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Trends in Emerging Markets with Martín Escobari · Masters in Business

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  Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is Masters in
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  Speaker 1: Business with Barry Ritholts on Bloomberg Radio.
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  Speaker 2: This week on the podcast Well strap yourself in for
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  Speaker 2: yet another fantastic conversation. Martine Escobari has an amazing background
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  Speaker 2: that ultimately led him to be co president, head of
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  Speaker 2: Global Growth Equity and head of the investment Committee at
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  Speaker 2: private equity giant General Atlantic. They run over one hundred
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  Speaker 2: billion dollars. The background in the story is fascinating, from
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  Speaker 2: duty free shops to the Atlantic Philanthropies. Those were set
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  Speaker 2: up in nineteen sixty nineteen eighty, respectively, and over the
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  Speaker 2: ensuing forty five years, they just have carved their own
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  Speaker 2: path and created their own expertise. They're kind of unique
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  Speaker 2: amongst the global private equity or even domestic private equity players,
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  Speaker 2: and that half of their people, half of their capital
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  Speaker 2: has invested overseas, kind of unusual in that space. Martin
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  Speaker 2: has just an amazing background. Born in Bolivia, built a
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  Speaker 2: company in Brazil, educated in the United States. Just really,
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  Speaker 2: there are a few people better situated to describe what
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  Speaker 2: it's like being a growth equity investor, meaning you're not
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  Speaker 2: investing in startups you're investing in companies that have started
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  Speaker 2: to develop some scale and perhaps are turning profitable and
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  Speaker 2: taking them to the next level. I thought the conversation
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  Speaker 2: was fascinating, and I think you will also with no
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  Speaker 2: further ado my conversation with General Atlantics Martin Escobodi.
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  Speaker 3: Perry. It is an honor and a privilege to be
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  Speaker 3: here with you.
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  Speaker 2: Well, thank you so much for coming. I've been looking
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  Speaker 2: forward to this in part because what you do is
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  Speaker 2: so interesting, but also because your background is a little different.
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  Speaker 2: You're born and raised in Bolivia. Tell us a little
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  Speaker 2: bit about your upbringing and your experiences.
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  Speaker 3: The odds of me being here with you today are
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  Speaker 3: about one in a million, right, I mean, I was
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  Speaker 3: born in a town of ten thousand people. My parents
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  Speaker 3: were communists and had disdain for capitalism. They spent their
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  Speaker 3: life saving children's lives in public hospitals, and to them,
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  Speaker 3: business people were so less, meaningless lives, and they expected
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  Speaker 3: something very different from me. So that's sort of the
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  Speaker 3: first set of unusual circumstances.
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  Speaker 2: I have to ask what was their response when you said, mom, Dad,
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  Speaker 2: I'm going to Harvard.
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  Speaker 3: What is Harvard.
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  Speaker 2: Still? God and I been talking about the Business School knowledge. Yeah,
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  Speaker 2: didn't register with them.
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  Speaker 3: And the accident that led me to Harvard is interesting.
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  Speaker 3: I had a neighbor who was a school teacher at
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  Speaker 3: the American School who became my mom's lifetime best friend.
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  Speaker 3: I talked her into putting me in the American School,
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  Speaker 3: and by chance, there was a very good American school
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  Speaker 3: because some oil companies were funding great education for the kids.
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  Speaker 3: And I got a great education. And then I got
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  Speaker 3: a scholarship to Harvard and that is where I sort
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  Speaker 3: of entered Hogwarts Academy of Wizardy and the doors of
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  Speaker 3: the universe opened to me, and I was the first
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  Speaker 3: Bolivian in three hundred and fifty years. Is that go
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  Speaker 3: to Harvard College?
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  Speaker 2: Yeah, oh my god, that's amazing. So economics BA, and
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  Speaker 2: then you get the NBA from the business school. What
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  Speaker 2: was the career plan?
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  Speaker 3: So listen, I've up until recently been very disciplined about
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  Speaker 3: setting up five year plans for myself and I keep them.
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  Speaker 3: And if you looked at my five year plan when
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  Speaker 3: I was in college, I was destined to go work
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  Speaker 3: at the World Bank, help solve big problems in emerging markets.
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  Speaker 3: One day get called back to my country to be
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  Speaker 3: finance minister and then if I did a good job,
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  Speaker 3: maybe have a shot at running Bolivia. That was the
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  Speaker 3: plan coming out of college. I stumbled into business, I
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  Speaker 3: fell in love, and that's how business school came about.
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  Speaker 3: And then that's what I've been doing for thirty years.
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  Speaker 2: Finance Minister of Bolivia is fairly ambitious. But before we
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  Speaker 2: get to that, you co found Submarino or Submarna. How
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  Speaker 2: do you pronounce that? Submarino Submarno really one of the
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  Speaker 2: earliest online retailers in Brazil. Tell us a little bit
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  Speaker 2: about your experience there and what it was like being
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  Speaker 2: an entrepreneur in Brazil in the nineteen nineties.
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  Speaker 3: So I believe each generation will have one giant wave,
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  Speaker 3: one giant disruption that will catch us in our twenties
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  Speaker 3: or thirties. For me, it was the Internet. Later, it
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  Speaker 3: was the mobile Internet, the cloud. Now it's AI and
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  Speaker 3: biotech revolution.
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  Speaker 2: But that sounds like four waves.
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  Speaker 3: That hit me in my twenties was the Internet, and
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  Speaker 3: I had this realization that this is my one shot.
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  Speaker 3: I don't know if you listened to the Hamilton musical,
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  Speaker 3: there's my shot, the scrappy immigrant that's waiting for the
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  Speaker 3: revolution where it's a level playing field and you're all
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  Speaker 3: trying to catch this giant wave and the internet felt
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  Speaker 3: at this amazing life changing opportunity, and I said, I
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  Speaker 3: can't miss this adventure. And to me, together with two
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  Speaker 3: other colleagues from the private equity group I was working
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  Speaker 3: on out of business school, from the three g guys
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  Speaker 3: said we're in the wrong side of this revolution. We
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  Speaker 3: shouldn't be financing the startups, we should be creating the startups.
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  Speaker 3: And we set out to build the Ali Baba or
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  Speaker 3: the Amazon dot Com of Brazil. And it was seven
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  Speaker 3: incredible years because it started great. We raised more money
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  Speaker 3: than we could ever dream We almost went public, the
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  Speaker 3: market shutdown, we almost went bankrupt. We had to sell
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  Speaker 3: the pieces, we had to get the profitability, and then
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  Speaker 3: we came back. So it was a compressed, you know,
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  Speaker 3: thirty years of life into seven. But I felt I
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  Speaker 3: did not miss the revolution of my generation.
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  Speaker 2: So New York City, in my recollection during the nineteen
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  Speaker 2: nineties was just. There was a fire hose of cash
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  Speaker 2: and capital over everything. It was a party. Apartment prices
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  Speaker 2: were going up, restaurants, clubs, everything was just. It was
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  Speaker 2: the Roaring twenties. All over again. You launched this in
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  Speaker 2: Brazil in nineteen ninety nine, What was the economy like,
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  Speaker 2: what was your experience like?
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  Speaker 3: So listen, the macro was horrible, but the technology was overwhelming,
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  Speaker 3: and the sources of capital recognized that this was a
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  Speaker 3: global opportunity. So we raised two hundred and fifty million
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  Speaker 3: dollars as a private company, So before the correction of
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  Speaker 3: March of two thousand, money was raiding. There was no infrastructure.
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  Speaker 3: You had to build everything from zero. Everything was one
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  Speaker 3: hundred times more difficult. But the advantage of Brazil is
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  Speaker 3: we had not developed the brick and mortar retail infrastructure.
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  Speaker 3: There were no superstores. The Brazilian consumer was starved variety
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  Speaker 3: because all the supermarkets carried very limited assortment. So the
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  Speaker 3: opportunity of e commerce, we believed, was ten times bigger
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  Speaker 3: than in the US or Western Europe because we were
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  Speaker 3: leapfrogging a whole stage of evolution of the retail format.
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  Speaker 3: And it came to be. E Commerce in Brazil now
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  Speaker 3: twenty five years later is close to twenty percent of
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  Speaker 3: all trade. It is a vibrant, dynamic industry and there
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  Speaker 3: are no category killers. We skipped that whole toys, r
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  Speaker 3: us and babies are us and bad and bond phase
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  Speaker 3: and that's good for the environment. So I was part
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  Speaker 3: of a transformational moment together with my co founders, and
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  Speaker 3: it was exciting, it was scary, and ultimately when we
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  Speaker 3: sold it producing good returns for the investors, it was
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  Speaker 3: very fulfilling.
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  Speaker 2: So what did that experience as an entrepreneur duty how
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  Speaker 2: did that impact you years later as an investor? What
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  Speaker 2: do you carry forward from that?
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  Speaker 3: So I've been an investor for twenty odd years. The
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  Speaker 3: main lesson is the profound realization that the heroes of
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  Speaker 3: the journey are not the investors, are the people that
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  Speaker 3: are in the front lines and the trench lines. It
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  Speaker 3: is so hard to create out of nothing something that thrives.
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  Speaker 3: It is in human level of sacrifice that these people
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  Speaker 3: go through. And I have so much respect for the
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  Speaker 3: heroes of the journey, and I remind my colleagues we're
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  Speaker 3: just the supply lines.
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  Speaker 2: They're on the front lines. You're just supriy and you're
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  Speaker 2: just supplying the AMMO and the material to do what
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  Speaker 2: they have to do. That's really interesting. So let's discuss
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  Speaker 2: some of the things you've talked about. When you discuss
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  Speaker 2: investing in entrepreneurship. One of the themes that keeps coming
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  Speaker 2: up that I've read in some of your notes is
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  Speaker 2: the unpredictability of the world. How do you think about
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  Speaker 2: making investments for five or ten years out when the
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  Speaker 2: world is just so unpredictable.
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  Speaker 3: So I grew up in Bolivia in the eighties. It
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  Speaker 3: was chaos, chaos that it's hard to internalize. So in
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  Speaker 3: my teenage years ten years, there were nine presidents. In
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  Speaker 3: my teenage years, there was thirty five thousand percent inflation.
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  Speaker 3: What that meant is halfway through my teenage years, we
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  Speaker 3: changed currencies from the peso Boliviano to justin Boliviano by
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  Speaker 3: chopping off six zeros. Wow, one million US dollars becomes
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  Speaker 3: one American. That happened when I was fifteen, So I
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  Speaker 3: get I grew up with chaos, and I got comfortable
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  Speaker 3: with chaos. And what the main lesson of chaos is
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  Speaker 3: it's never as bad as it seems, and it's always
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  Speaker 3: dark right before the sun is going to come out,
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  Speaker 3: and you have to believe the sun is going to
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  Speaker 3: come out and plan for the sun. And as it
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  Speaker 3: relates to a world that's highly unpredictable. Remember, the sign
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  Speaker 3: is going to come out and stay through to first
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  Speaker 3: principles and what makes great businesses, and who are great
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  Speaker 3: entrepreneurs and who's solving real world problems and lean in
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  Speaker 3: when everyone else is scared.
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  Speaker 2: So I want to talk a little bit more about
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  Speaker 2: your upbringing, but I want listeners to understand the genesis
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  Speaker 2: of General Atlantic and where it comes from. So let's
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  Speaker 2: talk a little bit about Chuck Feeney, which I had
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  Speaker 2: no idea about when I started doing my homework here.
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  Speaker 2: So in nineteen sixty in Hong Kong, he founds the
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  Speaker 2: first duty fee shop in the airport in Hong Kong.
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  Speaker 2: Right now, to the US travelers, duties aren't a big deal.
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  Speaker 2: Buy makeup, we buy it, booze, whatever it is, it's
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  Speaker 2: more or less the same price at home. But if
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  Speaker 2: you go to Europe, if you go to parts of Asia,
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  Speaker 2: there are like substantial taxes, and buying these things at
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  Speaker 2: the airport duty free real substantial savings in money. So
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  Speaker 2: he launches duty free Shops dfs in nineteen sixty. By
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  Speaker 2: nineteen eighty, it's so successful that they have to set
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  Speaker 2: up General Lannik to manage the philanthropy that he's now doing.
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  Speaker 2: Tell us a little bit about Chuck Feeney and how
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  Speaker 2: GA was established.
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  Speaker 3: Chuck is one of the most impressive people I've ever
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  Speaker 3: got a chance to meet. He stumbled into the duty
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  Speaker 3: free idea as a soldier because he was mesmerized by
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  Speaker 3: the vibrant trade that happened in the American bases in
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  Speaker 3: the Pacific. So you could buy cigars, liquor appliances half
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  Speaker 3: off because it wasn't America, and it wasn't the Philippines.
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  Speaker 3: Was no man's land in this area, and the taxes
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  Speaker 3: were very high in those regions, so there was a loophole.
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  Speaker 3: He created the world due to free business, which thrived
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  Speaker 3: to a major business. He landed upon a level of
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  Speaker 3: wealth he was not ready for, to say the least,
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  Speaker 3: and he questioned, what is the purpose of my wealth?
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  Speaker 3: And he thought about it for a long time. And
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  Speaker 3: I've heard him tell the story. He's now diseased two
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  Speaker 3: years ago, and he says, the purpose of my wealth
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  Speaker 3: is to improve the human condition today, not tomorrow, not
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  Speaker 3: one hundred years from not through foundation today. And he
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  Speaker 3: created General Atlantic as his family office, or the vehicle
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  Speaker 3: to manage his family wealth. He wanted us to invest
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  Speaker 3: in innovation and entrepreneurship globally, and he wanted all the
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  Speaker 3: proceeds of our investment activity to go finance the great
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  Speaker 3: causes anonymously. He was the originator of the giving pledge,
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  Speaker 3: except it wasn't fifty percent, it was one hundred percent.
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  Speaker 3: He famously said, I want my last check to bounce.
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  Speaker 3: Almost succeeded it when he died. He donated nine billion
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  Speaker 3: dollars over his lifetime, most of it anonymously, and at
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  Speaker 3: the later stages of his life he says, I actually
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  Speaker 3: need to tell my story because it maybe it motivates
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  Speaker 3: other people to follow this incredibly rewarding path, which is
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  Speaker 3: to spend my life giving away my wealth. And that
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  Speaker 3: he did, and he set us off on this incredible
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  Speaker 3: forty five year journey of backing innovators wherever they may
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  Speaker 3: be in the world. And that's what we are today,
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  Speaker 3: and that's what we've been doing for forty five years.
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  Speaker 2: And to fill in some of the blanks that some
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  Speaker 2: people may not be aware of. Duty Free Shoppers Limited
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  Speaker 2: is now owned by Luxury Giant LVMH and General Lannik
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  Speaker 2: evolved from his family office to manage money for the
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  Speaker 2: philanthropies to a leading growth and innovation investor with now
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  Speaker 2: more than one hundred billion dollars in assets under management.
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  Speaker 2: Tell us a little bit about what General at Atlantic
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  Speaker 2: has been doing for the past forty five years to
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  Speaker 2: build up those returns to that degree. I'm assuming there
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  Speaker 2: are lots of distributions along the way as well.
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  Speaker 3: Yes, yes, So we started investing in technology in the
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  Speaker 3: United States and soon discovered that technology is not just
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  Speaker 3: changing the technology sector, but it's changing the healthcare sector
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  Speaker 3: and the financial services. Then we discovered that this is
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  Speaker 3: a global opportunity. We opened up Europe thirty years ago,
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  Speaker 3: we opened up the emerging markets twenty two years ago,
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  Speaker 3: and now we've built what we think is the most experienced,
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  Speaker 3: scaled growth equity investor in the world. Now, growth equity
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  Speaker 3: has become incredibly competitive. It's now a two trillion dollar
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  Speaker 3: asset class. Why is it so large because there are
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  Speaker 3: more companies that are growing thirty forty percent. Why because
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  Speaker 3: they're embracing technology to change their business and that allows
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  Speaker 3: for faster growth at cost efficient metrics. How do we
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  Speaker 3: compete in this highly competitive world? We have more experience
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  Speaker 3: forty five years of track record, great brand, five hundred
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  Speaker 3: investments over the last forty five years. We have scale.
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  Speaker 3: We have two hundred and fifty investment professionals. We have
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  Speaker 3: ninety operators in the Operators group. We have tech enabled sourcing.
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  Speaker 3: We meet seven thousand entrepreneurs every year to pick the
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  Speaker 3: best twenty five. So this is a scale game. We
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  Speaker 3: have this scale, and then we also have specialization. There
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  Speaker 3: are sixteen strategies we call them the GA Power Alleys,
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  Speaker 3: where we've developed ten and twenty year track record. That's
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  Speaker 3: a huge source of competitive advantage. And then we have
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  Speaker 3: nineteen local offices throughout the world. In every local market,
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  Speaker 3: we are more local than the local players, and we
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  Speaker 3: have the advantage that we are plugged into this global
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  Speaker 3: network of knowledge and accumulated experience that the GA infrastructure
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  Speaker 3: provides thro all our local partners.
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  Speaker 2: So let's start out why we're even having this conversation.
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  Speaker 2: Not only did Chuck Feeni make most of his donations
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  Speaker 2: anonymously and gave away billions and billions of dollars with
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  Speaker 2: no name attached, but GA has historically been kind of
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  Speaker 2: a low profile shop, so I think listeners may not
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  Speaker 2: really know some of the details of how the firm
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  Speaker 2: invests and the key areas you focus on. So let's
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  Speaker 2: start out talking about those five sectors, which are technology,
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  Speaker 2: consumer services, financial services, healthcare, and life sciences. And I
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  Speaker 2: know you get into a lot of specific details, and
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  Speaker 2: each of those five sectors have tons of subsectors. Tell
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  Speaker 2: us a little bit about the areas GA focuses on.
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  Speaker 3: Listen, the sectors of how we are organized internally. What's
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  Speaker 3: more interesting is what are the trends changing our world today.
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  Speaker 3: There are four mega trends that define the opportunity set
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  Speaker 3: for growth equity. First is the digital transition. Ninety percent
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  Speaker 3: of the world's transactions are going digital. Four trillion dollars
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  Speaker 3: of capitalists invested every year in this digital transition, in
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  Speaker 3: the invest in AI in cloud computing. This is a
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  Speaker 3: trend that's twenty years in the making. It's been accelerated
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  Speaker 3: by AI massive wave. The second one is health care innovation.
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  Speaker 3: Huge challenges in the West. Healthcare is too expensive and ineffective.
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  Speaker 3: The only way to address that is through technology to
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  Speaker 3: drive better health outcomes. In parallel, there's a new generation
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  Speaker 3: of health care innovation that is using the advances of
• 17:25
  Speaker 3: it to apply it to the cell and creating the
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  Speaker 3: next generation of life sciences therapeuties which will dramatically change
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  Speaker 3: our health span. So that's another mega wave that's very relevant.
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  Speaker 2: By the way, I love the phrase health span as
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  Speaker 2: opposed to lifespan. Of course, the idea is to not
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  Speaker 2: just live long, but be healthy for as long as
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  Speaker 2: you possibly can.
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  Speaker 3: I'll give you one scary statistic. Ninety five percent of
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  Speaker 3: Americans die in hospitals. Only three percent of American doctors
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  Speaker 3: die in hospitals.
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  Speaker 2: Huh.
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  Speaker 3: It's not about the quality of your death, it's the
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  Speaker 3: quality of your life and your health span. As you said, Okay,
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  Speaker 3: so healthcare innovation huge area, our biggest, one of our
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  Speaker 3: biggest sectors energy transition. To get to our decop organization targets,
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  Speaker 3: we will need to spend north of six trillion dollars
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  Speaker 3: a year. That's a huge opportunity. The whole ecosystem around
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  Speaker 3: this trend to net zero. And the fourth major mega
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  Speaker 3: trend is the rise of the new consumer. The sort
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  Speaker 3: of younger middle class rising and purchasing power in the
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  Speaker 3: rest of the world will mean six trillion dollars of
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  Speaker 3: extra consumption by twenty thirty. In this emerging new middle class,
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  Speaker 3: these four mega trends define the growth equity opportunity set.
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  Speaker 2: I find it interesting that you're discussing mega trends that
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  Speaker 2: are global, in large part because I think this is
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  Speaker 2: an accurate statistic. Is General Atlantic the only private equity
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  Speaker 2: growth shop that has half of its assets and half
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  Speaker 2: of its people abroad? Like, only half of your capital
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  Speaker 2: and people are in the.
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  Speaker 3: Are you the only one among the top ten in
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  Speaker 3: the world. Yes, we are more global than anyone else.
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  Speaker 3: Why are we more global than anyone else? I'll give
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  Speaker 3: you two statistics. Half the unicorns, the sort of billion
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  Speaker 3: dollar companies in the world, are born outside the United States.
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  Speaker 3: More interestingly, half the unicorns in the United States are
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  Speaker 3: founded by immigrants from other parts of the world. So
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  Speaker 3: seventy five percent of value creation is for people that
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  Speaker 3: were in this world, people not born in US. Talent
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  Speaker 3: is sprinkled around the eight billion souls that inhabit the earth.
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  Speaker 3: We got to go where the talent is, and in
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  Speaker 3: our case, it means half of what we do is
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  Speaker 3: in the US and half is outside the US. And
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  Speaker 3: our activities outside the US have been a creative to returns.
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  Speaker 2: So let's talk about some of the other areas that
• 19:51
  Speaker 2: are outside you come from South America. But let's talk
• 19:58
  Speaker 2: generally emerging markets. Where do you look around the world
• 20:01
  Speaker 2: for this talent.
• 20:03
  Speaker 3: Listen, we have presence all over the world. We have
• 20:05
  Speaker 3: three offices in China, we have offices in India, we
• 20:07
  Speaker 3: have offices in Singapore, two in Latin America. We opened
• 20:11
  Speaker 3: offices in two of three offices in the Middle East.
• 20:15
  Speaker 3: What's exciting right now? And India. We've been in India
• 20:20
  Speaker 3: for twenty two years, and India did not have its
• 20:23
  Speaker 3: moment in the sun. Digital India wasn't ready. India infrastructure
• 20:27
  Speaker 3: wasn't ready. It has been ready for the last five years.
• 20:31
  Speaker 3: The business models, the digital business models that we saw
• 20:35
  Speaker 3: transform industries in China and Brazil in Mexico had not
• 20:39
  Speaker 3: yet done that in India. Over the last five years,
• 20:42
  Speaker 3: India did a couple of reforms. First demonetization taking currency
• 20:46
  Speaker 3: away and simplification of the tax code. Meant the informal
• 20:50
  Speaker 3: economy went from fifty percent to twenty five percent.
• 20:53
  Speaker 2: When you say informal economy, we not black market, we
• 20:57
  Speaker 2: just not paying taxes. Just cash economy.
• 20:59
  Speaker 3: Gosh economy, you don't have a credit, you don't it
• 21:02
  Speaker 3: doesn't count.
• 21:03
  Speaker 2: Kind of reminds me of the study they did in
• 21:06
  Speaker 2: Greece where you have to pay tax on the pools
• 21:09
  Speaker 2: and satellite images show there's something like twenty x number
• 21:12
  Speaker 2: of pools. Then there are people paying taxes exact. So
• 21:16
  Speaker 2: that was a modi change.
• 21:18
  Speaker 3: That was a modi change. Second change is the transformation
• 21:21
  Speaker 3: of digital India, which is Internet access was expensive and
• 21:25
  Speaker 3: not very available. The telecom sector restructure around GEO, which
• 21:28
  Speaker 3: is a great telco company, and now sixty percent of
• 21:31
  Speaker 3: Indias have low cost wireless broadband. In parallel, the government
• 21:35
  Speaker 3: created a national biometric identity database that enabled fraud free
• 21:39
  Speaker 3: digital transactions from your phone, and now sixty percent of
• 21:43
  Speaker 3: all transactions are in India are digital. All of a sudden,
• 21:45
  Speaker 3: you have one of the most digital economies in the world.
• 21:48
  Speaker 3: The final missing link their own capital markets, domestic saving
• 21:52
  Speaker 3: gone up. They have certain restrictions around foreign domestic savings
• 21:56
  Speaker 3: for individuals investing abroad, so they're investing in their local markets.
• 22:00
  Speaker 3: The best IPO market of the last two years in
• 22:02
  Speaker 3: the world has been India. So now you have the
• 22:04
  Speaker 3: confluence of three factors that create what we think will
• 22:08
  Speaker 3: be a virtuous next ten years for India, which is
• 22:12
  Speaker 3: about time. Latin America is seven hundred million inhabitants, rising
• 22:18
  Speaker 3: middle class, trading at all time low multiples. You can
• 22:22
  Speaker 3: buy the entire country of Brazil at ten times earnings. Mexico,
• 22:27
  Speaker 3: there is no better candidate or beneficiary of the trend
• 22:30
  Speaker 3: to French shoring than the Mexican economy. The Chinese per
• 22:34
  Speaker 3: hour worker is thirty percent cheaper than the Chinese worker
• 22:37
  Speaker 3: and their next door.
• 22:38
  Speaker 2: The Mexican workers. The Mexican cheaper than China.
• 22:41
  Speaker 3: Than China today and their next door and they're your friends.
• 22:43
  Speaker 3: They're not a geopolitical challenger to the US. So I
• 22:47
  Speaker 3: see another great decade for Latin America in the next
• 22:52
  Speaker 3: in the next years ahead.
• 22:53
  Speaker 2: So you mentioned the IPO market in India doing so well.
• 22:57
  Speaker 2: I got to ask, We've seen in two going on
• 23:01
  Speaker 2: three years of pretty mediocre IPO offerings and very few
• 23:07
  Speaker 2: IPOs actually come in to market. How do you look
• 23:11
  Speaker 2: at this environment? What do you think happens with the
• 23:14
  Speaker 2: IPO pipeline here?
• 23:16
  Speaker 3: So, the growth equity opportunity set is the cheapest it's
• 23:21
  Speaker 3: been in twenty five years. The price for growth that
• 23:25
  Speaker 3: we're being asked to at to pay is the cheapest
• 23:27
  Speaker 3: I've ever seen in my career, and I've been around.
• 23:30
  Speaker 3: Why is it to cheap? Exactly for what you just said, Berry,
• 23:33
  Speaker 3: We've gone three and a half years without a vibrant
• 23:36
  Speaker 3: IPO market in the United States. That is really long.
• 23:39
  Speaker 3: This is the longest period in recorded history. The second
• 23:42
  Speaker 3: longest this century was eighteen months starting in March of
• 23:45
  Speaker 3: two thousand. We estimate there's about three thousand companies waiting
• 23:50
  Speaker 3: to go public. This is about eight hundred globally. Globally right,
• 23:55
  Speaker 3: more than half in the US. But it is a
• 23:57
  Speaker 3: backlog of eight hundred billion dollars of stock that hasn't
• 24:00
  Speaker 3: been able to move. And that's why we're seeing such
• 24:03
  Speaker 3: attractive pricing in the growth equity space. It's mostly hunting
• 24:08
  Speaker 3: in these tired cap tables, pressure gps that need to
• 24:11
  Speaker 3: show DPI and companies that aren't able to go public. Now,
• 24:14
  Speaker 3: what does it take for the IPO market to open up?
• 24:16
  Speaker 3: Historically you need three things. One is you need positive
• 24:20
  Speaker 3: S and P five hundred performance for the trailing two years.
• 24:23
  Speaker 2: So we have that.
• 24:24
  Speaker 3: We have that. We need low and stable, relatively low
• 24:27
  Speaker 3: and stable VIX check.
• 24:29
  Speaker 2: Well, not so much this quarter this quarter.
• 24:32
  Speaker 3: A little up. Maybe maybe some headroom there when some headwinds.
• 24:36
  Speaker 3: The third one is you need six IPOs that pop.
• 24:39
  Speaker 3: We haven't had that, but I think you know, conditions
• 24:43
  Speaker 3: are set for the market to open at some point
• 24:44
  Speaker 3: in this year, and when they do, it will unlock
• 24:47
  Speaker 3: a lot of value. Now, this location is going to
• 24:50
  Speaker 3: take a while to flow through because a good IPO
• 24:54
  Speaker 3: market moves about two hundred billion dollars of stock. I said,
• 24:57
  Speaker 3: there's eight hundred billion dollars of backlog. It will take
• 25:00
  Speaker 3: two to three years to for pricing conditions to normalize.
• 25:03
  Speaker 2: And you mentioned the third thing you mentioned that we
• 25:06
  Speaker 2: need is six IPOs to pop. What happens does it
• 25:10
  Speaker 2: just shift the psychology and suddenly people.
• 25:13
  Speaker 3: Aren't Fomo replaces fear.
• 25:15
  Speaker 2: Hmm, that's really interesting, Fomo replaces fear. What about the
• 25:21
  Speaker 2: current political climate is it conducive? You know, the current
• 25:25
  Speaker 2: president got elected, the expectation was, hey, we'll have some
• 25:28
  Speaker 2: tax cuts, there'll be some capital gain tax cuts, there'll
• 25:32
  Speaker 2: be some deregulation. That feels like it was sort of
• 25:36
  Speaker 2: put on the back burner while we're dealing with tariffs
• 25:40
  Speaker 2: and doze and everything else. And mister market hasn't been
• 25:43
  Speaker 2: especially happy about that. Is this just a temporary setback?
• 25:48
  Speaker 2: What do we have to do to get to that
• 25:50
  Speaker 2: IPO pipeline that awaits us?
• 25:53
  Speaker 3: Listen, there's more uncertainty in the world than usual, and
• 25:57
  Speaker 3: predicting that macro is hard. When faced with uncertainty, Diversify globally,
• 26:06
  Speaker 3: diversify and focus on the highest quality companies, and the
• 26:10
  Speaker 3: uncertainly becomes less determinant to your faith. Predicting the US
• 26:15
  Speaker 3: politics for the next four weeks is impossible. For the
• 26:17
  Speaker 3: next six months is virtually even harder. So please don't
• 26:21
  Speaker 3: take me there. The solution to the uncertainty is diversification.
• 26:25
  Speaker 2: And quality makes a lot of sense. You have described
• 26:29
  Speaker 2: your favorite business model to invest in as we like
• 26:33
  Speaker 2: beautiful business models. What makes a business model beautiful?
• 26:38
  Speaker 3: Yeah, you have to capture gross margin. You have to
• 26:43
  Speaker 3: sell the unit you produce at a markup to what
• 26:46
  Speaker 3: the cost of production is. The bigger the margin, the
• 26:49
  Speaker 3: more beautiful you are. Now the beauty that's a picture
• 26:53
  Speaker 3: of beauty. What's really relevant about beauty is is lifetime beauty?
• 26:57
  Speaker 3: Is that gross margin pencible or will it be eroded
• 27:02
  Speaker 3: away by the competitors that see your beautiful gross margins.
• 27:06
  Speaker 3: And the real question about it is the durability of
• 27:08
  Speaker 3: the beauty. And you get durability when you have moat,
• 27:11
  Speaker 3: and you get moat when you have economies of scale,
• 27:13
  Speaker 3: economies of scope, learning externalities, network effects, agility. What are
• 27:18
  Speaker 3: the conditions that this team has to create gross margin
• 27:22
  Speaker 3: and have and build a humongous, beautiful moat that allows
• 27:25
  Speaker 3: us to be a lifetime gross margin hopefully an increase
• 27:28
  Speaker 3: in gross margin?
• 27:30
  Speaker 2: How do you evaluate those things? A lot of those
• 27:34
  Speaker 2: items you checked off don't show up in a balance sheet?
• 27:37
  Speaker 2: How do you figure out what managers or models are agile?
• 27:44
  Speaker 3: It helps when you're specialized in a business model. So
• 27:46
  Speaker 3: one of our power allys is investment management. And I'll
• 27:50
  Speaker 3: tell you one long story to bring a power alley
• 27:52
  Speaker 3: to life. In the late in the mid nineties, we
• 27:55
  Speaker 3: looked at the wealth management industry in the United States
• 27:58
  Speaker 3: and it was eighty percent concentrated retail banks. The guy
• 28:01
  Speaker 3: that was selling you the mortgage the checking account was
• 28:03
  Speaker 3: also selling your four oh one a K and your brokerage,
• 28:05
  Speaker 3: and the fees were high and the service was poor.
• 28:08
  Speaker 3: We took the bat that eighty percent would come down
• 28:12
  Speaker 3: and Sure enough, of the following decade, eighty percent came
• 28:14
  Speaker 3: down to ten percent. They were disrupted by Schwab a Merritrade,
• 28:18
  Speaker 3: e Trade, Fidelity Vanguard. We invested in e Trade twenty
• 28:22
  Speaker 3: seven times multiple within seven.
• 28:24
  Speaker 2: Years, sold to Morgan Stanley, eventually.
• 28:27
  Speaker 3: Sold tomorrow after long after we were gone twelve. In
• 28:31
  Speaker 3: twenty twelve, when I started ATJA, we looked at the
• 28:34
  Speaker 3: Brazilian market and the four retail banks had ninety nine
• 28:38
  Speaker 3: percent share, and we said, this smells like something we've
• 28:43
  Speaker 3: seen before. We backed one of the disruptors. Ninety nine
• 28:48
  Speaker 3: percent dropped to seventy eight percent. This company multiplied itself
• 28:51
  Speaker 3: that one hundred times. We've done the same thing in
• 28:53
  Speaker 3: India with IFL Wealth, in China with food Too. We're
• 28:56
  Speaker 3: doing it again in Mexico with clar So. A lot
• 28:59
  Speaker 3: of this future telling is pattern recognition, and the more
• 29:03
  Speaker 3: you have done in a power alley, the easier it
• 29:06
  Speaker 3: is to recognize these patterns.
• 29:08
  Speaker 2: So I'm fascinated by not only general ATLANTICX global footprint,
• 29:14
  Speaker 2: but your international experience. How did your upbringing in Bolivia
• 29:20
  Speaker 2: and your entrepreneurship in Brazil influence this career path you've taken.
• 29:26
  Speaker 3: Bolivia taught me about chaos. Brazil taught me about profiting
• 29:31
  Speaker 3: from chaos. So one of the interesting experiences is at
• 29:36
  Speaker 3: the darkest moment of the night, when so Money was
• 29:38
  Speaker 3: almost bankrupt, I decided I had almost lost hope at
• 29:42
  Speaker 3: emerging markets investing, and I decided, like I typically do,
• 29:46
  Speaker 3: to treat it like a research project. And I convinced
• 29:48
  Speaker 3: a professor from Harvard to do a project with me
• 29:51
  Speaker 3: where we studied ten incredible Brazilian companies that had thrived
• 29:56
  Speaker 3: in the nineties and become multi billion dollar corporations and
• 30:00
  Speaker 3: compare them to ten competitors of theirs that didn't thrive.
• 30:04
  Speaker 3: And we took it. We did five hundred interviews, We
• 30:06
  Speaker 3: wrote this book, which I gave you a copy of,
• 30:07
  Speaker 3: and I hope you'll enjoy it. And the big inside
• 30:11
  Speaker 3: is that in moments of chaos, there is a once
• 30:14
  Speaker 3: in a generation opportunity to do a transformational change to
• 30:16
  Speaker 3: your business. And the masters of this, and there's ten
• 30:20
  Speaker 3: examples in the book, but the masters of this is
• 30:21
  Speaker 3: the Three G guys. And what the Three G guys
• 30:24
  Speaker 3: set out to do is what I call spearfishing, and
• 30:28
  Speaker 3: they actually physically are spearfishers. They go on the weekend.
• 30:31
  Speaker 3: And the beauty of spearfishing I've done since is you
• 30:35
  Speaker 3: don't swim towards the fish. You choose an area full
• 30:39
  Speaker 3: of fish. You dive down without a tank, just you
• 30:42
  Speaker 3: under your spear, and you hold your breath for three
• 30:45
  Speaker 3: to five minutes waiting for the fat fish, and then
• 30:48
  Speaker 3: when he appears, you have two seconds to make the kill.
• 30:52
  Speaker 3: And that's what they do. And their journey was so
• 30:56
  Speaker 3: they're investment bankers. They had the number one investment bank
• 30:58
  Speaker 3: in Brazil. Too much cash. They wanted real assets. They
• 31:01
  Speaker 3: were hunting for a large asset that had characteristics of
• 31:07
  Speaker 3: an industry that would benefit once inflation stopped. That was
• 31:09
  Speaker 3: their bed and they the weight it. And a week
• 31:12
  Speaker 3: before a momentous election, the Swiss owners of the number
• 31:15
  Speaker 3: two beer company panicked and they sold their business in
• 31:18
  Speaker 3: two days. They bought it Big Fish. Then they waited
• 31:22
  Speaker 3: ten years. They made that business really profitable, really efficient,
• 31:25
  Speaker 3: and then another crisis, when the number one beer company
• 31:28
  Speaker 3: was in difficulties, they pounced again. And they did it
• 31:31
  Speaker 3: again twenty years later when Anheuser Bush was in the
• 31:34
  Speaker 3: Great Crisis of the Great Financial Crisis, and they struck
• 31:38
  Speaker 3: globally creating the So this idea that in moments of chaos,
• 31:43
  Speaker 3: there's opportunities to do once in a generation ten x
• 31:46
  Speaker 3: bets is an insight that has allowed me to navigate
• 31:50
  Speaker 3: the volatility in all the emerging markets, because chaos visits
• 31:54
  Speaker 3: more frequently the emerging markets.
• 31:56
  Speaker 2: So we've seen some growth in emerging markets over the
• 31:59
  Speaker 2: past few years. What are the areas. I know you're
• 32:03
  Speaker 2: focused on some of the mega trends, but what parts
• 32:07
  Speaker 2: of the world are you looking at? What's attractive outside
• 32:11
  Speaker 2: of the United States for the half of general nic
• 32:15
  Speaker 2: that's not domestic.
• 32:16
  Speaker 3: Yeah, listen, what we've tried to do in the emerging
• 32:19
  Speaker 3: markets is to focus on the big problems. Turns out
• 32:23
  Speaker 3: there are bigger problems in the emergent markets, and if
• 32:26
  Speaker 3: you can find a digital solution to a big problem,
• 32:29
  Speaker 3: you're likely going to be able to build a beautiful
• 32:32
  Speaker 3: business with gross margin that has a mote. So renting
• 32:37
  Speaker 3: an apartment we were just talking before about the rental market.
• 32:39
  Speaker 3: It's hard in the US. In Brazil, it's almost impossible
• 32:43
  Speaker 3: because eighty percent of the listings are fake. They're they're
• 32:46
  Speaker 3: just a broker trying to get you. Oh that one
• 32:48
  Speaker 3: just sold, but let me show you three other ones
• 32:50
  Speaker 3: that I have. Buying a used car is hard in
• 32:54
  Speaker 3: the United States. In Mexico, you may discover what you
• 32:57
  Speaker 3: bought is not actually a car. So if you create
• 32:59
  Speaker 3: a platform that creates a transactional platform education, huge problems
• 33:04
  Speaker 3: in education. If you create a supplier that provides a
• 33:07
  Speaker 3: digital curriculum, we now have a company in Brazil that
• 33:10
  Speaker 3: teaches three million kids a day or with a digital
• 33:12
  Speaker 3: curriculum that's self learning using AI blah blah blah. So
• 33:16
  Speaker 3: big problem, big solution. Another one, for example, turns out
• 33:19
  Speaker 3: Brazil and Mexico and number one and number two in
• 33:21
  Speaker 3: the world and fraud an identity fraud. We are absolutely
• 33:24
  Speaker 3: world class fraudsters. In my neck of the woods, we
• 33:28
  Speaker 3: have two companies, one focused in Mexico, one focused in
• 33:30
  Speaker 3: Brazil that use biometrics to zero out all fraud with
• 33:34
  Speaker 3: tremendous impact on financial inclusions. So our north star for
• 33:39
  Speaker 3: most of what we do in the emerging markets is
• 33:42
  Speaker 3: to find digital solutions to these big problems and hopefully
• 33:46
  Speaker 3: profit that way.
• 33:47
  Speaker 2: I'm fascinated by the concept of biometrics of fraud and
• 33:50
  Speaker 2: digital solution and I want to roll back to what
• 33:53
  Speaker 2: you said previously about India, and it sounds like the
• 33:59
  Speaker 2: government putting in a set of biometric standards and then
• 34:04
  Speaker 2: building out a digital mobile solution. Not only does it
• 34:10
  Speaker 2: put some power in the hand of the consumers, at
• 34:15
  Speaker 2: the same time that's very trackable and they could collect
• 34:19
  Speaker 2: taxes on whatever's going on. Is that the model for
• 34:23
  Speaker 2: what you're seeing in Mexico and Brazil or are they
• 34:26
  Speaker 2: you know, very different issues.
• 34:29
  Speaker 3: Same issue. Private solution, not a public solution, but it
• 34:32
  Speaker 3: addresses to one of the core beliefs I have, which
• 34:36
  Speaker 3: is a lot of the inefficiency and poverty outside the
• 34:40
  Speaker 3: US is there is no meritocracy. Biometrics allows for a meritocracy.
• 34:48
  Speaker 3: You can have a track record, you pay your taxes,
• 34:52
  Speaker 3: you show your formal you can borrow against it. If
• 34:56
  Speaker 3: you pay your loans, it is trackable, your interest rate
• 34:59
  Speaker 3: comes down. If your interest rate comes down, you can borrow,
• 35:02
  Speaker 3: and you can send your kid to a better college.
• 35:04
  Speaker 3: So this idea of you know, taking friction away and
• 35:06
  Speaker 3: bringing meritocracy forward is so mission critical and so unlocking
• 35:12
  Speaker 3: of value that it's very exciting to be able to
• 35:14
  Speaker 3: back the rails of that. And India has been a
• 35:16
  Speaker 3: role model on this.
• 35:17
  Speaker 2: All right, So we've talked about India, We've talked about Mexico,
• 35:20
  Speaker 2: We've talked about Brazil. What other parts of the world
• 35:23
  Speaker 2: look interesting? Do you do stuff in Asia? What do
• 35:26
  Speaker 2: you do in Africa?
• 35:27
  Speaker 3: Listen, Africa is the next frontier. We've done two initial
• 35:30
  Speaker 3: investments in Africa. It's still ten years away from growth, equity,
• 35:33
  Speaker 3: the rule of law still needs to work. We just
• 35:36
  Speaker 3: open offices. In the Middle East, the golf economy is vibrant,
• 35:40
  Speaker 3: entrepreneurship is thriving. Southeast Asia is having a pickup. We're
• 35:45
  Speaker 3: beginning to do more work in Japan. Japan, the next
• 35:48
  Speaker 3: generation of Japan is rediscovering its innovation routes that it
• 35:52
  Speaker 3: had in the nineties but lost for thirty years. So
• 35:55
  Speaker 3: all these places are very exciting. Now. The US is
• 35:58
  Speaker 3: incredibly exciting. It's half of what we do. It is transformational.
• 36:02
  Speaker 3: It's leading the AI revolution. AI is the defining, incredible
• 36:08
  Speaker 3: revolution of this generation of twenty five year olds, and
• 36:12
  Speaker 3: that's also very exciting. It's probably one of the most
• 36:14
  Speaker 3: exciting new power allies is what we see going on
• 36:16
  Speaker 3: in Ai.
• 36:17
  Speaker 2: It makes sense that Africa is still not quite where
• 36:20
  Speaker 2: it needs to be, but I'm kind of intrigued by
• 36:23
  Speaker 2: other parts of Asia and Japan. Japan just feels like
• 36:30
  Speaker 2: it's years ahead of everybody. It just feels like the
• 36:33
  Speaker 2: future has arrived in Japan before it makes it to
• 36:36
  Speaker 2: everywhere else. What sort of opportunities are you seeing in Japan.
• 36:40
  Speaker 2: They feel like a prettymature, Western style, democratic brand of capitalism.
• 36:47
  Speaker 3: Yeah, somehow Japan lost its innovation edge it had in
• 36:51
  Speaker 3: the nineties, and it had to do with a generation
• 36:53
  Speaker 3: that was not embracing of rapid change. And there's a
• 36:57
  Speaker 3: new generation of managers that are embracing rapid change. They
• 37:03
  Speaker 3: don't yet have a growth equity industry, but the great
• 37:07
  Speaker 3: in software, they're great in financial services, they're great in gaming.
• 37:11
  Speaker 3: So I think it's early, but I do see a
• 37:15
  Speaker 3: lot of innovation out of Japan and Southeast Asia. Vietnam
• 37:17
  Speaker 3: is super exciting. It's a net beneficiary of supply chain
• 37:21
  Speaker 3: diversification away from China. It is incredibly entrepreneurial, it's incredibly young.
• 37:27
  Speaker 3: We've made investments in the financial services sector where right
• 37:30
  Speaker 3: now looking at something in the healthcare sector that's also
• 37:32
  Speaker 3: very exciting.
• 37:33
  Speaker 2: So for a long time, every time Japan comes up
• 37:37
  Speaker 2: someone always brings up they have big demographic problems they
• 37:41
  Speaker 2: can't get out of the way, And I'm hearing similar
• 37:43
  Speaker 2: things about China. How do you look at those issues
• 37:47
  Speaker 2: which are large and macro and somewhat intractable.
• 37:52
  Speaker 3: That's a tough one. I think the aging of the West,
• 37:57
  Speaker 3: it creates a number of opportunities for healthcare services the
• 38:00
  Speaker 3: mission critical, and I think we have to invest in
• 38:03
  Speaker 3: making sure we work on the health spent issue. How
• 38:06
  Speaker 3: they solve those issues. My crystal ball is not perfect.
• 38:10
  Speaker 3: I am a big believer in immigration. The reason the
• 38:13
  Speaker 3: United States is not suffering from the same issues is
• 38:16
  Speaker 3: we've had very healthy legal immigration for the last thirty
• 38:20
  Speaker 3: years and that's refreshed and populated half the unicorns. So
• 38:25
  Speaker 3: I suspect part of the answer of the sort of
• 38:28
  Speaker 3: West that's aging is flexibilizing immigration.
• 38:32
  Speaker 2: Right We've been pretty receptive to it. It looks like
• 38:37
  Speaker 2: we know Japan has almost no permanent resident immigrants, the
• 38:42
  Speaker 2: UK is turning away from it. Is this going to
• 38:45
  Speaker 2: just be an opportunity for countries that open up their
• 38:48
  Speaker 2: doors to the best and the brightest, or is this
• 38:51
  Speaker 2: an ongoing source of political fodder for left versus right.
• 38:58
  Speaker 3: So this is a topic my sister cares really a
• 39:01
  Speaker 3: lot about. She dedicated her life to it. She was
• 39:03
  Speaker 3: most recently at the National Security Council focused on immigration. Yes,
• 39:08
  Speaker 3: I was just in Dubai two weeks ago. It's a
• 39:10
  Speaker 3: different Dubai. Some of the brightest minds of Europe have
• 39:14
  Speaker 3: moved to Dubai, attracted by the vibron metropolis that's setting
• 39:18
  Speaker 3: up there. They're low tax jurisdictions, low bureaucracy, whereas the
• 39:22
  Speaker 3: rest of Europe is taxing and making immigration harder and
• 39:25
  Speaker 3: ending than on THEMB Some countries like Dubai, like Singapore,
• 39:29
  Speaker 3: are opening up to the world and attracting the world's
• 39:31
  Speaker 3: best talent. Soon enough, we'll wake up and say, hey,
• 39:35
  Speaker 3: the United States can't lose this edge. I hope it does.
• 39:38
  Speaker 2: I'm kind of fascinated by the transition that's taking place,
• 39:42
  Speaker 2: not just in Dubai but through large parts of the
• 39:45
  Speaker 2: Middle East that seemed to be shifting from you know,
• 39:50
  Speaker 2: oil regimes and plutocracies to much more I don't want
• 39:57
  Speaker 2: to say open societies, but certainly economic, freer societies than
• 40:01
  Speaker 2: they've been in the past. What is going on in
• 40:06
  Speaker 2: the Middle East to drive these changes.
• 40:09
  Speaker 3: Brilliant governance, and the advantage of some having seen so
• 40:12
  Speaker 3: many natural resource rich countries squander it away with Dutch disease.
• 40:19
  Speaker 3: I think they've they got religious disease. Remember they got religion.
• 40:23
  Speaker 3: And they're making the right levels of investments and there's
• 40:25
  Speaker 3: so much innovation. We just invest in a company called Kayali.
• 40:28
  Speaker 3: It's a it's a perfume brand. It's a beautiful entrepreneur
• 40:32
  Speaker 3: who's created this concept which was new to me. It
• 40:35
  Speaker 3: turns out the gen z likes to do layering of perfumes,
• 40:39
  Speaker 3: which is to combine three, four five perfumes and create
• 40:42
  Speaker 3: your own blend. And this has built her whole brand
• 40:45
  Speaker 3: around this. That's and it's a global brand born in
• 40:48
  Speaker 3: the Middle East. How exciting is that? So I think
• 40:51
  Speaker 3: we're going to see more and more innovation in out
• 40:53
  Speaker 3: of the Middle East. And I think they're doing a
• 40:55
  Speaker 3: lot of things right.
• 40:56
  Speaker 2: Some of the investments you've made over the years almost
• 40:59
  Speaker 2: sound like venture capital investments as opposed to private equity.
• 41:03
  Speaker 2: So social media, perfume, consumer goods, Like what is the
• 41:09
  Speaker 2: line between VC and growth equity?
• 41:13
  Speaker 3: Yeah, we come in when you're profitable and scaled and
• 41:19
  Speaker 3: the risk we're taking is not whether you have product
• 41:21
  Speaker 3: market fit, but whether you can really scale to your
• 41:24
  Speaker 3: full potential. Our loss ratios, the sort of percent of
• 41:27
  Speaker 3: the time in which we lose money is three to
• 41:29
  Speaker 3: four percent.
• 41:29
  Speaker 2: For the last so it's the opposite.
• 41:31
  Speaker 3: The adventure is thirty forty percent, So I.
• 41:34
  Speaker 2: Think it's even higher than this, even higher.
• 41:36
  Speaker 3: So we come in when you are a late teenager,
• 41:39
  Speaker 3: not when you are a thriving young kid.
• 41:42
  Speaker 2: A wizard kid, gotcha. So it sounds like, given that
• 41:46
  Speaker 2: half of your investing is outside of the United States,
• 41:50
  Speaker 2: you think there are tailwinds for growth markets, for emerging markets.
• 41:54
  Speaker 2: What are going to be the big drivers for gains
• 41:58
  Speaker 2: in these companies receives and in emerging markets?
• 42:02
  Speaker 3: Listen, I think AI is the revolution that we were
• 42:06
  Speaker 3: talking about. Unlike the Internet or the mobile internet or
• 42:12
  Speaker 3: the cloud, this one is truly transformational because they will
• 42:15
  Speaker 3: touch about eighty percent of GDP. The previous waves touched
• 42:18
  Speaker 3: between ten and twenty percent. This is a four x
• 42:20
  Speaker 3: bigger wave. Every process we throw AI too, gets thirty
• 42:26
  Speaker 3: to forty percent more efficient in today's version of AI,
• 42:30
  Speaker 3: which will be outdated in about three weeks, so programmers
• 42:34
  Speaker 3: are more effective online marketing teams spend thirty percent less
• 42:38
  Speaker 3: call centers don't need any humans. Decision making enhanced with
• 42:42
  Speaker 3: a bot is better. So the proof points are already there,
• 42:47
  Speaker 3: and we're asking all our businesses, how will AI fundamentally
• 42:53
  Speaker 3: change your business model and get ahead of it investing AI,
• 42:57
  Speaker 3: which is one of the things we're doing. We stayed
• 43:01
  Speaker 3: away from the infrastructure layer sort of data in the
• 43:04
  Speaker 3: growth equity program, data centers, large language models, chips, capital intensive,
• 43:09
  Speaker 3: some technology risk that's hard to price. We've been focused
• 43:13
  Speaker 3: on the application layer sort of software companies that are
• 43:17
  Speaker 3: using proprietary data and AI to provide a new service.
• 43:22
  Speaker 3: And for the last four years we met eight hundred
• 43:24
  Speaker 3: companies and it was venture stage and evaluations were growth
• 43:28
  Speaker 3: equity stage, so bad combination. Finally, in the last six
• 43:32
  Speaker 3: months their growth equity stage. And we've just done three
• 43:34
  Speaker 3: major investments on AI, and I think we'll do dozens.
• 43:39
  Speaker 2: Give us what are the three investments you've just made
• 43:42
  Speaker 2: in AI?
• 43:42
  Speaker 3: So let me tell you about this company called Insider.
• 43:45
  Speaker 3: It's a software company enterprise marketing software companies. It helps
• 43:49
  Speaker 3: companies deliver the right message to the right person at
• 43:52
  Speaker 3: the right time, in the right media. This company was
• 43:55
  Speaker 3: founded in Turkey. Turkey has two things going for it.
• 43:58
  Speaker 3: Number one, huge gaming community and huge gaming programmer community,
• 44:03
  Speaker 3: so there's lots of programming talent. And because it's kind
• 44:06
  Speaker 3: of in Asia, but it's also in Europe, its population
• 44:09
  Speaker 3: uses we chat and what's Up. So they developed great
• 44:12
  Speaker 3: software that really worked with instant messaging for both the
• 44:16
  Speaker 3: West and the East, and they use this edge to
• 44:18
  Speaker 3: develop clients in Europe and in Asia. It's now one
• 44:23
  Speaker 3: hundred and thirty million dollar business is growing very fast, profitable,
• 44:26
  Speaker 3: the huge opportunities the US market. Turns out, the US
• 44:30
  Speaker 3: market is only now discovering instant messaging. We still send
• 44:33
  Speaker 3: emails to companies to inquire about our orders. The rest
• 44:36
  Speaker 3: of the world does not remember what it's like to
• 44:38
  Speaker 3: email a company.
• 44:39
  Speaker 2: Really.
• 44:39
  Speaker 3: That's so we all use we chat or what's Up.
• 44:42
  Speaker 3: Now there's an we think a window to bring insider
• 44:46
  Speaker 3: to the United States. US is half the market, but
• 44:48
  Speaker 3: only seven percent of insider sales. We're really strong in
• 44:51
  Speaker 3: the United States. We're going to help them grow. So
• 44:53
  Speaker 3: that's Insider. Another company's via Labs using AI for behavioral interventions,
• 44:58
  Speaker 3: helping the diabetics state of their medication, helping gym goers
• 45:02
  Speaker 3: go to the gym, reducing churn, all using AI to
• 45:05
  Speaker 3: provide behavioral nudges. Is ready entrepreneur in the US, building
• 45:09
  Speaker 3: in the US. And the fourth one is a Chilean
• 45:13
  Speaker 3: founder scholarship kid to n y U is created a
• 45:17
  Speaker 3: text to video program. You describe a scene, it produces
• 45:22
  Speaker 3: the video. He unlike JGBT, he trained it with permission,
• 45:26
  Speaker 3: so he has copyright right, which turns out if you're
• 45:29
  Speaker 3: in the image business, kind of important taking off like
• 45:33
  Speaker 3: fire and a super friendly, energized community builder of a team.
• 45:39
  Speaker 3: And it's a company called Runway dot Ai, which I
• 45:41
  Speaker 3: think will change the industry.
• 45:44
  Speaker 2: Runway dot ai. All right, So those are three pretty
• 45:48
  Speaker 2: big investments, it sounds like. And you've specifically said, you're
• 45:55
  Speaker 2: not doing chips, you're not doing data centers, you're not
• 45:57
  Speaker 2: doing all the capital intensive things. You know. I've been
• 46:01
  Speaker 2: fond of saying it's not the Magnificent seven, it's the
• 46:05
  Speaker 2: other four hundred and ninety three companies in the SMP
• 46:07
  Speaker 2: five hundred that are going to see benefits from this.
• 46:11
  Speaker 2: So far, it seems like it's kind of few and
• 46:14
  Speaker 2: far between. How long does an innovation like AI take
• 46:19
  Speaker 2: to make its way out into the broader economy. The hope,
• 46:23
  Speaker 2: the wishful thinking is hey, everybody becomes more productive, more efficient,
• 46:28
  Speaker 2: more profitable, supports higher stock prices. What is the timeline like?
• 46:34
  Speaker 2: And I know you don't have a crystal ball, but
• 46:36
  Speaker 2: you're immersed in this. How do you see this unfolding?
• 46:40
  Speaker 3: It's rapid, it's accelerating. But it's human nature to be
• 46:43
  Speaker 3: disappointed by the short term trajectory and wowed by how
• 46:48
  Speaker 3: deep it is five years from now. Like any exponential
• 46:51
  Speaker 3: we lose, we have a hard time imagining the power
• 46:54
  Speaker 3: of exponentials in five years it is going to be
• 46:58
  Speaker 3: massive and penetrated. Where the next twelve months disappoint, I
• 47:01
  Speaker 3: am sure they will disappoint.
• 47:04
  Speaker 2: That's really interesting when you're thinking about a disruptive technology
• 47:08
  Speaker 2: like AI and making investments. Is it about the addressable market?
• 47:15
  Speaker 2: Is it about how global it can be? What's on
• 47:18
  Speaker 2: your checklist?
• 47:19
  Speaker 3: Funny you mentioned checklist. So we do have a checklist,
• 47:21
  Speaker 3: But let me tell you a story of the GA checklist.
• 47:24
  Speaker 3: So when I became chairman of the Investment Committee seven
• 47:27
  Speaker 3: years ago, I felt grossly unqualified because my experience is
• 47:32
  Speaker 3: primarily emerging markets, and you know most of half of
• 47:35
  Speaker 3: what we do is develop markets. So I went to
• 47:37
  Speaker 3: the co founders of the firm, Steve Denning and Dave Hodson.
• 47:42
  Speaker 3: Incredible minds. These guys ran the firm for the first
• 47:44
  Speaker 3: twenty five years, incredible returns, geniuses. And I went to Steve,
• 47:48
  Speaker 3: and Steve was CEO for twenty five years. He's a
• 47:51
  Speaker 3: former Navy captain, McKinsey train, very very structured, and he says, Martin,
• 48:00
  Speaker 3: to build a checklist. Look at our deals, our best
• 48:03
  Speaker 3: performing deals. I'll share the three ms, and we'll talk
• 48:06
  Speaker 3: about the three ms and other characteristics, and then look
• 48:09
  Speaker 3: at the money losers and create a negative checklist. And
• 48:13
  Speaker 3: for God's sake, please produce the GA checklist. It was okay, checklist.
• 48:18
  Speaker 3: Same day I go to Dave Hodson. Dave Hodson PI
• 48:21
  Speaker 3: Beta Kappa dar Mud Stanford programmer, genius two hundred a
• 48:26
  Speaker 3: Q plus. Every time he speaks, I have to shut
• 48:28
  Speaker 3: my eyes and try to make sure I capture what
• 48:30
  Speaker 3: he's saying. And the first thing he says is resist
• 48:34
  Speaker 3: the temptation to have a checklist. If it was as
• 48:37
  Speaker 3: simple as a checklist, we wouldn't be paid two and
• 48:40
  Speaker 3: twenty to make the application of the checklist. And I
• 48:44
  Speaker 3: was like, oh my god, the two guys around the
• 48:46
  Speaker 3: firm for twenty five years can't agree on how to
• 48:48
  Speaker 3: make an investmentation through this. And I did some research
• 48:51
  Speaker 3: on this. You know, thinking fast, Sinking slow is the
• 48:54
  Speaker 3: checklist manifesto. But even the author of Shinking Fast and
• 48:59
  Speaker 3: Danny Callman, he came up. He stumbled into the checklist,
• 49:04
  Speaker 3: creating the checklist for interviewers for these really the French
• 49:07
  Speaker 3: Force elite units, and he used the checklist. But after
• 49:11
  Speaker 3: I found out and it was not in the book purposely,
• 49:13
  Speaker 3: there were these super interviewers that applied the checklist and
• 49:18
  Speaker 3: had not only eighty five percent accurateate, but a ninety
• 49:21
  Speaker 3: nine percent accurate. It turns out that's a big difference.
• 49:24
  Speaker 3: And it's best captured by this woman who was sort
• 49:27
  Speaker 3: of the master prognosticator. And what she would say is listen,
• 49:30
  Speaker 3: I do the work, I do the checklist, and before
• 49:34
  Speaker 3: I make a decision, I closed a notebook and see
• 49:36
  Speaker 3: how I feel in my gut. So the educated gut
• 49:44
  Speaker 3: is the way to make complex decisions.
• 49:47
  Speaker 2: So you and I have talked about this in the past,
• 49:49
  Speaker 2: but let's bring that up. You know people talk about
• 49:54
  Speaker 2: investing as part art, part science. What you've said is
• 49:58
  Speaker 2: it's a combination of the gut and the brain, which
• 50:01
  Speaker 2: I think is roughly the same. How do you know
• 50:06
  Speaker 2: when you're using your brain and when you have to
• 50:09
  Speaker 2: defer to your gut. We talked about George Soros's back
• 50:14
  Speaker 2: pains as effectively his gut overrunning his brain. How do
• 50:18
  Speaker 2: you balance the two?
• 50:20
  Speaker 3: Listen, You have to ignore the gut until you do
• 50:24
  Speaker 3: your homework. Do the work, do the analysis, do the
• 50:28
  Speaker 3: customer segmentation, the financial duets, do the market survey, do
• 50:31
  Speaker 3: this competitor service, do the cost analysis. After you fed
• 50:35
  Speaker 3: the gut with all that data, then you listen to
• 50:40
  Speaker 3: the system one gut, which is three million years old,
• 50:44
  Speaker 3: because it's likely to lead you in the right direction.
• 50:47
  Speaker 3: The gut is wise if you give it the right inputs.
• 50:50
  Speaker 3: If you let the gut guide you before you do
• 50:53
  Speaker 3: the work, you're likely to make mistakes.
• 50:56
  Speaker 2: So let me throw you a couple of curve balls
• 50:58
  Speaker 2: before we get to our favor for questions. What drew
• 51:03
  Speaker 2: you to Lincoln Center? How do you contribute to its mission?
• 51:06
  Speaker 2: You also work with Primary Chance and with the endeavor
• 51:11
  Speaker 2: mentorship tell us a little bit about those sort of interests.
• 51:16
  Speaker 3: So listen. I believe wealth is a unit of energy,
• 51:19
  Speaker 3: and if you just hoard it, you feel stuffy, slow,
• 51:24
  Speaker 3: and it's not good energy.
• 51:25
  Speaker 2: It's got to be in motion.
• 51:26
  Speaker 3: It's got to be in motion. So I run a
• 51:29
  Speaker 3: concentrated book. In my philanthropy, I put my time and
• 51:32
  Speaker 3: my wealth on a couple of things. I care deeply
• 51:35
  Speaker 3: about education, scholarships. I care deeply about entrepreneurship, and I
• 51:40
  Speaker 3: care deeply about music. Why do I care about music.
• 51:43
  Speaker 3: The cancer of our generation is tribalism in society, and
• 51:49
  Speaker 3: combat tribalism. I don't believe we should censor hate speech,
• 51:52
  Speaker 3: but we should promote love speech. And the best form
• 51:55
  Speaker 3: of love speech is live music. We're in a room
• 51:58
  Speaker 3: vibing to the same tune, breathing the same air, listening
• 52:02
  Speaker 3: to the o's, the ads, and the singing to the
• 52:04
  Speaker 3: same artists. We're all together. There's no racial there's no
• 52:07
  Speaker 3: income differential, there's no country differential. We're all vibing to
• 52:10
  Speaker 3: the same music. So mid Lincoln Center is about music
• 52:13
  Speaker 3: with endeavor, It's about promoting entrepreneurship across the globe. By
• 52:19
  Speaker 3: creating role models and mentorships. And I've been doing that
• 52:22
  Speaker 3: for twenty two years. I'm now in the global board
• 52:24
  Speaker 3: trying to make take this into even more countries and
• 52:27
  Speaker 3: then scholarships, premier chance and I do it also with Harvard.
• 52:31
  Speaker 3: I do it also with my high school in Bolivia.
• 52:34
  Speaker 3: Talent is sprinkled globally find those perils wherever they are.
• 52:38
  Speaker 3: Premier chans is quite interesting. It turns out the Bolivion,
• 52:41
  Speaker 3: the Brazilian public education system, test kids in the math
• 52:45
  Speaker 3: Olympics when they're thirteen, and they only use this data
• 52:49
  Speaker 3: to provide five kids to come meet the president and
• 52:51
  Speaker 3: they all get met live. Yeah, they choose five. There's
• 52:55
  Speaker 3: a lot of data about some other kids. So what
• 52:57
  Speaker 3: Primitra Chansi does is it goes to rule Northeast. This
• 53:01
  Speaker 3: is the poorest area of Brazil, the most unfair in
• 53:04
  Speaker 3: the world, finds these thirteen year old geniuses and helps
• 53:08
  Speaker 3: them get into good high schools in major cities and
• 53:11
  Speaker 3: eventually get into great colleges. So that's one of the
• 53:14
  Speaker 3: interventions on the education sector.
• 53:16
  Speaker 2: Huh. My last curveball question had something has to do
• 53:22
  Speaker 2: with something you said about when you were an undergraduate
• 53:27
  Speaker 2: picking up some extra cash bartending, and you actually bartended
• 53:33
  Speaker 2: at a Harvard Business School reunion. Tell us a little
• 53:36
  Speaker 2: bit about that experience. I kind of really like that story.
• 53:40
  Speaker 3: So I was eighteen years old. I bartended at all
• 53:45
  Speaker 3: sorts of reunions, and the most interesting reunions were the
• 53:48
  Speaker 3: twenty fifth and thirtieth reunion from both the college and
• 53:50
  Speaker 3: the Business School, because in both I used to have
• 53:54
  Speaker 3: a name tag and it said my name Bolivia and
• 53:56
  Speaker 3: how old I was. I think there were like thirty
• 53:59
  Speaker 3: people that came up. Some of them drunk look at me.
• 54:02
  Speaker 3: Some of them touched my cheek. I said, you're so young,
• 54:05
  Speaker 3: please enjoy it. Soon you'll be me, and it will
• 54:09
  Speaker 3: be a flicker of a turn of an eyelid. It
• 54:11
  Speaker 3: will be a second and you'll be me. And I
• 54:14
  Speaker 3: had forgotten this story. It was odd at the time.
• 54:17
  Speaker 3: I thought it was a little awkward. I was at
• 54:20
  Speaker 3: my thirtieth reunion and there was this young woman from
• 54:23
  Speaker 3: Finland who was seventeen years old, and I went up
• 54:25
  Speaker 3: to her and said, oh, please do enjoy your life
• 54:28
  Speaker 3: because it flows by in a second. And then I
• 54:32
  Speaker 3: remembered I was heir a second ago. The big insight,
• 54:36
  Speaker 3: and it takes us to get to the old age
• 54:39
  Speaker 3: to fully appreciate it. If you take stock, what percent
• 54:43
  Speaker 3: of your mental time are you in the past and
• 54:46
  Speaker 3: are you in the future. And for a lot of
• 54:49
  Speaker 3: young people, seventy percent of their time is not in
• 54:53
  Speaker 3: the present. And if you want to savor life and
• 54:56
  Speaker 3: breathe and savor the air you're breathing, you need eighty
• 55:00
  Speaker 3: percent of your mental time to be here now, today
• 55:04
  Speaker 3: with you and the sooner you get there. I mean
• 55:07
  Speaker 3: Confusion says this a great line. He says, every man
• 55:10
  Speaker 3: has two lives. The second one starts when you recognize
• 55:14
  Speaker 3: you only have one. And I just wish people get
• 55:17
  Speaker 3: to that realization in their thirties, not in their fifties,
• 55:20
  Speaker 3: when they're going to their thirtieth three union.
• 55:22
  Speaker 2: Huh. Really interesting that the days are long but the
• 55:25
  Speaker 2: decades are short, exactly. I've always been a fan of that.
• 55:29
  Speaker 2: All right, So let's jump to our favorite questions that
• 55:31
  Speaker 2: we ask, starting with what's keeping you entertained these days?
• 55:35
  Speaker 2: What are you watching or listening to?
• 55:37
  Speaker 3: White Lotus is a household favorite. I love Mike White.
• 55:41
  Speaker 3: He is a sophisticated storyteller.
• 55:44
  Speaker 2: This so far seems to be the best season of
• 55:48
  Speaker 2: the three. I don't know what your experience was. I
• 55:50
  Speaker 2: know people love the first season.
• 55:52
  Speaker 3: I love the second season. I got the Latin flair
• 55:55
  Speaker 3: going for me right, But this one is keeping up.
• 55:59
  Speaker 2: This one just feels to be no spoilers. I hated
• 56:03
  Speaker 2: the ending of the second season, not the outcome, just
• 56:07
  Speaker 2: the way they did it. They could have reached the
• 56:09
  Speaker 2: same conclusion in a less annoying fashion. But especially Thailand
• 56:15
  Speaker 2: is so fascinating the way this is unfolding. But it's
• 56:18
  Speaker 2: been really interesting.
• 56:19
  Speaker 3: It's gorgeous, and I'm a big fan of Mike White.
• 56:23
  Speaker 3: A great way I connect with my teenage daughter is
• 56:25
  Speaker 3: watching Saturday Night Live, not just the current but the old.
• 56:30
  Speaker 3: Lorne Michaels is a genius. He stayed fresh for fifty years.
• 56:35
  Speaker 3: And a great way to cross the intergenerational gap is
• 56:39
  Speaker 3: to show that us old people were once young and
• 56:42
  Speaker 3: our humor was actually kind of edgy. We're not just
• 56:45
  Speaker 3: these old parts that were to be grown to be.
• 56:47
  Speaker 3: Once upon a time, our generation had its shot. So
• 56:50
  Speaker 3: that's something else I spend time.
• 56:52
  Speaker 2: Every generation thinks that people came before them didn't have
• 56:55
  Speaker 2: a childhood, and then suddenly it's like, oh, I get it.
• 57:00
  Speaker 2: You have to kind of live it to realize. Oh okay,
• 57:03
  Speaker 2: I was a little quick to judge back then exactly.
• 57:06
  Speaker 2: Let's talk about mentors who helped influence and shape your career.
• 57:10
  Speaker 3: Listen, I've had the pleasure of working with six great investors,
• 57:14
  Speaker 3: the guys at three G, some people at Advan, Steve Dave,
• 57:18
  Speaker 3: and Bill Ford at GA, and having sat in three
• 57:22
  Speaker 3: different investment committees. There's a game I used to play,
• 57:26
  Speaker 3: which is every unique investor has a perspective that frames
• 57:29
  Speaker 3: their worldview. I would try to learn and predict what
• 57:34
  Speaker 3: they're going to say in the investment committee. And the
• 57:37
  Speaker 3: moment I got to eighty percent accuracies, Okay, I get it.
• 57:41
  Speaker 3: I got it. I get it how Steve Denning thinks,
• 57:43
  Speaker 3: I get it, how Bill Ford thinks. And my investment
• 57:47
  Speaker 3: style is a mixture of all these six great investors
• 57:50
  Speaker 3: that had the honor of working with. And I hope
• 57:54
  Speaker 3: I am utterly unpredictable when someone tries to do this
• 57:57
  Speaker 3: to me, because I hope my worldviews fluid enough that
• 58:01
  Speaker 3: it doesn't cannot be predicted at the eighty percent accuracy
• 58:04
  Speaker 3: level that that I was able to do.
• 58:07
  Speaker 2: So let's talk about books. What are some of your favorites?
• 58:10
  Speaker 2: What are you reading right now?
• 58:12
  Speaker 3: So there are three books that change my life as
• 58:15
  Speaker 3: a twenty year old. I read Tony Robins Awakened the
• 58:18
  Speaker 3: Giant Within. I know it's cheesy, I know it's help.
• 58:21
  Speaker 3: It is a fabulous people love it. It is fabulous.
• 58:25
  Speaker 3: It's about controlling your emotion and charting your own destiny
• 58:28
  Speaker 3: as a hungry twenty year old. It calmed the hell
• 58:32
  Speaker 3: out of me, really that it was life changing, and
• 58:35
  Speaker 3: I am forever grateful for to Tony, and I am
• 58:38
  Speaker 3: a big proponent and he's an incredible human being.
• 58:41
  Speaker 2: I am reluctant to call things cheesy where there is
• 58:46
  Speaker 2: a ground swell of support and just endless testimonials like
• 58:52
  Speaker 2: you just gave that said, hey, you may not love this,
• 58:55
  Speaker 2: but this really helped me through this challenge and I'm
• 58:59
  Speaker 2: better for it. So I don't know, I think it's
• 59:01
  Speaker 2: a little too blase, too glib to just say, oh,
• 59:05
  Speaker 2: it's cheesy. What did that book sell? Like ten million?
• 59:08
  Speaker 3: A million copies? And if you've never met him, see
• 59:11
  Speaker 3: I'm not your guru. At Netflix, and you'll get a
• 59:13
  Speaker 3: chance to feel his energy. Oh really, he's amazing. You
• 59:15
  Speaker 3: should totally see that.
• 59:16
  Speaker 2: I'm not your guru. Al Right, I'm going to put
• 59:18
  Speaker 2: that on my list. What are the other two?
• 59:20
  Speaker 3: So Victor Frankel meant in search of purpose? I read
• 59:23
  Speaker 3: it five times in my list. My purpose keeps changing.
• 59:27
  Speaker 3: And then we talked about this. I really am a
• 59:29
  Speaker 3: fan of Gentis kanon The Making of the Modern World.
• 59:32
  Speaker 3: It was a super interesting book because it defied the
• 59:37
  Speaker 3: stereotype that this was a savage, ruthless conquer He was
• 59:41
  Speaker 3: an incredibly sophisticated man that built the largest empire, built
• 59:45
  Speaker 3: in bigger than the Roman, bigger than the Roman, bigger
• 59:48
  Speaker 3: than the Ottoman. Only the British had a bigger empire,
• 59:51
  Speaker 3: and he had rule of law. He was married toocratic
• 59:55
  Speaker 3: He embraced diversity, He invested in the arts, he was portrayed.
• 1:00:00
  Speaker 3: He was pro interchange of ideas and built something unheard
• 1:00:04
  Speaker 3: of at the time before technology. It was seventeen percent
• 1:00:09
  Speaker 3: of the world's land under one empire. That a single man,
• 1:00:13
  Speaker 3: an orphan, a nomad built in the twelve hundreds.
• 1:00:17
  Speaker 2: Beautiful, arguably not just a military genius, but a governmental
• 1:00:25
  Speaker 2: societal genius, able to not just conquer, but keep the
• 1:00:31
  Speaker 2: empire together, which is always the challenge. The Romans spread
• 1:00:35
  Speaker 2: themselves too thin. You could say the same about the
• 1:00:38
  Speaker 2: Spanish Empire or the British Empire. He managed to maintain
• 1:00:41
  Speaker 2: this throughout his entire life.
• 1:00:43
  Speaker 3: And lived through the right page of sixty five twice
• 1:00:45
  Speaker 3: the life expectancy of his era.
• 1:00:48
  Speaker 2: Which is pretty impressive. Our final two questions, what sort
• 1:00:52
  Speaker 2: of advice would you give to a recent college grad
• 1:00:55
  Speaker 2: interested in a career in either growth, equity or investing,
• 1:01:00
  Speaker 2: or anything along those lines.
• 1:01:02
  Speaker 3: As I think of the twelve junctures where I had
• 1:01:05
  Speaker 3: to make life changing career choices, I always took the
• 1:01:10
  Speaker 3: most adventurous route, choose the most adventurous route, and don't
• 1:01:17
  Speaker 3: do it alone.
• 1:01:17
  Speaker 2: Bring someone, don't play it safe.
• 1:01:19
  Speaker 3: Don't play it safe. At the end of the day,
• 1:01:22
  Speaker 3: he who has the best stories wins.
• 1:01:26
  Speaker 2: And you were before I interrupted, you were about to say,
• 1:01:28
  Speaker 2: bring someone along with you.
• 1:01:29
  Speaker 3: Bring someone along, And that's what There's two points like
• 1:01:33
  Speaker 3: Robert Frost and Walt Wildman. Roberts Frost's journey, the road
• 1:01:36
  Speaker 3: less travel is a lonely journey. Walt Whitman's is about
• 1:01:41
  Speaker 3: opening the road you know and bringing, extend out a
• 1:01:45
  Speaker 3: hand and give you my he says, I give you
• 1:01:48
  Speaker 3: my love. Bring someone you love along. And the most
• 1:01:51
  Speaker 3: important decision of a man's life or a woman's life
• 1:01:54
  Speaker 3: is who your life partner is. Bring someone along on
• 1:01:57
  Speaker 3: this adventure because it's twice as fun if you can
• 1:01:59
  Speaker 3: reminess in your old age about all the great twists
• 1:02:03
  Speaker 3: and turns that life throws me in.
• 1:02:04
  Speaker 2: You And our final question, what do you know about
• 1:02:07
  Speaker 2: the world of investing today? You wish you knew thirty
• 1:02:11
  Speaker 2: or so years ago when you were first getting started.
• 1:02:15
  Speaker 3: From Warren Buffett. You only have tw twenty slots in
• 1:02:19
  Speaker 3: your life? Was your investor wait for the big fish,
• 1:02:22
  Speaker 3: don't waste them on marginal opportunities. You don't eat mark
• 1:02:26
  Speaker 3: to market, only cash on cash counts. And the final one.
• 1:02:31
  Speaker 3: If you think like the crowd, you're destined to mediocrity.
• 1:02:36
  Speaker 2: You're destined to perform like the crowd.
• 1:02:38
  Speaker 3: Exactly.
• 1:02:39
  Speaker 2: Huh really interesting? Thanks Martin for being so generous with
• 1:02:43
  Speaker 2: your time. We have been speaking with Martin Escobari. He
• 1:02:47
  Speaker 2: is co president and head of Global Growth Equity at
• 1:02:51
  Speaker 2: General Atlantic. The firm manages over one hundred billion dollars
• 1:02:55
  Speaker 2: in assets If you enjoy this conversation, we'll be sure
• 1:03:00
  Speaker 2: and check out any of the past five hundred and
• 1:03:02
  Speaker 2: fifty we've had over the previous ten and a half years.
• 1:03:07
  Speaker 2: You can find those at iTunes, Spotify, YouTube, Bloomberg, wherever
• 1:03:12
  Speaker 2: you find your favorite podcasts. And be sure and check
• 1:03:16
  Speaker 2: out my new book, How Not to Invest The Ideas,
• 1:03:20
  Speaker 2: numbers and behavior that destroys well out now wherever you
• 1:03:25
  Speaker 2: find your favorite books. I would be remiss if I
• 1:03:28
  Speaker 2: did not thank the Crack team that helps with these
• 1:03:30
  Speaker 2: conversations together each week. Steve Gonzalez is my audio engineer.
• 1:03:35
  Speaker 2: Sean Russo is my head of research. Anna Luke is
• 1:03:39
  Speaker 2: my producer. I'm Barry Retults. You've been listening to Masters
• 1:03:44
  Speaker 2: in Business on Bloomberg Radio.