Fear of Heights

The Rock of Gibraltar stands 1,398 feet tall at its highest point.

The mountain is located in the middle of Gibraltar, a British territory to the south of the Iberian Peninsula with around 34,000 residents.

It’s fair to wonder why Gibraltar is a British territory even though Spain is next door.

From 1701 to 1714, there was a European power struggle known as the War of the Spanish Succession.

Charles II, King of Spain, died without having a child to take the throne, leaving a power vacuum in the Spanish kingdom. At this time, Spain was a respectable empire that included large sections of Italy, the Netherlands, and the Americas. Other countries saw Spain’s momentary weakness as the perfect opportunity for expansion.

Charles II had named a French successor, Philip of Anjou, before his death. Philip formed a coalition between France and Spain, defending Spain from an alliance composed of Austria, Britain, and the Dutch Republic.

The war slowly subsided when the Grand Alliance’s leader, Archduke Charles of Austria, succeeded his deceased brother as the Holy Roman Emperor. When that happened, the British army decided to step back, and the Treaty of Urecht was instituted.

As part of the treaty, Spain ceded Gibraltar to Britain.

The beef didn’t end there.

In 1779, Spain spun the block and tried to take Gibraltar back while Britain was busy fighting in the American Revolutionary War. They even brought France along for good measure.

The British army had a robust military base in Gibraltar, with the Rock of Gibraltar serving as a central stronghold.

Spanish and French forces attacked for three years straight in what was known as the Great Siege of Gibraltar. But the Rock remained sturdy, forcing Spain and France to retire in 1783.

Gibraltar’s legacy was cemented.

More than a century later, Mortimer Remington from the J. Walter Thompson ad agency was working on a campaign for an insurance company.

Remington was struggling to find the right way to communicate his client’s brand to the masses. During a train ride to New Jersey, he passed by Laurel Hill, an igneous rock.

His mind connected the dots until he landed on this:

The campaign linking Prudential to Gibraltar was America’s first great ad campaign.

Prudential still has a symbol of Gibraltar in its logo today.

The story of Prudential starts with an American copying a British company.

In 1875, John Dryden founded an American insurance company named Prudential Friendly Society… He intended to copy the playbook of a British insurance company named Prudential. Dryden sold burial insurance to protect American families from the cost of death.

Like most copycat enterprises, Prudential Friendly Society struggled to replicate the real Prudential. Stubbornly, Dryden refused to throw in the towel; he hopped on a flight across the pond and studied his London counterpart from up close.

In 1877, John Dryden re-founded his company as The Prudential Insurance Company in America. Over time, the company started to find traction in the growing country.

The ad campaign from J. Walter Thompson in 1890 led to a spike in awareness around life insurance and Prudential prospered.

Dryden passed away 21 years later, and by then he had managed to accumulate around $50M of wealth, primarily from his holdings in Prudential.

Acquisitions helped fuel growth and allowed the company to expand into other products, providing a one-stop-shop for insurance solutions and financial management. Prudential acquired Bache & Co. (stock brokerage), American Skandia (annuities), The Hartford (life insurance), and other firms.

But Prudential’s most interesting investment came from left field.

Garnett Keith was the Chief Investment Officer of Prudential in 1987, and he had led the company to be the number one financier of leveraged buyouts.

He was also Stephen Schwarzman’s last hope.

Schwarzman and Peterson had been on the road for what seemed like forever. They had heard no from 488 investors without getting a single firm commitment. Patience was thinning. One low point was when Delta Airlines’ investment fund flew the duo out to Atlanta for a meeting. After hearing the presentation, the executives at Delta admitted that they had no interest in investing, and they just wanted to meet two famous Wall Street veterans. Although a 30 something year old Schwarzman had endless energy, Peterson was in his sixties and couldn’t be on the road much longer. Prudential was the last major investor on their list.

The three men met in Newark, New Jersey.

Garnett ate a tuna sandwich while Schwarzman talked. He didn’t say a single word in response. By the time Schwarzman was done talking, Garnett still had ¼ of his sandwich left.

He put the sandwich down and told the two men to count him in for a commitment of one hundred million dollars.

Blackstone went on to close the rest of their $800M fund after that. The original goal was $1B, but Schwarzman was tired and decided to not get greedy.

Immediately after the funds were secured, Black Monday took place on October 19. $1.7T in stock market value was wiped out and investor sentiment hit the floor.

Prudential is now significantly larger than its British counterpart, with a market cap of $39.4B compared to Prudential PLC’s $23.6B.

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• Meet the Gen Zers who launched side hustles before high school. Fortune

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