Latest / The ROAR Podcast / The ROAR Podcast: Alex Heriard-Dubreuil
Transcript
- Adam Grossman: Welcome to the ⁓ Roar podcast. I'm your host, Adam Grossman. With us today is Serge's global chief investment officer. I'll let him say his name because A, it sounds better when he says it and for in a beautiful French accent. And B, I definitely ⁓ don't want to butcher it as we're getting started. So Alex, welcome to the podcast. Alex Heriard-Dubreuil: Thanks Adam and thanks for having me. And ⁓ yeah, so my name is Alex Herriard Dubois, which is I agree quite difficult to pronounce, but here we go. You need a French person in your team. So I'm ⁓ the one. Adam Grossman: Absolutely. Yeah, exactly. Always good to have a French president on our team. thank you for joining us. Two, you know, you and I started around the same time at at Surge. So it's, you know, we've both now been there for several months and excited to talk more about what we what we're working on together and what you're working on on your own at Surge. But we like to start the podcast like we always like to start the podcast, which is tell us a little bit about your background and how you got to the role that you're in today. Alex Heriard-Dubreuil: Sure, happy to do so. And and again, thanks for having me. So so background, so I'm a civil engineer. I I my in in Paris, where I grew up. And I was I was ⁓ joined an American bank, so that was probably a sign here, but I joined Merrill Lynch to to to effectively invest in real estate across Europe. And it was it was an interesting time because he was the ⁓ late nineties, early two thousand, where there was still a very early it was still very early days for for the banks and they were very agile and they were trying to chase yields and and chase new deals. So more and more it was about to to to open new markets within the European environment and more risk, both from a capital structure point of view as well as from ⁓ from a type of investment. So from a I would say plant vanilla type of almost bond type of investment, office buildings in Paris and London to a more exotic development in Central Eastern Europe, which was back in 2007, 2008 a very ⁓ very ⁓ big thing to to to do. So that was really a very ⁓ very interesting stuff of my career. Very lucky to have that because it gave me ⁓ both the I would say probably the ability to work in vi different environments. go from I would say a traditional Western universe to a more exotic universe, opening new markets and being and and build the the discipline that you you need in an investment bank. So great ten years, spent most of it in London, but I was I was covering the the different markets. So very, very exciting. And then actually in 2008, which ⁓ was an interesting time to change platform, I joined joined the the family office ⁓ well actually the real estate units of a family office of Mr. Arno, who is the founder of LVMH. And I joined the team there to help building effectively ⁓ a strategy around luxury retail and and creating mixed use projects all around the world anchored by those ⁓ those luxury ⁓ elements. So obviously leveraging on the L VMH power but Being a bit the Swisseman there, so trying to effectively create the right product for not only the LV Metch brand, but all the the retailers. And I was for the 17 years, I was stationed most of the time in I mean most of it in in Hong Kong actually, 13 years. So great way to to learn new markets, great way to understand I would say Asia in particular, the do and dance. and and I think one of probably the the biggest chance I had to to spend so much time and and work with this incredible platform and team was to is to go beyond the traditional bone approach or cash flow approach that real estate investor had, but starting to actually learn a little bit more about your customers and your consumers and your end users, which sounds very normal these days. Every real estate investor will tell you they think that way, but but back then it was not. And And I find was good because no one better than an LV image group can really know about the customers. So great, ⁓ great, great time. again, it was a it was a global role, but ⁓ but I I spent quite a lot of time in Asia and the in the in the US and Canada in particular. So and after 26 or 27 years, yeah, I joined search. and it was was almost like it was almost like a natural And I was not necessarily going after sports in particular, but I was really I think for me, I'm a thematic investor. I think you need to be differentiated, I think you need to be able to really play on on really strong tailwinds, and and think you need to be able to understand and to be operational and understand who is going to use your your premises, who who needs it and and answer a need effectively more than anything else. And And the more I've been talking to John, the more I realized that it was probably it was probably one one step ahead of most of the people where most of the people were thinking hospitality and now he was thinking as experiential. So so yeah, it was very natural, very different environment very than my previous life, but ⁓ but but great, yeah. So that's a bit my background very quickly. So Adam Grossman: There's a well, very interesting. There's a lot to we want to talk about across all that, particularly what you were talking about the end. But ⁓ you know, as always like to say s like to start from the beginning, you know, I I'm relatively late coming to real estate, right? I have a data analytics background, a sports background. came to surge after particularly after writing a white paper on use developments and sports, which we'll talk more about. But you seem to have a desire to look into real estate, obviously civil engineering from a background of beginning. What was interesting to you about that? Why did you think you wanted to start your career, you know, both from a civil engineering perspective and then from a banking perspective, looking at thinking about real estate? Alex Heriard-Dubreuil: I think first and foremost is a tangible tangible product. So I think I like ⁓ like investing in in in things that you can really get your hands around. And I wanna and something I like even more is the is the fact that it's a people business as well. So I think when you combine the two, I think I was very, very excited about being able to to ⁓ to to to navigate in that universe. I mean when you start a career you never know where you're going to end. ⁓ Adam Grossman: ⁓ huh. Alex Heriard-Dubreuil: So they were a bit of a also an you know, it it sounds very f like thought through, but obviously there's a lot of risk attached and and serendipity about all this. But but frankly I think those two elements were paramount to somewhat my decision to in that space and to remain more importantly in that space actually. Adam Grossman: And then you know one of the things that we our audience, some of a member of our audience, particularly those who are younger and earlier in the career, are thinking about somewhat of a ⁓ field change. You know, obviously engineering is now one-to-one mapping on to finance. So how did you decide that you wanted from your engineering background that you wanted to go into investment banking to start with? Alex Heriard-Dubreuil: ⁓ you need a little bit of luck as well. so I was I was probably lucky in a way, but I just I think you to seize opportunities. ⁓ for me, real estate was relatively new ⁓ into the banking world and ⁓ and b because my engineering background, because of my ability to understand the underlying assets, I I was I was effectively a a a value proposition to to team and And and the financials you learn it on on on scratch and you learn in quite quickly. So I I that was you know, I I started from almost the back door. I mean, yeah, I was not necessarily on the on the financial front, but but that you learn as you as you as you go. So Adam Grossman: Yeah, and then talk about a little bit more of you know about real estate being relatively new to finance. I think people you know maybe associate that that I obviously these are big capital intensive projects and the you know understanding what was you know, particularly from a banking perspective, in the late nineties, early two thousands, what was that process like and why were banks starting to look into real estate in in more detail? Alex Heriard-Dubreuil: Yeah, it's a good question. So I I would say traditionally real estate was a bit passive from an investment point of view. So when you buy an in I mean when you buy US, it's a bit like similar to people when they buy their their residential, you live in your in your place and you you you don't really think about all this. I mean ⁓ you you pay your mortgage every month, so you think about it, but but the my point is that you don't always think about how to improve it or to to change things. And it was the case for institutional investors. They were they were just buying cash flows. ⁓ usually at that time the the the web lease were structured were long leases. So people were sitting on cash flow for 10-15 years, depending on the market. Actually, every market is different. But ⁓ and ⁓ the the tenants were about to expire, I think what you were trying to do is you pray that the tenants continue. ⁓ ⁓ obviously not just praying, but you were negotiating with with ⁓ with with with the tenants. But you were not like thinking, okay, if I change part of the floor plates and instead of you know doing an office and now I I bring like a a retail shop to create more reason for the office tenants to be happy, maybe to create like a a more interesting environment. So things that have been evolving over time, early main in the ninety-four, ninety-five, on the back of I would say obviously a big financial crisis as well in the real estate, especially in Europe. people were not very active and and more you you got more manager funds including and banks that were starting to to realize that you you can actually have a a fairly intense management style on the real estate and actually create revenue I mean and and revenue and extra revenues and And and don't forget also that ninety nine, two thousand you start to see the yield compress because of the interest rate compressing, which was a huge benefit from from the real estate point of view as well. So a lot of people embark, a lot of success made in in the real state. This is why it's been ⁓ so so so a lot of people have been so excited about that. Adam Grossman: Yeah, and you just started talking about a little bit about mixed use. You know, we use the term a lot that's being thrown around a lot in the sports industry. Not everybody really even knows what that means. You started to talk about that, but can you just explain like literally what is mixed use development and like when you're talking about, you know, yield compression, like what does that mean in terms of for people who are just starting to learn kind of about these terms, particularly as it gets more important from real estate becomes more important in the sports industry. Alex Heriard-Dubreuil: Yeah, sure. So so so mixed use is, I mean as as I mean as as it says in the sentence, is effectively you you you mix the different uses to to create an environment where people have more reason to stay, whether through living there, eating, shopping, working, and now with the sports, effectively enjoying a a great time with with the friends watching a fantastic game. So Actually, when you say a mixed use, it's effectively you you you you effectively mix those elements in order to create the right chemistry ⁓ to attract the your your eventually your customers. Because at the end of the day, you want your tenants to be successful, and for your tenants to be successful, you want them to have the right food traffic. and in order to create the right food traffic, you need to create the right reason for people to come. So mixed use not just about piling things is also which sounds sometimes people think is I just done an office office, and retail, I think should be there. ⁓ I think slightly more complex. I mean there's a bit of art to it, ⁓ because you you need to make sure that you the the allocation between the different users as the right ones in order to serve the right purposes. Again, so I think it comes with what is your vision, what is your intention, what what is your end goal, and how you get there through both the how you structure it, both how you conceive those those products as well as how you you fund those products. Adam Grossman: Yeah, and I ⁓ we'll talk yeah, and then you know, obviously at Surge we do art and science. Obviously that's something you and I have worked on together in terms of determining the right mix for mixed use development. But you know, you were talking about tenants and real estate. Again, for particularly for audiences, pr ⁓ particularly senior executives who are starting to really focus in and hone in on real estate for sports. You mentioned tenants, rental rates, yield compression, what are some of the core metrics you were even starting to look at? You know, you mentioned learning the financial kind of in your first job, kind of these core financial metrics. Can you just explain what they are and what you're looking for and why real estate ended up being a more attractive attractive investment for institutional capital in ways you you previously described, but I think putting those metrics in that context provides even a a deeper understanding. Alex Heriard-Dubreuil: Well, I I think unfortunately there's not you know one answer for for all the situation. I think ⁓ first and foremost it depends ⁓ the how you approach your your real estate investment, whether you're a developer, whether you're an investor, whether it's for your own use, whether it's for you know, creating those districts. ⁓ so each each ⁓ situation is slightly different, which ⁓ I mean makes our role quite exciting but also quite difficult. So this is why not everybody can really fully appreciate that unless they built a team around it to be able to really play in ⁓ in that field. and and we try to be one of of those unique ⁓ breeds, but I would say if you if you if you if you think about from a development perspective one of the key key aspect is is looking at your development yield margin and so how much it costs you to to build a product, how much rents you're going to generate in that product, what is effectively if you were to sell that product down the line, what is the multiple to those those revenues you're generating, which in In terminology in the real estate world, you you you talk about cap rate, which is a percentage. much you can really you get from a market point of view, and then you you you look at your development margin and you decide whether it's sound. And and certain cases, especially where you got very high inflation, you got construction costs of the roof, and sometimes your rent has been challenged. well. it doesn't pan out, so it's very difficult to do new new product. In other cases, these are fantastic situations. So that's one way to to to to look at at things. Adam Grossman: Yeah, that's great. That's that's a great summary and I I Definitely think that's helpful because I think, you know, we try to lay that out in previous podcasts and in other intellectual ⁓ capital and content that we create. But that's exactly what we're talking about. Or what are the levers to push? Why is it so important? Why is it so difficult? What are you trying to, you know, maximize? ⁓ and that's something you know you mentioned obviously, and we'll get into the the art and science of mixed use development and how you maximize rental incomes, how you can, you know, maximize the effectiveness of cap rate and try to get cap rate compression to increase the returns on investment. To capital, those are all things that you know you and John and the team talk about every day. And I think it's helpful for our audience to get a perspective of what that means. So want to continue on your career journey, just transitioning back to that. I obviously you mentioned 10 years. I don't want to just shortchange the 10 years you did in in investment banking, but I think what's interesting and particularly more relevant to ⁓ what we're doing now is your time with LVMH and also your global background. So it sounds like you know, getting a before we jump into what you were doing, just having a global perspective, having a global background, getting global experience was something that was important to you. You know, why was it so important? You know, you you moved to London from Paris, you then moved to Hong Kong, you did so much global traveling. Why was it important for you to get a global perspective on the work that you were doing? Alex Heriard-Dubreuil: I think I'm actually passionate about what's going on in the world and I'm very curious and I ⁓ and very ⁓ and ⁓ geopolitical is geopolitics has been something that is was in the back of my mind for a very, very long time. So I I'm actually I I find it fascinating to see how the different market moves or different country moves, ⁓ how you negotiating projects in Japan or in the US or in in in France for that matter is very, very different. So the the fact that you need to always adjust yourself to to to the audience to make sure that you can get your point across, but ⁓ sometimes in a very different way, I f I found it to be intellectually very, very challenging and very rewarding. So I think that's that's just being very very curious and passionate about that for for me. Again, back to my earlier point about people, ⁓ it's a people business and learning to deal with those different ⁓ nationalities during ⁓ during my twenty-six years and I'm still learning. I mean you you're still learning, you still have to adapt. I'm I'm learning every day how to to to work in a US organization. I work every day to to to on many ones. So Adam Grossman: Yeah. Alex Heriard-Dubreuil: So I I think it's but it's is very important because I I do think the world now, despite what's going on right now, where countries tend to focus on themselves again, I mean that's probably a short, short situation. The reality is that when you're in investors and when you try to build effectively if you try to do project that doing, being able to compare what's going elsewhere is actually also very, very valuable. So I do think being able to be ⁓ in the mix, expose, I think you s very different and and actually help to create products that are in in certain markets very very and therefore succ more with a higher chance of being successful. Adam Grossman: Yeah, speaking of being American, I can't let a fastball go down the middle without asking you about, you know, I know how much you travel, I know how much John travels, you know, and I obviously there's not one answer to this, but to your point about learning about different cultures and different people and particularly given the current political environment, ha what's I don't know, you know, this is a very large question. I don't you know, there could be a lot of different ways you go, but how have things evolved? you know, in terms of your experience of dealing with and learning about international cultures. Clearly every culture is different, countries are different, people have different backgrounds and experiences. How has your frame or anything has changed over the past twenty, seven years in terms of how you think about and learn about new cultures and new environments, particularly given the current ⁓ political lens? Alex Heriard-Dubreuil: it's a tough question actually, but I say probably frankly I I do think that it's probably it's probably slightly easier today than it was twenty-seven years ago when I started because I would say there lo local players and partners are slightly more used to dealing with international investors. there's been a bit I mean Despite I would have said the last few years, I think the has helped tremendously to to not bridge gaps but but effectively allowing more interaction of cro cross border situation between between countries. So I do think is improving, but I think when you make a difference, you still need to be able to understand the local culture, you still need to to pay you'd use in a way of spending a lot of time and energy to to to learn. And that's that won't change, but I would say people are probably a little bit more receptive than they were b back twenty-seven years ago when I I started. I mean for example when I was doing deal in France twenty seven years ago, sis I mean we were I mean everything it was in French they they have even difficulty I I was working for from our lynch and and most of my you know document had to be in English and so it was a bit of a an interesting situation but now I mean you know the language is not as a barrier as it is today. So it it was before so that's that's probably the one of the big changes. Adam Grossman: And then again, I w I do want to get back to the L L V ⁓ H experience, but you know, just in your again, are there consistent themes that you see when you're on the ground, right? What do you really get when you're on the ground in all these different locations that you can't get either obviously now there's AI, but even before that, right? You could Google places, you could go to you could get some information, you could read articles, but what do you get, you know, from the hand so to speak, from the hand to hand combat or and not even that, I don't mean that like pejoratively, but ⁓ in it with a negative kind of context. But you're on the ground, you're seeing people, you're talking to people, you know, you're consistently getting probably from your perspective, insights that people aren't getting by not being there. So You know, given that real estate is such a people to people business, are there consistent themes you learn about when you're on the ground? Alex Heriard-Dubreuil: I think you can go deeper in certain subjects, you can read ⁓ the room as well. So especially if you if you're in negotiation. I think we part of our our our as well is to to identify the few a few new concept IPs and and being to experience them first hand is also an interesting thing. So for example, if you if you're able to interact with a very cool restaurant in Japan. I mean maybe maybe you you will think, okay, one of our projects in the US, I think it will, ⁓ you this this concept will will work very well. So why don't we try to bring that there? So that's also one of the concrete opportunity when you're you're on the ground. So meeting people, seeing new new things is is obviously a very, very very important thing because that's something you Well it's it's great the zooms and the I mean the the this technology is super helpful so actually you can rationalize your your travel plans better and and but you still need to be on the ground and you still need to spend time with with with with the people. Adam Grossman: Yeah, and even I I've done much less travel than you have in in this role, but even just my experience of being on the ground, seeing the sites, seeing what they look like, talking to people, seeing what their perspectives are, getting, you know, locals' perspective of local markets. I obviously given my role, I am biased towards know, the use of data and AI, but there's just information that you're getting like exactly what you're talking about. Unique concepts, unique ideas, really understanding the y y you know, obviously we talk a lot about ⁓ PPP or public-private partnerships and understanding the political and community elements. There's work you can do and you should do research ahead of time, but being on the ground is really helpful. And it's there's some irony here in that I'm talking about the people side and you're talking about the Zoom technology side because that's usually the inverse of our internal conversation. But I find that you know I I just I think that is, know, I just want to emphasize I do think that's really valuable and really valuable context. And you've done it for so long that it's really it's really impressive how how far and how deep you've you've been able to go in these local markets, particularly in Asia, which transitions to LVMH. So you mentioned you spent a lot of time in Asia, in your LVMH experience, particularly obviously being based out of Hong Kong. So you know, coming into two thousand coming in two thousand eight, you know, what was the scene? What were you looking at? What are like some of the opportunities, Asia or otherwise, that you guys were thinking about in terms of growing the real estate portfolio. Alex Heriard-Dubreuil: Yeah, so so when I joined the team so we they had already some exposure in in China and Japan. So one of the the the immediate focus for me was to to help ⁓ the team on the ground to ⁓ to push those those those projects ⁓ forward and relieve through our partnerships and and and and creating those those developments. So that was just to remind it's a very large mixed use project with a ⁓ with a a luxury retail element. But it was not only about luxury retail, it was not only about LVMH, as I said earlier. But you know, trying to to to effectively realize those products. So it was it was trying to be sure that you know giving a hand to the local team to be able to to effectively do those projects and help them identify it ⁓ more whether in Asia or actually elsewhere in the world. So That was really the the intention. We i it started under the family office ⁓ slash L VMH, morph into a more fund management business with third party capital under management, and eventually ended up within the L cataton world, which was but the the journey was really about the consumer and making sure that the product that we were building was right for the demand. And back then, I would say ⁓ Asia and China in particular was was ⁓ was a booming market, especially for luxury brands ⁓ who were their audience was very strong, but the the the opportunity from a real estate point of view was very scarce. So the idea was effectively to bring the right product for the retailers to be able to express themselves and therefore give to the customers the experience that they deserve and therefore the ability to sell the product that they wanted. to sell. So we were effectively solving a a need which is always better when you you you you do real estate investments. It's it's making sure that what what what you create or what you you you own is effectively solving a need, whether it's from a a retail point of view or from a an entertainment or experience point of view in our case. Adam Grossman: Yeah, and how did you decide, you know, two questions here. One is how did you decide what the right product was for the environment and how did that potential definition change, particularly from a retail perspective as retail kind of changed in terms of, you know, retail could be in person, online, delivery, there's other retail coming in, and how do you guys you know, retail experiences coming in? Maybe that didn't change, but did that was there an evolution of the product market fit given the changes in the retail experience? Alex Heriard-Dubreuil: For sure. And and and the retail is still changing ⁓ every day. I think the and you see that actually. I mean the the the shops, I mean the luxury boutiques that you see now versus the ones that you you used to in department store back ⁓ twenty years ago are vastly different. Now you got it's almost like cathedrals. I mean these are enormous places where people not only shop but they they enjoy a meal or they have a coffee or so. it's it's all this experience and driven data's changed dramatically. So therefore the need from a real estate point of view have have evolved dramatically. So the ability to be close to the operators, close to the to to the user of those real estate is is is very important. So so you create the right product for them to be able to to to give the full experience to their customers. So we were to to answer your question it was The input, it's all about inputting the right information from the different sources. So it's all about having the right network, it's all about having the right connection, it's all about in the case of you work close to a group like LVMH, you you you have the huge advantage of talking directly to the brand managers, to the CEOs, and they they can tell you, you know, where they want to go, what are the important markets, what are the what is they are missing. So before you start a a a a product you you have a fair idea on on what to do and a bit similar to in our case where we we we look at project, we have the ability to pull on some of our relationship to be able to make sure we we we build the right products. Adam Grossman: And then from a were there any, you know, obviously I'm sure the answer is yes, but were there surprises or idiosyncratics to the, you know, specific markets? Obviously, Asia is a big geography on its own, but just were there surprises that you found from these conversations or things that you were different based on the conversations, the networks and relationship that you were not egg anticipating or expecting? Alex Heriard-Dubreuil: ⁓ I think you're surprised every day. ⁓ but if you if you're not then you're lucky. But ⁓ no, would say a few things. ⁓ I will say I will probably have not expected the speed of change, for example, in in mainland China. I think that's that was fascinating to to experience first and from the initial real estate to what they're building right now. I mean the Adam Grossman: Yeah. Alex Heriard-Dubreuil: the evolution of the quality of the of the product they're they're making of I mean and also the customers or they evolve and and the the expectation that I've changed so dramatically has been has been at a light speed and in the meantime over market have been very protective in in ⁓ ⁓ in of the experience. So no I think I think that was probably one of my biggest Not surprised, but w very to to to to to see that experience. And and it's still, you know, changing so fast. I mean the the adoption, I mean now in the in the UK it's you you pay mostly with your phone now and but that you know, eight eight to ten years ago it was already the case. You know, it was ⁓ already the eight to ten years ago in mainland China that it was very difficult to pay with real real money. I mean there was was all digital. But ⁓ you know, when you're when I moved back in London six ⁓ six years ago you you you you were a bit surprised. But now it's it's it sounds like obvious everybody's doing that, but it was it adoption rate was was a slightly slower than I would say for example in China where they're all born now with a with a phone in the hand. Adam Grossman: Yeah. And I and I do want you mentioned surge and some of the work and I want to transition to that soon. But you mentioned about your thesis about thematic investing. Clearly there was thematic investing at LBMH. So from your perspective, you know, you what did you learn about or the advantages of thematic investing, having a perspective and having kind of a point of view about real development through a specific theme, and and kind of how has that shaped your career going forward? Alex Heriard-Dubreuil: So I mean it it it it evolved over time to be to be very frank. So I was very generalistic. I mean for for for a long period of of time. I just you know it's it's it's it's also like driven the mar market demand and and and need. so it just just the reality right now in order for you to be successful in real estate, I mean considering the the the overall market environment and somewhat in in certain cases a bit of challenging environment, you need to be able to to create value and and and in order to create value it's no longer only about you know building the right product but somewhat ensuring that the tenants that in it's it's more like a partnership with the the people who occupying your your real estate. So how you can leverage that partnership or you can fully take advantage ⁓ jointly ⁓ about ⁓ creating those the the the the the the right universe for people to be successful. And therefore, for being thematic is you really need to be able to identify those those places where you can have, you know, both you you benefit from a strong tailwind, but you're able to to harvest those those those value creation opportunity through ⁓ both you the real estate and the operations. So that's that's what I mean by by being thematic. I mean A lot of people these days in real estate they talk about data centers. This is obviously a an obvious place where a lot of people are piling money into, but but again you have to look at the the time, you have to look at the number of products, you have to look at the the challenges, the access to power, which sounds ⁓ obvious, but it's not that obvious ⁓ when you you you look at those products. So I I I think the keys at the end of the day is is being able to be ⁓ ⁓ relatively focus in the type of product and being able to deliver the right product within a a a strong TAM and strong environment. And and that's what attracted me at at at SERG, so that's that's why I'm here. Adam Grossman: Yeah, let's talk about it. Yeah, you just brought it up. So what about what are those tailwinds that you're seeing from a search perspective? You you obviously mentioned you weren't necessarily it wasn't a hundred percent on your radar about sports and you know, sports entertainment anchor, real estate, which is what search stands for, you know, sport and entertainment, real estate, global holdings. So what what were those tailwinds? What were those things you were attracted to from opportunity as you were looking to join search? Alex Heriard-Dubreuil: Well, first of all I had to learn ⁓ all the NBA, MLS, all this ⁓ this ⁓ teams and she says I'm still ⁓ learning here because sometimes I can be trust. But no, I I think it was it was really about the the conversation I had with John the first time and and his ⁓ when he explained his vision and his it was very about, you know, people are And it has accelerated over the last ⁓ twelve month for sure with ⁓ with AI getting more and more power and and being front and center everybody. But I would say this mo more and more people want experience, want to ⁓ thing and being able to be, you know, the right product to offer your your your your clients, your your customers, your tenants, the ability to experience enjoy. live f the the the full extent. I mean this this that's what was exc exciting me because everybody embarking into dehospitalization. So what I mean by that is that now you you are in an office space you feel like you're in a living room because you want people to feel comfortable that you want your your your your your your worker, your team mates to to feel good at at work. But ⁓ here a step even further is you you want to to give emotion, you want to bring people under one one roof or one district in order for people to experience things different physic I mean, to really and and and and effectively being almost the edge of of the AI world that we are all embarking in. And and I thought Jesus is perfect because you're not playing against AI, you're embracing AI, but you you're giving you you you you work in parallel and you you're not necessarily in the in the place where all the hype is and therefore probably the the some somewhat the the very strong valuation to one can argue about the valuation here, but you you play in that field and you you create the right product and you benefit from that tailwind. So I thought the being able to play there and and and being on the global global scale, because that was ⁓ John's ambition is to to to to my earlier point, being able to to to act global, to take advantage of that global position to create those kind of unique unique product was was also very exciting and and I think the the entrepreneurial the the agility and the and the design to really and the fact that it was a very early stage. I mean this is still a r an early asset class. I mean it's almost like an asset class on its own. I mean you start to see even brokers are talking about those as a as a product. And I think more and more people will will talk about that as a as a new asset class. And and I think being niche and being being differentiated is again ⁓ quite quite unique and and and offer greater chance of success. Adam Grossman: Yeah, I think operating at the intersection of both live experience, like you're saying, live experience, what's gonna happen with AI. That was something that was attractive to me too when Surge was considering buying Roar is. the opportunity to take advantage of AI with the combination of of live and physical ⁓ assets and real assets were something that I found to be very attractive, very interesting. And John's, you know, he had a a vision for that as well, which I thought was very interesting and he was very early adopter in terms of that intersection. But, you know, going back to what your, you know, you mentioned where we're operating as a new asset class, you know, what are the kind of you know, from your perspective, what are you doing and thinking about from a day-to-day perspective? How are you, you know, you mentioned talking to brokers, you know, obviously that's part of it, but what are you thinking about? What are you working on? What's what's coming across your desk on a on a day-to-day basis? Alex Heriard-Dubreuil: vast question again. ⁓ I ⁓ it I mean again it depends a bit ⁓ where you are in the world and the the regions. I would say the great is is where you can have all the stakehold you can talk with all the stakeholders and somewhat create the right product that answers the needs from from all the stakeholders. And when I talk about stakeholders, I mean the team owners, I mean the the city, I mean And and being able to effectively work with with them and and help to to to create the the right real estate environment around some of their destination is something that it's actually really ⁓ one of our our our key objective and and and and part of my time. So part the ⁓ you being able to to to really f focus on that and and and and create along with the team the the right product. and and align the the different vision and objectives in order to to create the right environment for success is is extremely important because somewhat people have different objectives from a have a different timeline and and and and being able to to to have everybody working in the same the same direction is is where you're you're the most successful but I would say in the ⁓ in in in the U ⁓ the US and Canada, North America, which is probably one of our biggest market by by by by far, like probably forty to fifty percent eventually. you know, one of the big ⁓ big is around revitaliz revitalization of of downtown cities, taking advantage of the energy that like a stadium, for example, can bring to revive a a location and and building around that through you know, or understanding of the fan through thanks to you by the way, you know, with with the ROAR initiatives and the ability to understand better you the fans and and making sure that we we give the right experience in and around the stadium, create the right district and and and and effectively bring back, you know, the energy that that some of the downtown location before and had lost, since since COVID. I think that's that's one of the ⁓ you know great great project and great opportunities and and some of the great project we're working on right now revolve around that. So working with with cities to to to to to to get the right support, working with teams to make sure that we can work with them to make sure that the we give them the maximum you advantage for the fan to to experience more than just going and and see a show. I think that's this is something that is is very taking a lot of our time and my time, but but it's not only about the US. We we look in different markets. So it's yeah. Adam Grossman: Yeah, I think the the idea of That thesis about revitalizing downtown is something we're seeing globally. There's a different definition of downtown, different definition of what that territory or area looks like. But the idea of maximizing people's time, you know, John obviously talks about people potentially having more disposable time with the rise of AI and looking for live event, entertainment, real estate, live, work, shop, play, those are all things that you talk about. But those are a lot of different concepts, right? And there's a lot of different stakeholders. And you're talking about bringing stakeholders together and people with various different levels of experience from real estate development, finance, operations. So and that's a big part of what you do a and you know, obviously what I I'm doing as well. But can you talk about how you explain these, you know, you mentioned this being a niche at relatively niche asset class, a new asset class, an emerging asset class. How do you talk to different stakeholders, whether they're investors, people, you know, city government officials or not just in city, but government officials, community members, you know, how are you thinking about communicating what we're doing and the impact we can have To all these different stakeholders. Alex Heriard-Dubreuil: I mean I I I find it fascinating the the speed of change, especially in the US. I mean, ⁓ so I what is interesting is I do think that more and more of those stakeholders are are quite keen to to to move into that space, understanding the benefit of that space, but don't know necessarily how to tackle that and doesn't have all the ingredients, ⁓ whether just because they don't have the necessarily the capability in house or whether they have the experience. And so I do think that there the the the the the there is definitely more and more of stakeholders that are are keen to embark on a journey and and there is not that many still that can really being able to speak those different languages and bridge the between ⁓ know the sports the the the real estate the the financing the structuring and that makes us unique and if you add on top of that the fact that we don't necessarily focus on on a certain market which certain local developers can do i mean they are excellent about very specific niche market but while we're slightly different is we we we do that with on different continents so being able to bring that knowledge as well from elsewhere to to pepper it with with with with the district makes us even more unique and and makes our our our positioning more more strategic to those ⁓ those stakeholders but i do think that the the the the the it's it's you you less have to you you don't have to convince them as well is more now they need more to be guided and don't mean that in a in a in a wrong way. I think it's just more They need the the the right amount of support, which is normal because they can't do they can't do everything. I mean a team cannot it's already quite complex to to run a team and and if you see the value of teams these days, I mean the Lakers is an interesting record breaking and in less than a year. I mean you you I mean it's it's a big element, but I do think that because of those value Adam Grossman: Right. Exactly. Alex Heriard-Dubreuil: very high value for for the teams. I think there is needs to find other sources of of revenues and future revenue stream. And I think real estate is becoming more and more a strategic So I think everybody realize that. And the the the city realize also the impact, the potential positive impact on their downtown if if it's well well well organized and and the potential support that they can bring through public-private partnership. ⁓ could be very very beneficial so but they have to really being able to be well thought through so or or guide through so to make sure that that you know they they're achieving what they want to achieve and we all can collectively we be be be successful here. Adam Grossman: Yeah, and two two final questions as we're wrapping up. one, I think before I a ask the two final questions. I think you're exactly right. It's you know, if particularly if you're talking about the business of sports and you're talking about the operators of sports, you know, real estate is not necessarily a s a core operating skill of senior decision makers at, you know, teams, leagues, events, franchises, rights holders. You just need knowledge, right? You need to learn. It's not necessarily exactly what you're saying. You need some guidance and from people with expertise, and I think our ability to bridge both all all the things that you said, sports, real estate, development, finance, operations, data, technology, that really doesn't does put us in a unique competitive advantage. And I I just again wanted to emphasize that, you know, clearly this is Aurora Surge podcast. So we're not trying to make an advertisement for Surge, but I do think it is very important to stress that just being able to talk to people who know what they're doing across all different phases is really helpful. and then ⁓ Alex Heriard-Dubreuil: Yeah, and alignment of interest and and also alignment of interest. So I having people that think long term about what they're trying to achieve, which again I I don't want to really focus on the I mean I'm a bit biased, obviously Adam, so you have to excuse me about selling a little bit search, but but my ⁓ joke aside, think my point is more to say at the end of the day is also all about alignment of interest. So Adam Grossman: Right. Alex Heriard-Dubreuil: ability to be long term, the ability to the fo the focus to be long term, to be strategic for for those stakeholders and could be also developers by the way in in other market, other jurisdiction we work very closely with developers because we they are amazingly ⁓ strong local developers but they they see the benefit of us bringing this especially in Asia for example, we bring this ability to play in in the sports as well is is is quite unique. So Adam Grossman: Yeah, and I no no, I think we might streamline into one final question then. you know, ⁓ again, you're the the global chief investment officer, you know, we get people to us about potential investment, particularly around real estate. So you mentioned some of the things, but what are from your perspective, what makes for a good investment at a high level, right? Obviously we're not gonna say like here's the underwriting model, but like from your perspective, what makes for an interesting investment that you would like, you know, that you're Alex Heriard-Dubreuil: So sorry. Adam Grossman: would want to commit and potentially have Surge commit more time to understand and explore. Alex Heriard-Dubreuil: Yeah, well I think I w I so I will put the the discipline of of being a chief investment officer and therefore I mean I have a fiduciary duty to ensure that the returns meet our or return criteria, which is obviously unfortunately at the end of the day is ⁓ of the biggest funnel. But ⁓ frankly I think it's the long term nature of what we built. I I do think that if we can create a product that eventually f twenty years or thirty years from now we'll still be thriving and and and and being becoming a a place where people enjoy living, working, playing, eating, ⁓ and and enjoying games ⁓ and entertainment venues. I think that will be will be quite quite quite amazing. So I think the ability to see ⁓ you know, to participate, either to revive a situ a location that has been no longer successful and to repositioning into a very successful but I would say yeah to to from a a community impact point of view being able to have a positive community impact beyond beyond the returns. At the end of the day I think real estate has to have those two lenses. When you do real estate your impact is enormous. So being able to co to combine the financial returns with ⁓ with a with an impact return on the community is is extremely important and and having this sport and entertainment angle to it is you you're already a step there. I think is just how you make sure that you you fully honest that is is is important. Adam Grossman: Yeah, I think that's a a great place to end. Alex, thank you for your time. Thank you for explaining more about your background and, you know, your time at in the estate industry and what we're doing in Surge. Appreciate the time. Ha it was great to have you ⁓ on as a guest. And you mentioned this is your first podcast. I think you know hopefully there's many more to come after this episode. You did an excellent job. Alex Heriard-Dubreuil: Well I'll tell my kids that I've done a podcast. They will be very impressed actually. They said, Dad, you you're young again. There we go. Adam Grossman: Yeah. Exactly. That's what we're here for. Great. Thanks, Allie. Alex Heriard-Dubreuil: That's that's what matters. you, Adam. Take care.