Latest / Second Nature / E191 Nadia Nikolova: The Uncomfortable Truth About Investing in Nature

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E191 Nadia Nikolova: The Uncomfortable Truth About Investing in Nature · Second Nature

• 0:07
  SPEAKER_00: Are you a football fan?
• 0:08
  SPEAKER_03: I enjoyed a World Cup.
• 0:10
  SPEAKER_03: I enjoyed the World Cup pre-Qatar.
• 0:13
  SPEAKER_00: Oh, interesting.
• 0:14
  SPEAKER_03: Say more, why?
• 0:16
  SPEAKER_03: Well, Qatar was such a so much of the human rights violations were against everything I stand and live by.
• 0:27
  SPEAKER_03: That I just since then look at FIFA very differently.
• 0:31
  SPEAKER_03: And also the fact that the the president can co-op the president of FIFA and and say no, that panel, you know, that that doesn't work anymore.
• 0:39
  SPEAKER_03: Like what world do we live in?
• 0:41
  SPEAKER_03: So no.
• 0:42
  SPEAKER_03: So I like how much football has changed in terms of athletism.
• 0:48
  SPEAKER_03: And Bulgaria 1994 is a sacred year.
• 0:51
  SPEAKER_03: We got the quarterfinals, we knocked out Germany, very pride moment.
• 0:54
  SPEAKER_00: Aristido Stojkov.
• 0:55
  SPEAKER_03: Yeah, Aristid Stjechkov, exactly.
• 0:58
  SPEAKER_03: And now when you look at them, they're proper athletes.
• 1:00
  SPEAKER_03: Like 90s, they had a belly, they were kind of jogging.
• 1:04
  SPEAKER_00: Pint of beer and a cigarette at halftime.
• 1:05
  SPEAKER_00: Yeah.
• 1:07
  SPEAKER_03: So I like that the way the athletism has changed.
• 1:10
  SPEAKER_03: But um and I like Premier League because it's nice football.
• 1:15
  SPEAKER_00: Nice to watch.
• 1:16
  SPEAKER_00: Every every in well, every sport seems to tell the same story.
• 1:22
  SPEAKER_00: So I've seen this in uh Olympic sports in general.
• 1:26
  SPEAKER_00: I've seen it in soccer, football, in the NFL, in rugby, in cricket.
• 1:31
  SPEAKER_00: You have this period where they stop being amateur, they decide to professionalize, and then one team or country goes.
• 1:37
  SPEAKER_00: Then we got really into strength and conditioning, and this certain coach turned up and made us all athletes.
• 1:42
  SPEAKER_00: Then we won for five years, then everybody else became athletes as well.
• 1:46
  SPEAKER_00: The reason I think that's particularly interesting is I think we're seeing that in the environmental natural capital space now, and have from like 2022 to now.
• 1:58
  SPEAKER_00: So, especially in the UK, about four or five companies started around that 2021 timeline and actually brought a professionalism and intensity, a work ethic and a drive to business.
• 2:11
  SPEAKER_00: Whereas before that, everything environmental was nice and delicate and the purview of the retiree.
• 2:17
  SPEAKER_00: And actually, that's what's seen a sector wake up over the last decade.
• 2:21
  SPEAKER_00: Um you can say that's for the impact industry at large.
• 2:23
  SPEAKER_00: Do you think?
• 2:24
  SPEAKER_03: Yeah.
• 2:25
  SPEAKER_03: I think a lot of it came either from development finance background, mean multilateral system, and so on and so forth, or it came from a non-for-profit angle.
• 2:34
  SPEAKER_03: And over the last years, you can really start seeing professionalization.
• 2:38
  SPEAKER_03: A lot of the impact businesses, including ours, were bought by generalistic asset management companies.
• 2:43
  SPEAKER_03: Strado's bought Blue Orchard, responsibility was bought by MNG.
• 2:47
  SPEAKER_03: Um, and that of course brings um discipline to the sector.
• 2:52
  SPEAKER_03: And it's of course, the moment you start attracting institutional capital, by definition, you need to be at a different league.
• 3:01
  SPEAKER_03: Um the other part about soccer, football, whatever you want to call it, that I find quite interesting is how the tailoring of the shirts has changed as they've become more athletic, the shirts have gotten more fitted to more fitted.
• 3:14
  SPEAKER_00: Message's better for everyone, right?
• 3:16
  SPEAKER_03: With exception of Argentina, because Messi is not gonna wear a really fitted shirt.
• 3:21
  SPEAKER_03: Um and yeah, it's it's yeah, I've enjoyed it.
• 3:25
  SPEAKER_00: What what do you think the maturity curve looks like for an impact business to get to the point?
• 3:31
  SPEAKER_00: What did you see that allowed them to move to the point whereby traditional asset managers were making those purchases?
• 3:39
  SPEAKER_03: It's an interesting one whether they made they bought these businesses because they really thought they could scale them or because they bought them as a CSR play.
• 3:50
  SPEAKER_03: And I think you have to look at it case by case.
• 3:54
  SPEAKER_03: Those that have done well have genuinely genuinely believed that we're changing from an old economy into a new economy.
• 4:02
  SPEAKER_03: And that new economy is essentially underpinned by impact investment, what we call impact investments.
• 4:07
  SPEAKER_03: Um But if you see the way, for instance, Brookefield is pivoting its its the way it talks about its business, it's everything about owning the future.
• 4:20
  SPEAKER_03: What that underpins is very much impact business models that are providing solutions to environmental and societal problems that we're facing.
• 4:28
  SPEAKER_03: So it's it it depends, is the answer of what management bought it and what did management do with that with those businesses.
• 4:36
  SPEAKER_00: And it's probably a blend with both, right?
• 4:37
  SPEAKER_00: It's not going to be either or there's gonna be a proportion of each.
• 4:40
  SPEAKER_03: And you're seeing more and more, you've seen also some of these shops building organic capabilities, not just um outright buying.
• 4:47
  SPEAKER_03: And again, what do you call impact investing?
• 4:49
  SPEAKER_03: I mean, if there are as many definitions as people on this plan, more or less.
• 4:53
  SPEAKER_00: We that's probably a beautiful segue to tell people who you are and what you do.
• 4:56
  SPEAKER_03: Are we on the podcast?
• 4:57
  SPEAKER_03: We are great.
• 4:58
  SPEAKER_00: Yeah, yes.
• 4:59
  SPEAKER_03: Um Narinikova, I'm the CEO of Responsibility.
• 5:02
  SPEAKER_03: Um, we are an almost six billion assets under management business focused on impact investing in emergy markets owned by MNG.
• 5:10
  SPEAKER_03: Um we have been doing impact investing for over two decades.
• 5:15
  SPEAKER_00: And how on earth did you get there?
• 5:17
  SPEAKER_03: Oh, I um I am Bulgarian.
• 5:23
  SPEAKER_03: I grew up in interesting times.
• 5:26
  SPEAKER_03: My first memory is uh with my parents in front of the tanks, yelling democracy at the time one could hardly speak.
• 5:34
  SPEAKER_03: And then I have seen how capital transforms nations.
• 5:37
  SPEAKER_03: So if you take Bulgaria during the 90s and what was quite a turbulent time 97, hyperinflation, long lines for bread, you lose your money by the time you you you receive your salary.
• 5:51
  SPEAKER_03: Um through to today, where everyone walks around with an iPhone and uh the middle class has uh really increased a country in the European Union, everyone can travel within within the Eurozone.
• 6:06
  SPEAKER_03: It's a very different place.
• 6:08
  SPEAKER_00: How does how does experiencing hyperinflation and the trauma of that in early age, how does that inform how you think about things today?
• 6:18
  SPEAKER_00: How does it stay with you?
• 6:20
  SPEAKER_03: In multiple ways.
• 6:21
  SPEAKER_03: Uh it makes you very resilient.
• 6:23
  SPEAKER_03: I think that is one thing, especially if you're in the impact investing space, resilience is a a core to you.
• 6:31
  SPEAKER_03: Um it takes a long time to be able to launch the scale to really uh convince people that what you're doing has both the risk and the risk return and impact profiles that you're seeking.
• 6:41
  SPEAKER_03: Has stayed with me is hope.
• 6:49
  SPEAKER_03: Getting out of this place, getting out of a place of scarcity, um it brings resilience, but it also brings hope that things can change.
• 7:01
  SPEAKER_00: Does it also give you a confidence that however difficult a challenge is, it's not gonna be harder than that?
• 7:07
  SPEAKER_03: I think they're harder things than hyperinflation in life.
• 7:11
  SPEAKER_03: Um money scarcity is a real issue, but um combining some some other things in personal life can be harder than that.
• 7:24
  SPEAKER_03: Um we were very lucky that we had family in the countryside that would send us vegetables from the garden every now and then so on.
• 7:32
  SPEAKER_03: But also the lack created compassion between people.
• 7:38
  SPEAKER_03: It really allowed people to help each other out in a way that you don't see much today.
• 7:44
  SPEAKER_03: Maybe during COVID times we had a moment of it, a glimpse of that.
• 7:48
  SPEAKER_03: Harpship can create different relational um behaviors.
• 7:53
  SPEAKER_01: Okay, so take us on to the next chapter.
• 7:55
  SPEAKER_01: So after Bulgaria.
• 7:57
  SPEAKER_03: After Bulgaria, um, I went to Greece for a year while Bulgaria was becoming a member of the European Union, so I waited until we were part of the Union to actually come to the UK, where I studied and then started as an investment banker in the city of London at a time where things were tanking.
• 8:18
  SPEAKER_03: Um, so a great time to start.
• 8:21
  SPEAKER_03: I remember I started at City and not long after the share price was below one dollar that Sunday when they bailed out the US banks.
• 8:30
  SPEAKER_03: It was it was an incredible time to be part of the city of London.
• 8:33
  SPEAKER_03: And and and we were in Calarie Wharf at the time.
• 8:36
  SPEAKER_03: I remember um the auditors coming out from the Liman's Lyman's building with the big boxes out.
• 8:45
  SPEAKER_03: It was a it was a it was a it was a formative times um to start in finance, but I started in workouts, I started in with credit and restructurings, and I think this is a brilliant way to start a financial career.
• 8:58
  SPEAKER_03: Because you learn what goes wrong, so when you do investments after that, you can think about the things that have gone wrong.
• 9:09
  SPEAKER_03: And I find that great.
• 9:11
  SPEAKER_00: What are the lessons you carry from observing that period that you won't um replicate?
• 9:22
  SPEAKER_03: Going back to fundamentals, often in the industry and and the the CEO of a city at a time said something along the lines of dancing while the music is playing.
• 9:35
  SPEAKER_03: Um one can get overheated because everyone else is doing the deal and that person is doing the deal, and why shouldn't we be doing the deals?
• 9:45
  SPEAKER_03: And going back to fundamentals.
• 9:47
  SPEAKER_00: Almost sounds like AI investment, doesn't it?
• 9:49
  SPEAKER_03: Well, it very much reminds me of the times.
• 9:51
  SPEAKER_03: It feels a little bit 07-like at the moment, somewhere of 07 when I look at the credit markets.
• 9:58
  SPEAKER_00: Um I don't I don't know if you um how how much do you um keep a track on the sort of tech sector and the things going on in AI?
• 10:07
  SPEAKER_00: Does is that something that's on your radar?
• 10:09
  SPEAKER_03: It certainly is from an operations perspective of how do we embed it in our business and what does it mean for our business model, but also we invest in financial institutions in emerging markets.
• 10:18
  SPEAKER_03: What does it mean for disruption of the investigation companies in our portfolios is something that we look at quite in detail.
• 10:25
  SPEAKER_00: Literally yesterday, a Chinese developer dropped Kimmy 3.
• 10:30
  SPEAKER_02: Yeah.
• 10:30
  SPEAKER_00: And um the the abject panic that's gonna be sweeping Anthropic and OpenAI this morning is gonna be fascinating because someone who you've got a trillion-dollar project and someone gives it away for free the following day.
• 10:43
  SPEAKER_03: OpenAI, yeah.
• 10:45
  SPEAKER_00: So interesting how those I I would kill to be in those meetings this morning.
• 10:50
  SPEAKER_03: I mean it was interesting because the news of it came out, I think, over the weekend or Friday.
• 10:54
  SPEAKER_03: Um I I read the first article coming coming in.
• 10:58
  SPEAKER_03: I find it fascinating.
• 11:00
  SPEAKER_03: And also, what does it mean for society, right?
• 11:03
  SPEAKER_02: Oh.
• 11:04
  SPEAKER_03: Because that's the thing, is so AI is notorious about gender disbalances, right?
• 11:11
  SPEAKER_03: Um not only is it trained predominantly on men, but also whenever there is AI project, you hardly see women in the room.
• 11:21
  SPEAKER_00: Yeah, there's one female CEO, isn't there?
• 11:24
  SPEAKER_03: What does that mean?
• 11:25
  SPEAKER_03: The the gender gap would be increasingly and the competit the competitiveness of female employees would be continuously decreasing.
• 11:32
  SPEAKER_03: The gender gap pay gap would continue increasing.
• 11:36
  SPEAKER_03: So I'm very passionate about finding models in which we bring women to the conversation more proactively.
• 11:43
  SPEAKER_03: Um, so that the ladies listening to the podcast do proactively engage in the conversation because we have to be future-proof.
• 11:51
  SPEAKER_00: We have two very uh proactive AI proponents sat in the room with you right now, who were both female.
• 11:57
  SPEAKER_00: The um the the bit that I thought um tons of things I thought were really fascinating.
• 12:03
  SPEAKER_00: Um, so the the first sort of big US podcasts that respond to this type of thing started being released last night.
• 12:10
  SPEAKER_00: They kind of did emergency responses to it.
• 12:13
  SPEAKER_00: And it and it was fascinating how they articulated that the US restricting access to frontier models was actually the catalyst for the Chinese development of these things.
• 12:26
  SPEAKER_00: Whereas if they'd let Anthropic and OpenAI sell into China, the competitor wouldn't have developed at such a pace to which they had.
• 12:33
  SPEAKER_00: And because there was a trade embargo on the most sophisticated um computer chips available, they had to build it on substandard equipment, which has meant they could do it cheaper and easier as a result.
• 12:44
  SPEAKER_00: So it shows the unintended consequences of trade restrictions and uh political decisions, I think.
• 12:51
  SPEAKER_03: Yeah.
• 12:51
  SPEAKER_03: I mean, in the whole idea you can stop on Tropics models as a government because of security results, that also as a consumer, you you would like to have as a stable solution as possible and that is not necessarily governed, although you you can question around what can happen out of the Chinese government as well.
• 13:12
  SPEAKER_00: Do you think uh Dario Amade's whole this is the most dangerous thing in the world, we're gonna kill everybody.
• 13:18
  SPEAKER_00: Was that a strategic approach to try and get everyone else locked down because they had an advantage?
• 13:25
  SPEAKER_00: Or do you think it was genuinely his worried about these things?
• 13:28
  SPEAKER_03: I do think there is a genuine, genuine worry behind them.
• 13:32
  SPEAKER_00: So you mentioned in terms of thinking about the impact on society, how how do you think about it in the broader sense?
• 13:37
  SPEAKER_03: Okay, have a my brother is in in his twenties.
• 13:40
  SPEAKER_03: Um, if he's entering now the same career as I had, he isn't, but let's assume he did.
• 13:46
  SPEAKER_03: Everything I learned to do in my first five years, I can now do with technology.
• 13:50
  SPEAKER_03: That means we're going to lose a generation into employment.
• 13:57
  SPEAKER_03: Then what happens to judgment?
• 14:00
  SPEAKER_03: Because if people are trained not to think because it's easier.
• 14:08
  SPEAKER_03: What happens with future leaders?
• 14:10
  SPEAKER_03: What happens?
• 14:11
  SPEAKER_03: I I do worry about a a missing generation, the the the kids they're not kids, the young people in their early 20s that are entering employment at the moment, that weren't necessarily AI native, right?
• 14:23
  SPEAKER_03: Because they grew up through high school without the technology.
• 14:26
  SPEAKER_03: Um they're of course more native than me.
• 14:29
  SPEAKER_03: Um but at the moment companies are not recruiting them necessarily.
• 14:34
  SPEAKER_03: And you start seeing in the UK, I think you have almost 27% um unemployment rate in that generation.
• 14:43
  SPEAKER_03: That's massive.
• 14:44
  SPEAKER_00: That that might be because we've been really terrible as an economy for a long period of time.
• 14:49
  SPEAKER_03: Yeah, they could be both, right?
• 14:51
  SPEAKER_03: I mean, people are recruiting less, but also you can if if you can't do the same thing with technology that you did with humans as a company, you have to ask yourself, are you pro-human or not?
• 15:00
  SPEAKER_00: Is that any different from when the PC arrived or Windows arrived?
• 15:05
  SPEAKER_00: Because I imagine people would have been sat in a very smoky corner office, not on a podcast, but saying, Oh, well, the young people now they can't write shorthand or they can't trade on a ticker tape type thing, because now we've got technology.
• 15:18
  SPEAKER_00: I think we've probably heard that same narrative, like every time there's been a technological advance and change.
• 15:24
  SPEAKER_03: This one feels faster.
• 15:26
  SPEAKER_00: I completely agree.
• 15:27
  SPEAKER_03: The absorption of it feels faster.
• 15:30
  SPEAKER_03: I think the adoption, the re real adoption rates are lower than what the the fuzz is.
• 15:35
  SPEAKER_00: And of course they're lower because there's a human behavioural um I think I saw one in one in 16 houses in the US have a subscription to an AI.
• 15:47
  SPEAKER_00: So now that's the wrong metric because that's a domestic thing as opposed to a business.
• 15:51
  SPEAKER_00: But still, because I'm sat in it every day, pen penny always.
• 15:55
  SPEAKER_00: Like we're in a bubble, right?
• 15:56
  SPEAKER_00: We think everyone, because all our team are using it like ferociously, not all most, we think other people are, and they're really not.
• 16:03
  SPEAKER_00: Like when we were talking, we're in Spain and Portugal talking to land agents, they're like, no, no, what's that?
• 16:08
  SPEAKER_03: So yes, but nothing like a crisis for people to start adopting quite quickly.
• 16:16
  SPEAKER_03: Um so if you see taking us a little bit further away from AI into the food supply chain systems and and everything that that's happening with the Iran war.
• 16:26
  SPEAKER_03: And I think there is something around um seeing um critical components to agriculture supply uh being disrupted, that people would start using technology differently.
• 16:41
  SPEAKER_03: That's not necessarily AI technology.
• 16:43
  SPEAKER_03: Um, but I I would say farmers are probably one of the most conservative um people out there in terms of changing any approaches to anything if they could stick to something that was done for.
• 16:55
  SPEAKER_00: Even if they know the other one is better.
• 16:57
  SPEAKER_00: Even if you speak to them and go, oh, my neighbor's doing this, oh, it's definitely better and it's easier, but I I'll still do this, I think.
• 17:02
  SPEAKER_03: Nothing like a crisis to change that behavior.
• 17:04
  SPEAKER_03: So I wonder if there are going to be different crises in different places, how much that wouldn't change.
• 17:13
  SPEAKER_03: The one hope I have is technology can help us learn.
• 17:20
  SPEAKER_03: So I think we talk about adaptation a lot in climate, but I think there is something about adaptation for people.
• 17:26
  SPEAKER_03: I think we're gonna have to learn to relearn all the freaking time.
• 17:33
  SPEAKER_03: I think the the the the the world in the future is you just have to constantly learn and learn and learn, and that shouldn't be a source of stress.
• 17:42
  SPEAKER_03: I think for many people, because we have forgotten how to learn, and I have a three-year-old at home, I she's constantly learning, but it's not a source of stress.
• 17:52
  SPEAKER_03: You try to make me learn more things on the while I'm doing my job, that becomes immediately a source of stress.
• 17:59
  SPEAKER_03: So changing that attitude and rewiring the brain, I think is going to be the key for the success of humankind.
• 18:06
  SPEAKER_00: I I just had the most out-of-body experience of sat watching the trailer for your podcast, with that being the first line.
• 18:12
  SPEAKER_00: You've got to learn to relearn all the frigging time.
• 18:15
  SPEAKER_00: Love it.
• 18:15
  SPEAKER_00: Um so beautiful segue.
• 18:17
  SPEAKER_00: So we were in Spain and Portugal last week on our first visit there looking at potential land to buy.
• 18:22
  SPEAKER_00: One of the big draws for me is how much I will learn for that process.
• 18:26
  SPEAKER_00: So um I I think about the great football managers, Guadiola, Mourinho, Ancelotti.
• 18:33
  SPEAKER_00: They haven't just coached in one country, they've tried their system and approach in lots of different countries to see how it adapts to the league.
• 18:39
  SPEAKER_00: I want to see how the oxygen approach works in different countries and cultures.
• 18:43
  SPEAKER_00: And it was so interesting last week going across to Spain and Portugal, testing those ideas, describing what we do into an environment whereby Spain and Portugal were where natural capital was in the UK in probably 2012, 2014, in terms of awareness of regenerative agriculture and awareness of carbon markets and things like that.
• 19:02
  SPEAKER_00: So it was so, so early.
• 19:04
  SPEAKER_00: But you have to test everything.
• 19:07
  SPEAKER_00: So uh, narrative in the UK, there's not enough woodland planting.
• 19:10
  SPEAKER_00: We're in the low teens in terms of woodland.
• 19:13
  SPEAKER_00: When we went to Sweden, it's 78%.
• 19:15
  SPEAKER_00: So already the fundamental, oh, we need more trees.
• 19:18
  SPEAKER_00: No, we don't.
• 19:19
  SPEAKER_00: We need different type things.
• 19:20
  SPEAKER_00: In Spain and Portugal, I started asking about the food security issues.
• 19:24
  SPEAKER_00: And the questions were, what do you mean there's not enough food?
• 19:26
  SPEAKER_00: And we're like, oh no, there's a perception in the UK that there's not enough food that we're not resilient on.
• 19:30
  SPEAKER_00: Oh no, we're fine.
• 19:31
  SPEAKER_00: So the narrative was that's not even an issue here.
• 19:34
  SPEAKER_00: In England and Scotland, there is a housing crisis that people think is only urban.
• 19:39
  SPEAKER_00: It's not.
• 19:39
  SPEAKER_00: There is nowhere near enough houses for young people in rural communities.
• 19:43
  SPEAKER_00: Whereas one of the places, the specific places where we're in Spain, like, no, no, no, there's too many like empty rental properties.
• 19:49
  SPEAKER_00: We don't need more houses.
• 19:51
  SPEAKER_00: So literally the entire context you're operating in is so different.
• 19:54
  SPEAKER_00: And that excited me, like, oh my god, there's so much to learn.
• 19:58
  SPEAKER_03: You know, it's interesting.
• 19:59
  SPEAKER_03: Talk about football coaches.
• 20:01
  SPEAKER_03: Um, what I find incredible, these are names that have proven themselves.
• 20:06
  SPEAKER_03: They should be able to go into a new country and the team should just accept that this is the the this is pure gold.
• 20:13
  SPEAKER_03: I have to listen to this person has that never happens.
• 20:17
  SPEAKER_03: So even with coaches that are so well known and respected, they have to prove yet themselves to that particular team every single time.
• 20:26
  SPEAKER_03: So it would be interesting when you move from one country to the other.
• 20:30
  SPEAKER_03: Although you've proven that you have been able, especially with farmers that are again some of the most conservative people on this planet in terms of adopt adopting, how do you get that how do you how do you get them to be excited?
• 20:45
  SPEAKER_03: How do you get them to try something new?
• 20:49
  SPEAKER_00: So why why what do you think it is about?
• 20:51
  SPEAKER_00: We can do it through the athlete lens.
• 20:53
  SPEAKER_00: What why don't they see and accept the success?
• 20:56
  SPEAKER_00: What is it about the human psyche?
• 21:03
  SPEAKER_00: Because would we?
• 21:04
  SPEAKER_00: Like I don't know, we're you know, CEOs of companies, we're probably bad examples of this.
• 21:08
  SPEAKER_00: Because if if someone parachuted a new CEO above us, we'd probably be a bit like, hmm, what have they done?
• 21:13
  SPEAKER_00: What do they know?
• 21:14
  SPEAKER_03: I'll ask my team and I'll let you ask you.
• 21:17
  SPEAKER_03: Um trustees aren't even if you have been successful in one context in one country with one in one set of teams.
• 21:31
  SPEAKER_00: At one point in time.
• 21:33
  SPEAKER_00: I think that's the other thing, isn't it?
• 21:34
  SPEAKER_00: Because um, so the the rich that sits here 43 years old and five years into OC, that was a different rich five years ago when I was starting OC.
• 21:43
  SPEAKER_00: You know, and I'm rocking around saying we want to change a sector, we want to be ambitious and audacious.
• 21:48
  SPEAKER_00: Well, that that counts for nothing when you've got no land and no money under management and no team.
• 21:53
  SPEAKER_00: Once you've got half a billion under management, 50,000 acres and a team of 50 people, it's got a bit more credibility at that point.
• 22:00
  SPEAKER_03: Yeah.
• 22:01
  SPEAKER_03: Um And again uh when it comes to b teams of twenty-three people that are themselves think of themselves as stars and they know it all what else do you have to teach me?
• 22:19
  SPEAKER_00: Yeah, and in the footballing context they're all multimillionaires who never need to think about money again.
• 22:23
  SPEAKER_03: Yes, clearly.
• 22:24
  SPEAKER_01: Which is interesting.
• 22:26
  SPEAKER_00: What um what aspects of your leadership style were shaped during the city chapter?
• 22:34
  SPEAKER_00: Either things that you took on positively or things that you thought I don't want to replicate that type of behavior when I lead.
• 22:43
  SPEAKER_03: It's interesting, probably not so much the city chapter, um, but the alliance chapter certainly did that immediately follow City.
• 22:51
  SPEAKER_03: Yeah.
• 22:51
  SPEAKER_03: So after I left City, I um it was incredibly interesting times because just after the crisis, banks didn't have capital for long duration investments anymore.
• 23:03
  SPEAKER_03: Basel had changed the rules of the game, and banks couldn't lend 15-20 years for infrastructure projects, for instance.
• 23:12
  SPEAKER_03: And Alliance, um, one of the largest insurance companies in the world, had an asset management business, and they were going to start doing long-term investments directly into infrastructure projects.
• 23:25
  SPEAKER_00: Is that because they'd seen that as an opportunity that others weren't able to fulfill?
• 23:28
  SPEAKER_03: Well, remember, yields had come down massively.
• 23:31
  SPEAKER_03: So there were there were they they had annuity um books and they were trying to lock in rates.
• 23:37
  SPEAKER_03: So with government bonds going down, um, they had to find an alternative for Gavius that gave them a similar risk profile but higher yields.
• 23:45
  SPEAKER_03: And infrastructure, particularly public-private partnerships, regulated utility businesses, gave them a stable, predictable cash flow at higher yields.
• 23:54
  SPEAKER_03: And a public-private partnership, they almost saw it as a proxy to the government because the government was giving the concession.
• 24:01
  SPEAKER_03: So um so infrastructure was a good asset class for them, but we started seeing completely different investors coming into that space.
• 24:10
  SPEAKER_03: And I thought that was fascinating because you were now providing appropriate capital, no longer short liquidity, which is what banks should have been lending at, but actually matching assets and liabilities.
• 24:23
  SPEAKER_03: And that that's it's a it's a huge industry now.
• 24:26
  SPEAKER_03: It's a it's a part of standard asset allocation.
• 24:28
  SPEAKER_03: So regulators have given um uh more favorable treatment for infrastructure projects um within the European context for insurance companies to boost that investment.
• 24:40
  SPEAKER_03: 2011, 2012, there were no institutional money in that space.
• 24:44
  SPEAKER_03: So I was really attracted to that.
• 24:45
  SPEAKER_03: Besides, there was an amazing woman, Deborah Zirko, um, who was leading that team.
• 24:50
  SPEAKER_03: And she's a force of nature.
• 24:53
  SPEAKER_03: She comes into the room and um she had this massive energy about her, and I wanted to work for her.
• 25:00
  SPEAKER_03: And I told her that.
• 25:02
  SPEAKER_03: Um, it was funny, the first time I met her, she stepped one step back and said, Oh no, you're working for a friend of mine.
• 25:07
  SPEAKER_03: Um, anyhow, I did go and work for her.
• 25:10
  SPEAKER_00: Um and articulate the energy and and where it came from.
• 25:18
  SPEAKER_03: She's she she she is very passionate about infrastructure and transforming systems and change in general.
• 25:27
  SPEAKER_00: Did you when I asked you that question, you gripped the chair and it was brilliant.
• 25:31
  SPEAKER_03: She's she's she continues to be, she has now retired, but continues to be a powerhouse.
• 25:37
  SPEAKER_03: Um and there weren't that many in the industry at the time, especially in infrastructure.
• 25:42
  SPEAKER_03: I remember the first infrastructure conference in Berlin that I went to, there was probably less than 10% women in the room.
• 25:47
  SPEAKER_03: And we're talking thousands of people.
• 25:50
  SPEAKER_03: Um yet when Deborah Zirko would enter it through that door, everyone circled around her.
• 25:55
  SPEAKER_03: Um her ability to go through two boxes of business cards within one conference was uh unmatched.
• 26:02
  SPEAKER_03: So I went and I worked for her.
• 26:04
  SPEAKER_03: Uh, and that defined quite a lot my leadership style.
• 26:06
  SPEAKER_03: I remember in the bank I used to wear black suit, white shirt, flat shoes, look like every other investment banker possible, male investment banker possible.
• 26:15
  SPEAKER_03: But at the time I had graduated Deborah Zirko, um, as well as doing an executive MBA and really figuring out who I was, I was wearing colorful, just the way I was owning the fact that I am a woman in financial services, um, that I know what I'm talking about and I'm an expert in my field.
• 26:38
  SPEAKER_03: That really changed for me in my early 30s, having been under a different type of leadership.
• 26:44
  SPEAKER_03: So if I think about City, I was one, relatively young, two, I wasn't ready to be me.
• 26:55
  SPEAKER_03: That really changed at Alliance.
• 26:59
  SPEAKER_00: For people early in their career who aren't ready to be them yet, what are the key bits of advice you would give them for finding that confidence?
• 27:08
  SPEAKER_03: Well, find out who you are.
• 27:10
  SPEAKER_03: What are the things that are non-negotiable for you?
• 27:15
  SPEAKER_00: Um That's hard early in your career, isn't it?
• 27:18
  SPEAKER_00: Because often you just need the job.
• 27:21
  SPEAKER_00: You need enough freedom to be able to choose.
• 27:23
  SPEAKER_00: We we were talking about this this morning about um we're really fortunate we get almost a thousand applicants for every job.
• 27:30
  SPEAKER_00: And we want candidates to be really honest about what they need and how they'd work.
• 27:34
  SPEAKER_00: But with really young people, some of them just need a job.
• 27:37
  SPEAKER_00: So they're gonna say whatever we think they think we want to hear.
• 27:40
  SPEAKER_00: And we're pretty good at finding out if that's authentic or true or or not.
• 27:44
  SPEAKER_00: But I think it's much easier to be honest when you you're free to do that.
• 27:50
  SPEAKER_03: I think it's about how you formulate it.
• 27:52
  SPEAKER_03: One of the exercises that I I always ask people that are mentored to do is talk to your parents, talk to your parents' friends, to tell you who you were when you were three to five years old.
• 28:06
  SPEAKER_03: What were the things you were doing that were specifically you?
• 28:11
  SPEAKER_03: Maybe even when you were five or seven.
• 28:14
  SPEAKER_03: I can tell you, when I had those conversations with my mom, for her first memory was you were always getting everyone together.
• 28:21
  SPEAKER_03: Um, when we would have a gathering, I was the one that was bringing everyone to the dance floor.
• 28:26
  SPEAKER_03: I wanted everyone to be involved and to be having fun and to be in it together.
• 28:31
  SPEAKER_03: Relentless about that.
• 28:33
  SPEAKER_03: And I couldn't that and that is not a career.
• 28:36
  SPEAKER_03: That is where I'm in my flow.
• 28:39
  SPEAKER_03: When I pull different people for the purpose of something together.
• 28:43
  SPEAKER_03: And you don't have to name it a VP of X, Y, and Z, or a it is about what you do, that you lighten up and that you really, really are in your flow.
• 28:57
  SPEAKER_00: I think the VP of X, Y, and Z is the best job title ever.
• 29:02
  SPEAKER_00: You're the first person I've ever heard coach looking back.
• 29:07
  SPEAKER_00: Everyone else says, where do you want to be?
• 29:09
  SPEAKER_00: Where do you want to go?
• 29:11
  SPEAKER_00: They don't say what tools can you learn from who you were before, which I think is really fine.
• 29:16
  SPEAKER_00: And in fact, I think um, me included, lots of people are really silly in business that they naively think they're the first ones to invent things, and they don't stop and go, hold on, A, does this already exist?
• 29:29
  SPEAKER_00: Who's tried it before?
• 29:30
  SPEAKER_00: What lessons can we learn from the past before looking forward?
• 29:34
  SPEAKER_00: So I'm I'm gonna borrow that as a piece of advice.
• 29:36
  SPEAKER_03: I think it's really important to know who you authentically, and I that sounds very flat these days, but who you deeply are, and and I see it with my kid.
• 29:46
  SPEAKER_03: She was born with a personality, and then through education, through parenthood, through everything, we reshaped them.
• 29:52
  SPEAKER_03: We sand off the difference, right?
• 29:53
  SPEAKER_03: Yeah, we reshape them, but there is something that is core and fundamental to her.
• 29:57
  SPEAKER_03: That's why I asked, when you were a little kid, what was it about you?
• 30:03
  SPEAKER_03: What were you dreaming?
• 30:04
  SPEAKER_03: What did you want to be?
• 30:05
  SPEAKER_03: What was what was different about you?
• 30:07
  SPEAKER_03: Maybe you were very deep thinker and very quiet.
• 30:10
  SPEAKER_03: What was it deeply about you at that point in time?
• 30:16
  SPEAKER_03: Um, because this is this is something you can lean into on whatever whatever else there is in terms of noise out there in your personal, in your professional life, bringing back to where do I get my energy from?
• 30:33
  SPEAKER_03: Where does my core get its energy from?
• 30:35
  SPEAKER_03: I think is incredibly important.
• 30:38
  SPEAKER_00: Do you do you think you've been the same person throughout this career journey that's just evolved, or do you have definitive chapters of who you were as a person?
• 30:46
  SPEAKER_03: Absolutely have definitive channels.
• 30:48
  SPEAKER_03: I think I'm much more me now than I was for a big part of my career.
• 30:52
  SPEAKER_00: But it doesn't just happen, right?
• 30:53
  SPEAKER_00: You have to work at that and spend time thinking and reflecting and learning.
• 30:57
  SPEAKER_00: Uh what worries me, and and I certainly, and I imagine we both probably do, live in a bubble of being surrounded by really talented, super bright people.
• 31:05
  SPEAKER_00: They're the ones we talk to every day.
• 31:07
  SPEAKER_00: When I think back to where I grew up, lots of people did just live paycheck to paycheck in a manual job and just went through the flow.
• 31:15
  SPEAKER_00: And they were the same person for their entire life because they didn't have or create the space to go, oh, I want to go do an exec MBA or I want to be exposed to this amazing person who can teach me lots of things.
• 31:25
  SPEAKER_00: And it always scares me now.
• 31:26
  SPEAKER_00: If I hear anyone say, Oh no, no, I've always been the same person, I'm like, then you're missing out on a huge amount because I think I've been at least five or six different people in chapters of my life.
• 31:34
  SPEAKER_03: No, it's funny.
• 31:35
  SPEAKER_03: Um, there's a saying I correct my English here, but it's um you're as smart as the five people you surround yourself with.
• 31:43
  SPEAKER_00: You're the sum of the five people you spend the most time with.
• 31:46
  SPEAKER_03: Well, it'd replace that with a podcast.
• 31:47
  SPEAKER_03: You're the sum of the the five podcasts you listen to.
• 31:51
  SPEAKER_03: And that is the major difference.
• 31:54
  SPEAKER_03: The way you and I grew up was around our immediate surroundings.
• 31:58
  SPEAKER_03: That no longer is the case.
• 32:00
  SPEAKER_00: You're not geographically bound, right?
• 32:02
  SPEAKER_00: You have the ability to ideas bound.
• 32:04
  SPEAKER_03: You're not bound.
• 32:06
  SPEAKER_03: And I think that is scary, but also fascinating.
• 32:11
  SPEAKER_00: YouTube's the best thing ever.
• 32:13
  SPEAKER_00: Like honestly, you you could um one one of our most talented young people, he was he went, uh left us to go do an MBA and came back.
• 32:22
  SPEAKER_00: And I was being interviewed on a podcast, and I made the point of how no one should do an MBA now.
• 32:27
  SPEAKER_00: You can just learn it all on YouTube.
• 32:28
  SPEAKER_00: And I got a message going, that was a dig at me, wasn't it?
• 32:30
  SPEAKER_00: I'm like, yes, it was.
• 32:31
  SPEAKER_00: Yes it was.
• 32:32
  SPEAKER_00: In fact, it was James who you met out there.
• 32:34
  SPEAKER_00: Yeah.
• 32:34
  SPEAKER_00: It was it was him.
• 32:35
  SPEAKER_00: So I think you can just learn so much that that podcast thing is true, or or the five authors, or the the people you choose to give access to your memory.
• 32:43
  SPEAKER_00: What are the five inflows you get?
• 32:44
  SPEAKER_00: It might be a person or a podcast or an experience, or that's so true.
• 32:48
  SPEAKER_03: Well, the the the one thing with YouTube is how you how you choose to spend your time.
• 32:53
  SPEAKER_03: Because you it can be the best or the worst thing in your life.
• 32:56
  SPEAKER_03: You can just brain dead go through it, and this is what I worry with children.
• 33:00
  SPEAKER_03: Um passive absorption of information.
• 33:04
  SPEAKER_00: My my wife worries about that too.
• 33:06
  SPEAKER_00: But I watch some terrible stuff as a kid.
• 33:10
  SPEAKER_00: And I don't know, I think there's better and everything, the shades of grey, right?
• 33:16
  SPEAKER_00: Everything there's different facets.
• 33:17
  SPEAKER_00: It's interesting.
• 33:18
  SPEAKER_00: You you were speaking about what your mum said about you as a child.
• 33:22
  SPEAKER_00: I often get asked um how I can talk.
• 33:26
  SPEAKER_00: Because certainly like you speak beautifully, and that's you know how we first met.
• 33:29
  SPEAKER_00: You were on a panel and just completely stole the show just because the way you spoke with the honesty and the charisma, and you you were amazing, um, and are.
• 33:37
  SPEAKER_00: Um very few people in the environment sector can speak very well.
• 33:41
  SPEAKER_00: They present terribly because they they either lack confidence or they resort to uber scientific and they become a lecturer and almost they talk at an audience.
• 33:52
  SPEAKER_00: They don't include the audience at all.
• 33:53
  SPEAKER_00: It's not a conversation, it's just it's it's a lecture.
• 33:56
  SPEAKER_00: So I've gone back and thought about well, how how can I talk?
• 33:59
  SPEAKER_00: And it comes from watching 80s British comedy because it was written beautifully in terms of the timing and the cadence and yes, minister, and and all that stuff, and American professional wrestling.
• 34:12
  SPEAKER_00: Because the whole thing is 60 to 90 second sound bites to get people excited about something.
• 34:19
  SPEAKER_02: Right.
• 34:20
  SPEAKER_00: And what is a panel answer or a podcast response?
• 34:23
  SPEAKER_00: It's a nine 60 or 90 second short, concise response that's playful and creative and quick on an example you've got.
• 34:30
  SPEAKER_00: And people hear that and go, All right, that makes sense.
• 34:33
  SPEAKER_00: I didn't know that at the time.
• 34:34
  SPEAKER_00: That's just what I was absorbed to as a kid, so exposed to as a kid.
• 34:38
  SPEAKER_00: So it's interesting the skills we pick up in the different chapters.
• 34:42
  SPEAKER_03: I think that British comedy came into Bulgaria in the 90s, you know, certain curtains had to fall and so on and so forth.
• 34:48
  SPEAKER_02: Yeah.
• 34:49
  SPEAKER_03: Uh and and but it was in Bulgarian, translated.
• 34:55
  SPEAKER_03: But dubbed over the top.
• 34:56
  SPEAKER_03: Yeah, and it's funny when you because we have some French old French movies.
• 34:59
  SPEAKER_03: It's always funny when you get a native speaker to come and listen to the dubbed version.
• 35:03
  SPEAKER_03: They they love it.
• 35:08
  SPEAKER_00: Does some style of comedy work better in different languages?
• 35:12
  SPEAKER_03: I would have no idea.
• 35:14
  SPEAKER_00: Um I've never thought about that before.
• 35:17
  SPEAKER_00: I wonder if the the timing, the delivery, the cadence of it works better in different languages.
• 35:22
  SPEAKER_00: We should ask Elena.
• 35:23
  SPEAKER_00: She speaks tons of them.
• 35:24
  SPEAKER_03: Well, one is a language, the other one is what is culturally acceptable or not.
• 35:28
  SPEAKER_03: I mean, humor is very much context-based.
• 35:30
  SPEAKER_00: And temporally varied so dramatically as well.
• 35:34
  SPEAKER_00: Like 70s British comedy does not age well.
• 35:37
  SPEAKER_00: But 70s is a long time ago now.
• 35:39
  SPEAKER_00: Okay, um, do you want to take us on from the Alan's chapter?
• 35:43
  SPEAKER_03: Sure.
• 35:44
  SPEAKER_03: Um, about a year ago, um I it was announced that I would become the CEO of responsibility.
• 35:53
  SPEAKER_03: It was a terrifying moment.
• 35:55
  SPEAKER_03: Uh-huh.
• 35:56
  SPEAKER_03: Is that true?
• 35:56
  SPEAKER_03: Yeah.
• 35:57
  SPEAKER_03: You know, it's one of those things when you've run an investment team, you've been very comfortable, you know the whole organization.
• 36:02
  SPEAKER_01: Like, how big was your team previous?
• 36:05
  SPEAKER_03: My last, very last job, it was about 40, 45 people.
• 36:08
  SPEAKER_03: Before that, I had a very small team that I had built.
• 36:11
  SPEAKER_03: I knew each of them very well.
• 36:13
  SPEAKER_03: I knew their kids, I knew their lives, I knew I knew them.
• 36:18
  SPEAKER_01: And did you like leading that small team?
• 36:20
  SPEAKER_03: Yes, I loved it.
• 36:21
  SPEAKER_03: It was so I built the impact business um on the credit side within Alliance.
• 36:25
  SPEAKER_03: And then I ran a direct lending business.
• 36:28
  SPEAKER_03: Every two years I had a different job.
• 36:30
  SPEAKER_00: Was that you or was that the business?
• 36:33
  SPEAKER_00: I.
• 36:33
  SPEAKER_00: Was it normal to jump every two, or you were unique in that context?
• 36:37
  SPEAKER_03: I just I always saw opportunities, right?
• 36:40
  SPEAKER_03: Moving from running an investment team to running an entire organization is a game change.
• 36:46
  SPEAKER_00: Um Yeah, but that's always where you were going, otherwise you wouldn't have been moving.
• 36:51
  SPEAKER_03: I did not have a plan.
• 36:53
  SPEAKER_00: No, but it was what next, right?
• 36:55
  SPEAKER_00: No.
• 36:56
  SPEAKER_00: It's always sorry, forgive me.
• 36:58
  SPEAKER_00: Not that was what was next.
• 36:59
  SPEAKER_00: The question was always, I'm gonna be ready for the next challenge.
• 37:02
  SPEAKER_03: I don't know what the challenge is, but it's never been like I've always made decisions based on where can I be the most useful.
• 37:13
  SPEAKER_03: Where can I apply myself in a way that is most useful to moving and shifting something?
• 37:22
  SPEAKER_03: And the reason actually I took this job is because it's interesting.
• 37:26
  SPEAKER_03: It's a it's an independent asset manager owned by a very big asset manager, owned by a PLC, the state UK company, one of the independent word interesting.
• 37:36
  SPEAKER_03: Well, it's regulated independently.
• 37:39
  SPEAKER_03: So it has its own um its own governance and regulate and regulatory framework.
• 37:45
  SPEAKER_03: And it was run as an independent business for the last four years while it was acquired.
• 37:51
  SPEAKER_03: There aren't that many people that understand the development finance sector, emerging market investments, impact investing, but also in insurance companies and a generalist asset management.
• 38:02
  SPEAKER_03: And this is what I had built previously at Alliance.
• 38:06
  SPEAKER_03: So I could translate a lot of my prior experience, and it did feel like, well, if if not me, then who?
• 38:13
  SPEAKER_00: Yeah, I was about to say there can't have been that many people in the world that ticked all those boxes.
• 38:17
  SPEAKER_03: So for most of my decisions in my career, in the my last parts of my career, it's always been, but if not me, then who else?
• 38:24
  SPEAKER_03: And that's how I've melt I've made the decisions.
• 38:27
  SPEAKER_03: It's really important, and this is very personal to me, that I feel that I'm useful, that I am needed, that what I do I am the best person for the job.
• 38:38
  SPEAKER_00: Do you have you looked back to where that comes from?
• 38:45
  SPEAKER_03: Yeah, but probably not for a podcast.
• 38:47
  SPEAKER_00: Good answer.
• 38:48
  SPEAKER_00: Okay.
• 38:48
  SPEAKER_03: Um and I was terrified.
• 38:53
  SPEAKER_03: Um the one of the big reasons I took this job is I know my boss very well.
• 38:57
  SPEAKER_03: I've worked with him for for at Alianza, I've worked with him for a long time and I trust him.
• 39:02
  SPEAKER_00: And sounds like that's always been important to you, that direct relationship with the boss.
• 39:07
  SPEAKER_03: Incredibly important, yeah.
• 39:08
  SPEAKER_03: Especially when you're going for transformation at scale.
• 39:12
  SPEAKER_03: I think that's really important to know that you have your senior leadership backing.
• 39:16
  SPEAKER_03: Um and people that genuinely believe in you and in impact investing.
• 39:21
  SPEAKER_03: That's really important.
• 39:22
  SPEAKER_03: The last bit of this equation was there aren't that many female CEOs in Switzerland.
• 39:32
  SPEAKER_03: Out of 30 countries in the OECD, Switzerland is 29th in terms of female participation rate in the workforce.
• 39:39
  SPEAKER_03: Being a mom, having a full-time job, having a big full-time job in Switzerland was important to me for role modeling, not just for my daughter, but for other kids and for other mums, um, that it is possible to integrate work and life in a way that I come home fulfilled with what I do, energized by what I do, um, and I do make the the time for my daughter as well.
• 40:10
  SPEAKER_03: So that was really important for me.
• 40:13
  SPEAKER_00: When you make big decisions, what's your process for deciding?
• 40:18
  SPEAKER_03: Oh it's terrible.
• 40:21
  SPEAKER_03: Um I know my gut in my guts whether this is the right thing for me or not.
• 40:29
  SPEAKER_03: I make the decision and then I get really scared.
• 40:35
  SPEAKER_03: It is and I see the same thing happens to my daughter.
• 40:41
  SPEAKER_03: We went, um, what do you call this?
• 40:44
  SPEAKER_03: When you have the trees and you do ziplines and so I don't know, there must be a word for that.
• 40:50
  SPEAKER_00: It it kind of gets called go ape over here, but that's the company that do it.
• 40:54
  SPEAKER_00: Like um high rope.
• 40:56
  SPEAKER_00: High roping or high wiring or whatever.
• 41:00
  SPEAKER_03: You know what I mean.
• 41:00
  SPEAKER_03: So we went to one of those um during our holidays and she did the first level really well, and then she could just about reach with her tip with her fingers for the next level, so they allowed her to do the one level above.
• 41:14
  SPEAKER_03: There was no doubt in her mind that she was definitely going to do that.
• 41:17
  SPEAKER_03: She went in straight, she put the rope in and she went, ah, that's me.
• 41:22
  SPEAKER_03: That's how my decision making, the decision making goes.
• 41:25
  SPEAKER_03: And then she figured it out step by step, one foot in front of the other.
• 41:29
  SPEAKER_03: I like to be in that stretch zone.
• 41:32
  SPEAKER_03: Um, I know with my gut, I speak to my partner.
• 41:36
  SPEAKER_03: Um, there are a few people which I call my personal board of directors that I discuss with.
• 41:41
  SPEAKER_00: Do they know their personal board of directors?
• 41:44
  SPEAKER_00: Like you've told them that.
• 41:45
  SPEAKER_00: They know.
• 41:45
  SPEAKER_03: They know.
• 41:46
  SPEAKER_00: Interesting.
• 41:47
  SPEAKER_03: Um, I make the decision, and then I have a panic attack.
• 41:53
  SPEAKER_03: And then step by step I figure it out.
• 41:57
  SPEAKER_03: It is exactly like my daughter getting on that second level and starting to figure out.
• 42:01
  SPEAKER_03: And sometimes I need somebody to hold my hand, and sometimes I don't.
• 42:05
  SPEAKER_00: That is fascinating.
• 42:07
  SPEAKER_00: Uh, and does the time period scale to how big the decision is?
• 42:11
  SPEAKER_00: Is it like a longer panic attack for a bigger decision?
• 42:14
  SPEAKER_03: No, it's always the same panic attack.
• 42:16
  SPEAKER_03: It's relatively short-lived.
• 42:17
  SPEAKER_00: Yeah.
• 42:18
  SPEAKER_03: But I remember, I remember signing the contract and sending it through and then going, what did I just do?
• 42:24
  SPEAKER_03: Um, and then step by step, step by step, you figure it out.
• 42:29
  SPEAKER_03: You get to relearn to trust yourself.
• 42:33
  unknown: Interesting.
• 42:34
  SPEAKER_03: That you can do this.
• 42:36
  SPEAKER_01: So how how long in current role now?
• 42:38
  SPEAKER_03: Ten months.
• 42:39
  SPEAKER_00: Ten months.
• 42:40
  SPEAKER_00: Um, what has been um the biggest surprise of leading solo with this new team in this new world?
• 42:50
  SPEAKER_03: I went in knowing this is a mission-driven organization.
• 42:57
  SPEAKER_03: There's nothing like experiencing it.
• 42:59
  SPEAKER_00: So what does mission-driven mean and how does that show itself?
• 43:04
  SPEAKER_03: People are really there for the purpose.
• 43:08
  SPEAKER_03: They are there because they want a better world, whatever that means, whether that is and they're doing their bit with passion and compassion.
• 43:23
  SPEAKER_03: And that means you have very different conversations around the w around the lunch table.
• 43:29
  SPEAKER_03: It means you I I assumed that because I've built an impact business, of course I would be taken as an impact, as part of the impact community for them.
• 43:45
  SPEAKER_03: But that wasn't necessarily true.
• 43:46
  SPEAKER_03: I had to come from a Leance, a large institutional asset manager.
• 43:53
  SPEAKER_03: And I had to prove a bit like those coaches, I had to prove that I mean impact.
• 44:00
  SPEAKER_03: I mean deeper and larger scale impact.
• 44:04
  SPEAKER_03: And I mean systems and transformation at a larger scale because that's what we need.
• 44:12
  SPEAKER_03: Um and it really surprised me that I had to prove it.
• 44:18
  SPEAKER_03: Fair enough.
• 44:20
  SPEAKER_00: How how does one go about proving that?
• 44:24
  SPEAKER_03: Sure what you do, not what you say, right?
• 44:27
  SPEAKER_03: Every step of the way.
• 44:28
  SPEAKER_00: You ever heard the term the say do gap?
• 44:31
  SPEAKER_00: That that's the most dangerous thing for a leader, I think.
• 44:33
  SPEAKER_00: As soon as you say X and do Y, your credibility's gone.
• 44:37
  SPEAKER_00: You know, you have to have that tightness together.
• 44:40
  SPEAKER_03: You do, and sometimes the the the the ground beneath your feet changes.
• 44:46
  SPEAKER_02: Yeah.
• 44:46
  SPEAKER_03: So you may have to do something that you've said previously you weren't going to do, and you have to explain why.
• 44:53
  SPEAKER_03: I think where leadership often fails is you can never over-communicate.
• 45:01
  SPEAKER_03: You can never over-communicate.
• 45:05
  SPEAKER_03: Communicate your strategy every single day if it's needed, and in languages in ways that people can understand it.
• 45:13
  SPEAKER_00: Yeah, and I always wanted to talk un until you're bored of your message, not enough people have heard it.
• 45:43
  SPEAKER_03: If you remove my role from the investment design as a manager of people.
• 45:52
  SPEAKER_03: The best part is to help see somebody grow.
• 45:55
  SPEAKER_03: Um the best part is to see that they're they're better than you.
• 46:00
  SPEAKER_03: And I was able to do that in my previous shop where you've built a trust relationship, you really put people out there.
• 46:10
  SPEAKER_03: That's the best best part about working with people.
• 46:14
  SPEAKER_00: I mean it'll be too early, maybe too early in your your current chapter, but one of my favorite things is where you see the the passage of knowledge on coaching.
• 46:22
  SPEAKER_00: So where you've coached someone something, seeing them coach another person, and then if you get to third order, that is just the most goosebumpy moment because you can you can observe it, no one knows it's originally come from you, and you see it play out, and it's just like the goosebumps feeling to see that.
• 46:36
  SPEAKER_03: And also when somebody comes up with a solution I couldn't have never thought about.
• 46:40
  SPEAKER_03: I love my team outsmarting me.
• 46:43
  SPEAKER_03: That is the best moment.
• 46:46
  SPEAKER_00: It's it's mad how rare that is still.
• 46:50
  SPEAKER_00: It's mad how so many people still want to be the smartest person in the room.
• 46:55
  SPEAKER_00: It just means you're not growing, you're not getting better, and your business is if it's so reliant on the lead person for everything.
• 47:01
  SPEAKER_00: Uh that was the quote.
• 47:02
  SPEAKER_00: If um if you're vital to every aspect of your business, you don't have a business, you have a job.
• 47:09
  SPEAKER_00: So true.
• 47:10
  SPEAKER_00: It is true.
• 47:11
  SPEAKER_00: Um, so things are going pretty well, aren't they?
• 47:13
  SPEAKER_00: As we sit down to record this huge deal signed two weeks ago.
• 47:18
  SPEAKER_00: Can you tell us a little bit about that?
• 47:20
  SPEAKER_03: Sure.
• 47:21
  SPEAKER_03: Um we signed um a transaction with Alecta, which is a Swedish um pension fund, to invest 150 million into one of our funds through a note.
• 47:36
  SPEAKER_03: Why is this a big deal?
• 47:38
  SPEAKER_03: First of all, 150 million ticket size for an asset manager of our size is is significant.
• 47:44
  SPEAKER_00: Alecta is a huge amount of investment.
• 47:47
  SPEAKER_03: It's Alecte is a reference investor.
• 47:50
  SPEAKER_03: Um, they're very smart, um, very sophisticated investor.
• 47:55
  SPEAKER_03: Into impact into emerging markets um at scale, and that is that is outstanding.
• 48:01
  SPEAKER_03: Look, this is a relationship that one of the things I think I'm most proud about, the team that has done this, but it's the third time Alecte invests with us.
• 48:10
  SPEAKER_03: Um that in itself is a phenomenal achievement.
• 48:15
  SPEAKER_03: We have special.
• 48:16
  SPEAKER_03: We have taken this client from investing into emerging markets across different structures, and they've invested in different structures and different products.
• 48:26
  SPEAKER_03: Um and I think that's um that's something I'm incredibly proud of.
• 48:30
  SPEAKER_03: It also shows um that impact investing continues to be important and continues being part of allocations for large sophisticated investors.
• 48:42
  SPEAKER_00: In your context, how do you define impact investment?
• 48:46
  SPEAKER_03: Again, as many people as you have, there will be different definitions.
• 48:51
  SPEAKER_03: Um we do something relatively um we we invest across three spaces climate, sustainable food, and financial inclusion.
• 49:04
  SPEAKER_03: So we look at how our capital is helping one of these thematics, um whether that's through um removing carbon out of the systems or providing renewable energy resources or through um making sustainable food um supply chains more resilient or regenerate re-regenerate agriculture all the way to how are entrepreneurs funded in emerging markets and what are we doing with the money um to support entrepreneurs in in these countries?
• 49:35
  SPEAKER_00: And how many different types and structures of investment does does this take?
• 49:40
  SPEAKER_00: You mentioned public-private partnerships from historic chapters.
• 49:43
  SPEAKER_00: Is this all direct investment from you guys?
• 49:45
  SPEAKER_00: Are there partnerships there?
• 49:46
  SPEAKER_00: Is it blended?
• 49:47
  SPEAKER_00: What do these look like?
• 49:49
  SPEAKER_00: That big smile suggests this this is going to be a good answer.
• 49:52
  SPEAKER_03: There'll be so many, I'll I'll be able to bore you to death.
• 49:55
  SPEAKER_03: In principle, we invest across um three major areas.
• 50:00
  SPEAKER_03: We invest through financial institutions.
• 50:03
  SPEAKER_03: So we provide capital for financial institutions that then goes to entrepreneurs, it goes through microfinance and so on and so forth.
• 50:11
  SPEAKER_03: So that's intermediated.
• 50:12
  SPEAKER_03: That's about half of our business.
• 50:14
  SPEAKER_00: So that would go into a product or a fund that they had?
• 50:17
  SPEAKER_03: No, into directly to a bank.
• 50:18
  SPEAKER_03: So we provide funding to banks or to microfinance institutions that then would provide microcredits themselves.
• 50:27
  SPEAKER_03: So intermediated through banks or microfinance institutions.
• 50:31
  SPEAKER_03: Um then we do direct, where we provide capital to companies direct.
• 50:36
  SPEAKER_03: So um uh three-wheeler, um, electric three-wheelers in India um or rooftop solar um in the Philippines.
• 50:45
  SPEAKER_03: We provide capital direct that can be blended or non-blended, and I'll explain what blending means in a second.
• 50:52
  SPEAKER_03: And then we do fund investments, so we support fund managers in emerging markets by providing capital into the funds.
• 50:58
  SPEAKER_03: So that's on the equity side.
• 51:01
  SPEAKER_03: Blended and non-blended.
• 51:04
  SPEAKER_03: When people talk about blended finance, they mean different things.
• 51:08
  SPEAKER_03: You can blend capital at a transaction level or can blend capital with a fund.
• 51:15
  SPEAKER_03: We tend to blend capital with a fund because it's more capital efficient.
• 51:18
  SPEAKER_03: Portfolio theory, the more assets you have, the less blending you need.
• 51:22
  SPEAKER_03: What does blending mean?
• 51:23
  SPEAKER_03: Um, usually it means that we have different types of risk return profile.
• 51:28
  SPEAKER_03: We have investors with different types of risk return profile.
• 51:32
  SPEAKER_03: You have commercial investors, the likes of Alecta, that would want commercial return, um, commensurate with commensurate with the risk that they perceive they're taking.
• 51:42
  SPEAKER_03: And then you would have governments or development finance institutions that would like private capital to go into specific areas, so climate in emerging markets, climate in Asia, and they would be willing to take more risk or they would be willing to take a lower return.
• 51:57
  SPEAKER_03: And that's why we're calling this blending of public and private capital into the same into the same vehicles.
• 52:03
  SPEAKER_00: And that's where you might see a first loss capital scenario.
• 52:06
  SPEAKER_03: That's where the development finance institutions or for or or um governments would provide that first loss.
• 52:13
  SPEAKER_03: Um, could be capital, could be guarantee, could be could come in different forms.
• 52:17
  SPEAKER_03: And then there is something which is really magical, which is called technical assistance.
• 52:21
  SPEAKER_03: Technical assistance is usually where governments are giving the fund or responsibility a capital, the we provide then grants to the investie companies for them to do something that they would otherwise not do.
• 52:37
  SPEAKER_03: So this could mean that we work with a financial institution in a country which is dependent on oil, and we help them build their renewable energy practice.
• 52:48
  SPEAKER_03: So they start then lending to renewable energy projects.
• 52:51
  SPEAKER_03: So we start building the ecosystem for um renewable energy in the country.
• 52:58
  SPEAKER_03: Um but if we hadn't provided them that grant and lent them commercial money, they would have never done this before.
• 53:05
  SPEAKER_03: So we combine these two things to try to shift systems in a cleaner, um, more equitable world.
• 53:14
  SPEAKER_00: And do the idealized ticket sizes vary by uh bucket in terms of investment type, or do you have a set range you like to work in per project?
• 53:23
  SPEAKER_03: Every fund is different.
• 53:25
  SPEAKER_03: Um for institutional investors, our financial institution business works more or less like a fixed income product.
• 53:31
  SPEAKER_03: It's a it's a semi-liquid strategy, 0.3% average exposure per borrow.
• 53:37
  SPEAKER_03: This is super granular.
• 53:38
  SPEAKER_03: It's I call it it's really a boring asset class.
• 53:41
  SPEAKER_03: In the more direct lending businesses, they're less diversified.
• 53:44
  SPEAKER_03: There you're taking more alpha exposure.
• 53:47
  SPEAKER_03: So more concentrated funds, this is much more of a private credit, um, private credit form and you can have it blended and non-blended.
• 53:54
  SPEAKER_03: Now, in Latin America strategies, we don't blend because the return, the risk return profile is one that meets investor appetite.
• 54:01
  SPEAKER_03: What's really important with blending blend only when there is a need for blending.
• 54:07
  SPEAKER_00: Otherwise, you're making it overcomplex for no benefit.
• 54:10
  SPEAKER_03: Or do you distort markets?
• 54:12
  SPEAKER_03: Ideally, we graduate to a world where blending is not long, no longer required.
• 54:18
  SPEAKER_03: And that for me is the long-term goal.
• 54:23
  SPEAKER_00: It's really interesting.
• 54:23
  SPEAKER_00: My my brain's doing backflips on where natural capital is at different stages of that journey.
• 54:29
  SPEAKER_00: And I think it's relative to country.
• 54:31
  SPEAKER_00: So um there was a really awesome transaction that's just been done by Finance Earth in in the UK, where they've been trying for a number of years to get this away.
• 54:39
  SPEAKER_00: But uh DEFRA, the government department have provided first loss capital on a nature fund for them.
• 54:45
  SPEAKER_00: So they're somewhere around 60 or 70 million that they're going to invest in partnership projects to deliver reforestation and peatland restoration.
• 54:52
  SPEAKER_00: But the government first loss capital and blending that with private was a key part of getting that away, which is really interesting because and then you've got the other side of that.
• 55:02
  SPEAKER_00: There's a view that that's needed to get institutional capital in.
• 55:05
  SPEAKER_00: Whereas actually we're at an order of magnitude bigger without needing the blending element of it.
• 55:10
  SPEAKER_00: So different parts of the sector are moving at a different time period.
• 55:14
  SPEAKER_03: What is the difference in what you're investing in versus what they're investing in?
• 55:17
  SPEAKER_03: Why do they need to blend?
• 55:18
  SPEAKER_00: Um we're going to so we own the underlying asset class and we were able to offer a product that private investors were excited about.
• 55:29
  SPEAKER_00: Whereas I think they're taking a sort of more traditional, safer route, much lower risk, much lower capital exposure.
• 55:39
  SPEAKER_00: So they're taking a capital light model where I think principally they're going to invest in the project deliverer with a lease-based system, whereas we own the real assets themselves.
• 55:48
  SPEAKER_03: Trevor Burrus, Jr.: So you're taking equity risk as well.
• 55:50
  SPEAKER_03: So that's you're essentially blending the return because you're going for the equity higher return.
• 55:57
  SPEAKER_03: So that's how you which is much more of a portfolio approach.
• 56:02
  SPEAKER_00: Yeah.
• 56:02
  SPEAKER_00: So we've got 12 different estates across the UK.
• 56:05
  SPEAKER_00: Each has a different balance of revenues from carbon to nature to BNG to the underlying land itself to renewable energy to ecotourism to build property.
• 56:14
  SPEAKER_00: So we've managed to put those different revenue streams across 12 different estates, each of which being different.
• 56:20
  SPEAKER_03: What do you think is more scalable?
• 56:25
  SPEAKER_03: When you think about the investor universe, not the investment.
• 56:30
  SPEAKER_00: I think so.
• 56:31
  SPEAKER_00: We were always told from day one, if you wanted to unlock sophisticated, serious investment, you needed to be in the hundreds of millions to make it worth the time and focus.
• 56:42
  SPEAKER_00: You've just demonstrated that with that um deal.
• 56:46
  SPEAKER_00: I don't think you can get there in the UK without owning the underlying asset.
• 56:51
  SPEAKER_00: And I think the risk you have to take on politically is huge, which will be really interesting.
• 56:55
  SPEAKER_00: One of my next questions I'm going to come to is how you do choose the geographies you operate in.
• 56:59
  SPEAKER_00: Um if tomorrow the government say, Do you know what we've decided voluntary carbon credits shouldn't be a thing and we're not doing BNG anymore, that entire model is gone.
• 57:09
  SPEAKER_03: Yeah, and we still with um um land rents, right?
• 57:15
  SPEAKER_03: In the UK.
• 57:15
  SPEAKER_00: Uh yeah, subsidies.
• 57:17
  SPEAKER_00: Yeah, exactly.
• 57:17
  SPEAKER_00: So it just disappeared overnight.
• 57:19
  SPEAKER_00: So if you are exclusively exposed to government regulation policy, you know, we have a different Prime Minister every ten minutes.
• 57:25
  SPEAKER_00: So it and we're gonna have another one today.
• 57:27
  SPEAKER_00: So it literally could change where it's we didn't even vote for it.
• 57:31
  SPEAKER_00: We we don't anymore.
• 57:32
  SPEAKER_00: We don't really tend to do that.
• 57:33
  SPEAKER_00: Every four years we do, and then they change it as much as they like.
• 57:35
  SPEAKER_00: Don't I'm not allowed to tell off politicians because I have a rule on this, right?
• 57:39
  SPEAKER_00: If I'm not gonna try and solve something, I shouldn't criticise it.
• 57:42
  SPEAKER_00: And um, I've been asked to run for parliament by three political parties Labour, Tory, and Green.
• 57:50
  SPEAKER_00: I don't know how I appeal to all of reforms.
• 57:56
  SPEAKER_00: When they find out I'm northern, that's true, it might it might appeal.
• 58:01
  SPEAKER_00: Um so scalable.
• 58:04
  SPEAKER_00: So I was pausing with what the definition of scalable is.
• 58:07
  SPEAKER_00: If we are talking about scale of impact or scale of assets under management, I think it has to be a real asset-based investment.
• 58:15
  SPEAKER_00: So, and of course I would think that because that's our model.
• 58:17
  SPEAKER_00: Um, I do think we might end up blending that approach a little bit more in Europe, in terms of there might be some capital light options.
• 58:25
  SPEAKER_00: Where I think the biggest scaling opportunity in the natural capital spaces at the moment is in the US.
• 58:32
  SPEAKER_00: And I think it is aligning land-based acquisitions with um big tech companies, because in the absence of uh new national parks hosted and paid for by Anthropic and OpenAI and Google, they just will not be able to secure the environmental and social license to operate.
• 58:51
  SPEAKER_00: And you look at the OpenAI Foundation, 250 billion to use into impact immediately, if they put 2 billion into real asset nature-based products that generated the carbon credits they need, the water offsets they need, and the mitigation, also potentially renewable energy on that basis, that would they could significantly say, and and authentically say, we are having a net positive impact on the environment and on society, as well as what we're doing around intelligence.
• 59:21
  SPEAKER_00: I just don't see a way that doesn't happen.
• 59:24
  SPEAKER_00: Um, so much so I was very fortunate to have a conversation with one of Tim Cook's direct reports at Apple, who literally sits on their exec board and he said to me, We're having that conversation as we speak.
• 59:34
  SPEAKER_00: We're talking about what that would look like.
• 59:36
  SPEAKER_00: So I think in the next two to five years, we will see that.
• 59:40
  SPEAKER_00: We will see a private array of national parks paid for by those companies.
• 59:45
  SPEAKER_03: It's really interesting because basically you're saying they're pricing externalities.
• 59:49
  SPEAKER_03: And that from an valuation of assets perspective is really interesting.
• 59:54
  SPEAKER_03: Think about capital markets, and the moment you start being able to put the price on clean clean air, on clean water, on democracy, what does that make for valuations of public markets?
• 1:00:11
  SPEAKER_00: Is well one of the key themes that uh book number two, plug, uh picked up was the absence of a price on carbon is the cause of climate change.
• 1:00:23
  SPEAKER_00: If emitting a ton of carbon, if you were taxed at$1,000 a ton, everyone would be driving electric vehicles, no one would fly.
• 1:00:31
  SPEAKER_00: I I'm not saying that's a viable or a sensible thing to do.
• 1:00:34
  SPEAKER_00: There's lots of reasons not to do that, but the world would look very different if that was the case.
• 1:00:39
  SPEAKER_00: So, um, and that's I think that's why carbon has accelerated a bit faster than nature, a lot faster than nature markets, because it is easier to quantify in that regard.
• 1:00:48
  SPEAKER_00: You can just say here's a punitive number on it, and that's effectively what voluntary carbon, well in EU ETS and and regulated markets have done.
• 1:00:57
  SPEAKER_00: But we will now need to start seeing that in nature.
• 1:00:59
  SPEAKER_03: Really interesting.
• 1:01:00
  SPEAKER_03: Um, I've just come back from holiday and I was in a tiny shop where there were two prices on each product.
• 1:01:10
  SPEAKER_03: One, the match price that you would find in any other product, and the other one was trying to cost in externalities.
• 1:01:18
  SPEAKER_03: And buyers could go and choose which price they wanted to pay.
• 1:01:25
  SPEAKER_03: I loved it.
• 1:01:26
  SPEAKER_00: What that's fascinating.
• 1:01:28
  SPEAKER_03: And and of course, it's it the guy said that he can explain how he got to those numbers.
• 1:01:33
  SPEAKER_03: What type of shop was that?
• 1:01:35
  SPEAKER_03: And it was just a a a little a little a little place in the Netherlands.
• 1:01:38
  SPEAKER_01: I'll send you the That's amazing.
• 1:01:40
  SPEAKER_03: It's but it I think it it it teaches you something really interesting.
• 1:01:43
  SPEAKER_03: It teaches you about behavior.
• 1:01:44
  SPEAKER_03: Because I ask himself, how many people that come to your shop go for the higher price?
• 1:01:50
  SPEAKER_03: Almost everyone.
• 1:01:51
  SPEAKER_00: Why shouldn't this be available to people to make coherent choices?
• 1:01:54
  SPEAKER_00: Because sometimes people say, Oh, who's the responsibility to help improve things for the environment?
• 1:01:58
  SPEAKER_00: Is it business, is it government, is it's everyone.
• 1:02:01
  SPEAKER_00: So I want it to be possible and available for everyone to do that.
• 1:02:04
  SPEAKER_00: And in time, that's where I think the ownership of natural capital assets should sit increasingly in a commercial sense with a sovereign wealth fund or with a pension fund.
• 1:02:14
  SPEAKER_00: Because what a better thing to be invested in long term than literally the future of air and water and land and soil and all the things that our future relies upon.
• 1:02:23
  SPEAKER_00: It almost seems madden us that more institutions aren't aligned with it yet.
• 1:02:28
  SPEAKER_00: But I fully appreciate the sector hasn't presented a product that is um investable or has the integrity and the standards required.
• 1:02:37
  SPEAKER_00: And we're one of the first to get to scale in the UK of that in any way that's meaningful.
• 1:02:42
  SPEAKER_03: And then you have to, having gone through a few rounds of shifting allocators, because we've said you've heard me say that at Zuri Climate Week, we don't have a capital problem, we have an allocation problem.
• 1:02:56
  SPEAKER_03: And um often you sit with this three to four people that are allocating capital with a in a in an institutional investor.
• 1:03:04
  SPEAKER_03: They're used to doing liquid products within private markets.
• 1:03:08
  SPEAKER_03: We operate within these three to five managers that um everyone knows, they start with an A or a B and they're usually American.
• 1:03:15
  SPEAKER_03: And investing with a new manager, investing in something that hasn't been invested before.
• 1:03:22
  SPEAKER_03: That behavioral change with a CIO whose average tenure is three years, it is really hard to do.
• 1:03:32
  SPEAKER_00: Yeah, no one no one's career is put at risk for failing in the way you're supposed to fail.
• 1:03:38
  SPEAKER_00: If you do the standard same thing that everyone thought was sensible and it doesn't go right, that's okay.
• 1:03:44
  SPEAKER_00: Whereas if you do the thing that's different, you are taking that risk on a personal level as well.
• 1:03:49
  SPEAKER_03: Yeah.
• 1:03:49
  SPEAKER_03: And it's an interesting one because you know that it's the it's the frog in the warm water, right?
• 1:03:56
  SPEAKER_03: It is the the water is continuously increasing and increasing and increasing.
• 1:04:00
  SPEAKER_03: Um The way I usually have these conversations is what do you talk to your children when you have dinner?
• 1:04:09
  SPEAKER_03: What do you want to be talking to them about?
• 1:04:11
  SPEAKER_03: The next private credit fund you've invested in?
• 1:04:15
  SPEAKER_03: Or actually how you're making a meaningful difference and generating a remote the returns for your investors that are needed.
• 1:04:23
  SPEAKER_00: It's really interesting that you go to the almost you bring in emotion and connection quite early in that conversation.
• 1:04:33
  SPEAKER_00: I'm always quite hesitant to.
• 1:04:36
  SPEAKER_00: I I think I because the and I'm talking purely from an environment sector perspective, okay.
• 1:04:42
  SPEAKER_00: You you have a broader range of impact that you can discuss and work in.
• 1:04:48
  SPEAKER_01: Probably.
• 1:04:49
  SPEAKER_00: Um I always think because the environment sector in the UK has spent 20 years yelling at anyone with capital that they're terrible human beings and morally they should just give us more money, because that's what should be happening, and the the concept of a return is just never talked about.
• 1:05:07
  SPEAKER_00: They just want philanthropy and gifts.
• 1:05:09
  SPEAKER_00: I'm carrying that baggage into conversations, I think.
• 1:05:12
  SPEAKER_00: I think I'm overly careful to say, no, no, no, we're a commercial organization.
• 1:05:16
  SPEAKER_00: We want to make you a return.
• 1:05:18
  SPEAKER_00: Yes, we will do all this impact.
• 1:05:20
  SPEAKER_00: But I'm almost, and because my background is environment, tech, and data, not financial, I think I always almost go too heavy.
• 1:05:28
  SPEAKER_00: This is commercial and return first.
• 1:05:30
  SPEAKER_03: So we I usually start the conversation.
• 1:05:32
  SPEAKER_03: I wouldn't be doing something that doesn't meet the return hard, because that by definition is not sustainable.
• 1:05:38
  SPEAKER_00: But I almost think you you come with that without saying anything with your background, it almost No, because we're an impact investor.
• 1:05:45
  SPEAKER_03: Always by definition, people think that we're doing something that's impact first.
• 1:05:48
  SPEAKER_01: Yeah.
• 1:05:49
  SPEAKER_03: The reality of impact first models is one, they don't scale, two, they're not long-term sustainable.
• 1:05:56
  SPEAKER_03: If you're if you're funding businesses that would not make it.
• 1:06:00
  SPEAKER_00: Yeah, to be a good business you have to be in business.
• 1:06:04
  SPEAKER_03: So we by definition come up with products that are good fit for investors' portfolio.
• 1:06:12
  SPEAKER_03: And then we talk about what we do from an impact perspective.
• 1:06:18
  SPEAKER_03: We always have the conversation of how does this fit in your how does it fit in your portfolio?
• 1:06:24
  SPEAKER_03: For that you need to understand your client really well.
• 1:06:28
  SPEAKER_03: And the hodgepodge of regulation within Europe is making that conversation always quite uh well, let's say that you have to be really prepared.
• 1:06:40
  SPEAKER_03: Um but no, we start with risk return profile, this is how it fits.
• 1:06:44
  SPEAKER_03: And this is the story you get to tell your kids.
• 1:06:48
  SPEAKER_03: And I think that's really important.
• 1:06:50
  SPEAKER_00: What does that what does that briefing process look like?
• 1:06:52
  SPEAKER_00: So presumably, yes, you had extensive networks from previous chapters of your career, but I'm guessing you're meeting some new investors and new allocators for the first time.
• 1:07:03
  SPEAKER_03: Yes, and no, the community of um investors is um not that dissimilar.
• 1:07:09
  SPEAKER_00: So the mostly existing relationships?
• 1:07:11
  SPEAKER_03: Um yes.
• 1:07:12
  SPEAKER_03: And the I have to say, responsibility started in retail, which is phenomenal.
• 1:07:18
  SPEAKER_01: Yeah.
• 1:07:19
  SPEAKER_03: Twin years ago, it launched a retail product, which is almost unthinkable today because regulation has become so stringent, um it would be almost impossible to get the same license today.
• 1:07:32
  SPEAKER_03: But we started with a with a retail product.
• 1:07:35
  SPEAKER_03: So for me, all of that retail part was completely different.
• 1:07:38
  SPEAKER_03: Development banks, we I have spoken to previously, institutional investors, I know very well.
• 1:07:42
  SPEAKER_03: Families are um family offices, single and multiple multifamily offices is something that it was relatively new to me when I when I joined the responsibility.
• 1:07:51
  SPEAKER_03: And these are very different conversations.
• 1:07:54
  SPEAKER_00: What marks them as particularly different?
• 1:07:57
  SPEAKER_03: When we speak to them, because we're an impact investors, if usually they have a 5% impact bucket, they think of allocating directly from the impact bucket.
• 1:08:07
  SPEAKER_03: So my conversations with them have been, but this is a product that meets the same risk return profile that you have in the 95%.
• 1:08:15
  SPEAKER_03: Why don't we allocate from the 95% so that you can use the 5% for things that do need concessionality?
• 1:08:23
  SPEAKER_03: So a lot of my conversations with them have been around we need to take impact out of the niche into the global scale.
• 1:08:33
  SPEAKER_03: Because the economy and the fundamentals of the economy are shifting around many of these business models are profitable.
• 1:08:43
  SPEAKER_00: I I love that about your approach.
• 1:08:45
  SPEAKER_00: It was it was one of the things you spoke about in Zurich as well.
• 1:08:48
  SPEAKER_00: I I I've seen a sector fighting over that 5% for 20 years without even thinking, well, why wouldn't we just make a more compelling case to talk about the 95?
• 1:09:01
  SPEAKER_00: Isn't it a much um the more sophisticated the investor, the bigger the potential investment ticket, the easier I found every conversation?
• 1:09:11
  SPEAKER_02: Yeah.
• 1:09:12
  SPEAKER_00: Because you can you can you can have a better conversation, you can have a more sophisticated one, you can talk about bigger issues rather than the the smaller the pot you're going to, the more challenging, the more niggly, the more difficult the conversation.
• 1:09:24
  SPEAKER_03: And also the conversation often with families is around systems change.
• 1:09:28
  SPEAKER_03: And I don't mean systems change from an asset sub food supply chain and so I mean from a capital markets.
• 1:09:36
  SPEAKER_03: How do we how do we put products onto the wealth distribution channels?
• 1:09:42
  SPEAKER_03: How do we make them retail?
• 1:09:43
  SPEAKER_03: How do we how do we use catalytic capital?
• 1:09:48
  SPEAKER_03: How can the capital be catalytic not from a concessionality of return, but from a market creation perspective?
• 1:09:55
  SPEAKER_01: Yeah.
• 1:09:56
  SPEAKER_03: That's a really exciting conversation.
• 1:09:59
  SPEAKER_03: Because maybe it doesn't fit an idealistic portfolio today for them, but it does for institutional investors if a product would exist.
• 1:10:08
  SPEAKER_03: So these are the conversations I find really interesting.
• 1:10:11
  SPEAKER_00: Is there a difference in the sort of timeline of that sort of customer journey in the uh an institutional investor might take years for the conversation to develop into an allocation, whereas a family office might be faster or slower, or how do the timeline?
• 1:10:24
  SPEAKER_03: They tend to be faster, much again, much more catalytic.
• 1:10:31
  SPEAKER_00: The family offices are faster.
• 1:10:33
  SPEAKER_03: Faster and much more flexible.
• 1:10:36
  SPEAKER_03: Um because they don't have regulatory frameworks around them.
• 1:10:40
  SPEAKER_03: Um much more involved.
• 1:10:44
  SPEAKER_03: Which is what we want.
• 1:10:45
  SPEAKER_03: We want partnerships, we want relationships that evolve over time and help us shift the market.
• 1:10:51
  SPEAKER_03: At the end of the day, and that's the case for development finance institutions, but it's also the case for impact investors.
• 1:10:58
  SPEAKER_03: If there is no need for us, that's a world I want to live in.
• 1:11:04
  SPEAKER_00: Um it's why I didn't mourn the death of ESG as a terminology.
• 1:11:10
  SPEAKER_00: Like what you show me anyone who doesn't think their investment should be sustainable.
• 1:11:16
  SPEAKER_00: Who is actively trying to find an unsustainable investment?
• 1:11:19
  SPEAKER_00: Like I've I've never met anyone who just wants it to be, oh no, this thing's really high risk and is likely to be gone tomorrow.
• 1:11:25
  SPEAKER_00: We don't need it anymore.
• 1:11:26
  SPEAKER_00: It was a badge, a terminology, a bridging set of languages.
• 1:11:30
  SPEAKER_00: Surely all those things should be embedded as much as possible.
• 1:11:33
  SPEAKER_00: We we don't talk about search engines anymore, you Google something.
• 1:11:36
  SPEAKER_00: You know, you don't you don't need the language.
• 1:11:38
  SPEAKER_00: I think it's so interesting.
• 1:11:40
  SPEAKER_00: You talked earlier about helping allocators um enter markets for the first time and things.
• 1:11:46
  SPEAKER_00: What are some of the vehicles and the more the tools and the techniques that make it easier for those allocators to to allocate to a manager for the first time or into a new asset class?
• 1:11:56
  SPEAKER_00: What are some of the things you've been able to use to make that easier?
• 1:12:02
  SPEAKER_03: As a GP, you need to go to where the investor is and not expect them to adjust to what you have.
• 1:12:09
  SPEAKER_03: I think that's fundamentally critically important.
• 1:12:15
  SPEAKER_03: And that means that for some investors, they've needed data.
• 1:12:21
  SPEAKER_03: So we figured out at some point that there is a bottleneck within the chief risk officers with institutional investors, because the perception of emerging markets is that it's more risky.
• 1:12:31
  SPEAKER_03: I've spent the last seven, eight years pushing development finance institutions into publishing what's called the GEMS database, the global emerging markets database, that actually shows that the historic track record of development finance institutions is incredibly robust.
• 1:12:48
  SPEAKER_03: That data then allows rating agencies to be able to rate funds and products in emerging markets.
• 1:12:55
  SPEAKER_03: So I'm very much on a journey around make the pipe beaver.
• 1:13:01
  SPEAKER_03: Let's all of us publish our data.
• 1:13:03
  SPEAKER_03: Um, let's be able to show and price risk adequately.
• 1:13:08
  SPEAKER_03: Um, so we have been helping institutional investors by providing data by using rating agencies models to show if they were a rating, that's what it would have looked like.
• 1:13:17
  SPEAKER_03: We've worked closely with the rating agencies to help them push them gently, um, create a methodology for blended finance structures and so on, where the blend the methodologies that they've used are not necessarily adequate for what we're presenting in terms of the historic track record.
• 1:13:35
  SPEAKER_03: We've been working with them and say, well, um why you think about this this way?
• 1:13:40
  SPEAKER_03: Is there a way that we can think more efficiently about the structures?
• 1:13:45
  SPEAKER_03: What do we need to change on our side for the rating methodology to be appropriately adjusted?
• 1:13:51
  SPEAKER_03: So this is these are living conversations.
• 1:13:53
  SPEAKER_03: And again, this is a little bit about the different parts in the system that you need to work with to make it a standard allocation because it is at the moment, it is a strategic, it's a tactical allocation, it's not a strategic asset allocation.
• 1:14:08
  SPEAKER_03: So data, ratings, replicability, replicability, replicability.
• 1:14:15
  SPEAKER_03: What an institutional investor hates is that every fund looks differently from the previous vintages.
• 1:14:19
  SPEAKER_03: They want scalable, over 500 million, 750 ideally, scalable, replicable um funds with track record backed by data.
• 1:14:30
  SPEAKER_03: So that's what the journey has been for us.
• 1:14:34
  SPEAKER_00: And has that appetite for data increased as we've gone into the period of AI, or are we pretty much there's a set standard on what people want now?
• 1:14:44
  SPEAKER_03: People always want more data.
• 1:14:46
  SPEAKER_00: They do tend to ask for more, don't they?
• 1:14:49
  SPEAKER_03: The thing is, people tend to ask, and we have one investor in particular.
• 1:14:53
  SPEAKER_03: I think we provide them with over 300 indicators.
• 1:14:58
  SPEAKER_03: I promise you, they don't look into the data.
• 1:15:00
  SPEAKER_00: He's getting snowblindness with that.
• 1:15:02
  SPEAKER_00: You can't see it at that point.
• 1:15:03
  SPEAKER_03: So the the the point is, what data do you need?
• 1:15:08
  SPEAKER_03: For what purposes?
• 1:15:11
  SPEAKER_03: And regulation hasn't been helpful in some of these respects because they've just asked for more and more and more and more.
• 1:15:17
  SPEAKER_03: Um, so data for the sake of data is not not good enough, but often the investor does not necessarily want to accept that.
• 1:15:27
  SPEAKER_03: It's a journey.
• 1:15:28
  SPEAKER_00: Yeah.
• 1:15:28
  SPEAKER_00: I I don't know if you were in the room.
• 1:15:30
  SPEAKER_00: It was one of the one of the keynote speeches before you were on stage in Zurich, and I think it was the the lady that was maybe the chief exec at UBS, or certainly one of the very senior people.
• 1:15:40
  SPEAKER_00: President, yeah.
• 1:15:41
  SPEAKER_00: Yeah, present.
• 1:15:42
  SPEAKER_00: Um and she went, There's nothing else to disclose.
• 1:15:45
  SPEAKER_00: You've asked for everything.
• 1:15:46
  SPEAKER_00: Like we've got nothing else.
• 1:15:47
  SPEAKER_00: Like all you've got all the data.
• 1:15:49
  SPEAKER_00: Can we just stop?
• 1:15:50
  SPEAKER_00: There's enough.
• 1:15:51
  SPEAKER_00: There's too much for us all to deal with.
• 1:15:52
  SPEAKER_00: Like anything you want to know, you've got it.
• 1:15:54
  SPEAKER_00: I've got nothing else to share.
• 1:15:55
  SPEAKER_00: I just thought, yeah, that's a really fair point on the data side of things.
• 1:15:58
  SPEAKER_03: I mean, it's it's data, but also what is the quality of that data?
• 1:16:02
  SPEAKER_03: That's the other thing.
• 1:16:03
  SPEAKER_03: Emissions avoided are calculated in so many different ways.
• 1:16:06
  SPEAKER_03: Let's standardize some of the methodologies as well.
• 1:16:08
  SPEAKER_03: Um, what would be really great to see is more convergence of methodologies, not more definitions.
• 1:16:14
  SPEAKER_03: Um, and we in the impact community love to just slightly tweak something here and there to make it more.
• 1:16:20
  SPEAKER_03: No, let's standardize that.
• 1:16:23
  SPEAKER_03: Let's converge.
• 1:16:25
  SPEAKER_00: Yeah.
• 1:16:26
  SPEAKER_00: Um, for those not in the sector, what do emerging markets mean?
• 1:16:33
  SPEAKER_03: That is also very debated.
• 1:16:35
  SPEAKER_03: Is Chile an emerging market?
• 1:16:36
  SPEAKER_03: Is South Korea an emerging market for us?
• 1:16:39
  SPEAKER_00: I don't know, I'd ring you and ask.
• 1:16:41
  SPEAKER_03: You wouldn't Google it.
• 1:16:43
  SPEAKER_03: Uh search engine it.
• 1:16:45
  SPEAKER_00: Yeah, maybe.
• 1:16:46
  SPEAKER_00: Maybe.
• 1:16:46
  SPEAKER_00: I'd probably use chatters to be honest, wouldn't they?
• 1:16:49
  SPEAKER_03: Um so we invest across what's called emerging and frontier markets.
• 1:16:53
  SPEAKER_03: Um people refer to them as global south.
• 1:16:57
  SPEAKER_03: Um, these are economies um where there is significant growth.
• 1:17:03
  SPEAKER_03: Um in some cases, um, there's a significant growth expectation.
• 1:17:09
  SPEAKER_03: The growth might have not actually transpired, but you can think about them as outside of the traditional world, um, the traditional OECD 30 countries world.
• 1:17:18
  SPEAKER_03: So the majority of the world is emerging.
• 1:17:21
  SPEAKER_00: Okay.
• 1:17:21
  SPEAKER_00: And when you think about individual countries or regions, how do you begin to uh assess the risk reward of those?
• 1:17:29
  SPEAKER_03: I love it.
• 1:17:30
  SPEAKER_03: Do you know how many countries there are in Asia?
• 1:17:32
  SPEAKER_03: I mean, we we speak about Asia if it's one place.
• 1:17:34
  SPEAKER_03: My my favorite, we talk about Africa as if it's one place and one country.
• 1:17:40
  SPEAKER_00: Um as a as a data geek, I love the maps where you see actual land holdings on top of each other in terms of scale.
• 1:17:47
  SPEAKER_03: Yeah.
• 1:17:48
  SPEAKER_03: That that is a particularly interesting uh and then you think about population growth as well then and and drivers of of um I have a point that I'll tell you in in a little bit.
• 1:18:01
  SPEAKER_03: Um so we invest in about 70 countries.
• 1:18:07
  unknown: Wow.
• 1:18:10
  SPEAKER_00: Well that's I my head's doing the multiples.
• 1:18:12
  SPEAKER_00: So that's different regulatory regimes, cultural issues, language issues, time zones.
• 1:18:17
  SPEAKER_00: It's just all complicated, right?
• 1:18:19
  SPEAKER_03: But we invest through different strategies.
• 1:18:21
  SPEAKER_03: In the financial institutions space, we have invested with the same companies for 20 years.
• 1:18:27
  SPEAKER_03: So there's a portfolio between 200 and 400 companies that we have tracked for 20 years.
• 1:18:34
  SPEAKER_03: Individual company exposure is very small, 0.3%.
• 1:18:38
  SPEAKER_03: So you can see how um the granularity of a single single borrower is not material to your end performance.
• 1:18:49
  SPEAKER_03: So you blend by diversification.
• 1:18:54
  SPEAKER_03: But then you have to monitor country um country risk.
• 1:18:59
  SPEAKER_03: So in in the microfinance space in Cambodia, early on, we started seeing a few years ago um that the end customers um to microfinance institutions were getting over-levered.
• 1:19:11
  SPEAKER_03: Then you start worrying about predatory practices and gaining the money back from the microfinance institutions and so on and so forth.
• 1:19:18
  SPEAKER_03: So at that point in time, we decided to pull out of the country.
• 1:19:22
  SPEAKER_03: So you monitor various factors on a macro level.
• 1:19:26
  SPEAKER_03: So it's a combination between micro knowing the institutions and the regulatory environment and the management and the macro picture, and is marrying the two.
• 1:19:37
  SPEAKER_03: In the more alpha strategies, um often it is about the company itself.
• 1:19:45
  SPEAKER_03: So it's much more on the micro level.
• 1:19:47
  SPEAKER_03: Now things do happen.
• 1:19:48
  SPEAKER_03: You may have a coup.
• 1:19:51
  SPEAKER_03: That and there, this is where blending really helps when you're doing some of this more frontier markets, or you invest with capital that can be more patient, like a development finance institution capital.
• 1:20:02
  SPEAKER_03: That doesn't necessarily mean the commercial, commercial investor.
• 1:20:05
  SPEAKER_03: So you have to marry the type of investors you have with the risk that they can tolerate within a structure that can mitigate partly that risk.
• 1:20:12
  SPEAKER_03: So the World Bank provides political risk guarantees that could be used for certain structures of payment mechanisms, their currency mechanisms to be used, because one of the big risks we actually see in emerging markets has been the devaluation of the currency.
• 1:20:29
  SPEAKER_03: And that has led to some um more challenging private equity performance, for instance.
• 1:20:36
  SPEAKER_03: Fun fact, and this is where my brain was going.
• 1:20:40
  SPEAKER_03: We were talking about AI earlier.
• 1:20:43
  SPEAKER_03: If you think about where the growth in emerging markets has been, it's been a lot of offshoring.
• 1:20:49
  SPEAKER_03: Big companies here, we'll offshore our IT into India.
• 1:20:54
  SPEAKER_03: Can you start thinking because we talk about AI, but we don't talk enough about robotics, right?
• 1:20:59
  SPEAKER_03: Massive manufacturing that is being done out of Bangladesh, out of many of those countries.
• 1:21:04
  SPEAKER_03: One of the things that really worries me, once the price of robotics has really shrunk, and we can do all of our manufacturing from the basement downstairs without one without Windows 24-7, and that economic cost, that advantage of the economic cost of the labour cost that emerging markets has had over these years, it disappears.
• 1:21:30
  SPEAKER_03: What happens to society?
• 1:21:34
  SPEAKER_00: I suppose the optimistic argument is a rush to the middle classes and a um more knowledge-led economy, but that's now filled by AI as well.
• 1:21:46
  SPEAKER_00: So almost if you looked at the timeline of like the Industrial Revolution here in in sort of the UK, as opposed to seeing steam engines or seeing robots, well, the people that were on the factory floor then went into more professional jobs, not my terminology.
• 1:22:01
  SPEAKER_00: Appreciate it slightly pejorative, um, but they're not gonna be there anymore either.
• 1:22:05
  SPEAKER_00: So may maybe it is more of the the creative space.
• 1:22:08
  SPEAKER_00: You know, we're sat on a podcast which was an industry 10 years ago that didn't exist and now employs almost, if not more, people than does it employ more than television yet?
• 1:22:17
  SPEAKER_00: The sort of creator economy, if you win like yeah.
• 1:22:21
  SPEAKER_00: So they can't all be YouTubers though.
• 1:22:25
  SPEAKER_03: It's an interesting thing to think about.
• 1:22:27
  SPEAKER_00: And I do you do you um do you have any investments in India?
• 1:22:31
  SPEAKER_03: Of course.
• 1:22:32
  SPEAKER_03: We have over 80 people in our offices in India.
• 1:22:37
  SPEAKER_03: Wow.
• 1:22:37
  SPEAKER_03: Investment people.
• 1:22:38
  SPEAKER_00: So I know very little about India other than I'm a massive fan of cricket.
• 1:22:43
  unknown: Okay.
• 1:22:44
  SPEAKER_00: Which which by extension pretty much means you need to be a massive fan of India.
• 1:22:49
  SPEAKER_00: But there's so many uh are you familiar with the acquired podcast?
• 1:22:53
  SPEAKER_01: No.
• 1:22:54
  SPEAKER_00: Oh my god, I'm about to change your life.
• 1:22:57
  SPEAKER_00: This is going to become one of your five.
• 1:22:58
  SPEAKER_00: Okay.
• 1:22:59
  SPEAKER_00: It is amazing.
• 1:23:00
  SPEAKER_00: So I made the entire team sit through a six-hour podcast on the IPL, which is the cricket league from start to finish.
• 1:23:08
  SPEAKER_00: It is the most incredible um exploration into how you can transform an entire sector and a country inside 20 years.
• 1:23:19
  SPEAKER_00: So it's just every tool and trick of the trade for making something go from an idea to the most valuable sports league in the world in inside 20 years.
• 1:23:28
  SPEAKER_00: But some of the things you pick up from that journey is that 250 million people went from poverty to middle class in the space of 10 years.
• 1:23:37
  SPEAKER_00: And things like, and this is what happens when it's done well.
• 1:23:40
  SPEAKER_00: So, like the billions that were spent on subsurface uh telecommunication infrastructure in the UK and the US and things just hasn't happened in India because they immediately went to mobile phones instead.
• 1:23:54
  SPEAKER_00: So I suppose that's one of the hopeful examples of where technology actually allows us to skip some challenging generations and problematic things and gets us to a better solution quicker.
• 1:24:04
  SPEAKER_03: And health tech, ettech, testing all of these things in India to scale because of the massive population that they have, it happens like this.
• 1:24:14
  SPEAKER_03: And then Silicon Valley companies come and buy the technology.
• 1:24:18
  SPEAKER_03: So there is a shift.
• 1:24:19
  SPEAKER_03: So if you I I gave you the the gloomy part of it, but if you also look at the education improvement um in some of these economies and you start looking at the innovation indexes, which I find fascinating, there is some really interesting um things happening within the technology space that are actually we're seeing a lot more innovation come out of emerging markets.
• 1:24:40
  SPEAKER_03: I mean, we just talked about China um and the release, right?
• 1:24:44
  SPEAKER_03: I mean, there there is a there is a talent war that's that's happening, but I I'm worried about that layer below.
• 1:24:55
  SPEAKER_03: The uneducated, the moment was factory workers, and what happens to them if the technology of robotics shifts and we want and and what does that mean?
• 1:25:06
  SPEAKER_03: Who's going to be do we have to pay robots?
• 1:25:08
  SPEAKER_03: Is it capital or is it capex versus opex?
• 1:25:11
  SPEAKER_03: What does that mean?
• 1:25:12
  SPEAKER_03: How do you fund this?
• 1:25:13
  SPEAKER_03: The whole way of how we have been thinking about funding companies shifts.
• 1:25:18
  SPEAKER_00: Do you paying robots?
• 1:25:21
  SPEAKER_00: So there was a line I used quite a lot in London Climate Week about um it was a a playful illustration of the externality point that we don't pay the bees, do we, for pollinating our food?
• 1:25:33
  SPEAKER_00: Yeah, in the UK we're so worried about food, yet we use pesticides and destroy the workforce that's actually doing it.
• 1:25:39
  SPEAKER_00: I wonder if we'll pay robots or bees first.
• 1:25:43
  SPEAKER_00: It's robots, isn't it?
• 1:25:44
  SPEAKER_00: We're gonna pay robots in Social Security.
• 1:25:48
  SPEAKER_00: There was um The lawyers.
• 1:25:53
  SPEAKER_00: Everyone was worried about lawyers.
• 1:25:54
  SPEAKER_00: There's gonna be so many lawyers.
• 1:25:56
  SPEAKER_00: Because there's gonna be lawyers representing the rights of AI, non non-human intelligence and entities and things like that.
• 1:26:04
  SPEAKER_03: Yeah.
• 1:26:04
  SPEAKER_00: The whole world.
• 1:26:05
  SPEAKER_03: How do you make your kids future-proof?
• 1:26:08
  SPEAKER_00: Great question.
• 1:26:14
  SPEAKER_00: Honesty.
• 1:26:21
  SPEAKER_00: I think being really honest with them about the reality of stuff, like speak speaking to them a lot about why and answering every question and how I think about things and why I think about it in a certain way, letting them experience a lot of things.
• 1:26:36
  SPEAKER_00: And at the moment, so they're seven and ten, letting them follow the things they enjoy the most.
• 1:26:43
  SPEAKER_00: A really interesting point on this is so by an objective measure, uh I most people would assume I'm defined as successful, okay, in terms of where I started to where I am.
• 1:26:55
  SPEAKER_00: I'm not very happy in terms of like uh I'm still I'm much happier than I was, but I'm quite frustrated about the business and I want the next thing and I want to keep improving and doing things.
• 1:27:06
  SPEAKER_00: And I had a horrific childhood.
• 1:27:08
  SPEAKER_00: My kids have got a lovely childhood.
• 1:27:11
  SPEAKER_00: How much of my success now is based on that trauma and unhappiness and drive?
• 1:27:18
  SPEAKER_00: And actually, if you give your kids a really lovely lifestyle, do they still have a drive at the end of it?
• 1:27:23
  SPEAKER_00: And and I don't know the answer to that.
• 1:27:27
  SPEAKER_00: I've been battling with a similar question.
• 1:27:29
  SPEAKER_00: I think everyone does.
• 1:27:30
  SPEAKER_00: So more I I've been very fortunate in this job to meet quite a lot of very successful people by whatever financial metrics.
• 1:27:39
  SPEAKER_00: Within 20 minutes, we're having this conversation.
• 1:27:41
  SPEAKER_00: Because if uh and one of them said to me, If if you could pay for the answer to make sure your kids had a work ethic still, that would be the best selling product ever.
• 1:27:52
  SPEAKER_03: What is the future of work?
• 1:27:53
  SPEAKER_00: Yeah.
• 1:27:54
  SPEAKER_03: I have I know someone, she's been an inspiration to me.
• 1:28:00
  unknown: Me.
• 1:28:00
  SPEAKER_03: Um we've worked together for a while.
• 1:28:03
  SPEAKER_03: That had a very grounded childhood.
• 1:28:09
  SPEAKER_03: Very stable in her.
• 1:28:12
  SPEAKER_03: She's incredibly successful.
• 1:28:14
  SPEAKER_03: So she has been my my motto in it is you don't have to have had a horrific childhood to have learned work ethic, to have learned right from wrong.
• 1:28:29
  SPEAKER_00: Um have you asked her where she got the work ethic from?
• 1:28:33
  SPEAKER_03: Her dad.
• 1:28:35
  SPEAKER_03: So her she saw her dad working really hard.
• 1:28:38
  SPEAKER_03: Um and she likes things well done.
• 1:28:41
  SPEAKER_03: She I think it's really sports are an incredible thing.
• 1:28:47
  SPEAKER_03: So whether you've had a horrific childhood or not, if you have ever been good at something and you enjoyed being good at something, whatever it was, I think that stays with you for life.
• 1:28:59
  SPEAKER_00: I agree.
• 1:29:00
  SPEAKER_00: It teaches you so many lessons.
• 1:29:02
  SPEAKER_03: And you want it.
• 1:29:04
  SPEAKER_00: CVs is what when we're a crew, if there is elite level something, be it sport, be it adventure, be it music, if there is like international level of those things, then that says the person knows what it takes to be successful in a realm.
• 1:29:20
  SPEAKER_00: And if they want to apply that here, they will be successful because they can do it.
• 1:29:24
  SPEAKER_00: They know what it takes.
• 1:29:25
  SPEAKER_00: One of our lawyers, she just ran the London Marathon in the elite runners bracket, not the hobbyist, like with international and she's incredible at everything.
• 1:29:34
  SPEAKER_00: But if you perform at that level and you want to be here, we almost fast track you to interview because it's like you know what it takes to suffer and to turn up every day.
• 1:29:42
  SPEAKER_00: And because if you don't, someone else is going to come past you.
• 1:29:45
  SPEAKER_03: When I did my executive MBA, I had a privilege of having a number of Navy SEALs into our group.
• 1:29:56
  SPEAKER_03: Probably some of the people I've learned most from in terms of what it means to go through that training.
• 1:30:02
  SPEAKER_03: Some of them got injured in training.
• 1:30:04
  SPEAKER_03: So they were, they were, they were, it was their dream to be a Navy SEAL and to have given everything to that and it crashes what it teaches in terms of resilience.
• 1:30:15
  SPEAKER_03: Very good childhood.
• 1:30:17
  SPEAKER_03: But somewhere in there, a massive challenge in your life.
• 1:30:23
  SPEAKER_03: And you see, there's a reason why Goldman's was hiring all those people years ago, right?
• 1:30:28
  SPEAKER_03: That was that was the the way Goldman's hired.
• 1:30:30
  SPEAKER_03: Uh professional athletes, ex-professional athletes, people that had sailed competitively on boats.
• 1:30:36
  SPEAKER_03: They might have never even graduated.
• 1:30:42
  SPEAKER_00: Like fast track program with that.
• 1:30:45
  SPEAKER_03: Yeah.
• 1:30:45
  SPEAKER_03: Yeah, no, I I I see that.
• 1:30:48
  SPEAKER_03: Um it's interesting, and the responsibility it also matters that you care deeply about the mission.
• 1:31:01
  SPEAKER_00: First question we ask on any application is what does living sustainably mean to you?
• 1:31:07
  SPEAKER_00: I alm I've almost moved that question now.
• 1:31:10
  SPEAKER_00: And I I probably shouldn't.
• 1:31:12
  SPEAKER_00: So um we uh your your point about earlier about why people work for the business.
• 1:31:17
  SPEAKER_00: We did a survey, so we we literally went back to everyone in the business and said, rank all these different reasons in order, and you could put units next to each one so you could wait how much.
• 1:31:26
  SPEAKER_00: And something like 80% of the reason people worked here was the mission, was that they wanted to scale conservation.
• 1:31:31
  SPEAKER_03: So you'll run a mission-driven organization?
• 1:31:33
  SPEAKER_00: Yeah, yeah.
• 1:31:35
  SPEAKER_03: These are special places.
• 1:31:38
  SPEAKER_00: We sometimes get accused of being a cult.
• 1:31:40
  SPEAKER_00: In fact, more often than yeah.
• 1:31:43
  SPEAKER_00: Have you um read uh Zero to One by Peter Teal?
• 1:31:46
  SPEAKER_02: No.
• 1:31:47
  SPEAKER_00: It's really good, and um, it's it's like 20 years old now, but it could have been written yesterday.
• 1:31:52
  SPEAKER_00: And one of his things he says is really good startups from the outside look like a cult.
• 1:31:56
  SPEAKER_00: From inside, they feel like a really good sports team because everyone's pulling in the same direction.
• 1:32:02
  SPEAKER_00: Um so we're we're just north of 50 people now, and we're at that point whereby I'm acutely aware of the size of the business, and I've had so many friends who've scaled things to bigger numbers, and we're starting to get in the territory where they fell out of love with their businesses, where it's like seven seventy is a number where I've heard multiple times that's where I didn't like it anymore.
• 1:32:23
  SPEAKER_00: Now, in two or three of those scenarios, the main person stopped being part of the decision-making process on hiring at that point.
• 1:32:30
  SPEAKER_00: So, actually, I interviewed a candidate at the weekend, a final interview, and he said, Oh, I've listened to your podcast and all this.
• 1:32:36
  SPEAKER_00: He said, I made the mistake of stopping hiring at 70.
• 1:32:39
  SPEAKER_00: Don't whatever you do, make sure you still meet every person.
• 1:32:42
  SPEAKER_00: Like, I still meet every intern before they start, and I'm not gonna give that up until it's not even feasible to do it.
• 1:32:48
  SPEAKER_00: So actually, I think I can say I'm never gonna give it up because we won't be that big.
• 1:32:52
  SPEAKER_00: Like, I don't want to run a business that's hundreds and hundreds of people.
• 1:32:55
  SPEAKER_00: I've done it.
• 1:32:56
  SPEAKER_00: My last team in the public sector was 500 people, and I hated it.
• 1:32:59
  SPEAKER_00: I just said no to everything.
• 1:33:00
  SPEAKER_00: That was my job.
• 1:33:01
  SPEAKER_00: Just say no to stuff, and I hate saying no, much prefer to say yes.
• 1:33:05
  SPEAKER_03: It's great to be running a growth business.
• 1:33:10
  SPEAKER_00: What are you most excited about for the rest of 2026?
• 1:33:18
  SPEAKER_03: Figuring out food systems.
• 1:33:20
  SPEAKER_03: I think with everything that's happening in the Middle East, um I would like for us to think about what is our role as an impact investor going forward, not just what we've historically been building, but how do we fit into the future of that system?
• 1:33:42
  SPEAKER_00: That just popped two questions into my head.
• 1:33:44
  SPEAKER_00: First one, do you think if we go to that world whereby we see so many more uh robotic resources and things?
• 1:33:53
  SPEAKER_00: One of the arguments I heard on podcast yesterday was the reason China are pushing so hard on robots is that demographically they don't have a future population growth, so they're gonna need it.
• 1:34:02
  SPEAKER_00: I wonder actually, is a potential unintended consequence of a growth in robot resources that actually we will see birth weights drop off dramatically, which might lessen food security risks?
• 1:34:13
  SPEAKER_03: I think we have so as you said, we have enough food.
• 1:34:17
  SPEAKER_03: It's the distribution of food, is the nutrition of that food that I am worried about.
• 1:34:24
  SPEAKER_03: I mean, the reality is for parts of the demographics people have figured out nutrition in pills, right?
• 1:34:34
  SPEAKER_03: So we can have lab food created.
• 1:34:38
  SPEAKER_03: It's the whether the price point of that reduces significantly for us not to need agriculture question mark, is that a world we want to live in, and so on and so forth.
• 1:34:48
  SPEAKER_03: But uh that these are the big questions that I am really looking forward to having some time to spend with my team thinking about if we are 20, 30 years from now, what does the food supply system in this world look like?
• 1:35:05
  SPEAKER_03: What do we want it to look like?
• 1:35:07
  SPEAKER_03: And what is our role in that transition as an impact investor?
• 1:35:11
  SPEAKER_03: What are the partners that we have to build that with?
• 1:35:14
  SPEAKER_03: Um, so I'm excited about having those conversations.
• 1:35:18
  SPEAKER_01: Where do you do your best thinking?
• 1:35:20
  SPEAKER_03: In the shower.
• 1:35:24
  SPEAKER_03: I am notorious for that.
• 1:35:25
  SPEAKER_03: I had a colleague of mine who said, Nadia, you need to go take a shower now.
• 1:35:29
  SPEAKER_03: And it was the inside I love water.
• 1:35:32
  SPEAKER_03: I think well while swim or under the shower.
• 1:35:37
  SPEAKER_00: We um we have an estate in Scotland called in Bigeldi, which I'll show you when we're done recording.
• 1:35:43
  SPEAKER_00: There is a um pool on the top of a mountain.
• 1:35:49
  SPEAKER_00: It's literally, you can only you have to walk together.
• 1:35:51
  SPEAKER_00: You can't see anything else.
• 1:35:52
  SPEAKER_00: You literally, we own the whole 12,000-acre um valley, you sat on top of it.
• 1:35:57
  SPEAKER_00: And because the water comes through the peatland up there, it looks like whiskey when you swim through it.
• 1:36:02
  SPEAKER_00: So you dive.
• 1:36:03
  SPEAKER_00: As you come up, it is gold, and it is the most incredible wild, you've got to come.
• 1:36:07
  SPEAKER_00: It is the most incredible wild swimming spot in the world.
• 1:36:10
  SPEAKER_00: It is amazing.
• 1:36:11
  SPEAKER_00: Um, I I have adored every minute of our conversation.
• 1:36:14
  SPEAKER_00: You you are astonishing.
• 1:36:16
  SPEAKER_00: I um I don't think I've seen someone with the stage presence, the charisma, the I mean, you also say lots of things I agree with, so probably I'm quite I'm quite biased, but you you stole the show in Zurich and um thank you so much for coming on the show this morning.
• 1:36:29
  SPEAKER_03: Thank you for having me.
• 1:36:30
  SPEAKER_00: I end with one final question every time.
• 1:36:33
  SPEAKER_00: What is the one question I haven't asked you you wish I had Well, answer it directly.
• 1:36:45
  SPEAKER_03: Um if I could have a magic wand, what I would ask investors to do is to have a target allocation to impact investing.
• 1:36:57
  SPEAKER_03: And then let the me and the you's of this world give them the products that satisfy that target allocation.
• 1:37:08
  SPEAKER_03: Because having a target means that it keeps their minds open to a conversation, but it also creates an incentive for asset managers to create the right products, and that shifts the convers that shifts the gear of the conversation.
• 1:37:29
  SPEAKER_00: That was spectacular.
• 1:37:30
  SPEAKER_00: Thank you so much.
• 1:37:31
  SPEAKER_03: Thank you so much for having me.