Puerto Rico's First-Ever Chief Investment Officer

Gerardo Portela

The Opportunity Zone Expo Podcast
Puerto Rico's First-Ever Chief Investment Officer


Jack Heald: Welcome back everyone to the OZExpo Podcast. I'm your host, Jack Heald, and I am very honored to have a special guest today, Gerry Portela. Who is Gerry? Give us your title again, one more time.

Gerry: Sure. Good morning, Jack. Good morning to all the Podcast listeners. I'm Puerto Rico's chief investment officer and senior advisor to the governor of Puerto Rico, Recardo Rossello.

Jack: There we go. Chief investment officer. Welcome to the Podcast. We are very glad to have you here, Gerry. I always like to start these interviews by finding out who you are and where you came from. So, that's my question. Who are you? Where did you come from?

Gerry: I've been, an investment banker for the past 12 or 13 years in Puerto Rico. I worked for both UBS and Santander, at the end heading the investment banking group at Santander. Doing basically the investment banking world in Puerto Rico. Since is that we're a small island. We're all generalists, basically.

We do a lot from MNA to originate mutual funds, but our bread and butter, or our main business is public finance. So, I basically issued a lot of Puerto Rico bonds. I did that for 12 or 13 years, and in 2016, as Governor Recardo Rossello, was elected by the people of Puerto Rico. I joined his team, as the senior Director of FAFAA, which is the Fiscal Agents and Financial Advisory Authority.

Basically this sort of the Chief Restructuring Officer of Puerto Rico. FAFAA had the faculty or the powers to negotiate Puerto Rico's debt. As you all may know, Puerto Rico is in the middle of the largest, U.S. Municipal bankruptcy with approximately $70 billion in debt and approximately $48 billion in pension liabilities. So, this authority or FAFAA was in charge, and not only had the powers to restructure Puerto Rico's debt, but also to construct and implement fiscal plans, which is sort of a business plan for a municipality. And also in charge to reengineer the whole government entity itself. Right now we have approximately 140 agencies. The governor's submission was to have a more effective, smaller government entity to reduce from 140 agencies to 40 agencies.

But I'm going to stop there because maybe you have some questions, but that's, that's sort of the main work streams that FAFAA had. I did that for 18 years, for 18 months. And after I helped stabilize the right side of the balance sheet, the liabilities side of Puerto Rico.

Now the governor asked me to help rebuild and optimize that left side of the balance sheet, the asset side. So, this position, chief investment officer, is a new position within our administration and it's sort of a best practices to have someone that has that buy side or that financial experience and to translate it into public work.

Jack: So, I guess that leads pretty naturally to Opportunity Zone. So, as we were talking just before the show started, you gave me some very recent news in regards to Puerto Rico and Opportunity Zone program. Why don't you update us on that?

Gerry: So, great. So to go back to what I said earlier, Jack, it's very important to highlight what Puerto Rico was two-and-a-half years ago, and what Puerto Rico is now. Puerto Rico in January, 2017 was insolvent, right?

It had approximately $200 million in cash flows. Right now we have close to $3 billion in cash flows. We had $70 billion of debt in default. We've already restructured 31% of the debt. Also in the past two years, we reduced 22% of our government expenditures. So, we reduced 22% of our budget in the past two and a half years.

Jack: You've reduced expenditures, 22%. What's the feel in Puerto Rico as a result of these changes?

Gerry: So, the governor's vision and our vision was, “Let's reduce government expenditure without layoffs.”

Jack: Yes.

Gerry: So, we cut the fat, right? So, a lot of APEX, government contracts, things that we could reduce or, have more efficiencies there without firing someone.

Jack: Uh huh.

Gerry: So, it's has been a great accomplishment by the governor.

Jack: It sounds like it.

Gerry: You know, we believe now that Puerto Rico, since that right side of the balance sheet, the liability side, we've paved the way and there's going to be more renegotiations or restructuring of the debt. That's taking its course.
Now we stabilized the government entity, we're reducing the government entity. We've passed a lot of reforms such as tax reform, pension reform. We're going to pass the incentives code, for the incentives that Puerto Rico gets.
We're going to have a more scientific, quantitative approach to that. So, now we believe that Puerto Rico is ready to be open for business. There's more information out there for possible proponents or investors to make an informed decision whether to invest in Puerto Rico or not.

So, Puerto Rico's had to, stabilize the house, stabilize the patient, in order to attract business. Now we're ready to attract business and we believe that Opportunity Zones are a catalyst for economic development. It's a game changing catalysts for Puerto Rico.

Jack: Well, unlike anywhere else in the continental U.S., the entire island of Puerto Rico is an Opportunity Zone. And that's not the only thing that's different about Puerto Rico. Why don't you fill in our listeners on some of the sovereign differences between the 50 states and Puerto Rico, because I know the island has as special status within the U.S.

Gerry: So we are a U.S. Territory, for the listeners that are listening to this podcast, and like you said, Jack, 96% of Puerto Rico is an Opportunity Zone. We believe we are doing everything possible. The stars are aligned here in Puerto Rico to attract investment through Opportunity Zones. Let me explain what's our competitive advantage to our formula.

So, Puerto Rico has been in a recession for 13 years. Okay. Not only that, we're in the middle of the bankruptcy proceeding. Moreover, you know, on October 20 and September, 2017, we had two Category Five hurricanes battling through the island that leveled the infrastructure here.

Jack: Yeah.

Gerry: My dad has always said from a bad thing comes always a good thing.

Jack: So, that gave us a blank canvas, right? 

Gerry: With approximately $65 billion in federal funds coming to the island in the next five to seven years, it gave us a blank canvas for the governor. It has been his vision to reconstruct and rebuild Puerto Rico in a more modern and resilient manner. That means better infrastructure, better roads, better roads, better telecom, energy.

Right now we're, in the middle of the transformation of our electric power authority. This is going to be a combination of private generation and a longterm concession or a public/private partnership for the transmission and distribution. We're going to have clean and reliable energy that translates into productivity within the island. So, we're working toward all of that. And Opportunity Zones are going to be a mechanism to not only improve our infrastructure with private proponents, but also to improve our hospitality as part of the economy.

Gerry: Right now, tourism represents 7.2% of the economy. We want to double that down in the next five years. We have over $1 billion pipeline in tourism for Puerto Rico.

Jack: That really surprises me. I would've guessed it was much higher than that.

Gerry: Yeah. But we want to get that to you over the 10 handle in the next few years. So, that 12-year recession translates into competitive pricing for real estate, right? Given that 96% of the island is an Opportunity Zone, we're working closely with treasury.

We tried to see if we can try to get a 100% designation for the island given everything that has passed right through. The hurricanes and the humanitarian crisis that happened, you know, so you can acquire prime locations that could be designated as Opportunity Zones.

What I mean by prime locations, they can be waterfront locations. They can be multi-zoning, industrial, commercial, properties that you could redevelop here. The new economy is flourishing in Puerto Rico. Startups, small and medium businesses. It’s something that is thriving in Puerto Rico as well. So, you have competitive pricing for real estate and now you have the possible injection of CBDB funds, which is a federal fund that could be used for economic development or housing or blight work that could be used to help that project or that possible Opportunity Zone within Puerto Rico. And moreover, a local legislation that was just passed our legislature yesterday,
I'm not going to go to more too much in detail with that legislation because that's something that the governor's probably going to announce next week, but it gave us a local legislation that has ample benefits, from tax credits as part of the investment to exemptions in property tax, a municipal tax in construction, excise tax and the list goes on. So, you put that in a blender, you know, the competitive pricing possible use of federal funds, and a local legislation would benefit and our IRR will be a lot higher, we believe, than other jurisdictions in the United States.

Jack: So, let's talk about, some of the challenges specific to Puerto Rico that investors should be aware of when they think about, bringing in investment money to Opportunity Zones in Puerto Rico.

Gerry: I've been traveling as part of this job as a chief investment officer, Puerto Rico. I've been traveling to DC and to New York, to talk to the investor community. And some of the challenges are the permitting process in Puerto Rico has had some constant critics on it. That red tape in the past, the historical red tape has been pretty long.

Jack: Sure and that certainly is a problem that can certainly cause challenges given the time constraints with investments under the Opportunity Zone program.

Gerry: Correct. But with that in mind, this new legislation will cut through that red tape. We're going out, we're working on our whole re-engineering of the permitting process in Puerto Rico, centralizing it. And there's some that we're working toward, that expedited permitting process, not only for Opportunity Zones, but for other investments. Second, Puerto Rico has over probably 150 different regulations, some of which have a duality to them. We're cutting through that as well.

We're cutting some, regulations from different agencies and public corporations within the government. We’re not only re-engineering the permitting process, but we're cutting down and removing obsolete regulations. We're working towards that. We call that a "Da la tijera" which means "using the scissors" to cut down those regulations.

So, this has been a complete turnaround back on Puerto Rico. We believe that Puerto Rico could be the hub for the Americas. The Governor has expressed that in many ways. Puerto Rico has strong core fundamentals. We're U.S. Citizens where we have a dollarized economy, we have skilled labor, bilingual labor.

So, there's a lot of benefits to being in Puerto Rico and we're here to do everything in our power to get the correct investment in Puerto Rico and help Puerto Rico flourish.

Jack: That's a great story. How have attitudes towards this kind of extreme restructuring changed? Compare before the hurricanes to after the hurricanes. Was that the triggering event that allowed people to say, “you know, maybe we really do need to make some core changes. Or has it been building? Where did this come from?

Gerry: What exactly? Like the whole restructuring in Puerto Rico?

Jack: Yeah. If I understand you correctly, you're talking about changes in political will where there's probably been resistance in the past. There is cooperation now. And my question is what triggered that? Was it the hurricane?

Gerry: Jack as you may know, there's always going to be resistance to change. But this has been\ something that the governor had to express before he was elected. He had a "Plan para Puerto Rico," or plan for Puerto Rico. We didn't anticipate a hurricane, but that had the whole restructuring or re-engineering of the government entity itself and a vision for the future. So it's been a lot of dialogue, a lot of hand-holding with the legislature, with the judicial branch, to try to make changes in a subtle way, in a way that everyone could be aligned. Obviously there's, there's always differences between the different branches, but at the end, we all have the same goal. It is to revitalize, Puerto Rico, right?

Jack: Yeah.

Gerry: There's still a lot to do left and hopefully the governor gets reelected to finish the job that he started. The elections are in accordance with the U.S. Elections next year.

Jack: You made what I think is a really important point. We all have the same goal. And oftentimes it seems like we think that those who disagree with us in terms of means think that we're going in a different direction as well. Seem to think that we have a different goal. But if we can keep in mind that -- by and large -- we all pretty much want the same thing. We want to have safe and secure places to live with good family life and public services that actually serve us rather than hinder the way we want to live. And most of the time, our disagreements are about how we get there rather than where we're going.

Gerry: I agree with you.

Jack: What's been a pleasant surprise you've run into so far. It may be too early in the program, but are you starting to see Opportunity Zone development? You know, actual shovels in the ground?

Gerry: That's a great question. I think people wanted it too. Some of the proponents that I've talked to wanted to see when that local legislation is passed. There's been a lot of interest in Puerto Rico and specifically when they come down and visit the different project sites here in Puerto Rico. We are going to have, by the way Jack, and I want to invite you formally, I want to send you a letter an Opportunity Zone conference on May 14th in Puerto Rico, in collaboration with U.S. Treasury. We’re going to have different speakers and not only U.S. investors, but Puerto Rico investors that are looking at Opportunity Zones in Puerto Rico, not only the real estate play, but also and you know, in possible acquisitions or expansions of businesses.

That’s something that, that we're going to talk in more detail in our, Opportunity Zone conference on May 14th here in Puerto Rico. I'm inviting you formally through this podcast. I'm going to send you a letter on it. We'll look for you to join us. There’s been a lot of interest.

I would say we're seeing between $300 million to approximately $700 million right now of possible Opportunity Zones in Puerto Rico. Hopefully that number will grow and we want to communicate correctly to the all the different stakeholders and all different jurisdictions that we're open for business and that we truly believe in this game changing catalyst for economic development in our Opportunity Zones.

The hurricane was not in the books, but we came out of it as best as we could. There's still a lot of work to do, but they gave us an opportunity through the help of the federal government to bring into or to inject $60 billion-plus of federal funds to modernize the whole island into more agile, more efficient, more resilient infrastructure.

Jack: Was that part of the problem with the hurricane? Here's where I'm going with this. So, I'm a high net worth investor. I'm looking at various places I can put my money. Puerto Rico is one of the possibilities. But I look and I see, you know, holy smokes, the hurricane just devastated this place. How do you respond to someone who says, “You know, all things being equal, I'd rather put my money in a place that didn't just get wiped out by a hurricane.”

Gerry: Sure. So, I would tell that investor, take a look at the history of Puerto Rico. What it used to be an investment -grade issuer under S&P and Moody's. So, we were a pretty robust economy. You know, we passed through a lot, obviously recession, bankruptcy, the hurricane. Today's very different from two- and-a half years ago in. For example, Jack, we're polishing weekly cashflow reports. They're posted in the FAFAA website. I mean, I haven't seen a Forbes 500 company doing that.

Jack: Tell us again what the acronym stands for.

Gerry: It's called the Fiscal Agency and Financial Advisory Authority. In English it's "FAFAA" basically, and you can Google it. There's a lot of information there.

Now, you know, Christian Sobrino is running the agency and doing a great job there as well. there's a lot of information there. So, from weekly cash flows to budget to actual data, to HR assistance to pension related information and the list goes on. We’re improving that financial information out there for savvy investors to make an informed decision, whether to invest in Puerto Rico or not. Another issue was, Puerto Rico's in a bankruptcy state, they're defaulting on their debt. Yes, we are.

Jack: Yeah.

Gerry: We've renegotiated 31% of our debt already and we're in the middle to renegotiate the rest of the debt by 2020. That's our expectation. Puerto Rico has a big pension liability right now. We did a pension reform to protect our most vulnerable and to protect our retirees.

So, we're doing a pay-as-you-go system in which the government is assuming that liability. Puerto Rico has a large government or bureaucracy; their permitting processes is bureaucratic and long. We’re regenerating the whole permitting process.

We’re actually re-engineering the whole government itself. We've been trying to mitigate most of the critics that and things that were going wrong in Puerto Rico in just two-and-a-half years. Maybe I'm subjective about this, right?

Jack: Hey, it's OK. You should be passionate about this.

Gerry: I think it's the time to ride Puerto Rico's wave. Right now is the time. You know, I think that Puerto Rico's in the middle of an expansion. We've had record sales in cars and cement.

And that's been without the injection of over $60 billion of federal funds that are coming in. So, you do the math, right? We’ve done everything possible. There are difficult changes and difficult moods in the government but for the right reason, right for the future. The long-term play of Puerto Rico and honestly the governor has had that vision since day one and he's been, like they say, “I shouldn't speak louder than words,” he’s been doing that and the numbers show. So, that's sort of the story of Puerto Rico sort of in a more in a nutshell, the way I would sell Puerto Rico. And basically Puerto Rico has strong core fundamentals,

Jack: I know that's, that would be music to the ears of most investors.

Gerry: Yeah.

Jack: I'm interested in your move from the private to the public sector.

Gerry: Sure.

Jack: That's got to be a little bit disorienting. Tell us about that change, how you've handled it. I know there's challenges.

Gerry: Yeah.

Jack: I know that that we were talking before-hand and you do have to be a little bit more legitimately politically correct than you would have to be if you held a private position. Talk about that transition.

Gerry: Sure. You know, I've always been in the private sector. I did my masters. I have an MBA from the University of Virginia and started in business school since that. When I did my MBA from '06 to '08, I knew that I wanted to do something for Puerto Rico. And I wanted to have the opportunity to give back since I've gotten back from Puerto Rico.

I've gotten back from my education, my parents, I wanted to give back and I know Puerto Rico was in a dire situation for the past few years. So, when Promesa was approved by the U.S. Congress. The federal law Promessa, which has an oversight board sort of similar to the DC board or the New York board in the 70s.

Jack: Right.

Gerry: That’s another stakeholder that we have and their mission is to put back Puerto Rico in fiscal stability, and to regain access to the markets. That's sort of their main vision. So, I know Puerto Rico was in bankruptcy and the Promessa board was in place and when Governor Rossello, someone I truly admire, was elected, I was contacted by the administration to help to restructure the debt of Puerto Rico.

Gerry: I knew that sort was going to be a big change. I was going to be more public, obviously. But that was such a particular historic moment that I could definitely help Puerto Rico in that mainstream network stream and help restructure Puerto Rico's debt. Or help fix the right side of the balance sheet of Puerto Rico.

That was my thinking. And I knew that I had to give my attention to Puerto Rico and help the governor through its mission. So, I decided to, to join the administration. I was part of the transition proceedings in December, 2016 and then on January 2 when the governor was elected and announced, we already knew what we were going to do with the FAFAA.

You know what I told you earlier, to restructure Puerto Rico's debtto create fiscal plans and to be the intermediary on behalf of the government with the oversight board. So, basically we mirrored the disposition, the faculty that the board had with that agency itself, so we can mirror everything or the work streams that the board had.

Jack: So at the state level or the federal level? Was this the internal version of this external board, which reports to the federal government?

Gerry: Yes, they're appointed by the president. the oversight board. We had to have a new modern agency that could handle that work, that could recruit people from the private sector. We recruited a lot of people from the private sector, from consultants to bankers to two attorneys to even asset managers.

So doing all the work that's been done for two-and-a-half years. So, my decision was, okay, this is a historic moment.

Jack: Yes.

Gerry: I can definitely help. I know the market, you know, obviously sad but true. But I've issued the bonds. I, issued some bumps in Puerto Rico, so I know how they work. What they are, and how to restructure them efficiently. I know there were very little people capable of doing that here in Puerto Rico. So I joined and it's been, it's been a gratifying experience. A lot of work, obviously, you know, very little vacation, very little weekends, almost no holiday. So, got a little fatter.

Jack: Oh my.

Gerry: But it's been a great experience. I mean, I believe I'm a different professional now. You know, the combination or we're getting a reorg bankruptcy.

Jack: Yeah.

Gerry: I obviously know the ropes within the political structure. So for me as a professional, this has been gratifying. It's been additive, it's been sort of another degree. Moreover, on a personal level, you know, there's a lot that has been done. I sleep great at night. I believe that a lot of things have been done -- a lot of, work and sweat and blood and tears -- to get where Puerto Rico is. And the governor, I don't know if the governor actually, that guy is machine, right? A lot of work has been done, Jack.

Jack: Your passion is palpable. It really comes through Gerry. I've got to tell you. So, what, what was it that prepared you? And I don't mean professionally. What prepared you personally to be able to recognize this opportunity, recognize that you are the right person at the right time, and have the confidence to jump into it? Don't tell me about your education and your work experience. I want to know personally.

Gerry: Do you know the the game seven degrees, in that people know each other in seven degrees? In Puerto Rico, they know one degree so, almost everyone knows each other.

Jack: Oh.

Gerry: And obviously a lot of work has been done. I've done I guess a great job in the past and the governor knew about me. And, I had expressed my interestin joining the government. So, you know, the stars were aligned. He had a complete trust in me and same as me, you know, trusting the governor and a lot was done.

So, that's for the 20 months and now with this new position is sort of the same thing. I've been in this position since August, 2018, to try to reoptimize and revitalize Puerto Rico's economy. Obviously I've been working a lot with Secretary Laboy, who also is going to be in Las Vegas May 9th and 10th. He is the Secretary of Economic Development.

We joined forces to optimize Puerto Rico's economy because we could do a lot on the right side and negotiate the debt. But if we don't take care of our asset side on our revenue side, then we were probably be back in the table again in the next few years.

Jack: Right.

Gerry: This is more of a longterm vision on what catalyst will put Puerto Rico back in the map? And that's where I go back to Opportunity Zones.

Jack: Right.

Gerry: I am in charge of the Puerto Rico Opportunity Zones initiatives. We are ecstatic that the governor's signature priority is to leverage Opportunity Zones for not only economic development, but also to create jobs.

Jack: Sure.

Gerry: We need jobs back in Puerto Rico. We need to have the correct capital. What do I mean by the correct capital? People who want what’s in the best interest of Puerto Rico, not speculative, but the correct interest in Puerto Rico that want to stay; who want to inject longterm capital in Puerto Rico.

And moreover this Opportunity Zones project will impact socially, will help our communities adjacent to it. It’s not only an economic stance, but it's also a social initiative, right?

Jack: Oh yeah.

Gerry: Because Opportunity Zones will help the communities around Puerto Rico as well. So, that's why we are, like they say in poker, all in Opportunity Zones. We truly believe in this mechanism and you know, it's all going to be creative. It’s new money that was not here in Puerto Rico. And we're going to do everything in our power to lure investors and our funds and other stakeholders back to Puerto Rico.

Jack: I'm guessing there are new Puerto Rico government organizations, structures designed specifically to draw in and address the concerns and needs of Opportunity Zone investors.

Gerry: There's been, I think, two or three conferences in Opportunity Zones in Puerto Rico already. But this is the first government-sponsored Opportunity Zone. The others were private sector, smaller conferences. This is the first government-sponsored conference on Opportunity Zones, May 14, but it's going to be in collaboration with treasury as well. So, we're going to have treasury folks here as well. There's firms, there's nonprofits that are working on this -- people, that I'd been impressed how savv they are with this Opportunity Zone matter. There's a lot of people getting involved in this because we believe it’s changing catalysts for Puerto Rico's economy. Lots of needs, lots of opportunities for various types of investment.

Jack: Is there a particular area of investment that you can say -- and I'm talking specifically about Opportunity Zone type investment - that you can say, “Yeah, we really, really need this. This is a top priority. This particular sector is where -- if it goes nowhere else -- we want it here.”

Gerry: To answer the question, I think tourism is important in Puerto Rico. We believe that tourism is going to be a bigger, it's going to be have bigger slice of the pie in Puerto Rico. So there's a lot of opportunities for Opportunity Zones, sorry for the duel opportunity, but..

Jack: I'll deal with it.

Gerry: Also in terms of infrastructure, there's ways around it. For example, you could invest or you can acquire a construction company or contractors in Puerto Rico that are located in an Opportunity Zone and those contractors or that construction company could be working with different infrastructure initiatives in Puerto Rico. You can create a new company here in Puerto Rico that is located in an Opportunity Zone which 96% of the island is Opportunity Zone.

Jack: Right. So almost certainly going to be in one.

Gerry: Exactly. So that's sort of the way I thought about it. Maybe renewable projects, you know, for energy that's a new thing. The governor signed an executive order that we're going to have 100% renewable energy by 2050, that by the end of 2020, we're going to, remove coal from our energy production and, and replace it with natural gas. I tell the investors, think about a large restaurant menu for Puerto Rico that says there's a lot to be done and then all the infrastructure: hotels, pharmaceuticals, manufacturing. So, the menu is so big on the different opportunities of Puerto Rico.

Jack: Right.

Gerry: That I can't pinpoint or put something in a specific quadrant. Right? So, there's a lot of opportunity. That's all I'm trying to say.

Jack: What unique advantages does an investor have investing in Puerto Rico that wouldn't accrue to him in any other state in the union?

Gerry: So I'm going to be careful in how do I answer that? Because I don't know the difference by 50 state laws. But I can talk about Puerto Rico and the way we see it in the numbers.

Jack: Sure.

Gerry: It's competitive pricing in Puerto Rico for real estate: skilled labor, dollarized economy, mispricing entirely, local legislation and possible use of federal funds in those projects. For example, doing blight work with CDBG, we can use the blight work for this proponents. Something that the upfront cost of demolition, they're very high.

Jack: Right.

Gerry: We can work on that. The government can partner with that proponent and help with that area to use CDDG for infrastructure adjacent to that project around, improve the telecom, cable water access, et Cetera, and improve the roads around it.

There’s a lot that the government can help as well. And again, since we all believe that Opportunity Zones are a catalyst such as this one comes once in a lifetime, maybe a couple in lifetime.

Jack: Yes.

Gerry: We have to put all our efforts and align all the ducks in a row to try to get it to try to, you know, maximize, Opportunity Zones in Puerto Rico.

Jack: A couple of times. You've mentioned CDDG Is that the community development...

Gerry: Disaster grant.

Jack: Disaster grants. Right. Okay. Yeah. I wanted to make sure I got that right. And I suspect there are other listeners who are trying to remember what that meant. Well let's find out a little bit more about you and particularly you as a person. You mentioned that you got your masters at UVA.

Gerry: Yeah. You’re going to congratulate me for the national championship?

Jack: Well, I did spend 18 years in Texas and I wouldn't say I was a Texas Tech fan, but I will admit that I thought it would be kind of cool if the Red Raiders actually pulled off the upset. But yes, congratulations on the national championship. It's actually a pretty good story going from, being the first number one seed knocked out by a 16 to one year.

Gerry: Oh, ouch.

Jack: Look, I'm sorry, but you know, the light is brighter after you've come out of the darkness.

Gerry: Oh yeah. And I closed my eyes and that bucket still goes in. It's incredible, so those buckets come and go in.

Jack: It was kind of magical, wasn't it? It was just one game after another. Purdue and then,

Gerry: Yeah. Purdue then. . .

Jack: Michigan State. Good grief.

Gerry: Yes, it was incredible. Go ahead.

Jack: So why did you pick, why UVA?

Gerry: In '06 there's a program that is called the Consortium for Graduate Management. It is basically a consortium that has a pool of schools together. Top 20 schools, such as NYU, UVA, University of Texas-Austin, UCAL, USC, Michigan, etc. So, pulls together and it's a consortium that helps minority students, with one application to try to, you know, reach out to this schools for MBA programs. And in some cases, they gave you a full ride. So, so you have to rank the universities. Basically UVA was my second choice. My first choice was NYU Stern, but hopefully the UVA Folks don't hear this.

Jack: I'll bet. I'll bet you're glad now that you went to UVA.

Gerry: Of course.

Jack: Because we wouldn't be discussing basketball if you'd gone to NYU.

Gerry: It was the second best decision of my life. The first was getting married. I got married back in February two months ago. I'm recently married.

Jack: Well, congratulations.

Gerry: Thank you. My wife will say during that March Madness, she actually saw the madness in me and watching those games. But, she decided to stay with me anyway.

Jack: She had her chance and she didn't take it.

Gerry:   Exactly. So, you know, UVA was high up there as well. The fellowship for the Consortium Graduate Management, I got it for another school, but it was later, it was ranked and that school was ranked fourth, I think.
I'm not going to name it. But then UVA since it could me the consortium fellowship, UVA gave me the Darden Fellowship Award. So, basically gave me almost a year and a half in scholarships. So, that's why I decided to go to UVA. The second best decision of my life. I have established a great network, great relationships, great friends.
It's a bar, you know, great faculty. It was a great experience that opened my eyes a lot. And the business case methodology gives you a chance to hear other perspectives and with other experiences and basically, you know, you see a way to how to skin a cat, right? Different ways to skin a cat. So it was a great experience and gratifying experience.

Jack: You come out of a background of finance, and you're now in a position with the title chief at the beginning of the title of the name. So, that's, that's more of an executive function. What allowed you to make that transition, it sounds like quite effectively? What personality strengths do you have?

Gerry: To be involved in this past two-and-a-half years? Unprecedented events. At worst, you’ve got to be perseverant, right? Not everything's going to go your way. You have to find a way to find a solution for each problem. Sometimes the problems come from angles that you didn't even know were there.

Jack: Sure.

Gerry: And they can turn into forest fires. So, you need to prevent that as well, be able to anticipate those moves.
Obviously, communication, writing, when I was in investment banker will, I did a lot of pitch books and tried to get the deal and tried to communicate what's the best for that client. But there's public policy, so it's sort of, “how do you communicate?”

Everything has to be done that goes in accordance to the different stakeholders. Puerto Rico has different stakeholders and normally has a position party, but you have congress, you have the board, you have bondholders that are still trying to negotiate the debt. You have different sectors within the economy. So, how do you make the right decision that benefits holistically everyone? You can't make everyone happy. Right?

Jack: Right.

Gerry: So, you've got to find a way to improve your chances or the probabilities; to take a holistic approach to everything. So obviously crisis management. I think I've gotten some thicker skin from the past two-and-a-half years.

Jack: You would have to, wouldn't you?

Gerry: Yeah, and that has helped me a lot. I think that's why I said, I'm, I'm a different professional now. I'm different, you know, executive., I mean there's, there's, there's a lot of tools that you need here, to, basically just survive here. Right? So, but it's been a great experience.

Jack: Well, I will tell you that it's quite obvious that if nothing else, one thing that you bring to the job that's got to make a huge difference is just passion and energy. And I can't help but wonder, I can't help but think, how do you keep it going with a job that size, with a challenge that big. And yet, I know on the other hand, oftentimes it is those giant challenges that do give us almost superhuman energy, make us able to keep going when maybe we just give up in a lesser circumstance. Us humans are strange, strange creatures.

Gerry: But you hit a great point. And I mean, the passion's there, my family lives here, my friends and you and our citizens. It's important to see that everything you've worked so hard for, you could start seeing it reflected in Puerto Rico. So, that gives me more power and that gives me more and more energy. That's where I get more energy to keep going.

Jack: Right.

Gerry: And I think that passion and that energy is intertwined there, right in between.

Jack: Well, I see that by the old clock on the wall here we've been going actually a lot longer than I meant to keep you. So you've got a great story there, Gerry. If folks, particularly investors, want to know more about Puerto Rico and Opportunity Zone investing, what's the best way to do that?

Gerry: You know, there's a lot of people working on Opportunity Zones, but you know, I can give you my email. It's gportela@fortaleza.pr.gov. They can shoot me an email and I’ll try to help them out as much as I can.

Anyway, I'm going to be speaking at the Las Vegas Expo on the 10th. There's an Opportunity Zone conference here in Puerto Rico that I'm going to send you the details about. So that's sort of the way to, get more information on Puerto Rico and the initiatives that are moving along.

Jack: Alright, very good. And I want to remind our listeners that as always, this information will also be available on the Opportunity Zone Expo website. Any lasts words for us Gerry, before I let you go?

Gerry: Sure, I want to first thank to thank you, Jack, for giving the opportunity to, to speak out to your listeners abut theo Puerto Rico story. Puerto Rico, you know, it's a great story as a turnaround story. We're ready to be back on the map. There's a lot of benefits, when you come into Puerto Rico. So I encourage people to get more informed on Puerto Rico and that we're open for business and this governor has done a great job and he has a lot more to do. We're open for business and you can count on us. And we believe that Opportunity Zone is a game changing catalyst for Puerto Rico, so thank you.

Jack: I think we all believe that. Well Gerry, I look forward to seeing you in Las Vegas and perhaps in Puerto Rico on May 14th. Great. This has been an  exciting time. And I can see that it looks to be like this is absolutely an opportune time to jump into Puerto Rico.

Jack: Well, for the Opportunity Zone Expo Podcast, I am Jack Heald. I thank you for joining us and we will talk to you next time.

Announcer: This Podcast is for informational purposes only and does not constitute legal tax or investment advice. For specific recommendations, please consult with your financial, legal, or tax professional.

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