom equivalent. And it's amazing how many people have adapted to it in less than a year.

And many people that I know do not want to go back to work in their offices, certainly not full-time. So the world's going to change. People are going to travel a little bit less, I think. People are going to-- you know, eventually they'll go travel again the way they-- they were going to do, I suppose. But right now, they're going to travel less, and that will probably happen for a while.

They're also going to go out less in many ways. They're going to probably use hotels less than they were before. They're going to spend less time commuting to their offices than they were before. And they're probably going to buy different things than they-- than they bought before, and they're going to learn more technology than they knew before. So the world's going to change in many ways, and it's happened relatively quickly.

ELLIE RUBENSTEIN: You know, I just want to add to this. I wish people could see the scene of our house. But we used to say-- our investment thesis is, "how can we get better food faster, better, and cheaper," in the same way that Jeff Bezos uses that for Amazon. I think what my father has figured out during quarantine is he can get things faster, better, and cheaper by making our house be a-- a warehouse for purchasing of all of his books, so the scene of our dining room is thousands of books that he's signing.

And then his commute time is now 10 seconds instead of traveling around the world to meet investors. So I think that one of the advantages of when you get to observe people that come before you in the industry is if you can see that they are able to innovate while things happen. We've always said that the best leaders are agile. So it's amazing to see this. I wish we could turn the camera right now to show people what my father has figured out.

DAVID RUBENSTEIN: So human interaction has obviously been the hallmark of how people get things done throughout the history. So it's not likely that all of a sudden people say, I don't want to have human interaction. I think they will want to have human interaction, but they're going to come back to it slowly. And I don't think people will feel they need to travel around the world for a half hour meeting. They can do it on, you know, a Zoom conference kind of call-- call.

So the world will change in ways we can't predict. But I do think that-- that you're going to see people adapting to this way of life for quite some time. Now, 10 years from now, who knows? But I do think that over the next couple of years, you're not going to see people rushing back to work the way they did before.

SEANA SMITH: So, Ellie, just you at Manna Tree Partners then. I mean, how are you then adjusting your leadership behavior right now just in terms of what you think your company is going to look like 12, 18, 24 months from now? Because certainly what we've seen play out over the last nine months, like you and your father were just talking about, there certainly are a number of changes that are already underway, but I think a lot of it is still unknown at this point.

ELLIE RUBENSTEIN: You know, at our firm, we're very enthusiastic about what we see. We-- we used to say that maybe it would take five to seven years to get a food exit in this industry. We're seeing faster exits happen in the span of one to three years. We actually now feel like food can be a top five asset class in somebody's portfolio.

And-- and what makes us excited about it is if you look at consumer purchases today, 77% of purchases in the US are done with personal health in mind. And related to food, 69% of all foods purchased, the number one criteria is actually the nutritional content. So I think another thing my father used to question when we started our firm is we're based in Vail, Colorado, and he'd say, why Vail? And we would say, well, we're the healthiest county per capita in the US.

And as COVID has shine light on what really matters, which is your health, it is important to live and work in a place where you can have outdoor access, where you can be healthy and focus on your own immunity. And that's a lesson my father has always, you know, said, you know, he-- he wanted for his kids, how to be healthy and happy. So that's why we're based in Vail, and that's why we are focused-- singularly focused on focusing on getting more dollars into the industry, focus on human health. It's never been more important.

And I think it's not just food. COVID has done that in many industries. So, you know, another quote that I-- I always love to tell people. When you need to convince your parents to come alongside what you believe in, you try to find people that can actually-- actually prove the point. So Mike Milken said something to my father, which is a very interesting point related to investing. Food is where the internet is 15 years ago.

And so if you think about how fast that change happened, that's what we're now seeing within food is that it's so fast. And, you know, maybe my dad could tell a story about he-- he never understood it at first. He said, I don't understand. Humans have been eating for thousands of years, so what changed? And I think what changed is now people realize there is an efficiency to food. If you can eat and make yourselves healthy and make money while understanding that concept, it's a very unique thing to deploy capital into.

DAVID RUBENSTEIN: Yeah, think about it. Humans came out of caves as Homo sapiens roughly 400,000 years ago. And for 99% of that time, humans wanted to eat food to-- for energy and just-- and sustenance to stay alive. It was really only in probably the last 50 years or so that humans realized that eating certain things would be healthier for you. And over the last five years, there has been a much more of an obsession that the healthier things you eat, the better you're likely to-- to be and you're-- the longer you're likely to live.

And this is now not just in the United States, but it's all over the world. And so it's not just wealthy countries that realize if you eat healthy things you're going to be better off, it's people all over the world who want to eat healthier things. So it's a global change in the way people keep alive by eating food.

SEANA SMITH: And, David, going off of that, just talking about so much change that has been underway, I'm curious just about investors' priorities from your perspective because we can see that investors' priorities are changing clearly with what you guys we're just talking about, the interest that Manna Tree has generated here over the last couple of years. David, how do you think investors have evolved from when you started Carlyle over 30 years ago?

DAVID RUBENSTEIN: In those days, I would say most people in the private equity were-- let me speak to that-- were mostly interested in the highest rate of return they could legally get from-- from people like us. And so they were not as worried about ESG factors, not as worried about whether you're shipping jobs offshore, things like that. It was basically, what kind of return can you get me? How long will it take you to get it? And everything you're doing is legal, right?

Now people say, I want to make sure I have an investment that I can be proud of. I have to go to my board and say, here's the ESG factors. I do believe many investors say that if you comply with ESG factors, you're likely to get a higher rate of return. For some period of time, people thought that an ESG would mean you're going to get a lower rate of return.

Increasingly, the zeitgeist of the era is that if you comply well with ESG factors, good corporate governance, good concern about the environment, good social practices, you are going to get a higher rate of return. And that's particularly true in diversity as well. Increasingly, investors say, I want to give money to people that have diverse people in their organizations because those people are going to reflect society much better than-- than just old white males. And I think they're right.

So the investment base-- investor base has changed. And it's also changed-- it's not just a US investor base, but people all over the world are increasingly saying, I want to observe these kind of factors in my investments, and I'm more interested in doing something that's good for the world than just getting the extra 1 or 2 basis points I might get from an investment that's not doing something good for the world.

ELLIE RUBENSTEIN: You know, what's interesting about what my father just said is when you are, you know, the-- the daughter of somebody who really invented the industry, you take a hard look at the industry. And what Manna Tree is trying to do is make sure that we're reinventing private equity for the next 30 years. And so with that, that means not just ESG. We call it ESG plus H, and how do you combine all of the good stuff for the environment with also health?

And also, what is also unique is that if you look at our firm, while I'm a woman, 6 out of 10 of us are women. And even within our investor base, 20% are women, and another 25% are next generation. So that means 45% of our investors are usually not the typical investor that maybe Carlyle would be looking at. So we call it not only diversity of-- of investors, diversity of our own team, and of course we look for that in more-- our portfolio companies, but it's really also diversity of ideas.

And we don't believe that you need to have a private equity background to join this area. What we're looking for is the innovative minds that want to redo the industry. So Manna Tree is really trying to say, well, let's use food as a currency. But I would point out to people that you can't have the conversations on, you know, ESG in health or impact unless you have the rate of return.

And, you know, in my father's case, he-- he always says, you really think that you can get, you know, the true IRR that you need to prove this out. And that's exactly what we were looking for is we want to do both. So we tried to have the seriousness of an institutionalized firm that something like Carlyle would combined with healthy food.

DAVID RUBENSTEIN: Let me just add that when-- when Ellie was getting the firm started, you always want to help your children out. I think all parents want to do that. But you don't want to smother them. And so that if they do something, it's not because of you, it's that they did it on their own, and they should have that feeling. So you don't want to do too much, but you don't want to do too little.

So I did say to Ellie, I'll help introduce her to a couple of people. And when I introduced her to a couple of people who were my age, they didn't understand what she was talking about. But they said, well, I have a daughter, I have a son. They might understand it better. So the next generation understood exactly what healthy food was all about, and they tended to be much more supportive than their parents were.

ELLIE RUBENSTEIN: What-- and what's interesting about that is it became a global phenomenon. So I-- like I said, I'm in my childhood home, and I came across my Purdue capstone. And this is the, as my father would call it, the "War and Peace" 500-page report that I presented to him when I was in school about why we should position ourselves as a single family office investing in food.

And what we came to learn is this was my focus, this was not the rest of my family. So how about we actually go separate our firm out, and I wanted to go find investors that believed in this. And so as I ran around the world in 2019 raising our fund, we actually thought we would be a $25 million fund starting. But it turns out that investors around the world are going through the same multi-generation transfer, where children my age are coming to their parents and say, dad, let's make sure we have values in the way we're investing, and this is my area.

And so I think what we've tried to do within our firm is give other families or institutions that work with families a model to say, here's how you can work with next generation to include their-- their values, which are not irrelevant. So our firm, I think, has been a model for that. We have investors in 18 countries and 19 states.

And more importantly, I think we've also shown people that you don't need to work in a family office to feel like you're contributing to family legacy. Find something you're really passionate about, become an expert, become knowledgeable, and then you can help guide your family, like I have with my father in food. And that's probably the most important way to give back to your family is show them you have a skill set that's useful, and then you earn respect of your parents.

DAVID RUBENSTEIN: You know, recently, I did a book on leadership, and one the-- one of the qualities I'd noticed in leaders around the world was that they had a passion for what they're doing. If you hate what you're doing, you're never going to be great at it. And so I tell young people all the time, particularly when I'd make a commencement speech or speak to students, find your passion.

And if your passion is something that your parents didn't want, that's fine. But you can't live your parents' life. You have to live your life. And what you have to do is find something you're passionate about. If you're passionate about it, you'll be really successful at it. I didn't really like some of the things I did before I started Carlyle. I wasn't a great lawyer. I didn't like it. And it was obvious to my clients I wasn't a great lawyer. Now I have something I'm passionate about. I'm fortunate my-- my daughter has found something she's passionate about.

ELLIE RUBENSTEIN: And one more thing I'd add. I think what's so unique is that, you know, many people know my father for his philanthropy, but I don't think anyone ever said thank you for building Carlyle. And it is really one of the best asset classes, private equity. And so while my father and I have different views about where to put the money in private equity, me being food, I think we both really believe that private equity is the best asset class to outperform the market today.

So it has been, you know, really for me the honor of the lifetime to sit, you know, next to the guy that writes the book "How to Lead." Because what we're trying to figure out is, how do you lead people to live healthier and happier lives? And for me, it'll probably take the next 30 years, until I'm my father's age, and-- and figuring out, how do you get a billion people healthy, and how can use private equity to actually get and deploy capital into this asset class?

SEANA SMITH: Yeah, well, I wish we had more time because there's certainly so much more to talk about, especially when it comes to how to lead in some of those conversations, David, that you did have with so many prominent people in that book. And I wish we also had time to turn the camera around so we can really see what that living room looks like and all the books that are stacked up there. But, David and Ellie Rubenstein, it was great to have you together.

DAVID RUBENSTEIN: Thank you.

SEANA SMITH: Thanks so much for taking the time to join Yahoo--

DAVID RUBENSTEIN: A pleasure.

SEANA SMITH: --Finance today.

ELLIE RUBENSTEIN: Thank you very much.

DAVID RUBENSTEIN: Thanks very much.