Inside Ray McGuire’s decision to jump from Citigroup to running for New York City mayor, and the biggest challenges he’ll face in trying to win the job

  • Raymond McGuire resigned as Citigroup's vice chairman on Thursday to announce his candidacy for New York City mayor.
  • Business Insider spoke to those who are close to McGuire, along with political strategists, to understand what led the long-time Wall Street executive to make a bid for public office. 
  • Insiders explained how McGuire is uniquely positioned to lead New York City at a critical juncture for the city.
  • They also highlighted three challenges McGuire will face between now and the Democratic primaries in June 2021. 
  • Visit Business Insider's homepage for more stories.

When Citigroup announced in September 2018 that it was shaking up its investment banking operations, the personnel moves brought an end to Raymond McGuire's 13-year run managing the bank's merger advisory business.

The decision gave McGuire, as a Citigroup vice chairman, more time to focus on the corporate relationships he'd developed over a 30-year Wall Street career. It also left him without the day-to-day management responsibilities he had come to enjoy as a top executive at a global bank, according to a former colleague. 

McGuire, 63, took a step toward managing a large enterprise once again on Thursday when he resigned from Citigroup and announced his candidacy to become the next mayor of New York City.

He joins a crowded race of six or so Democratic candidates that's expected to get even bigger before a June 2021 primary, according to political strategists who spoke to Business Insider. 

"Ray is a very interesting candidate," said Bradley Tusk, a venture capitalist who served as campaign manager for Mayor Michael Bloomberg and communications director for Senator Chuck Schumer. "Right now, prime Democratic voters in New York City are trending very much to the left, but if crime keeps going up, if job losses grow even worse, if the city's quality of life — trash, graffiti, homelessness — continues to decline and voters get really fed up with all of it, then Ray has a chance to capitalize on that and contend." 

His move had been rumored for months. In January, Brian Schwartz at CNBC reported that McGuire was being urged by business leaders to consider a run for mayor, and that the then-Citigroup executive hadn't ruled it out. Talk picked up this summer and culminated with this week's announcement.

But it was only as the city's troubles mounted that McGuire made the decision to enter the race, according to friends.

"I have known Ray for 20 years, and I've been talking to him about what he's been planning to do," said Chad Leat, a former Citigroup banker who now advises private equity firms TPG and Apollo Global Management. "I've already maxed out my contribution and I will be happy to support him in every way I can."

Schwartz reported Thursday that McGuire had tapped Valerie Jarrett, an advisor during the Obama administration, and Charles Phillips, former CEO of Infor, as co-chairs of his campaign. 

McGuire's campaign declined to comment for this story.

McGuire's bid for mayor comes at a critical time for NYC

A lot has changed since that first CNBC story in January.

In March and April, the coronavirus ravaged New York City, leading to thousands of deaths and shelter-in-place orders that crushed local restaurants and bars.

Millions of square feet of corporate office space emptied out, and there was soon such an exodus from the city to the suburbs that the New Yorker magazine wrote a feature story titled "The Pandemic Sparks a Real-Estate Gold Rush in Upstate New York." The city now faces a $9 billion budget shortfall. 

See more: 'A more comprehensive coverage model': Read the memo Citigroup sent to employees about its investment banking overhaul

With New York City on edge, the June killing of George Floyd by Minneapolis police officers sparked protests across the city and clashes with police.

Gun violence has increased in the city. This August saw a 166% rise in the number of shooting incidents compared to the previous year, according to data released by the New York City Police Department. September also saw an uptick.

Joseph Perella, founding partner of investment bank Perella Weinberg Partners, said the moment is right for a mayor with McGuire's skill set.

Perella, who gave McGuire his first Wall Street internship, hired him at a succession of jobs that concluded with his naming McGuire co-head of M&A at Morgan Stanley in the early 2000s. Perella, who considers McGuire a friend, said the candidate saw what was happening with New York City and decided that he has the right blend of financial acumen, people skills, and leadership chops to get the city back on track.  

"Ray is ready for this," Perella said. "In some ways this is a calling to him. He loves the city so much and he feels the city right now is very divided and it needs healing and bringing people together. I think he feels that someone needs to step up and try to do this."

Wall Street rides to the rescue

There's a long history in the city of calling in Wall Street leaders at times of economic distress.

In 1975, New York Governor Hugh Carey tapped Lazard Freres banker Felix Rohatyn to lead a committee responsible for digging the city out of a fiscal crisis. In 2001, after the World Trade Center attacks plunged the city into a recession, city residents voted Wall Street trading mogul Mike Bloomberg into the mayor's office to help pull them out of trouble. 

And yet everyone that Business Insider spoke to agrees that the city's current challenge is different than years past. 

"He will in many ways be able to bring good fiscal policy to the city at a time when there will be concerns about substantial deficits," Basil A. Smikle Jr., the former executive director of the New York State Democratic Party. "And since the pandemic has impacted communities of color disproportionately, especially when you consider the livelihood of essential workers and people who work in small business, he will have a good understanding of the economic challenges."

In the wake of the Floyd killing, McGuire, who is Black, spoke in some of the starkest terms of any corporate executive.

Speaking with CNBC, McGuire said Floyd's killing was "cold-blooded murder." When the interviewer followed up with a question about how he would advise corporate execs and boards, McGuire cited the pandemic's disproportionate impact on Black Americans and said the health crisis has exposed the 400-year old virus of systemic racism. 

His candidacy will hinge on three challenges

McGuire will have to take similar stands across a wide range of issues if he is to have any hope of winning, and he'll have to overcome at least three key challenges, according to the strategists and people who know him. 

The first, according to a former colleague who asked for anonymity to preserve their relationship, will be finding a way to make decisions quickly even if he can't reach consensus. One of the knocks on his time at Citigroup, this person said, is that McGuire was overly focused on ensuring that everyone bought into a decision. The result was that decision-making sometimes lagged. 

"When he has had organizational changes, people changes, tough conversations to be had with individuals in the organization, he has always struggled with that," according to this person. "That won't be a campaign problem for him but when he becomes mayor, it may be."

Read more: Citi has quietly undergone a massive restructuring over the past year. Here are the businesses it overhauled and the executives who departed.

Another is that while he is well known on Wall Street, McGuire doesn't have a lot of name recognition with New York's Democratic voters. That makes it critical that he spend the next six months getting out and meeting voters in their neighborhoods, according to New York political strategist Jon Reinish, a challenge made harder by the pandemic.

McGuire was right to enter the race now, when the field is still small and attention hasn't completely shifted to the national election, Reinish added. 

"He has to introduce himself to people," Reinish said. "I would hesitate to pigeon hole McGuire into just being his Wall Street experience. It's obvious he has a lot more to say and a lot more experience to draw from. That's why his introduction to the voting public will be so important."

McGuire grew up in Dayton, Ohio, raised by his mother and grandparents, according to his campaign website. He never knew his father. As a grade schooler, McGuire got a scholarship to a better school and had to walk a mile each day to catch the bus. As a high schooler he got a scholarship to Connecticut prep academy Hotchkiss School.

From there he went east to Harvard College, where he would go on to pursue both law and business degrees at Harvard's prestigious graduate schools. When McGuire finished at Harvard, Perella recommended he try both law and finance before settling on one industry, he said in an interview. 

Read more: The real reasons behind Citigroup CEO Mike Corbat's retirement

It didn't take long for McGuire to find his calling, and Perella hired him at First Boston, where he began his Wall Street career. With the city facing such a shortfall, his financial skills will be tested.

"Ray is a financial engineer," former Citigroup banker Leat said. "He will be able to come up with the most creative financial solutions; whether getting money from Washington or raising it in the financial markets, he will have to do something." 

McGuire has built a following outside of Wall Street as a noted philanthropist, and for the last 30 years, he's served on the board of the De La Salle Academy, a day school attended by gifted students who live below the poverty line. He's also served on the boards of the New York Presbyterian Hospital, the New York Public Library, the Whitney Museum, and the Studio Museum in Harlem.

McGuire's third challenge will be finding a way to thread the needle between calling out Wall Street's excesses in a way that appeals to progressive voters, without alienating his friends and supporters in the industry, according to strategists. 

Voters are going to expect him to call out "the abuses of Wall Street in order to make his case for why he can rise above that," Smikle said. "Voters will want him to be honest about the ills of working on Wall Street and pull back the curtain while also touting how he can be the bridge between Wall Street and Main Street to support small businesses."

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