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"This career is a marathon": Here"s the advice Philadelphia"s Best of the Bar have for young lawyers

The Business Journal's 34 Best of the Bar honorees for 2023 are diverse in practice focus and experience, but when we asked them to offer advice to up-and-coming lawyers there were some common themes......»»

Category: topSource: bizjournalsNov 20th, 2023

Here"s how to start your 6-figure side hustle, according to entrepreneurs who have done it

Insider gathered advice from successful entrepreneurs on turning passions into profitable businesses. Annalisa Abell working from homeCourtesy of Annalisa Abell Small businesses have boomed since the start of COVID-19, earning some entrepreneurs six figures. Famous companies such as Apple, Twitter, and Facebook started as side projects. Insider gathered career advice for those who want to turn their passions into profitable businesses. Now may be a good time to invest in a side hustle. Side hustles became more popular during the pandemic as people sought new hobbies during lockdowns or extra income, said Luke Pardue, an economist at Gusto, a platform for small-business payroll and benefits.In fact, 33% of the small-business owners who used Gusto said they needed side hustles to keep their companies afloat. Other experts advised that taking on a side gig during the pandemic could provide more financial security. "The surge in side hustles is partly caused by new entrepreneurs who need to rely on additional sources of income to cover the businesses that they just started," Pardue said.In the past, people have taken on side hustles to pay off student loans, pursue an unfulfilled passion, or become their own boss. Some of the most recognizable companies, such as Apple, Twitter, and Facebook, started as side projects and later became multibillion-dollar corporations. Insider spoke with entrepreneurs who earn almost six figures or more about their advice on building side hustles.Here are the side hustles that you can try now and how you can build them efficiently.Mark Stenberg and Weng Cheong contributed to an earlier version of this story. If you love cars, you can earn extra money by renting them out on Turo. Natalia Zorina earned $922,225 last year renting out her 69 vehicles on the app.Natalia Zorina is a Turo host based in Miami.Natalia ZorinaNatalia Zorina is a 31-year-old Turo host in Miami who started her business with one car in 2018 as a side hustle. She eventually purchased more vehicles  and in 2021 landed the first investor in her company.Turo is a car-sharing app that allows people to rent out their cars to customers for a daily rate. Some hosts rent as a side hustle to earn passive income, while others, like Zorina, operate full-time businesses. In 2022, Zorina earned $922,225 from renting her cars on Turo, which Insider verified with documentation. Today, she has 69 cars including a Ferrari, Porsche, Rolls Royce, Aston Martin, Audi, and Lamborghini.Read more.If you're looking for a low-cost side hustle to start with little business experience, investing in a vending machine can be a good place to start. Crystal Warren booked $242,000 in sales in 2022.Crystal Warren owns Vending Factory.Crystal WarrenVending machines can make up a lucrative business for entrepreneurs looking to earn passive income.Crystal Warren started her vending-machine business in 2016 as a side hustle while she worked full time as a teacher. Once she began earning more from her business than her full-time job, she quit teaching to focus on her company, Vending Factory. Now, she runs the business full time and finds locations for other entrepreneurs. In 2022, Vending Factory booked more than $242,000 in sales, which Insider verified with documentation. Read more.If you have skills in copywriting, graphic design, or software automation, you can become a freelancer on Upwork. Courtney Allen earned more than $1.3 million since using the platform.Courtney Allen is a freelancer based in Seoul, South Korea.Courtney AllenFreelancing is a great way to make the most of your skills while working a regular 9-to-5, since you set your own hours and can work from anywhere. A Statista report found that there are nearly 58 million freelance workers, and that number is expected to reach 86.5 million by 2027. Moreover, many freelancers earn more than they did when working 9-to-5 jobs. Courtney Allen started freelancing in 2016 after a failed business attempt left her with $25,000 in credit-card debt. She previously worked at Cisco Systems as a presentation designer for senior executives, so she used her PowerPoint and graphic-design skills to branch off on her own.Allen used the freelance platform Upwork to find clients and started with an hourly rate of $27. Today, her hourly rate is $150 in addition to some flat-rate gigs. Since 2016, Allen has earned more than $1.3 million in payments on Upwork, which Insider verified with documentation. Read more.If you're a graphic designer, you can make a living from designing logos. Here's how Joana Galvão earned $100,000 in 10 months.Joana Galvão.Courtesy of Joana GalvãoGalvão quit her job and became a full-time freelancer after discovering that clients would pay big bucks for logo designs. She charged her first client $800, and she was earning $100,000 within 10 months, she wrote in an Insider post.In 2014, she cofounded GIF Design Studios, an award-winning design agency in Portugal. Galvão wrote that she didn't need a big audience to build her company. Instead, she emphasized in-person networking, attending conferences, and reaching out to other entrepreneurs for advice. Similarly, Morgan Overholt, a graphic designer, wrote in an Insider post that she makes $200,000 a year using the freelance website Upwork and securing contracts she procured on her own. The 34-year-old gave a breakdown of her expenses and how she makes it work — by developing careful spending habits and investing in future growth. Read more.If you're a good writer, there's a path to making a sustainable living as a ghostwriter. Here's how Annastasia Kamwithi earned $80,000 in a year.Annastasia Kamwithi.Courtesy of Annastasia KamwithiQuitting a full-time job to write is a lot more common than you might expect. When Kamwithi lost her job as a banker with Co-operative Bank Ltd. in 2015, she was on the lookout for something to replace $50,000 of lost annual income. Now, she's a ghostwriter earning $80,000 a year on her own time. The entrepreneur told Insider that good writing comes with practice. She also recommended developing a writing portfolio with your byline so that you have original samples to show clients."I remember when I started out I had written one personal article on entrepreneurship tips," Kamwithi said. "I had used this when I was training and just starting out, but turns out it was a great piece that got me hired by a few good clients who created for me an opportunity to launch my career as a ghostwriter."Read more.You can leverage your online presence and make a living as an influencer. Here's how beauty mogul Huda Kattan built a billion-dollar brand in five years.Huda Kattan.Courtesy of Huda BeautyIn today's day and age, becoming an influencer is recognized as a career choice. Insider has interviewed social-media stars and YouTube creators such as Kevin David and Marina Mogilko on how they leverage their online platform.One such star, Kattan, is a self-made beauty mogul worth an estimated $610 million.After quitting her job in finance, Kattan built her cosmetics empire of more than 40 million Instagram followers and cofounded the makeup brand Huda Beauty with her sister Mona. When it comes to starting an influencer business, the Kattan sisters suggested straightening out legal aspects as soon as you can. "A lot of people think good lawyers are expensive," Mona told Insider. "But bad lawyers are much more expensive in the end. Not having that right will screw you up later on." Read more.If you're a young entrepreneur with a business idea, there's a way to jump-start your career without a four-year degree. Here's how Ethan "Moose" Read, who dropped out of college, made $225,000 in sales last year reselling sneakers.Ethan "Moose" Read.Courtesy of Moose ReadRead dropped out of college to pursue his side hustle full time. In an interview with Insider, he said he made $225,000 in sales in 2018 by reselling sneakers through his website, Moosetraxshop, and at shoe conventions and events. Read, who was 20 years old at the time, warned against taking out loans to get started and recommended having at least $1,000 in savings or an emergency fund to start. Read more.If you're a consultant, you can capitalize on the number of people needing business advice during the pandemic. Here's how Maya Elious earned over $250,000 in a year.Maya Elious.Courtesy of Mecca GambleElious, a 29-year-old who turned a college side hustle designing Myspace profiles into a full-time consulting gig, said that starting young helped her make a career transition.In an interview with Insider, she said she was able to keep her personal expenses low by living at home or with a roommate. She based her living choices on her side hustle, and she turned it into a full-time business in five years. The entrepreneur recommended self-reflection on the level of commitment and time it takes to build something from scratch. "Make sure that your side hustle is going to be able to pay you for the life that you want," she said. "You have to have that bold, calculated mindset to take on short-term paying for long-term gain."Read more. If you're an online shopper, you can sell products on retail resale platforms. Here's how Shannon Welch made $127,000 on Poshmark.Shannon Welch.Courtesy of Shannon WelchInsider previously spoke with Welch, a Poshmark seller who decided to turn her closet into a six-figure career. Welch started with zero sales, and she built a customer base through understanding the websites' wholesale portal and demographic. By the time she graduated from college, the side hustler was already making more than $100,000 in sales. "All of these entry-level positions pay — I think typical is around $50,000 a year. And I'm making more than that doing something that I love and something that I know that I'm good at," she said.The secondhand market is currently worth $36 billion and expected to reach $77 billion by 2025, according to a ThredUp report.Read more.If you're a small-business owner, you can teach your skills online. Here's how Manville Chan and Jeff Parsons brought in nearly six figures in a month by teaching ramen-making classes.Manville Chan.Courtesy of The Story of RamenChan and Parsons set up ramen cooking classes as an Airbnb Experience in 2017, and the side hustle became so popular that Chan was able to quit his job a year later to pursue it full time, Insider previously reported.They initially pulled 64% of his client base from Airbnb. But the entrepreneurs then created a company website that soon became the main venue for bookings. Now, 70% of their business is from corporate teams that are looking for company activities. "A lot of companies tell me they don't have to just pick a restaurant or a bar for the team bonding because everyone will just eat and drink," Chan said previously. "They want something more engaging. Making noodles and working as a team is interactive and engaging."Read more.If you're a relationship coach or a therapist, you can start a counseling business online. Here's how a couple used their own relationship struggles to build a $2 million business and saved 10,000 marriages.Stacey and Paul Martino.Courtesy of Stacey and Paul MartinoThe Martinos decided to start a relationship-coaching side hustle after saving their own marriage from divorce.The couple cofounded Relationship Development, a relationship-coaching side hustle that they turned into a $2 million business in 2010. They spent two years forming a business plan before officially launching the company. One thing that helped the couple grow the business significantly was online marketing."Understanding traffic allows you to become stable in a very unstable world," Stacey said. "We were under seven figures back then, and now we have a seven-figure, mission-based business serving a lot more people than we used to."Read more.If you're a sexual extrovert, you can combine your magnetism with some marketing acumen to make more than $250,000 a year on sites such as OnlyFans. Here's how amateur adult entertainers and sex workers are making triple-digit incomes from their bedrooms.Erica North.Courtesy of Erica NorthNorth, an adult-entertainment creator, said that when fans pay to subscribe to her channel, the content draws them in, but the connection keeps them paying.North is one of many creators who have taken to sites such as OnlyFans to monetize their ability to connect with fans. North doesn't identify as a sex worker, and she makes a substantial portion of her income by charging her subscribers for the opportunity to text her."I tell people, 'My favorite feature on OnlyFans is talking to people,'" North told Insider. "I really mean it when I tell them that I'm there for them, I want to talk to them, and that doing so is the best part of my day."Read more.If you're a successful salesperson, you might want to become a drop shipper, or a middleman between the customer and the product supplier in e-commerce. Here's how Kamil Sattar, who dropped out of college, created a Shopify account to sell $1.7 million in products.Kamil Sattar.Courtesy of Kamil SattarDrop shippers use wholesale marketplaces such as AliExpress, which sells every category of product in cheap prices, to identify things that might be of interest to consumers. They advertise these products on social-media platforms and act as middlemen between the supplier and customer once the product is sold.Sattar, who dropped out of college, sold $1.7 million worth of products through drop-shipping this year. He told Insider's Catherine LeClair that sellers should focus on selling one product and leverage other product-branding websites to legitimatize their business. For example, he used e-commerce platform Shopify to make product websites. Sattar also relied on apps to simplify drop-shipping processes, such as automation for customer texts and emails, order-tracking for products, and video- and photo-editing for ads, he said.Read more.If you're interested in starting a side hustle but don't know what it should be, serial entrepreneur Amy Porterfield suggested that you sell digital courses. Here's how she found her niche and made more than $13 million in 2020.Amy Porterfield.Courtesy of Amy PorterfieldPorterfield is a former content-development executive for the popular performance coach Tony Robbins, and she has since leveraged her corporate skill set to earn $13 million selling digital courses to entrepreneurs.She recommended that side hustlers self-reflect in areas where they've gotten the most positive results. It doesn't necessarily have to be the same work you do at your job. In fact, a teachable skill can range from beating a marathon record to making a secret recipe for caramel candied apples, she said.Using that same mindset, Porterfield found her niche and now focuses on her two programs: a $397 curriculum that teaches people how to build successful email lists and a $1,997 package on how entrepreneurs can launch a digital course teaching anything from scratch. "You only need one or two digital courses to be successful," she said. "Just create one and validate the fact the people are buying your product, launch it again with a better marketing strategy, and launch it again." Read more. If you're a writer, you can make a living self-publishing on Amazon. Here's how Sally Miller makes $9,000 a month in royalties.Sally Miller.Courtesy of Sally MillerMiller worked as a stay-at-home mom, life coach, business analyst, and project manager before starting her latest career as a self-published author.She built a following through her subject matter, which focuses on how people can make money through various entrepreneurial ventures, such as Airbnb and ghostwriting. So far, she's coauthored and published 16 books on Amazon's platform, Kindle Direct Publishing, and booked $9,000 in royalties in January, her highest amount to date, documents viewed by Insider showed.When wading into this side hustle, Miller suggested exploring paid advertising as a way to increase sales. She buys paid advertising on Amazon for her work, budgeting about $2,500 a month for Amazon ads. She only has to pay for an ad if someone clicks on it, and it directs customers to her author page.Read more.If you're into haircare, you can launch your own products. Here's how Stormi Steele started her haircare brand with a series of kitchen experiments and earned almost $20 million in sales last year.Stormi Steele.Courtesy of Stormi SteeleSteele was working as a hairstylist when she started making her own hair products in her kitchen. She mixed ingredients such as flaxseed oil and vitamin E in the hopes of creating a concoction that would help her hair grow. Today, she's the founder of Canvas Beauty Brand, a three-year-old haircare brand that made almost $20 million in sales last year, statements viewed by Insider said.To help grow her business, she invested in paid social-media advertising — $100 got her a promotion that she shared across outlets such as Facebook and Instagram. That one ad led to nearly $15,000 in sales in a few days, and two weeks later, she sold an additional $440,000 worth of products.Read more.If you're a collector, you can sell to an online community of people with the same interests through live shopping. Here's how Vivian Nguyen earned $60,000 on Popshop Live selling squishy and plushy toys.Vivian Nguyen is the owner of Cyndercake.Courtesy of Vivian NguyenVivian Nguyen was one of the first sellers on the live shopping app Popshop Live when it launched two years ago. Before joining the app, she was an influencer on YouTube selling "squishies," or foam toys with a viral following.In 2020, Nguyen's business Cyndercake made more than $60,000 in sales on Popshop Live and now it's helping her pay for college. Her growth led her to open an e-commerce site this year. "When I was starting to sell, it kind of felt like a garage sale," she said. "I figured that an online shop would be a good step to officially make my mark as a business owner."As more small businesses and resellers are using livestream shows to grow their businesses and personally connect with customers, the livestream shopping market is estimated to be worth $6 billion this year and $25 billion by 2023, according to Coresight Research. Read more.If you excel at SEO and affiliate marketing, you can earn a living buying and selling websites. Here's how Chelsea Clarke earned $127,000 in 2020 flipping websites.Chelsea Clarke is the founder of Blogs for Sale.(Courtesy of Friday Eve Photo)Chelsea Clarke launched her business Blogs For Sale while marketing and building websites for a brokerage that sold brick-and-mortar businesses. She applied the same concept to online businesses: By revamping a rundown blog with Google Search optimization she could turn it into an online business that generates $16,800 in a year.Her company took off last year as more people sought online revenue streams during the pandemic. In 2020, she earned $127,000 from flipping 13 websites and brokering sales for 50 more sites, Insider verified with documentation. Clarke said it's simple to start a business flipping websites, but it takes a lot of work and commitment. Though certification isn't required, she highly recommends getting trained and certified to boost your knowledge and credibility. She trained through the International Business Brokers Association with a program focused on selling brick-and-mortar businesses.Read more.If you're organized and creative, consider becoming a virtual assistant for brands you love. Here's how Jessica Hawks made $9,000 per month freelance assisting.Jessica Hawks, virtual assistant.Jackie SternaJessica Hawks jumped from one corporate job to another before deciding to reclaim her creative side. That's when she reached out to her favorite brands and entrepreneurs on social media, asking if they needed help with content creation, business management, or backend administration.  Hawks created a business profile in March 2020, and by August, had seven consistent clients. She was also hitting $9,000 per month as a virtual assistant, quadrupling her salary as a full-time employee. Now as a full-time virtual assistant coach, Hawks holds multiple masterclasses per year, hosts a podcast, and helps aspiring entrepreneurs start their own businesses. Read more.If you have a pool in your backyard, you can rent it out to your community. Here's how Jim Battan earned $159,000 through Swimply.Jim Battan (right) and his wife at their backyard pool.courtesy of BattanJim Battan was scrolling through a local social media group when he realized how many families were in search of a pool to visit. Having a pool that was rarely used by his family, he decided to offer it up as a rental.He joined Swimply, a pool-sharing app similar to Airbnb, during the summer of 2020."I put it on Swimply and within two hours it had three bookings," Battan told Insider. "It has just steamrolled from there, and in the last 21 months in business, I've had almost 9,000 guests come through."Battan earned $159,000 in revenue since opening his pool for business, according to documents previously verified by Insider. As a serial entrepreneur, Battan said this is the perfect side hustle because it's allowed him to monetize what he already owned. But he still invests time and money into updating his property to increase his customer flow. Read more.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJun 10th, 2023

The not-quite-redemption of South Africa"s infamous ultra-marathon cheats

In 1999, two South African brothers cheated in the Comrades, the largest and oldest ultramarathon in the world. One stretch of the Comrades Marathon from 2015.RAJESH JANTILAL/AFP via Getty ImagesThey did an idiotic thing when they were young. 23 years later, it's still the one thing most people knew about them.Some of you will know this story already. Some of you will think you do. In South Africa, it's lodged in the collective memory, sticky and stubborn. The race. The twins. The watches. The subterfuge. In the world of global running, meanwhile, it still makes lists of the greatest marathon cheats. Even now. Even 23 years later. But before the scandal and the shame, the comeback and the infamy, was the event itself. And to understand how things ended up where they did, there's nowhere else to start but right there. It's Wednesday, the 16th of June, 1990. South Africa, five years clean of apartheid rule, is the world's darling. And today happens to be the day that Nelson Mandela will step down as the nation's first Black president. In a few hours, he'll hand over the reins to his deputy, Thabo Mbeki.At 5:59 a.m., when this story starts, it's still pitch black outside. We're in Pietermaritzburg, a tidy colonial city an hour's drive inland from Durban. In front of the red brick city hall stand 12,794 runners. It's the starting line of the Comrades, a 89.9-kilometer (56-mile) race that cuts through the rolling hills that tumble out from here to the Indian Ocean. In addition to the runners gathered on the start line, and the tens of thousands who will flank the route from here to Durban, many South Africans are watching live on television.  South Africans became obsessed with this homegrown event, the largest and oldest ultramarathon in the world, when a global boycott targeting its racist apartheid government barred the country from big international sporting events like the Olympics and the World Cup. In the lonely depths of South Africa's isolation, winners of this insanely long race were catapulted to fame and landed lucrative sponsorship deals. Even after apartheid was toppled and South Africa was invited back into the global fold, the Comrades retained its caché, and now it also had big-ticket prize money.One of the runners at the start line this morning, not yet attracting any attention, wears the race number 13018 – Sergio Motsoeneng. At 21, he's one of the youngest runners here, competing in a field crowded with world champions, in a sport where people often peak in their 30s or 40s. He's come here from Phuthaditjhaba, an impoverished area near the Lesotho border. He's never run this far in his life.  First prize in the Comrades is 100,000 South African Rand ($16,400 at the time). This year, the big corporate running clubs are offering additional money to runners who could break the course records. Sergio's club is offering a R1 million ($164,000) bonus, the equivalent of 70 years of his father's salary. Sergio has nine siblings to help support, and no job. This race is going to be his ticket out. From the loudspeakers, the theme song from the running cult film Chariots of Fire blasts into the crowd. Runners peel off the trash bags and ratty sweatshirts they've brought to keep warm while they wait. On a raised platform above the start line, Pietermaritzburg's mayor lifts a handgun. He fires. The race is on.Runners are seen taking part in the Comrades Marathon in 2018.RAJESH JANTILAL/AFP via Getty ImagesFor years, the idea of winning the Comrades has vibrated through Sergio and his younger brother, Arnold, at a constant frequency. Beginning as teenagers, they won race after race, dominating the sport in Phuthaditjhaba, a small city in the bowl of the Maluti Mountains, a poor and rural corner of the country near South Africa's border with Lesotho. They were rewarded mostly in dinky plastic trophies and bragging rights, plus the occasional cash prize. But the boys had bigger ambitions. When Sergio was about 15, and Arnold about 13, they started training informally with a white coach named Eugene Botha. Then in his late 20s, Eugene was short and jovial, with the twitchy excitability of a boxer. He'd been a pro runner in Johannesburg. Now, he ran a fire extinguisher business in the town of Bethlehem, 165 miles to the southeast. The tidy town center – once named the cleanest town in South Africa – was nearly all white. The township of matchbox houses and shacks crowded together on its perimeter was all Black. Eugene ran his business from his living room and coached high school running on the side. Sergio and Arnold noticed that his runners were good. They wanted to know how he did it. Eugene was charmed by the brothers' drive to show what they could do on a bigger stage. "A runner can always recognize another runner," Eugene tells me. "They were the best in Phuthaditjhaba. At all the races they entered, they won them by far." Sergio, he says, "had the style, the strength, the everything." Eugene's business often brought him to Phuthaditjhaba, an hour drive from Bethlehem, and he began taking Sergio and Arnold on long runs through the mountains, or to a track for speedwork drills. It wasn't yet clear to him if Sergio and Arnold were just Phuthaditjhaba good or once-in-a-generation good. But they had pluck.From the start, the boys were impatient. They wanted to run longer distances, the ones with the big prize money. Hold back, Eugene told them. It didn't make sense to punish their bodies like that, not when they had so much potential, not when they were just getting started.  Against their mentor's advice Sergio and Arnold decided the Comrades was the race to win. And not in ten years. Now. ***Five hours and 40 minutes after the crack of the start gun, Sergio Motsoeneng staggers across the finish line at Kingsmead Cricket Ground in Durban. He looks dazed as a race official drapes him in a blue and white Powerade towel. Ninth place, behind a mix of Black and white runners. It's not the record-breaking run he was hoping for, but it is, unequivocally, a phenomenal performance. He'll get R6000 ($1000) in prize money, plus a medal made of real gold. The TV commentators are stunned. A top ten finish from a no-name runner, and on his first go no less? "Motsoeneng coming through and surprising us all," marvels Bruce Fordyce, a nine-time Comrades winner turned pundit.  That night, there's a dinner for Sergio's running club, Rentmeester Reparil Gel, which takes its tongue-twisting name from the insurance company and pain relief gel that co-sponsor it. It's one of the country's elite clubs, and its runners have done well. Four, including Sergio, finished in the top ten, and three more in the top 50. Everyone is celebrating, drinking beer, slapping each other on the back. Andrew Kelehe, a runner who finished third — though he'd land in second place after another runner was disqualified for doping — and one of the coaches, John Hamlett, will tell me later that Sergio looked off. He's being really quiet, maybe he's sick. By the time Sergio arrives back in Phuthaditjhaba the next day, he's all smiles. His family meets him outside their two-bedroom brick house in a flurry of hugs and tears. They all watched the race together on their tiny black and white TV, squinting for footage of Sergio at the front of the pack, they tell him. It was only at the end that they'd spotted him, as the TV cameras panned to Sergio sprinting to the finish just ten minutes behind the winner, arms pumping and face drawn. They'd spend the whole night singing and praising god and dancing in the street. "You've opened the future for all of us," Joseph Mphuthi, another runner and an old friend of Sergio's, tells him.The prize money is a far cry from the R1.1 million Sergio had dreamed of, but it's not nothing either. He buys groceries for the family, new shoes for himself, cloth for the tailoring business that Arnold has started in Bloemfontein, three hours away. Their father had told them, more than once, to cut it out with the running. He was fed up with his sons constantly begging him for taxi fare and race entry money, and he didn't hesitate to tell them, you boys need real jobs. His rages were red-hot, often stoked by alcohol. But a top 10 finish in South Africa's most prestigious race is something no one expected. This is the moment, Sergio thinks, when everything changes. ***A few weeks later, Eugene is home in Bethlehem when his phone rings. It's someone from Rentmeester, Sergio's running club. Do you know the runner, Motsoeneng? The caller asks.Yes, I do.Do you know there are two of them, brothers? I do. Would you be able to tell them apart?Of course. Ok, says the man on the other end, we're going to fax you some photos now. Please tell us what you see. A minute later, Eugene is staring at side-by-side images of a lanky Black runner wearing the number 13018. There's a blue and green Rentmeester singlet hanging off his trim frame, a black cap is pulled low over his face, and he has on a pair of blue and yellow Nikes. Immediately, Eugene sees the problem. The runner on the right is clearly Sergio. Ropey and slight, he has soaring cheekbones and a torso so thin you can see the air ripple through his lungs when he breathes. His fists are balled and he's wearing a pink watch on his right wrist. Eugene studies the picture on the left. This runner looks stockier and there's a scar running down his right shin. His head is tilted forward, and his face is shrouded by the bill of his cap. He's also wearing a watch, but it's yellow and on his left wrist. A side-by-side comparison of Sergio Motsoeneng and his brother, Arnold Motsoeneng, racing in the Comrades in 1999.Gail Irwin/ReutersEugene's stomach drops. The runner on the left – Eugene has no doubt – is Sergio's brother Arnold.Within a few days, the two pictures will be splashed across the front pages of South Africa's biggest newspapers. ***The sun is setting quickly as I scramble up the steep hillside outside Phuthaditjhaba. Ahead of me, Arnold Motsoeneng moves nimbly, hopping over rocks and thorn bushes with the light, sure-footed steps of someone who has run this route many times before. For going on thirty years, this mountain he and Sergio nicknamed the Titanic, for its sharp pointed slope, is where they have trained, back and forth, up and down, until their legs and lungs burned. Tonight, though, we are walking, Arnold at the front, Sergio and another brother, Moratoe, at the back, and me in the middle, taking big ragged breaths in the thin air. "You doing ok?" Arnold calls back to me. His voice is warm and gentle, and he smiles at me with the same dazzling cheekbones that graced magazine covers in 1999 beside headlines about the "Crooked Comrades 'Twins.'" I smile back, flashing him a thumbs up. A few weeks earlier, I was home in Johannesburg, Sergio's number punched into my phone, screwing up the courage to start the call. By then, I'd spent hours scouring the internet for information about the Motsoenengs, reading article after article with titles like "Two Brothers, One Ultramarathon, and the Greatest Cheat in Running History" and "Top 10 Worst Sporting Cheats." They all told the same basic story, although some of the details were fuzzy: In 1999, two lookalike brothers concocted a clever plan to win the Comrades. They ran the race as a relay, swapping their clothes and shoes in portable toilets along the route. If they hadn't forgotten to swap their watches, too, they might have pulled it off. Some of the retellings had it — mistakenly — that the brothers were identical twins. One had Sergio and Arnold speeding between handoff points in a getaway car, as if part of an elegantly choreographed heist. One or two stories speculated that a third runner, a "Mr. X," had also run parts of the race. The stories hinted at a bigger anxiety. This was, remember, a fragile moment in the life of the new South Africa. There were plenty of people out there, white people especially, who were still praying to see it fail. Reporters from the time wrote that the brothers were "getting rich" off their "skullduggery" and opined that they'd "turned an illustrious event into a race of shame.""People were saying, 'look what they did to this race, that's what they'll do to the country," remembers Dana Snyman, a white tabloid journalist from the time. So when I reached Sergio and made my pitch for an interview, it surprised me that he seemed willing to hear me out. Sure, what they'd done was unethical, I said. But they'd also grown up in apartheid South Africa, one of the most immoral systems imaginable. Weren't they just giving themselves an advantage in a world that had disadvantaged them in every possible way? I tell him, their story rang like a kind of analogue prequel to twenty-first century shaming, where seemingly all of society lays into someone's bad behavior and leaves them branded forever. They'd done an idiotic thing when they were young and now, 23 years later, it was still the one thing most people knew about them. I wanted to hear their side, and to know what they'd made of their lives in the long shadow of this scandal. Sergio invited me to come meet him. He'd show me around, he said, and help me make sense of what had really happened. "Trust me," he said, "I'll explain everything." So that's how I end up here, catching my breath on a mountain top. From up here, Phuthaditjhaba stretches out below us like a scale model of a city. The Motsoeneng brothers pointed out their schools, their favorite running routes, and the old track stadium where Sergio and Arnold won races as teenagers. Arnold (left) and Sergio.Ryan Brown for insiderIn those days, they didn't run for South Africa, but for QwaQwa – one of ten "homelands" established for Black South Africans. According to the apartheid government, South Africa was actually a mosaic of different, separate nations, coexisting in beautiful harmony, and QwaQwa was a tiny nub of land backing up against Lesotho. The homeland system, much like apartheid, was an elaborate display of racist make-believe. Tiny, non-contiguous territories – supposedly, the original territory of different Black South African ethnic groups – dotted across the country. Naturally, those territories comprised only 13 percent of the land, in a country where three quarters of the population was Black, and excluded the country's best farmland, and its wealthy mineral reserves.The family arrived here in 1987. Sergio and Arnold's father Jonas was hired as a school caretaker, and squashed in the two-bedroom caretakers' cottage. Jonas and his wife, Emily, were both from a nearby farm in "white" South Africa's eastern Orange Free State, where their families had been long-term tenants of a family of white farmers. Emily left school in at the age of 10  to take care of the white family's baby. Jonas milked their cows. Sergio could remember, when he was little, watching how the white farmer ran his tractor, harvesting field after field of maize and beans. When he was done, Sergio's father and the other Black farmworkers walked those same fields, picking up for themselves whatever the white man had left behind. But if opportunities still seemed dim for Emily and Jonas' generation, their children expected more. Even as most of the country remained under strict racial segregation, South Africa's apartheid government cared enough about getting back into international sports that it agreed to integrate running. In 1975, Black runners, and women, were allowed to compete in the Comrades for the first time. Other major races also integrated, and soon, Black runners dominated the sport. Eugene, who started competing in the late 1980s, recalls competing in the 1991 City to City ultra-marathon from Johannesburg to Pretoria and finishing ninth, behind eight Black runners. As an incentive to keep up white runners' spirits now that they were regularly bested by Black athletes, Eugene's running club gave him a bonus for finishing first among white runners, he told me.Sergio and Arnold were the athletes of their family. Although they were two years apart in age, they started school together on the farm, and from the time they were young, they were inseparable. Two boys who seemed to know each other's thoughts without asking. Mafahla, the other kids called them, the twins. "We didn't have another friend," Sergio remembers. The mountains around Witsieshoek rise high in the Drakensberg region in South Africa.COLLART Hervé/Sygma via Getty ImagesPeople were constantly confusing him and Arnold, stopping him on the street to congratulate him for a race Arnold had won, and vice versa. In his teens, Sergio was named to a South African development squad for young athletes, which meant he was supposed to focus on short-distance training and stay away from long races  But he couldn't help himself, the prize money for marathons was too good. So yes, he once ran a marathon and then told officials to record the finish as Arnold's.  Who was it hurting? Everyone always said they looked like twins anyway. ***Back to 1999. Eugene can see the story has legs. Even before the photos dropped on his fax tray, there'd been questions. Not long after the race, Nick Bester, the Comrades' 15th place finisher, lodged a complaint with the Comrades Marathon Association, the CMA. A timing mat showed that the runner registered as Sergio Motsoeneng passed the race's halfway point 7 minutes behind Nick Bester. But somehow, that same runner beat him by eight minutes. At first, the Comrades dismissed the allegations. Then, Nick helped dig up these race photos. As soon as Eugene hangs up with the official from Sergio's club, he calls Clem Harrington. A prosecutor in the old South Africa, Clem was also a Comrades veteran who'd run it 21 times before he turned 40, some kind of record. Clem was the kind of guy who could fight for – or against – anyone, and win. And that, Eugene thought, was what the Motsoenengs needed.  They confront Sergio together, and Clem proposes a solution: Sell the story to a tabloid. Confess everything. Say how deeply sorry they are. The money's gone, so use the tabloid's fee to pay it back. You might save your running career. And it might still be a good one – after all, Sergio's marathon best was a 2:19, and even running half a Comrades at the pace you did is no joke. Sergio agrees, and Clem negotiates the fee with the Huisgenoot, a Afrikaans tabloid known for its scoops and celebrity gossip. A few days later, reporter Dana Synman comes to the cottage in Phuthaditjhaba and interviews the brothers for four hours, while a knot of other journalists huddle outside."The overwhelming impression I got from them was sincere," the journalist remembers. "They were desperate and they were naïve. They tried their luck, and they didn't get away with it. It's not like robbing a bank. To run a Comrades, even half a Comrades, that's very tough." The story appears on the cover of the Huisgenoot under the headline POOR BROTHERS' DREAM BECOMES A NIGHTMARE. Inside, there's a photo of Sergio with his arm draped over Arnold, the famous pink watch dangling from his wrist. "I am sorry about what happened at the Comrades," Sergio is quoted saying. "But people also need to know: I did not kill. I'm just tired of being poor."A few days after the story appears, Eugene, Clem, and Sergio drive to Pietermaritzburg to return the medal and hand over that fistful of cash. Sergio tells the CMA board how sorry he is and Clem asks for the minimum sentence. "We ask South Africa to forgive him," he pleads. An old photograph of Eugene, Clem, and Sergio, held by Eugene.Curtesy of Eugene BothaIt's been an embarrassing year all around for the CMA, actually. In addition to Sergio, two other runners in the top ten have been disqualified, both for doping. The winners' tables keep shifting, prize money keeps getting returned. In the end, Sergio and Arnold get a five-year ban from the Comrades. Clem is satisfied – it's punishment enough to scare them straight, and they'll still be young enough to compete. They'll have a chance, one day, to put this behind them, and maybe turn an embarrassing story into a triumphant one. But shame blooms out from the lie like a bloodstain, dark and heavy and hard to wash out. "My heart was broken," says Emily, their mother. "I still don't believe they ever cheated. "We just wanted to forget it ever happened," Sergio's wife, who was then his girlfriend, tells me. Not long after the scandal slid out of the public eye, Jonas Motsoeneng learned he had brain cancer. He died in the early hours of January 1, 2000, as South Africa spun into a new millennium. ***When we finally get into it, Sergio and Arnold claim can't remember exactly when they decided they would cheat, or whose idea it was to begin with. Sergio had been training, really training, he says. But when he heard about Rentmeester's R1 million reward, something inside him shifted. Together, they scrutinized the course map, which showed the portable toilets. They picked a spot, just before halfway, where they hoped it would be easy to slip in and out of the crowd. And that was it. It was Arnold who had started the race in Pietermaritzburg, they say. At the agreed-upon spot, they'd both slipped into the cramped space of a portable toilet and hurriedly peeled off their clothes. Suddenly, bang! There was a knock at the door.Sergio, are you in there? It was Dewald Steyn, one of Rentmeester's managers. I've got your energy drinks out here for you.Inside the toilet, the men froze. They couldn't open the door now. He'd see for sure that there were two of them inside.I feel sick, Sergio called back out.Hurry up, Dewald said. You're losing time.Outside, he waited. Inside, they waited.Finally, Dewald said he'd leave the drinks, and walked off. Sergio and Arnold waited a little longer, then Sergio slipped out the door, and onto the road to run the race's second half. Arnold waited a little longer, then hitched a ride back to Durban, where he caught a mini-bus taxi home. Runners use the bathrooms before the start of the start of the 94th edition of the Comrades Marathon in 2019.RAJESH JANTILAL/AFP via Getty ImagesBut many of the Motsoeneng's contemporaries in South African running say the story still feels fuzzy, incomplete. "They were in the toilets so long, they would have had to cut the course to make up the time," Nick says when I call him. And many suspect this hadn't been the first time they cheated. Arnold entered the Comrades in 1998, but dropped out around halfway – had that been a dress rehearsal? A handoff gone wrong? And then there was the City to City Marathon in 1998. "We" – the front runners "were far, far ahead of the rest of the guys," says Nixon Nkodima, another professional runner, tells me. "Then suddenly this guy" — Sergio — "comes out of nowhere and passes us, like he's running a 5k pace [45k's into an ultra]. I thought, maybe he's on drugs."But Arnold, who has largely managed to stay out of the limelight, says there's no reason for them to retreat. "The only thing is that we were looking for cash," he tells me. "But apart from that, we knew we could make it."*** There's a second chapter to this story that makes a bit of a mess of the narrative that made me want to talk to the brothers in the first place. When the ban that Clem had brokered lifted, both Sergio and Arnold started racing again, and winning. In 2009, Sergio made a triumphant return to the Comrades, and the following year, in 2010, he had a breakthrough race. In a photo taken as he sprints towards the finish line, he's grinning, an inversion of the tense, drawn face he wore when he crossed the line a decade before. He finished third.Speaking to the press afterwards, Sergio is again a model of contrition, saying he's now a family man who'd paid his dues and learned from his mistakes. "It just goes to show he did not have to do what he did in 1999," said Cheryl Winn from the Comrades Marathon Association, co-signing his narrative of redemption. "He has great ability."But six weeks later, the Comrades announced the results of its drug testing of top finishers. Sergio's has come back positive for a performance-enhancing steroid called Norandrosterone.*** "When they told me I'm positive, I told them, go to hell," Sergio tells me now. He, of all people, knew how a decision like that could snap a life in two. We're sitting on a covered porch, beside the brick house he's been building for the last decade and a half in a neighborhood of Phuthaditjhaba called Elite. He's been doing the work himself, by hand, adding a room every time he gets a bit of money. The building sits at a slightly precarious angle to the rocky ground. Its walls bow gently inward. Today, Sergio works as a teacher and drives an old green forest green Mercedes, which is parked out front. He has a daughter in university and a wife he lists in his phone as "The Love of My Life." His ten pit bulls clatter around in the house. Both he and Arnold coach running on the side. In person, Sergio fizzes with charisma and warmth. But he also holds me at arm's length. I ask to visit the school where he works, but he demurs, saying he would rather not remind his colleagues of the scandal. As it is, when he disciplines his students, he says, the pluckier ones demand to know why they should have to listen to a liar and a cheat like him. Of course he didn't cheat at the Comrades in 2010, he tells me. He can't prove it but offers some theories. Nandrolone, Sergio says, is found in uncastrated pigs, and there are known cases where athletes tested positive after consuming wild pork. He ate a lot of meat when he was training hard. And also, rumors have swirled for years about Comrades athletes and coaches spiking their rivals' sports drinks, or swapping urine samples before they were shipped off to the lab. Maybe it was that.And what about what happened to Ludwick Mamabolo, he says, the man whose Comrades win in 2012, two years after Sergio was disqualified, was revoked after he tested positive for a stimulant? His lawyers argued the Comrades' procedures for doping testing had been so haphazard, it was impossible to say with any certainty if the sample tested had even been Ludwick's at all. Ludwick was exonerated and got his title back. Ludwick Mamabolo crosses the Comrades Marathon finish line in 2012. After he disqualified for testing positive for a stimulant, he challenged the test and got his title back.RAJESH JANTILAL/AFP/GettyImagesI looked into all of it, and even spoke to Ludwick's lawyer. But their cases seemed fundamentally different – you could slip the substance Ludwick tested positive for into a sports drink. Nandrolone, by contrast, is usually injected. South Africa's anti-doping body, meanwhile, destroys case records after ten years, and I couldn't find anyone who believed enough in Sergio to plead his case.Except, of course, Arnold. "If he took it, I would know. Each and everywhere he goes, I go," Arnold tells me. Those results shattered them both. "I knew, that's it for him," Arnold says. Gone, was any hope of convincing people they'd just made a stupid mistake all those years before. It doesn't make any sense that Sergio would cheat, Arnold keeps saying. It just doesn't make any sense. ***It's hard, sometimes, not to read everything that happens in South Africa as a metaphor. This is a country where the jailers handed the keys to the inmates, and everyone was told to forgive. While the whole world watched, Nelson Mandela shook hands with apartheid's last president, FW de Klerk, and told him, What is past, is past – "Wat is verby, is verby!"The story of two young men, born into one of the most unequal societies on earth, trying – imperfectly, deceitfully – to find their way out of it also feels like something bigger than itself. It's a version of what South Africans have been doing for a generation now since the end of apartheid. As Sergio tells me, "Nobody wants to be poor forever."A Comrades Marathon runner holds a portrait of late South African icon Nelson Mandela in 2014.RAJESH JANTILAL/AFP via Getty ImagesFor Sergio and Arnold, the past was something they believed they could, quite literally, outrun. It didn't turn out like that, but it didn't turn out like that for most Black South Africans either. In the generation since the end of apartheid, inequality has remained stubbornly persistent. The wealthiest 3,500 South Africans own more than the poorest 32 million. Much of the country's elite is now Black, but so too are nearly all its poorest people.When Sergio and Arnold cheated, it felt to many like it was saying something not just about them, but about the moral character of Black South Africans generally. Look, they said, this is who you've handed our country to. As I sat speaking to Sergio, South Africa's president, Cyril Ramaphosa, was fighting for his political life after revelations that wads of cash, potentially ill-gotten, had been stolen from inside his sofa. Of course corruption isn't limited to Black leaders, in South Africa or anywhere else. The apartheid regime was shot through with graft. Its first Black government inherited a state that was nearly bankrupt. And a generation, like Sergio and Arnold, came of age promised a world that was, for most of them, never going to materialize. "You have to be Zola Budd level to get out of here," Eugene remarked to me, referring to the bare-footed white South African teenager who became a record-breaking runner for England in the 1980s. "People steal millions, and yet this [Sergio] is the guy they want to go after." Now, sitting by Sergio's house, I listen carefully as he lays out his theories about that 2010 race. I nod along, scribbling notes. It feels like we're up on that mountain in Phuthaditjhaba again. The world is laid out below us, small and vast and we can't quite make out all the details. ***Toward the end of my trip, I'm with Arnold, twisting my car up a steep road to the border with Lesotho.The Maluti Mountains, as seen from Butha Buthe, Lesotho, in 2021.Sumaya Hisham/ReutersHe wanted to show me this route where they used to train, 20 kilometers up, 20 kilometers down, waving to the border guards as they went. The air is dry and thin, and smells of wood smoke. Below us, in the valley where the Motsoeneng brothers have lived nearly all of their lives, the high-altitude sun glints off tin roofs. A shepherd coaxes a small flock of grey sheep up a hillside. The vegetation is dry and crisp. Of the two Motsoeneng brothers, Arnold has always been the more reserved. In 1999, he faded into the background of the cheating scandal. Even now, he is content to let Sergio, clever, fast-talking, and brash, be the face of their story. I realize there's something I haven't asked him yet. When he was running in the Comrades, keeping pace with South Africa's greatest runners, he knew it was a lie, but was it also a thrill? He smiles. It was one of those charmed days runners are blessed with every now and again, where you feel like you could run forever, he says. He was weightless. Nothing hurt.Even now, when he is training, he thinks, I wish it could feel like that day again, he says.Arnold with the kids her coaches.Ryan Brown for InsiderThe next day, I stood next to the dirt soccer field where Arnold coaches an elementary school cross country team, watching the kids plunk down backpacks and shed their school uniform sweaters. Here, on the edges of Phuthaditjhaba, the city slips in and out of focus. A city bus grumbles past, then a shepherd on horseback. A lot of the kids run barefoot, just as Arnold and Sergio did when they were that age. They call Arnold ntate, the Sesotho word for father. He explains the day's drills, and they all take off running, arms untucked and flailing.  Sometimes the kids get lazy and start cutting the corners, he tells me. "And I tell them, when you do that, you're not cheating me. You are only cheating yourself." Read the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 30th, 2022

Transcript: Linda Gibson, CEO PGIM Quantitative Solutions

   The transcript from this week’s, MiB: Linda Gibson, CEO, PGIM Quantitative Solutions, is below. You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ This is Masters in business with… Read More The post Transcript: Linda Gibson, CEO PGIM Quantitative Solutions appeared first on The Big Picture.    The transcript from this week’s, MiB: Linda Gibson, CEO, PGIM Quantitative Solutions, is below. You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ This is Masters in business with Barry Ri Holtz on Bloomberg Radio. 00:00:06 [Barry Ritholtz] This week on the podcast, I have yet another extra special guest, Linda Gibson, CEO of PG imm Quantitative Solutions. She has a really fascinating background, very eclectic, a combination of math and law. She has run a number of firms and a number of divisions at large firms and traced a career arc that’s just very unusual compared to the typical person in finance. Eventually leading her to a point where she’s managing quants, running about a hundred billion dollars in assets. Really a fascinating background, and it just goes to show you how broad and flexible the world of finance is, that there are so many different ways you can find yourself in a senior management position in, in this industry. If, if you had to guess someone would run through this path, you would, you would never assume, well, you’re gonna come outta law school and eventually you’re gonna be general counsel. 00:01:15 How does that lead to running a group of quants? But that was Linda’s career path. There are a few people in the world who are more knowledgeable about the management of asset managers and what it’s like to actually run a global organization and interact with lots of aspects of the business of finance, whether that’s acquisitions or compliance, or dealing with all the legalities of multi-jurisdictional regulations. She, she really has been the person who’s lived this and, and walk the walk. And I found this conversation to be quite fascinating. And I think you will also, with no further ado, my conversation with Linda Gibson, CEO of PGIM, quantitative Solutions. So let’s get into your background, which is really kind of interesting. You, you get a, a BS in Mathematics and a JD from Boston University Math and Law. Yep. Not the usual combination. 00:02:16 [LINDA GIBSON] Not, not at all, Barry. It is something, math has always come easy to me since a child. So I was a math major pretty much because it was an easy a for me, 00:02:27 [Speaker Changed] Math is truth. It’s, it’s 00:02:29 [Speaker Changed] Absolutely, it is. I loved the fact that my grades weren’t subject to the subjectivity of my professors and that there was always a right and wrong answer. And the one that, 00:02:41 [Speaker Changed] Well, that’s, that’s until you get to applied Mathematics where it all goes off the rails, 00:02:44 [Speaker Changed] Which if you notice, that is where I stopped. I didn’t get an advanced degree in math. 00:02:50 [Speaker Changed] But you do get the, the jd and, and you said you weren’t a math nerd. You, you were not looking for a job in finance. What happened? 00:02:59 [Speaker Changed] I was not, I was waitressing one summer, my final summer after my senior year and a friend called and said, I just interviewed with the financial services company. I’m not interested in the job, but you might wanna reach out. And I literally reached out. It was Mass Financial Services. I reached out, I got the interview and I got the job. And I started the next week. Didn’t really think about going into financial services. I thought it was going to be honestly a math teacher. I was thinking about teaching in, in boarding school. So 00:03:29 [Speaker Changed] Wait, so you go to MFS, is that 00:03:31 [Speaker Changed] M 00:03:31 [Speaker Changed] That Right. And was this between college and law school or after you graduated law school? 00:03:35 [Speaker Changed] It was between college and law school. Okay. So first job out of college 00:03:38 [Speaker Changed] And, and you discover, Hey, this finance stuff is kind of interesting. What then led you to go to law school instead of business school? 00:03:46 [Speaker Changed] I worked with a bunch of lawyers. So I worked at the third party administrator distribution arm of mutual fund family at Mass Financial. So it’s called the banking services group. It was back when banks couldn’t offer and distribute mutual funds. So we had clients like Chase and Citibank and JP Morgan and all of those. And so I worked with a bunch of lawyers and our company was going through transition at the time, and I thought I always wanted, I knew I wanted to get an advanced degree. My father is still a practicing lawyer at 85, and my grandfather was a 00:04:17 [Speaker Changed] Lawyer. So you come from a long family of of attorneys. 00:04:21 [Speaker Changed] I do. But my father advised me not to go into law. He always wanted to be a stockbroker, even though he is entrust in estates. Yes. So he was never really interested in pushing me to go into the law. And even though he worked for his father’s law practice with the name on the door, literally. Right. That was not an option for me. 00:04:41 [Speaker Changed] That, that’s so amusing. ’cause I immediately imagined getting pushback from the family. Hey, everybody here is a lawyer. We, our name is on the door. You’re you’re turning your back on the family business. No such 00:04:55 [Speaker Changed] Thing. Nope. They were at a point where they anti-nepotism or nepotism was an issue. And they said, Nope, you will not be coming to work for this firm. So don’t even think about it. Huh. So I was literally sitting on the roof deck one night and I was balancing law business school, which one made more sense for me and didn’t really know that much about either, but I was very logical by nature. And I was working with a bunch of lawyers at the time. And I also love the fact that, well, it took one more a year to get through school, three years versus two. But when you come out, you are something, you’re a lawyer, you have something. And so off I went to law school. 00:05:30 [Speaker Changed] I I thought you were gonna say indebted, but it it really that too. It, it really doesn’t matter when you, when you come outta business school, you’re an MBA, when you come outta law school, assuming you pass the bar, you’re JD and you’re to practice. How soon after law school did you realize I don’t wanna practice law? 00:05:50 [Speaker Changed] Pretty soon. I, I went into second 00:05:53 [Speaker Changed] Year, third year law 00:05:54 [Speaker Changed] School. It was pretty much the third year of law school. I was an immersive mock trial program where you spend the whole year and you work for the DA’s office and the prosecutor’s office. Right. I thought I wanted to be a trial lawyer. Lawyer. LA Law was what it was all about. 00:06:08 [Speaker Changed] Everybody did it. Exactly, exactly. 00:06:09 [Speaker Changed] It was so cool. And so I thought that’s what I wanted to do. I I got into it. I wanted every single one of my cases to settle. I did not like law, especially trial work at all. And I was walking on the street and I ran into somebody I had worked with at this banking services group of MFS, which had spun off and become Signature Financial Group. And the woman said to me, you might wanna come back and work for us. Have you thought about it? And I said, absolutely. I’m in. What do I need to do? And I started working for them part-time during my third year of law school, and then worked for them 10 years after. 00:06:44 [Speaker Changed] Huh. That, that’s interesting. When, when did the Harvard Advance Management program come along? 00:06:50 [Speaker Changed] That came along much later. So I spent the first decade of my career as a mutual fund attorney, which was really 00:06:59 [Speaker Changed] In-house for, not for a law firm, but for a, a mutual fund related company. 00:07:05 [Speaker Changed] Right. This was the Signature Financial group. And that was a great opportunity to learn, frankly, because not only was I writing, offering documents, I was reading, I mean, how many people do you know that have read the 40 Act and read the various use its directives, which is the, basically the UK equivalent to the 40 Act. 00:07:23 [Speaker Changed] I know a lot of people keeping on the nightstand in case they get a little, little 00:07:26 [Speaker Changed] Case. They’re tired. Tired. No. 00:07:27 [Speaker Changed] If they have getting sleep, yeah. Puts ’em right out. 00:07:30 [Speaker Changed] Right. So that was just a really good foundation for me. I, I also sat, as I said, we were the third party distributor for all of these major companies. So I was on 12 different boards, not on them, but I was the officer, so I was taking minutes. So I was learning just a ton about the mutual fund industry and working with these big global companies. But then this company, I’m getting off topic of the advanced management degree, but this company launched a new investment fund structure called Global Hub and Spoke or Master Feeder, you might have heard of it. Yep. And I was chosen by the CEO to go travel globally with him to not only get big firms, the likes of HSBC, Julius Bayer, those types to adopt this fund structure, but also to get regulatory approval. So I was traveling all around the globe. This is, I was in my twenties and pregnancy. That 00:08:19 [Speaker Changed] Has to be a lot of fun on the company dime. It 00:08:21 [Speaker Changed] Was very, very fun. We were front of the bus, front of the bus, hotels, everything. Yeah. Well, we actually had a flat in London bet. So I was going to Luxembourg, Germany, Switzerland, the UK trying to get regulatory approval of this mutual fund structure. So it was really, really a great foundation for me. And I, I did that for about 10 years. And this is where I, I moved over to UAM at the time, which is the first multi boutique investment business. And I moved over there into their third party mutual fund business as general counsel. 00:08:56 [Speaker Changed] So that, that’s the real interesting question is why General counsel in-House when given your background, you could have gone to any of the big firms, Skadden elsewhere. It is. And, and made a ton of money working as an attorney working for these big fund companies. 00:09:14 [Speaker Changed] It’s ironic that you, you said that, you said Skadden because, 00:09:18 [Speaker Changed] Not ironic at all. When 00:09:19 [Speaker Changed] I was thinking about going to Old Mutual, I was offered a job at Skadden that same day for the same amount of money. And I knew UAM was potentially going to be acquired, and I knew it was a riskier business, but I thought I can go work for a law firm and then eventually become a general counsel, or I can just skip the law firm step, especially working at a firm like Skadden and go directly to the general counsel job, which I thought was much more interesting to me. So even though Skadden had such a big name, I decided to go to UAM. And it’s, 00:09:54 [Speaker Changed] It’s a really challenging life work balance at my, my friends who all went to big firms. Like you hear stories and, and they, all they do is wine. Why don’t you quit? I can’t leave. I’m making so much money. Right? But you’re miserable. I’m just gonna do this for another five years. I, I’ve heard every 10, 20 years it keeps going. So you skip that, went in house, never looked back, 00:10:17 [Speaker Changed] Never looked back. And the firm got acquired. Pretty much a year later, I was told to shut down my division or my business unit, which I did. And more interestingly, given my UITs background and the fact that I had traveled globally, this was a South African based firm. So Old Mutual, but it was listed in London. So the head office was in London. They were very interested in my global experience and my regulatory experience. So they said, Hey, you wanna become general counsel of the holding company? Why wouldn’t you? Right? So I then put all of my 40 ACT work aside, and that’s when I really learned the art of negotiation. They had 44 affiliates at the time. We had to convert them from revenue share to profit sharing. We had to put equity in the hands of the founders and their management teams. We were doing m and a work, we were disposing of firms that weren’t strategic. We were acquiring firms. So I ended up negotiating with so many CEOs, CIOs, and founders that was really eye-opening when people have self-interest and it infects their wallets. They are very interesting people. So I had to pivot and just, that’s a 00:11:23 [Speaker Changed] Very polite phrase. Interesting people. Were you New York based, London based, or nylon back and forth? 00:11:30 [Speaker Changed] I was Boston based. We were Boston based, but we had, our parent company was in London, and then the ultimate Insurance company was in South Africa. So I was in London quarterly. And then we had affiliates. We had 44 affiliates, and they were all over the us but they were also in the UK and Tokyo at the time. 00:11:50 [Speaker Changed] Oh, so you were really on a plane a lot global. Yeah, I think, I think the flight from Vancouver to Tokyo is faster than the flight from New York to South Africa. That’s a, that’s a bear of a flight, isn’t it? It 00:12:02 [Speaker Changed] Is. But South Africa is really amazing. And it was interesting going into Cape Town and looking around. The brand old Mutual was like Coca-Cola here. Oh, really? It was on every building everywhere. Huh? It was really interesting. They had offices in Cape Town and Joe Burke. I preferred Cape Town, of course. But, 00:12:19 [Speaker Changed] So the obvious question, given this background in, in law and working on mutual funds and eventually becoming general counsel, how does this prep you for the role you have today? Essentially herding cats and managing a whole bunch of quants. 00:12:38 [Speaker Changed] Again, the learning and negotiation skills really helped a a lot in, in dealing with managing investment professionals as well as managing quants. As you know, quants have extremely high IQs. I mean, our firm PGM Quant, we have 29 PhDs. Our CIO is literally an ex rocket scientist who used to work at nasa. Right. And then we have an advisor to the Chancellor of the Ex Checker in the UK as ACIO. So these are very, very smart people. Managing them. You, you definitely have to adapt your style a bit. So you have to learn how to deal with smart people as well as introverts. We have a lot of introverts at our firm. They sometimes have trouble talking to clients. Sometimes they have trouble talking to me. So I need to adjust my management style. But what I learned really early in my career is that it’s not about iq, it’s about, well, it is about iq. 00:13:30 We need very smart people. But EQ is equally important. So I, what I have to do for them is I have to lead them, direct them, manage them, and then sort of push them, but then just leave them alone. I wanna make sure I’ve got, give them the resources that they need, but also give them the direction that they need. And, and having this legal background, what was really great about it is when you’re a lawyer, you’re in every important meeting. So you’re in all the board meetings, admitting everything. You’re in the board meetings, you’re in the compensation meetings, you’re in the internal audit meetings. So you really learn everything about a business, everything that goes right and everything that goes wrong. So that really helped me understand what it was like or what it would be like to manage a company. And then I had this strange seven year stint of heading global distribution, which is, that was very interesting. I didn’t want that job at all. The CEO of our firm came to me and said, I don’t really need a chief operating officer, but what I do need is a global head of distribution. Can you build a centralized global sales team? And oh, by the way, your compensation’s gonna be tied to assets raised, which is the first time that had ever happened in my life. Right. 00:14:41 [Speaker Changed] Interesting. Perspective change, eating what you kill, right? 00:14:44 [Speaker Changed] Yes. I had never sold anything either. So again, what I had to do there was be comfortable with hiring really smart people. So I analyzed the landscape, figured out where there was demand for our products, made sure we had the right products to sell, made sure that the regulatory and the expense hurdles weren’t too high to go in. And then I had to build a lean team of very smart salespeople that could sell our products in these various jurisdictions. But also, when you think you’re managing people so far away from you, the distance is so vast that you have to trust them. We had people in Dubai, I need to make sure those people are doing what they say they’re doing, and that I can trust them. And nevermind. Also, we had people in China, Hong Kong, Tokyo, sometimes we had language barriers. So again, I had to make sure that I hired the best people that I could really trust to do what they needed to do. And then again, let them go. I also needed to learn fast that when somebody is not right or not a good cultural fit, that you need to make a change very, very quickly. 00:15:40 [Speaker Changed] Yeah. No, to say the very least. So let’s talk a little bit about your work with PG imm. They are one of the world’s top 20 asset managers. Well over a trillion dollars. What was it like settling into such a giant firm coming from more reasonable sized firms in, in the early part of your career? 00:16:01 [Speaker Changed] Well, I came from a more reasonably sized firm. It was a very, very easy transition for me because I spent 17 years at a, an insurance owned, multi boutique at the head office in various executive positions. So it was a surprisingly easy transition for me 00:16:21 [Speaker Changed] Because of the insurance background or because of just 00:16:24 [Speaker Changed] The multi boutique background. So I wasn’t on the insurance side. So I was at the asset management arm of the old mutual insurance enterprise. And I worked at the head office. I was after I was general counsel, I was chief operating officer and head of affiliate management. So I oversaw 19 different investment boutiques that frankly spanned the gamut of offerings. We had timber, we had real estate, we had global fixed income, quant equity, fundamental equity, managed futures, everyth, you name it, we had it. And, 00:16:58 [Speaker Changed] And Old Mutual is 00:17:00 [Speaker Changed] The main South Africa, London, New York, Boston. 00:17:03 [Speaker Changed] Boston. Okay. So you, you’re used to working across timelines and regions. 00:17:08 [Speaker Changed] Absolutely. And having worked in that environment for so long, made moving over to PGIM and P GM Quant Solutions, a pretty easy transition for me. I was really excited about it. I had been watching PGIM, I had been watching their reputation and their brand grow exponentially under David Hunt’s leadership. And then I had also known a lot about PGIM quant at the time was called QMA. And we had a firm at Old Mutual two firms, Acadian and Analytic, who are both quant firms. And I sat on both of their boards for years. And as head of affiliate management, you’re responsible for their p and ls. So you are in their shorts with respect to their strategy, their product development, any lift outs they would do, making sure they had appropriate distribution resources and funding, made sure their succession plans were set and were executed seamlessly. 00:18:00 So I spent a lot of time with quantitative firms, and I really, really liked it. Coming from a math science background, I very much liked the systematic nature of a quant firm. But I also liked, at PM Quant, we like to call it the fusion of art and science. So you have the fundamental insights plus the systematic. And while I am a math science person, I am very, very artsy and creative. I love a good craft. My daughter got married two weeks ago, and I spent my winter, last summer learning how to decoupage oyster shells with maps of the cape and gold gilding along the edges. So I, I spent, I don’t know how many weekends doing 200 of these over the winter last year. So that is, that is a little snapshot into my life. But to take it back, so I very much like sort of the art and science of quant investing. 00:18:53 So it was a natural fit for me to come to PGM, but also to come to PGIM quant. And it’s been, it was remarkably easy to transition to the firm and more interesting to me when I became COO, I expected, frankly, organ rejection because I didn’t come from the investment management side of the business. Right. And often you think that investment professionals want CEOs who are investment professionals. And I was shocked and delighted, frankly, when I was appointed Chief operating officer of PGM Quant that the investment group embraced it. They loved the fact that I would support them and lean into them and really let them do what they do and not micromanage them. So 00:19:40 [Speaker Changed] CIO and CEO are very, very different skill sets. CIO you’re essentially dealing with a, a probabilistic process trying to make assessments about an unknown outcome in the future. CEOs have to manage people, they have to manage budgets. It’s much more blocking and tackling and less probabilistic than the investment side. So the fact that you are now CEO of this group of quants, but don’t have a background as ACIO that I don’t think that at all would work to your disadvantage. 00:20:14 [Speaker Changed] Yeah. And I saw it in real life when, you know, being part of a multi boutique and being on the boards of 19 investment managers, I saw the difference between the CEOs that had been investment professionals or CIOs and the ones that were heads of distribution or were an operations. It, it is interesting though, the majority are either in distribution or CIOs. Right. They don’t tend to be lawyers. So, but regardless, I I do think that CIOs tend, if I’m going to stereotype, they tend to do better managing money 00:20:49 [Speaker Changed] Than people. I think. So. You know, that’s absolutely, I I don’t think that that’s over generalizing at all. What’s, what’s kind of interesting is, I thought the ease going from Old Mutual to PGM given both of their insurance backgrounds might’ve been that. But you’re suggesting it was less had to do with that and more had to do with just running a broad assortment of different groups, departments, division, strategies, et cetera. Yeah, 00:21:18 [Speaker Changed] Both PGIM and all Mutual are similar with respect to their investment management. Businesses tend to be pretty separate and distinct from their insurance businesses. So they report in and they have, you know, quarterly business reviews and all of that stuff. And they, they dovetail nicely, but they, they really are run separately. 00:21:38 [Speaker Changed] So you were general counsel and, and how to manage a large group of attorneys, and now you’re managing a large group of quants. Any similarities or differences that, that are noteworthy between herding each herd of cats over there? 00:21:53 [Speaker Changed] There are similarities in that they both tend to be meticulous. So they’re, they’re both type A, they’re both very, very smart and they tend to get into the weeds and the details. So you have to constantly take them up. So at our firm, putting portfolio managers in front of prospects and clients, we constantly have to train them, give them presentation training. We need to often bring in CPMs to help translate their knowledge into layman’s terms. 00:22:23 [Speaker Changed] CCPM being? 00:22:24 [Speaker Changed] Being client portfolio managers. So these are the people that explain what we do in layman’s terms to 00:22:30 [Speaker Changed] Prospects, client facing. 00:22:32 [Speaker Changed] Yes. And many of our, as I said before, many of our investment professionals or introverts, they do not wanna be in front of clients or prospects. Lawyers can be the same. And you often have to get lawyers to think like business people. You do the same thing with investment professionals. They don’t have to think like business professional as much as lawyers do, but they still need to adjust their thinking a little bit. And I often need to change my leadership style. And I learned early on, I took a personality profiling test, I don’t know if you’ve ever heard of it. It’s called Insights Discovery. And they put you into a color bracket, and I’m red, which means I, I tend to like people to be, be bright, be brief, and be gone. That’s how I like people to interact with me. But there are a lot of people that want a lot of data. They want a lot of information. You need to spend time with them. You need to ask them how their kids are. Some are extroverts, they don’t care about the topic. They just wanna have fun. You know, others care more about socializing. There’s a lot of different ways people like to take in information. So when you’re managing lawyers and you’re managing quants, there is something similar there. Managing distribution people is a whole different ball of wax though. That, that, that was fascinating when I managed distribution group 00:23:47 [Speaker Changed] Salespeople respond to financial incentives. 00:23:50 [Speaker Changed] They do. They’re all, they also can be very needy. Oh really? They can, and they can require a lot of your time. And they also want to be praised quite a bit, huh. Which is interesting. Although everybody, I think everyone likes praise, 00:24:03 [Speaker Changed] I guess. But I, I, if you are on a variable comp system, depending on how successful you raise assets, it’s there in black and white on the sales log, you’ve raised X, Hey, do I really need to tell you? This is fantastic. You did a great job this quarter. You 00:24:20 [Speaker Changed] Do actually, what I did learn is you do, and the more you do it, the better they perform. Now. Now, I think again, that works everywhere. What do they say? You have to say something positive X number of times that you The 00:24:30 [Speaker Changed] Sandwich. Yeah. If you’re gonna say something negative, you gotta put something positive on either, either side of it. Either side of it, the criticism sandwich. Okay. I find that amusing. So let’s drill down a little bit to the various quant strategies that PGM utilizes. Is it different asset classes, different geographies, different strategies? What is the full spectrum of offerings PGM has for their quant group? 00:24:53 [Speaker Changed] Short answer is all of the above. So PGIM quant is divided into three platforms. We have our quant equity platform, which manages risk control equity portfolios that are, we’re quants. So they’re model and factor driven. They cover core value, opportunistic equity and indexing. Then we have a multi-asset platform. The multi-asset platform manages things like offerings that give you inflation, hedging against inflation. So we use publicly traded real assets and commodities. We do defensive equity strategies. We also do asset allocation and overlays. And then we have a third platform, which PIM quant acquired right before I Jo joined, which was another interest of mine, was integrating a new firm into the fold. And this is PIM Wanni, it’s our London-based liquid alternatives firm. It offers global macro trend following. It also has inflation hedging products, as well as macro tail risk products. So we kind of cover and, and we go up and down the market spectrum from micro cap all the way up to large cap. And then we go across geographies. So we’ll do, you know, US International, EM, Ex-China, you name it, we, we offer most of it in quant form. The one thing we don’t offer is privates. Huh. Really? Our, our sister company does that. 00:26:19 [Speaker Changed] What’s the name of the sister company? 00:26:20 [Speaker Changed] We have, well, P GM Private Capital. We have p GM real estate. We actually have six sisters. We have p Fixed income, Jenison P Portfolio advisory, and PM Investments. Those all wrapped together make up that $1.2 trillion. That is p gm. 00:26:38 [Speaker Changed] Really interesting. So let’s talk a little bit about multi-asset opportunities. Starting with, you have a year, like last year, 2022, stocks are down, bonds are down. All these asset classes are under pressure. How does that affect all the various strategies that you guys are running? 00:26:57 [Speaker Changed] Well, clearly the markets affect our strategies, but that, that’s one of the reasons that we feel strongly that that quants excel in volatile times. Mostly because they have a long- term approach. They’re data-driven. They’re disciplined. They’re diversified. So we have 300 plus stocks in our portfolios. We look at hundreds of pieces of data on 10,000 companies every day. So we’re very, very diversified. But the other thing about being a quant, which is nice, is it it removes the, the emotional bias from picking socks. So you don’t get caught up in what’s going on in the market and, and freaking out in essence and, and making bad decisions. You have your models to ground you Sure there’s fundamental insights on top and there are people here back to that fusion of art and science. But we have the models as our bedrock. 00:27:53 [Speaker Changed] So given what 2022 is like, and obviously very challenging, what’s it like when the calendar flips, really it was last October, 2022 when markets bottomed and, and took off. How does that change in, in market regime affect how you’re going about your business? Or is it, you know, still the same thing, just whether market’s going up and down, you’re still applying the same strategies? 00:28:18 [Speaker Changed] We’re applying the same strategies. But having said that, and, and again, we offer so many different strategies, but what we do have, and IT people have been very, very interested in them, are sort of that infl, the inflation hedging strategies that we offer. The custom mandates. We’re all about sort of solving our clients’ needs, not only today, but tomorrow. So how do we work with those clients to figure out what they’re trying to solve for? Some are want downside protection. So we’ve been recently putting together portfolios that have downside protection. They might limit the upside a little bit. We can adjust that depending on our client’s preferences and needs and wants. The macro tail risk products, the inflation hedging products, all of these different things that are helping clients right now move away from the 60 40 portfolio is just not working for clients right now. And sure, they, they wanna put money into privates. Privates are big right now. And PGIM is leaning into our privates and our alts, meaning PGIM at our head office. But at the same time, people need liquid investments. And so what we provide for them is liquid solutions to help them navigate through these turbulent times. 00:29:32 [Speaker Changed] Huh. Re really interesting. So, so the bulk of of what you’re doing is liquid. You don’t need a gate to get out. These are all stocks, bonds, other assets that are readily tradable any given day. Yep. 00:29:50 [Speaker Changed] All liquid, including publicly traded real assets and commodities. Clearly liquidity’s a little tougher with sort of the micro cap and the small. Sure. So what we do, what our models do there is they assess the trading costs of getting in and out of companies. ’cause we wanna make sure, of course, that you don’t pay more in trading costs to get out than your alpha. So we have to pay attention to that. We also have people that use us for overlay strategies and they often have to get out on a dime. So we need to make sure that everything is very, very liquid. 00:30:19 [Speaker Changed] Hmm. That, that’s really interesting. How bespoke are the portfolios and the solutions that you come up with for clients? Are they really customized for individual institutions or how do you think about that approach? 00:30:37 [Speaker Changed] They’re extremely customizable across all of our platforms. So even, I’ll give you an example. Our quant equity platform, we have an ESG solutions offering. We had a very, very large ENF endowment and foundation come to us and say we need to get, we need to solve for our ESG needs and we want to do that. We wanna track a certain index, but we wanna take energy out of the portfolio. So what we’ve been able to do is we’ve been able to help investors solve for their ESG needs wherever they are in their journey. And I, and I get that it’s different for different people. Sure. But that’s what’s really unique about our offerings is that we’re able to sit there and talk to you and say, Barry, what’s important to you? Do you care about water usage? Do you care about women on boards? Do you care about energy? Do you care about carbon footprint? How much do you want it to impact your returns? Or maybe you don’t want it to impact your returns at all. So how do we work with you to create a portfolio that does what you’re, you know, what you wish. So that’s been really interesting and we’ve gotten a lot of traction there. Huh. 00:31:44 [Speaker Changed] Really super intriguing. So you mentioned some people are looking for inflation hedging. I would imagine that would’ve been really useful last year. Are you still getting demand for that? Given how far CPI has fallen from the peak, when was that? June, 2022, something like that. Is there still a demand for inflation hedging? 00:32:07 [Speaker Changed] There still is. It may not be as in demand as it’s been, but if you think about where we are, the macro environment is so uncertain. People still don’t know whether we’re gonna have a recession. People don’t know. People are assuming there’s gonna be a recession in Europe. So people just don’t know. So I think they’re really trying to, pardon the use of the word hedge, but hedge their betts and make sure that they have downside protection. And people get a bit scared in, in this type of environment and they wanna diversify their portfolio. So we just, what what we wanna do is we wanna partner with our clients and they might have any number of needs. They might have, you know, risk parameters, they might have liquidity needs, they might wanna track a benchmark. They might wanna just absolute return. They might want real return. Whatever they need, we will solve for. 00:33:03 [Speaker Changed] So about half of your clients, ballpark are large institutions. You mentioned endowments and, and foundations. And given the background of PGIM with insurance, I think about future liabilities. Is there a lot of matching, Hey, in 2035 we have this sort of expected demand on, on our capital. How important is, is future liability matching to custom solutions? 00:33:31 [Speaker Changed] It’s not, we don’t do as much of that at, at PGM quant. So we do manage money for the Prudential general account, but it tends to be in equities. And we do manage some money for them through our P GM wood one. But as you know, insurance companies have various constraints and they need to solve for these things. And they have much smaller buckets of risk assets. So should insurance companies invest in equities, we very much want to be a part of that. And we do manage equities on behalf of our parent company. But lucky for us is, is we don’t, we don’t have to think about paying claims. We just have to think about managing the money in the best way that we can. 00:34:11 [Speaker Changed] What about, since people are talking about hedging, how do you think about risk management? Are you looking at a series of small wins or is there sometimes a Hey, we’re gonna take a big bet ’cause we have a lot of conviction here. So 00:34:26 [Speaker Changed] Risk management is very much embedded in our process. So it’s not an afterthought. It is something that we pay attention to. And clearly you have to take risk if you’re gonna get gain. So, but what our models try to do is take the, the risks, the risks that are going to benefit us and then manage the risks that are not, we tend to take a lot of singles and be consistent, but it depends on what our clients are looking for. So I say that with respect to our equity book. But then we have also, we take much, you know, larger betts with our P Jim Wood one platform as well as if you’re thinking about maybe a small cap investment versus a large cap investment. So it really goes up and down the gamut, depending on what our clients are looking for, what their risk tolerances are, we try to solve for their risk needs. And again, quants can do that pretty effectively because of their process. 00:35:18 [Speaker Changed] So how big a differentiator is PGIM quantitative solutions to PIM? Again, given the insurance background, I don’t know of a lot of other large insurers whose financial arms are leaning this heavily into the quant side. 00:35:37 [Speaker Changed] I think it’s a, it’s a big differentiator for PGIM one. I just, PGIM has one of, as you mentioned, one of the broadest asset management offerings out there. And I feel like quant is a very important component to the offering. Especially how, if you think about how technology is advancing and it’s becoming more and more a part of our lives, AI is evolving and we’ve been doing that for a long, long time. So I think it’s just natural to have a quant manager as part of your stable of offerings. But yes, I do believe that it’s a differentiator for peach. M huh. 00:36:10 [Speaker Changed] Really, really intriguing. So, so there’s a couple of quotes of yours that I have to ask about ’cause they’re kind of fascinating. Quote, softer skills are more valuable than ever. They are what clients want. So, so first I have to ask, what do you mean by softer skills? Tell us about that. 00:36:30 [Speaker Changed] I often refer to softer skills when I am talking about women in management. Actually, when you think about the ability to connect with people, to really listen, to understand what their wants and needs are, that many people don’t do that. And I feel like, I feel as though softer skills, especially in this tech enabled environment. So in a hybrid environment, when you are streaming and dealing with people by zoom and teams and you’re not seeing people in the hallway, these softer skills really, really differentiate you. And one of the things that I’ve been doing as CEO during co, what I did during Covid and I’ve continued to do now, is you lack that ability to run into people in the kitchen and to, to connect with them and really build a relationship. Because I do believe that building relationships is important to building trust. Building trust is essential to building working relationships with your business partners. 00:37:33 And so what I started doing was, I started doing a video series, if you think carpool karaoke, I would drive my, my dog to the dog park in the mornings and it was about a 40 minute drive and I would do a lot of reflecting and thinking about strategy people, whatever I was doing at work. And instead of thinking about it, I thought, I’m gonna do some little video segments, two minutes, didn’t really think about what I was gonna say, just got on the video and talked to the employees of our company. And I did that regularly so they would know what I’m up to, what I’m thinking about. They knew a little about me personally, but they also knew what I was thinking about, what the management team was thinking about and what we were up to. And that’s an example of a softer skill that it’s that ability to connect with people and to think about how you can connect with people in different ways to build their trust and get to know you better. 00:38:29 [Speaker Changed] You, you mentioned the various hybrid work options that especially what took place during the pandemic. Are you guys still operating on a hybrid basis and and what does that do for you? 00:38:43 [Speaker Changed] We are, we’re working in a hybrid three days in the office. Two days work from home. And I believe that it’s the best of both worlds because we have those three days to collaborate, to continue to get to know each other, to brainstorm. And then we have two days that we can do heads down work, meaning the, the work from home days. And I also feel that we get a lot of credit for doing that with our employees, our employment, our employees are happier in this environment. It’s what they want, it’s what they’re getting used to. And I was just listening to actually Bloomberg this morning where they were talking about how the trains are getting busier and workplaces are going, are, are changing their hybrid schedules. So I’ll be interested to see what happens in the next year or so with respect to hybrid. But I think right now it’s a pretty good balance. 00:39:38 [Speaker Changed] Does it, does it help with employee retention and, and even new hires? 00:39:43 [Speaker Changed] It does. We’ve actually had certain people that wanted full work from home, which we don’t do. So it, it is something that I believe companies need to do. They need to pay attention to that. I think you, our offices are in Newark, New Jersey, so hybrid is pretty appealing and I, I do think it’s a differentiator or maybe it’s not even a differentiator. It might just be table stakes, 00:40:11 [Speaker Changed] Right. Amongst the big banks, a lot of them have been gone back to JP Morgan, chase, Goldman Sachs, Morgan Stanley, a lot of these have gone back to five days in the office and there’s been some pushback, not so much from the young 20 somethings who really need to be immersed, but the, the slightly older generation, late twenties, early thirties who, who really know how to work remote. 00:40:36 [Speaker Changed] Right. I believe it’s important for the younger generation because you want that mentoring. You wanna be able to, again, run into people in the halls, get to know them, get to understand what they do. And, and I do think that’s important. I think flexibility is also important to, many, many have either young kids at home or they have ailing parents or they have hobbies or they just have wellness goals. So getting that balance right can be tricky. But this is again, why I think the three days is, is a good balance. It, it’s a nice way to solve for our employees’ needs, but also get the work done and build a culture, building a culture. We haven’t talked much about that, but it, it, one of the first things that I did when I took over as CEO was work with the employees to reset our values and then not only reset them, but then drive them home and live by them and make changes based on them. And I think that building that culture, it’s very, very difficult to do if you’re in a fully work from home environment. 00:41:38 [Speaker Changed] Yeah, no, that makes, that makes a lot of sense. Last, last quote of yours. You’ve talked a lot about leadership and diversity, especially when it comes to women in finance. Tell us a little bit about your thoughts about the best strategies for leading in an industry that’s spent so many decades as a male dominated bastion. 00:42:04 [Speaker Changed] Again, it’s lean into those softer skills. I think it’s a trifecta of opportunity right now for women. So you have companies and boards that are trying to increase their diversity stats so they’re more open to women in senior leadership positions. The hybrid work environment makes it easier for women that are balancing multiple, multiple different chores and responsibilities. And then you have the benefit of women having these softer skills that work in this new te tech enabled environment. So I think it’s a, a great opportunity for women going forward. I think the issue really is the pipeline. And one of the things that I’m passionate about and we’re doing a lot with at PGM Quant is we’re going out and doing community work. We’re reaching out into the newer community and we’re working with kids as young as elementary school kids. Wow. So we’re, we’re getting them interested in asset management. We’re doing things like Shark Tank and job fairs and things like that, that are kind of mock job fairs. And it’s just been really rewarding for us because we have to start at such a young age. So these, these women and other diverse populations will continue to have an interest in asset management. You’re, 00:43:20 [Speaker Changed] You’re playing a long game, you’re planting seeds 10, 15 years in advance. ’cause none of this is gonna pay off for a long time. 00:43:29 [Speaker Changed] We need to be patient as, as we invest for the long term, we need to be patient. So, but not complacent. 00:43:36 [Speaker Changed] Not complacent. So, so let’s jump to our favorite questions that we ask all of our guests. Starting with, Hey, what kept you entertained during the lockdown? What are you, what are you streaming these days? 00:43:47 [Speaker Changed] Gosh. Meaning streaming on television. 00:43:52 [Speaker Changed] Sure. Television podcast doesn’t matter. Yeah. What whatever, whatever audio, video is entertaining you. So 00:43:58 [Speaker Changed] I like documentaries. So what I was looking or watching this weekend was fantastic fungi, which I highly recommend. This is all about the medicinal and healing properties of mushrooms. If one has ailing parents or is having health issues, I highly encourage you to tune in. But it is also a beautifully, beautifully filmed documentary. Hmm. I also live on the Cape, so I had to, you know, the shark population is booming, so I had had to watch after the Bite, which is all about the, the shark population on Cape Cod. But other than that, as far as sort of more mainstream, I, I did like Ted lasso very much. It was what’s not to love. Right. Entertaining. You always got a good tidbit of knowledge. Like be an authentic leader, you know, lean into your insecurities. I never turned that off about picking up some little tidbit of information. As far as podcasts, I get most of my news by email feed. So I tend to do that more as a hobby. So I do, I’m very interested right now in longevity and health. So I listened to something called the Cabral Concept by Dr. Steven Cabral, which talks about all sorts of things. One of the things I was looking into was an infrared sauna and a cold plunge. So my husband and I just recently purchased both of those things. 00:45:24 [Speaker Changed] We, I have a buddy who is crazy into the cold plunge and whatever that breathing technique is Yep. That you need to do. And I committed to doing a cold plunge next summer. So we’ll see how that goes. I, I’m in the ocean every Memorial Day weekend. Wow. That’s my cold plunge. ’cause that’s like, you know, 60 degrees. But what these guys are talking about is high thirties, low forties, really, really cold. 00:45:50 [Speaker Changed] Yeah. Ours is 49 degrees. Wow. And, and it’s cold. It takes about a minute and 30 seconds to, to numb up. So, so that’s an interesting podcast for me. I do tune into this other podcast, it’s called your CEO Mentor. It’s by the author of No Bull Leadership. And this individual’s name’s Martin Moore. And I totally skipped your conversa your question about the AMP program, which is an advance management program. It’s an elite executive education program. But he was a buddy of mine at the AMP and he wrote a book on leadership. He was the CEO of a company and he wrote a book called No Leadership. And I of course read it out of courtesy because I don’t normally get a lot, frankly out of leadership books. It’s very intuitive to me. But I got quite a few nug nuggets of information from this book and he’s just very entertaining. And so I tune into his podcasts frequently and I get little tidbits like, it’s about respect, not popularity, it’s about excellence, not per perfection, different things like that. It’s just interesting. And he’s Australian, so he’s really interesting to listen to. 00:47:03 [Speaker Changed] So, so you mentioned mentors. That’s my next question. Who are your mentors who helped guide your career? 00:47:10 [Speaker Changed] I have one mentor. She was the lawyer that hired me for that job out of college. Her name is Molly Mugler. And she worked with me my entire career. Her entire career. She’s now retired. So she hired me. I then became general counsel. I moved to Old Mutual. I brought her with me. And what was amazing about her is she believed in me before I did. She had such confidence and vision for me and my future. And she kept referring to herself as my sticky asset that she’d stay with me, but wasn’t. What was inspiring about her is she’s so intelligent and she’s such an accomplished lawyer, but at the same time she was militant about balancing her personal life and her professional life. She prioritized watercolor, painting and tennis equally with her job as a general counsel of a big firm. So to this day, I am still connected with her and I am still constantly inspired by her. 00:48:08 [Speaker Changed] Huh, that’s interesting. Let’s talk about books. What are some of your favorites? What are you reading right now? 00:48:14 [Speaker Changed] My nightstand is a bit eclectic right now. So I have, again, another book on longevity called Out outliving, which has again, to do with health and longevity. I have the Rain barrel effect, which is again, about what you put into your body and how it affects again your health and longevity. But the, the real shocker on there is, I believe it’s called the Modern Textbook of astrology. During Covid I started thinking a lot about astrological charts and I found them fascinating. And they are tied a lot to math and science and they’re very, very technical. And I had my chart read and I said, you know, I’d be interested in learning how to read, read charts. That doesn’t seem that hard. He said, oh, trust me, it’s hard. He gave me the name of three books. He said, start reading and then get back to me. 00:49:05 I might have to postpone that to retirement ’cause it is quite technical, it’s very math forward. But it’s, it’s still interesting. For fun, recently I read the Lincoln Highway. I really liked, I loved, I think it’s called Beneath the Scarlet Sky. What I liked to do back when I was a lawyer, everybody would say, oh, have you re-read the most recent, you know, fiction book on law, you know, Tom Clancy kind of stuff. And I just don’t wanna read things that I’m living. So I don’t wanna read books on investing. I don’t wanna read books on the law. I wanna read books that transport me to another place in time where I can just learn about memoirs of Aisha was, you know, interesting. Oh really? Things like that. Just get outta my own head and think about something different. We do enough re as a lawyer, think about how much you have to read when you, when I read, I wanna read for fun or for gaining knowledge of something different. 00:50:01 [Speaker Changed] Huh, really interesting. Down to our final two questions. What sort of advice would you give to a recent college grad interested in a career in either investment, finance, management, or law? 00:50:15 [Speaker Changed] As we’ve been going through this podcast, I, I’ve realized the benefit that my legal profession has had on my management abilities. I, I never quite tied those two things together so much. The broad knowledge that you get from being a business lawyer, i i is quite extreme. So depending on what that person’s interest in interests are, I would say network, network, network. It’s all about talking to people and understanding what they do and understanding what’s out there and really building relationships. That’s really what it’s about. That’s what it’s about in business. That’s what it’s about in dealing with clients, building relationships. It’s, it’s just what it is about life. But it it, but it’s very hard to make that decision. Again, I fell into my career and I’m pretty fortunate that I’ve had a lot of opportunities come my way. But I’m not somebody who says you need a goal and you need to follow it. Because I think if you have blinders on for that one goal, that you’re gonna miss all of these other opportunities that can lead you in a direction that might be much more fruitful for you. Huh, 00:51:23 [Speaker Changed] Interesting. And our final question, what do you know about the world of investing today you wish you knew 25 years or so ago when you were first getting started? 00:51:34 [Speaker Changed] Gosh, that one’s more tricky for me. I feel like I was pretty informed back then. But if I can flip it on its head a little bit, maybe it, I’ll answer it as to what advice would I give to those 20 somethings out there now. And I would say understand the benefits of compounding. Make sure you invest early, make sure you’re diverse, and make sure you invest in your 4 0 1 k plan. Because as much as it feels though, as though you can’t afford that extra a hundred dollars or $10 or a thousand dollars, it’s just so important to, to start investing early. 00:52:09 [Speaker Changed] Yeah, no, to say the very least kind of that, that decade, twenties to thirties, it makes a huge difference that over 40 years 00:52:15 [Speaker Changed] It does for sure. 00:52:17 [Speaker Changed] Linda, thank you for being so generous with your time. We have been speaking with Linda Gibson, CEO of PGIM, quantitative Solutions. If you enjoy this conversation, well be sure and check out any of the previous 500 or so we’ve done over the past nine years. You can find those at iTunes, Spotify, YouTube, wherever you find your favorite podcasts. Sign up for my daily reading list@riol.com. Follow me on Twitter at ritholtz. Follow all of the Bloomberg family of podcasts at podcast. I would be remiss if I did not thank the correct team that helps put these conversations together each week. Sarah Livesey is my audio engineer. Atika Val Brown is my project manager. Anna Luke is my producer. Sean Russo is my researcher. I’m Barry Ritos. You’ve been listening to Masters of Business on Bloomberg Radio. ~~~   The post Transcript: Linda Gibson, CEO PGIM Quantitative Solutions appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureNov 14th, 2023

Preparing for Retirement: 5 Overlooked Financial Steps to Take in Your 30s and 40s

Your 30s and 40s are arguably the best time of your life – still young and energetic, but a little ... Read more Your 30s and 40s are arguably the best time of your life - still young and energetic, but a little wiser. This is also an exciting, sometimes daunting period of life - with career growth, personal growth, and raising a family to contend with. Amidst all of this, retirement might seem like an abstract, far-away thing that isn’t anywhere near the top of the list of priorities. However, your 30s and 40s are crucial when it comes to achieving financial stability for your post-career life. Find A Qualified Financial Advisor Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now. Retirement planning isn’t a simple, monolithic task—it’s multifaceted, complex, and requires balancing competing interests. However, there’s no going around it—if you want to enjoy life after your early 70s, you need to start preparing for retirement as soon as possible, if you haven’t already begun. One in five Americans expect that they won’t be able to retire at all. Doing this the right way consists of plenty of small steps and decisions, along with leveraging a couple of slightly more complex mechanisms. We’ve boiled things down to the 5 most important and overlooked financial steps that you can take in your 30s and 40s to ensure a successful retirement. Let’s get started, one step at a time. 1. Understanding and Maximizing Employer Retirement Plans Right off the bat, employer retirement plans are your most important and powerful tool when it comes to saving for retirement. Employer retirement plans work like this—a portion of your pre-tax salary is deducted from your paycheck, put into a separate account (most of which have tax benefits), and then accrues gains from the investments made inside the retirement account. There are several types of employer retirement plans—however, for the purpose of this guide, we’ll focus on the much more common 401(k) plan, as it applies to a large percentage of our readership. We’ll leave the topic of the 403b retirement plan, which is designed for employees of nonprofit or tax-exempt organizations, for another day. To recap—these plans allow investors like yourself to set aside a part of today’s income to ensure a steady flow of funds later. So, how does that come to fruition? First, we have to deal with the most underappreciated and underutilized part of these plans—and that is employee matching. A lot of employers in the US will match your contributions to these plans, up to a certain percentage—effectively incentivizing you to save for retirement by giving you free money. So, the first practical consideration here is this: Find out if your employee matches 401(k) contributions, and maximize this benefit by taking full advantage of it. The second piece of the puzzle is compound interest. Think of the term like this—compound interest is the interest you earn on interest. To put it in slightly more grounded terms, the gains you secure from your investments will be reinvested to generate further profits—this allows the size of your account to snowball over the long term, and is a key reason why you should start investing for retirement as soon as possible. Next on the list, but no less important, are individual retirement accounts, more commonly referred to as IRAs. IRAs operate on a very similar basis to 401(k) plans, but they aren’t employee-sponsored. With IRAs, you’re on your own, and the contribution limits are much lower—but you have a lot more flexibility in terms of what you can invest in. Both 401(k)s and IRAs also come in another version—Roth 401(k)’s and Roth IRAs. Basically, the Roth versions are funded with after-tax dollars—however, in return for that, your withdrawals in retirement (after the age of 59 and a half) are tax-free. The pesky thing about Roth IRAs is that they have income limits—anyone making more than $153,000 on an annual basis cannot contribute to such an account. If this applies to you, there are some backdoor Roth IRA considerations that you should keep in mind. 2. Diversifying Your Investment Portfolio Diversification is a method of managing risk when investing. In fact, it is the method of managing risk—the bread and butter of it, if you will. The idea is pretty straightforward: Allocating your investments across a variety of financial instruments, industries, sectors, and countries allows you to experience smaller losses should one of them experience a catastrophic downturn. At the same time, you are exposing yourself to a lot of potential upside. Should any of the industries, sectors, etcetera that you’ve invested in see great returns, it will be reflected in your portfolio. Don’t put all of your eggs in one basket, but in investing terms. The crucial thing to remember is that proper diversification is achieved by carefully balancing your allocations between investments that are not correlated. In plain terms, you should invest in areas that react differently to a single set of conditions. It’s important to note that diversification does not prevent losses—it mitigates them. Secondly, seeing as how conditions are always changing, diversification isn’t a one-and-done affair—it will require monitoring and adjustments from time to time. Let’s go a bit more in-depth with diversification. Essentially, this method spreads out risk by investing in a variety of assets whose returns haven’t historically moved in the same direction and to the same degree. By doing this, should a portion of your portfolio decline in value the rest should either increase or not decrease in value as much, mitigating overall losses. So, how do you go about achieving effective diversification for your portfolio? First order of business—asset classes. The three main asset classes are equities (stocks), fixed-income securities (bonds), and cash and equivalents. There are also other asset classes, such as commodities, real estate, precious metals, and cryptocurrencies, but for the sake of brevity, we’ll focus on the main three. All of these asset classes respond in different ways to market conditions. As an example, when the economy is trending upward, stocks usually perform well, while bonds offer subpar returns in comparison. When the tables turn, however, and the economy is in a recessionary environment, bonds can outperform stocks. Just by using this simple example, you see the underlying logic—diversification is a buffer against market volatility. Second, diversification is also done within an asset class. Following the same logic, investing in stocks that are contained within one sector or industry is a death knell for your portfolio should that sector or industry face a crisis. Several industries and sectors are negatively correlated with one another — meaning that when one falls, the other tends to rise (for example, oil prices and airline stocks). It is estimated that some 90% of retail traders do not generate a positive return with their investments in the stock market—highlighting the need for diversification. The same holds true for fixed-income securities. You need to diversify your bonds by investing in government, municipal, and corporate bonds in order to achieve the best returns. Third, consider diversification in terms of geography as well. There is no reason to limit yourself to the place where you live. Allocating a part of your portfolio to developing markets can lead to high returns while simultaneously reducing overall risk. Diversification is invaluable and necessary—but it isn’t a matter of“fire and forget”. As the value of specific parts within your portfolio increases or decreases, your actual allocations will drift. This is remedied by occasionally rebalancing your portfolio, which helps in maintaining a consistent risk profile. 3. Life Insurance and Estate Planning You might easily think that if you do everything right in terms of retirement planning, you won’t need life insurance. That’s completely wrong. Let’s take a minute to discuss why. Life insurance works like this—you pay premium payments, and the insurance company provides a lump-sum payment, known as a death benefit, to beneficiaries upon the insured’s death. This benefit acts as a financial safety net, ensuring that your dependents can meet their financial obligations and maintain their standard of living. When choosing a life insurance policy, it’s crucial to assess your family’s financial needs, taking into account factors such as your income, the number of dependents, their ages, future education expenses, and your spouse’s earning capacity. When tackling the topic of life insurance, keep these three ideas at the forefront of your plans: Replacing a source of income: If you are the primary provider of income in your household, life insurance can replace that lack of income, helping your family maintain their standard of living. Repaying debts: Life insurance can help pay off debts such as mortgages, personal loans, student loan debts, and other forms of debt, ensuring that your family doesn’t face financial hardship. Funeral costs and cash on hand: Life insurance can also offer liquidity to your family, ensuring that funeral expenses are covered. Different types of life insurance exist, including: Term life Whole life Universal life Each of them has its own advantages and drawbacks. Since these are long-term commitments with potentially huge implications, it is best to go about the entire process of selecting and purchasing life insurance with a financial advisor. Now let’s move on to the topic of estate planning. While it might sound like something only people that have summer homes in the Hamptons need, that’s a far cry from the truth — and estate planning is essential in not only securing the financial future of your family but also in securing mental and emotional stability for yourself as you age. Put simply, estate planning entails the management of your estate in the event of your death or incapacitation. It involves deciding on important decisions like how assets should be distributed (or preserved), who should care for your minor children, and who should make decisions on your behalf if you yourself are not able. Estate planning includes several elements. Wills are legally binding documents that clearly state how your assets should be handled after your passing, and how they should be distributed or preserved. Trusts offer a bit more say in exactly how and when your assets are distributed to heirs and can come with tax benefits. On the less financial side of things, the process also entails choosing who to assign power of attorney to—a person you trust to make both financial and medical decisions in case you are unable to, and setting healthcare directives—instructions for medical care that go into effect if you are not able to communicate your wishes. We should also tackle the topic of estate taxes. While the federal estate tax exemption is quite sizable (just shy of $13 million in 2023), some states have lower thresholds when compared to others. In order to optimize the estate planning process, you might have to gift some of your assets to your heirs or set up trusts while you’re still alive. Now that we’ve covered all of that, it should be clear that you can’t do all of this on your own. Estate planning entails enlisting the help of professionals, such as financial advisors and estate attorneys. 4. Health Savings Account (HSA) and Long-term Health Care An often overlooked but indispensable part of retirement planning, health savings accounts, and long-term health care are crucial elements that are *not* optional. As we get older, the odds of experiencing significant health-related expenses increase year by year. Medical costs, especially unexpected ones, can quickly pile up, spiral out of control, and completely deplete your retirement savings. Let’s first explore Health Savings Accounts or HSAs. This type of savings account allows individuals to contribute pre-tax money to pay for qualified medical expenses. By contributing to an account like this, an investor can not only pay for their current healthcare expenditures but also save for future costs — all with significant tax benefits. The HSA offers a triple tax benefit. The contributions you make are tax-deductible, the earnings in the account grow tax-free, and withdrawals for qualified medical expenses are also tax-free. Your HSA funds roll over year to year if you don’t spend them. Additionally, after reaching the age of 65, you can withdraw funds for non-medical expenses without penalty, although these withdrawals will be taxed as income in those cases.HSA’s also have a degree of flexibility to them — while it depends from account to account, some of them do allow you to invest in assets such as stocks, bonds, or funds. Now, let’s move on to the second part of this point — long-term health care. As we grow older, the odds of needing assistance with everyday activities, such as bathing, dressing, or eating, increase. The cost of long-term care can be staggeringly steep and can do quite a number on your savings. Long-term care insurance can help cover these costs. This type of insurance policy reimburses policyholders a daily amount (up to a preselected limit) for services to assist them with activities of daily living. When considering long-term care insurance, remember that premiums may rise significantly over time and benefits may not cover all types of long-term care. Policies generally cover care in nursing homes, assisted living communities, and home health care. They can (and often do) cover other types of care, but this will require an in-depth overview by a professional. 5. Financial Literacy and Regular Review of Financial Plan Securing a comfortable retirement is a marathon — not a sprint. This is a long-term commitment, and it will require continuous attention, effort, and adjustment in order to succeed. That continuous effort should primarily go in two directions — financial literacy and regular reviews of your financial plan. Let’s deal with financial literacy first. This is a catch-all term that encompasses managing your personal finances, budgeting, and various forms of investing. Simply put, the more you know about finances, the better equipped you are to make the right decision at any given moment. We’ve touched on some topics that fall under financial literacy — concepts such as compound interest, tax-advantaged retirement accounts, asset allocation, and risk tolerance. However, that’s just a small sliver of financial knowledge — you should approach the topic as a lifelong commitment to learning. Just as a quick example, we’ve barely touched on the topic of taxes and inflation, which also have significant effects on retirement. Nowadays, getting access to high-quality educational material is easier than ever. True, you will have to sort through things in order to separate the wheat from the chaff, but there are many books, online courses, newsletters, and financial media outlets that will help you understand any topic in the world of finance. Now for the second point — a regular review of your financial plan. Think of this as a health check-up, as you might have at the doctor’s office, but for your retirement plan. Nothing in this world is ever static — changes in employment and income, marriage, children, college tuition, inheritances, all of these factors can have huge impacts on your retirement plans. And those are just personal matters — to say nothing of changes in the tax code, laws, and the investment landscape. Having regular check-ins allows you to see whether or not the ship is sailing in the right direction — and no matter how well you go about things, you will always have to make at least some minor adjustments in order for your plans to perform optimally. In all likelihood, this will consist of reviewing whether or not you’re saving enough, reallocating and rebalancing your portfolio to get back to your desired allocation and risk tolerance, and updating your game plan if necessary. We touched on risk tolerance above. This isn’t a static category — an investor’s risk tolerance will naturally change over time. While young investors can afford to make mistakes and take on more risk, since the longer time horizon allows the opportunity to make up for losses, the older amongst us don’t have that luxury — so we tend to opt for safer investments such as bonds. Next, changing market conditions are another reason why you should regularly revisit your retirement plan. Having regular, pre-scheduled appointments with a financial professional allows you to keep track of these changes, mitigate emerging risks, and take advantage of emerging opportunities. While you can (and should) think of these factors on your own, it is absolutely essential to enlist the help of a certified professional when reviewing your financial plan in order to avoid any potential blindspots and gain access to a vetted source of authoritative advice. Conclusion While retirement might seem like something that’s a lifetime away, especially for our younger readers, starting on time is well worth the temporary financial sacrifices. As previously stated, retirement planning is a marathon, not a sprint. In accordance with that, the sooner you begin, the more leisurely you can reach your goal. This is an expansive process that entails a lot of different factors, so we hope that your list helps you prioritize your goals in what is arguably life’s most important financial journey. We realize that there is no one-size-fits-all approach, but the steps we’ve outlined here—including maximizing your employer’s retirement plans, maintaining a well-diversified portfolio, and getting appropriate life insurance should apply to each and every working person in the United States. If you keep these factors in mind, take a proactive approach, and remember to always consult vetted, trusted professionals, your long journey to retirement will be a calm one. Start on time, secure your tomorrow today, and start making your future self proud now. The post Preparing for Retirement: 5 Overlooked Financial Steps to Take in Your 30s and 40s appeared first on Due......»»

Category: blogSource: valuewalkSep 6th, 2023

I left Germany and moved to the US for work. Here are the 5 things that shocked me the most about American culture.

Emma Brooke moved from Berlin to New York City in 2022, and her rent nearly tripled. She noticed a lack of work-life balance but found communicating at work easier. Emma Brooke.Courtesy of Emma BrookeEmma Brooke moved from Berlin to New York City in 2022 after working throughout Europe and Japan.UK-born, she expected a smooth transition without a language barrier but was met with challenges.In the US, her cost of living was much higher and she found work-life balance harder to achieve.I've been obsessed with travel since I was young. While other kids dreamed of becoming doctors and lawyers, I wanted my career to take me places — literally.Now, as a 35-year-old creative lead, I've traveled the world with my career. After a decade of working all over Europe and in Japan, I moved my job to New York City from Berlin in 2022.Like many people, I thought that the actual move would be the hard part. It's not easy to haul your life across an ocean. Little did I know, the real challenge would start after the last box was unpacked.I'm from the UK, and I had visited New York City once as a teenager, so I assumed that working in another English-speaking country would be a breeze. But in some ways, the differences have been just as hard to navigate as when I moved to Tokyo. Here are some of the biggest culture shocks I've encountered and how I survived them.1. Cost of livingBrooke walking in New York.Courtesy of Emma BrookeIn Paris and Berlin, I met Americans who were not-so-pleasantly surprised at their European salaries. But soon after discovering that a coffee cost 1 euro, they learned that what seemed like a little went a long way.My experience was the opposite. After seeing my paycheck almost double overnight, I started imagining Fifth Avenue shopping sprees and a roomy Manhattan apartment. But my first month stateside gave me a reality check.Eye-watering rents, huge grocery bills, and the cost of healthcare soon made me realize that there's a reason the salaries seemed so high: The cost of living was, too. My monthly rent of 1,000 euros, or about $1,100, felt like a lot in Berlin — until I signed a $3,000 lease in Brooklyn.Before you move to the US, do your research. Use a paycheck calculator to estimate your income after tax. Check out local rents to understand where you can afford to live. But most of all, reframe your mindset with that research in mind.Your glamorous midtown Manhattan dream might land you in Brooklyn, but if you know what to expect, you can fall in love with that reality, too. After a few months, I did.2. Self-promotionIn the UK, most people have a self-deprecating mindset. It's not a culture that encourages bigging up your achievements.In the US, people seem more at ease championing their accomplishments. If you're not willing to get on board, it's easy to be overlooked when opportunities arise — to succeed, you have to be your own biggest fan.This confidence is one of the things that I love the most about the US, but it was also one of the hardest to get used to. My advice is to get comfortable with feeling awkward at first and treat it like an affirmation practice.Talk to yourself about your accomplishments in the mirror. Say them aloud when you're alone. Soon, what once felt weird and unnatural will feel as easy as ordering lunch — and likely give you a big self-esteem boost along the way.3. CommunicationIn international offices, communication is an art. In one country, small talk might be superfluous, but in another, it's key to a successful negotiation.Before moving here, I constantly adapted my communication style to accommodate cultural nuance, but I felt a sense of lightness and ease in New York. Finally, I wasn't getting reprimanded for not using formal verb conjugations with clients in Paris or forgetting to bow to my boss in Japan.For anyone working in a new country, accept that open-mindedness is the key to successful communication. Start by observing how your colleagues interact. Do they address each other more formally than you're used to? How and where are key decisions made? A willingness to adapt and challenge your instinctive way of working can reduce friction and open up collaboration opportunities.4. Work-life balanceEurope's work culture is the stuff of legend — 30 days of vacation, two-hour lunches, and no emails after 5 p.m. While this is an exaggeration in many environments, there's no doubt that a healthy work-life balance is easier to achieve. In the US, I've noticed people answering emails on dates, taking calls at family birthdays, and never taking time off.This is one area where I've actively tried not to change. Sometimes it's hard to switch off when it feels like the whole city is still working, but by setting boundaries — such as not putting Slack on my phone — it's possible.Unless I'm in the middle of a busy project, I try to keep a 9-to-6 schedule, which allows me to perform at my peak and keep my creative brain sharp.I've also found little ways to bring my European work perks across the pond. I always book the bridge day between a public holiday and a weekend. I never eat lunch at my desk. And, even if it's only for 15 minutes, I make sure that every day I cultivate a part of my nonwork life, whether that's reading a fiction book or meeting a friend after work.5. IdentityBrooke waiting for the subway.Courtesy of Emma BrookeUpon moving to the US, I noticed how quickly professions came up in conversation. Despite having a decadelong career as a writer and creative, I rarely defined myself in those terms before moving here.Surviving this identity shift came in a couple of ways. There was no getting around more closely connecting my sense of self with my career. But in my personal life, I experimented with ways to talk about myself. Bringing up a passion project or new favorite hobby allowed me to define who I was on my own terms and helped people get to know me beyond my job title.Working in a new country continues to challenge me in ways I'd never expected. But with every culture shock comes a new lesson, idea, or way of looking at the world, and it's one of the best crash courses in personal growth I've ever taken.I'm no longer fazed by all the differences I've encountered, and they've grown into a source of endless fascination.Have you experienced culture shock after moving to a new country? Email Lauryn Haas at lhaas@insider.com.Read the original article on Business Insider.....»»

Category: smallbizSource: nytAug 11th, 2023

Transcript: Brian Hamburger

     The transcript from this week’s, MiB: Brian Hamburger, MarketCounsel, is below. You can stream and download our full conversation, including any podcast extras, on iTunes, Spotify, Stitcher, Google, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is “Masters in Business”… Read More The post Transcript: Brian Hamburger appeared first on The Big Picture.      The transcript from this week’s, MiB: Brian Hamburger, MarketCounsel, is below. You can stream and download our full conversation, including any podcast extras, on iTunes, Spotify, Stitcher, Google, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is “Masters in Business” with Barry Ritholtz on Bloomberg Radio. BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have an extra special guest. Brian Hamburger has been one of the leading authorities in the world of registered investment advisories, broker-dealers, SEC regulatory compliance. He is the founder of MarketCounsel, which is one of the leading firms in that space, as well as the Hamburger Law Firm. I know Brian for, I don’t know, a dozen years, maybe longer, but I’ve really gotten to know him over the past couple of years. Really there are a few people in the industry with a better perch on what’s going on, a better position to see the industry, which, depending on which survey you read, is anywhere between $38 trillion and $97 trillion. He just knows everything about how to stand up an RIA, what’s happening in the worlds of mergers and acquisitions in this space, where the capital is flowing, how people change their employment in the industry, and how various groups get carved out or stood up or established on both the broker-dealer side and the registered investment advisory side. He is highly sought after as a counsel in this space, and I’m glad we had the opportunity to finally sit down and talk about the industry. It’s a little inside baseball if you’re an RIA, if you’re an attorney working in the space, if you’re a broker-dealer, if you’re anybody within the financial services industry, or if you’re somebody just curious as to how all these things actually happen, I think you’re going to find this to be an absolutely fascinating conversation. With no further ado, MarketCounsel’s Brian Hamburger. BRIAN HAMBURGER, FOUNDER, PRESIDENT & CEO, MARKETCOUNSEL: Thanks, Barry. It’s so great to be here. RITHOLTZ: It’s great to have you. Now, full disclosure, Ritholtz Wealth Management has been around a decade. A couple of years before we launched, we were exploring merging with somebody. We retained your firm. You guys did a nice job, and that was, I don’t know, 12 years ago? I always feel more disclosures, better than less. As an attorney, I assume you wouldn’t disagree with that perspective. HAMBURGER: I wouldn’t disagree. We also co-invested in an investment recently where we — RITHOLTZ: That’s right. HAMBURGER: — we participated in the same investment. RITHOLTZ: I didn’t know if that closed yet. Has that closed? HAMBURGER: That closed last week. RITHOLTZ: So there you go. So now I have to disclose that also. So, Brian is not a stranger to me, and we have some shared financial interests, but the reason I wanted to bring him in here is there are few people in the industry who have a better perch by which to look at the world of registered investment advisors, broker-dealers, all of the changes that are taking place in the space. And before we delve into that, let’s jump into your background. You turned out to be the first dual economics financial management major at Quinnipiac. What led to the interest in finance? HAMBURGER: Quite frankly, the interest in finance started when I was young. My father was an investment advisor, and he made his way to be an investment advisor from being a manager with a textile factory to selling insurance to find his way out of that business, went from insurance to financial planning, financial planning to the independent broker-dealer world, independent broker-dealer to hybrid IBD slash RIA. RITHOLTZ: And so really, you’re saying he couldn’t keep a job, constantly looking for a new gig. HAMBURGER: He made his way into this space, and I was captivated. Keep in mind also that when I was going through school in the mid to late 90s, Wall Street was pretty appealing. RITHOLTZ: It was banging. It was on fire. HAMBURGER: Yes, pretty sexy. And so — RITHOLTZ: So why law school? Why not go to University in Miami? Why not go for a business degree? HAMBURGER: So, I did. I mean, at first, I got out of undergrad, and a degree in finance coming out of a small college at the time, Quinnipiac College, the gigs I was offered were essentially customer service jobs at mutual funds, call service, manning the phones, which I was no stranger to. I worked my way through high school and college on the phones, but was uninspired by that work. I didn’t see the real path ahead. I saw myself, if anything, maybe doing product wholesaling, getting involved in financial product structuring, but I didn’t really see a clear path. And my grandmother sat me down and she said, maximize the opportunity. She said, you’re still in learning mode. You’re never going to go back to school. If you’re going to do it, go to law school. RITHOLTZ: Really? HAMBURGER: And actually, I’m going to tell you, she did something a little interesting. She was an investor. She loved stocks. She had her broker at Merrill Lynch, and she put in front of me a stack of annual reports. Remember these big glossy things — RITHOLTZ: Sure. HAMBURGER: — used to come out all the time? RITHOLTZ: Right, right. With a little bit of information buried in the back, but the front was the narrative story — HAMBURGER: Glorious. RITHOLTZ: It was compelling. HAMBURGER: Yes, and so — RITHOLTZ: How could you not put money into this company? HAMBURGER: Right, and so she puts these annual reports, and she said, I want you to look at the management and the board of directors, and I want you to tell me what they have in common. So, we’re at dinner that night, and she said, did you look through them? I said, yes. I said, I’m good with my answer. I’m ready. She goes, what do they have in common? I said, they’re all white bald men. And she — RITHOLTZ: And one day, I’ll be a white bald man. HAMBURGER: And she said, that’s not what I wanted you to get out of it. But what she did — RITHOLTZ: Grandma was tough. She wasn’t fooling around with you. HAMBURGER: No, she wasn’t fooling around. RITHOLTZ: She was looking for the answer “they all went to law school.” HAMBURGER: They all went to law school, and they didn’t necessarily pursue a career purely in law. But her understanding of it is, they must know the rules of the game better than others. RITHOLTZ: Right. HAMBURGER: And so that really stuck with me. And I decided to go to law school. RITHOLTZ: They know the rules of the road better than others. That’s really insightful. HAMBURGER: Yes. RITHOLTZ: What did grandma do that she had such market savvy back in the 90s? HAMBURGER: So, my grandma, Nana Sophie, she lost her husband at a young age before I was born, and her husband ran an auto body shop. They were first generation immigrants. And when faced with the typical widow dilemma, she stepped in and said – RITHOLTZ: I’m not going to sell (ph). HAMBURGER: — I’m not going to sell. I’m going to run this business. RITHOLTZ: OK. HAMBURGER: And so, to this day, I continue to meet some old school mechanics who knew my grandmother when. And they said, man, she was a tough son of a — RITHOLTZ: Really? HAMBURGER: Yes, and it’s really — RITHOLTZ: So, I’ve been having a hard time chasing down an old 911 Turbo, the charger. Can she — can grandma hook me up? HAMBURGER: She’s unfortunately passed away for many years now. But I had some really good, strong women in my life. My other grandmother was another first-generation immigrant from Germany. And she took to selling beauty supplies on the side. And before you knew it, she was the number one salesperson for selling to professional salons in the whole country. So, I learned a lot from these ladies. RITHOLTZ: Really? That’s quite interesting. So, one of your grandmothers steers you towards law. When did you kind of realize, hey, I can make law and finance work well together, and one plus one is three? HAMBURGER: Yes, so I don’t think there was that necessarily eureka moment. But I was definitely informed by my father’s study groups, you know, I knew his network of friends and colleagues. And I would constantly hear them frustrated by the compliance department. RITHOLTZ: Right. HAMBURGER: They were just blaming compliance for everything they couldn’t do. RITHOLTZ: The Bureau of Business Prevention is how the retail brokers used to describe compliance. HAMBURGER: I think many still do, right? They know that the answer is no, but they don’t know why, right? And they really don’t care to know why. RITHOLTZ: Right. HAMBURGER: And it just struck me that it can’t be all that complicated. And so, when I would look into why certain of their marketing materials would get declined or certain of their business requests or authorizations would get declined and I would share it with them, we would sit down and figure out a way around it, a way to deal with those issues. And they were really grateful. And I love solving things that other people think are unsolvable. I love — RITHOLTZ: The puzzle. HAMBURGER: Well, more than the puzzle, I love coming up with a solution when they can’t even formulate the question. Right? So, it’s almost like pulling it out of them and asking what the problem is. And I’ve always been drawn to that. And so, to me, that really helped. And then early in law school, I had a professor, an adjunct professor, I think some of the best professors in college are adjunct professors. RITHOLTZ: They’re working an actual career in the industry and teaching part-time. HAMBURGER: Absolutely. And I was fortunate that this professor, Chuck Senatore, was, during the day, the head of enforcement in Miami’s SEC Enforcement Division. And so, I started to see, you know, what he’s done with his law school education. Chuck went on to be general counsel for a small firm like Fidelity Investments — RITHOLTZ: Heard of them, heard of them. HAMBURGER: — and him and I are still in touch to this day, but it’s people like that who take the education and really make it their own that really inspired me. RITHOLTZ: So, let me throw a compliance question at you, because you’re making my — HAMBURGER: You want free advice. RITHOLTZ: No, no, no. I want to talk about the industry. So, I always assumed the reason compliance departments always said no was simple game theory. There’s zero upside for them saying yes. The best that can happen is nothing goes terribly wrong. The worst that can happen is there’s a big problem, and why did you approve this? So internally, there’s no incentive for them to do business until they stop so much business that some senior person has to come in and say, hey, you got to loosen the reins a little bit. You’re killing us. HAMBURGER: You are very correct, and I’m not going to tell you that that often. But the root of that is this big misnomer. It’s this word compliance that major firms have used because it’s a good catch-all. Right? Compliance at big firms is similar to saying, wait till your mother gets home, right, because they know that people are fearful of the regulators far more than their colleagues sitting at the cubicle right across the hall. And so, they call things compliance when really probably about 80 percent of the issues are risk mitigation issues, right? And so, as advisors look to leave these big enterprises and go independent, one of the biggest things we need to train them on is the distinction between compliance, legal, and risk. RITHOLTZ: Compliance, legal, and risk. Those are three very, very distinct issues that sometimes get lumped together as a lazy way to say no. HAMBURGER: Exactly. RITHOLTZ: Really intriguing. So clearly you see the overlap between being an attorney, understanding the intricacies of securities law. I’m going to use a dirty word now. How did you come across the synergy of combining a law firm with a consultancy that specialized in compliance and regulatory supervision? HAMBURGER: Has that become a dirty word now? RITHOLTZ: In the M&A world, it’s the worst word you can use. HAMBURGER: Really? RITHOLTZ: Because it means we don’t really know why we’re slamming these two companies together other than the fees, the banking fees. So, let’s say there’s synergies here and we’ll all go out for beer. I mean that’s kind of how that word became a dirty word. It was a substitute for actually thinking about how do two disparate things, how do you get to that one plus one equals three? HAMBURGER: So, we’ll just assume that that’s going to work out instead of doing the analysis. Got it. So, yes — RITHOLTZ: I mean, I don’t think that’s that far from the truth. HAMBURGER: So, what I realized is that people were intimidated by law firms. My first job out of law school was at a mid-sized law firm out of Princeton, New Jersey, and I would have clients who wouldn’t call when an issue arose. RITHOLTZ: They’re afraid of getting billed. HAMBURGER: That was it. 100 percent that was it because I would ask them after the fact and they would say, you know, honestly, I didn’t want to run the clock. That would have cost you $50 and we would have been done with this. RITHOLTZ: You know, I didn’t want to tell you what you guys hit me for every time I made a phone call. I thought it was, no, you guys were pretty fair so I can — HAMBURGER: So — RITHOLTZ: But that is a legitimate concern, especially for a small firm that has a modest budget for legal. HAMBURGER: Absolutely. Yes. So, in my mind, we had to do something to democratize regulatory compliance without diminishing the quality of work. Because when I started MarketCounsel and the Hamburger Law Firm back in 2000, the only firms that were doing regulatory compliance work were registration services and service bureaus. Right? It was a very much next available operator, former regulators were the best you would get. And a lot of the answers were, well, this is what we do, right? This is our practice. This is what other firms do. And they couldn’t go back to the source. They couldn’t go back to the root. They couldn’t rationalize why things were being done that way. And so, I wanted to be able to bring a higher degree of quality to regulatory compliance. At the same time, I didn’t want to walk away from the things that we need to be lawyers to do, right? And so, there are certain things. There are drafting of contracts, negotiating deals, representing someone’s interests, right? Actually, working on their behalf. RITHOLTZ: Right. HAMBURGER: Dealing with some complex issues where we’re going beyond the rules and regulations. All of those have to be done by an attorney. And so, I didn’t want to skirt that or circumvent that. And so, we set up two distinct firms. RITHOLTZ: So how many companies — and I’m actually literally researching as we speak — how many companies do what MarketCounsel does, or some partial approximation? HAMBURGER: So, I don’t think there’s anyone that has the breadth of services that we do. Other firms have launched in the past as affiliates or related companies to law firms. But they’ve either sold off the compliance business, so they’re no longer affiliated, or they really do — they do completely different work. It’s really just a referral relationship. With us, the law firm is basically a customer of MarketCounsel for a lot of our startup work. RITHOLTZ: So, when you say startup, it’s a new firm that’s stepping out to launch a new company, and they need to go through the whole SEC registration process, unless they’re small enough, in which case it’s whatever states they’re operating in. They need to set up their policies and procedures. It’s just all those initial painful, tedious, difficult things. I mean we’re only not even a decade out from launching ours. And I remember it was a pretty painful set of circumstances to get up and running. HAMBURGER: Well, yes and no. Right? I mean so MarketCounsel consulting will work with firms on really understanding their scope of services, taking inventory over their conflicts of interest, drafting out fee schedules, investment strategy. A lot of it is disclosure-based, right? So, we’ll work on creating all the disclosures, obviously handling all of the registrations, the regulatory reporting that needs to be done, drafting a compliance manual, and installing an initial compliance program. All of that work is handled by MarketCounsel. For most of the clients that come to us for startup work, right? And that program, we call it the RA incubator, right? Which is a really, I think describes, you know, what it does. But for almost all the clients that come to us, they’re not coming from a very pure place where they can just engage in that activity, right? You know, for — RITHOLTZ: Meaning they’re coming from a broker-dealer or another RIA, and that raises a question as to some of the technical legal employment issues around their exits. HAMBURGER: So yes, there’s definitely issues with their employment and employment transition, right? What can and they can’t do while they are currently gainfully employed elsewhere, right? That captive employment restricts them often far more than they know, but they can’t engage in an outside business activity, right? They can’t engage in selling away. And the big one that they get hung up on is they can’t engage in a private securities transaction without getting the prior written consent of the firm. Now you may say, Barry, well, how is this a private securities transaction? RITHOLTZ: Because they’re launching a new firm that’s SEC regulated. HAMBURGER: It doesn’t even matter if it’s SEC regulated. The fact that they are, let’s say, in preparation for launching this new firm, they are acquiring 100 percent of the membership interest of an LLC or 100 percent of the stock of a corporation. RITHOLTZ: So, can’t you disclose that at the last minute? HAMBURGER: No, prior written consent of the firm you’re working for. RITHOLTZ: I got you. HAMBURGER: So, you can. RITHOLTZ: That’s technical, isn’t it? HAMBURGER: And it’s enforced, right? And so, you can decide that you want to sever your employment and then begin the startup work, but that’s not tenable — RITHOLTZ: Right. HAMBURGER: — for most people in this industry. RITHOLTZ: — take six months and so how do you — that seems kind of an absurd set of rules that prevents people from leaving a firm if — or I guess you could always use a straw up man, you could use a third person to set this up and then, hey, I didn’t decide to leave until the day I resigned. And my wife did all the work. It’s on her. Does that work? HAMBURGER: Unfortunately, no. RITHOLTZ: Okay. HAMBURGER: But there are strategies that we do deploy in order to make that work. And it doesn’t work for a whole variety of situations depending upon how restrictive their current employment situation is. But when you say, you know, that seems awfully restrictive, keep in mind these are rules written by a self-regulatory organization comprised of broker-dealers — RITHOLTZ: Right. HAMBURGER: — who are looking to create a moat. RITHOLTZ: So, you launch both Hamburger Law Firm and MarketCounsel in 2000. That’s some timing. Everything’s going to hell. The dot-com implosion is happening. The Nasdaq falls. I think it was 81 percent peak to trough. What was it like launching two firms into that mess? HAMBURGER: I was dumb and young. Right? I mean — RITHOLTZ: Well, that’s the time to be dumb when you have, you know, a recovery period. HAMBURGER: Absolutely. You know, I had — RITHOLTZ: And let’s talk exactly how dumb. You sold your house to fund this. Is that true? HAMBURGER: I did. I did. And to this day, I’m grateful to my former wife for supporting that decision and actually coming up with the idea. RITHOLTZ: It was her idea. You were both all in. Let’s sell the house and see what sticks against the wall. HAMBURGER: So, I came up with this consulting concept and I pitched it to the firm’s partnership. And I said, I really think that we would be able to do a great job for our RIA clients, for our wealth management clients, by having this consulting firm, and they rejected the idea. And I would come home from work and crack open a beer, sit on the back porch. And I don’t do that every day, but I did it coming out of work there. And I would punch the pillow in the morning. I was just — RITHOLTZ: Why did they reject the idea? What was the explanation? HAMBURGER: Law firms don’t do that, –no. RITHOLTZ: Okay. HAMBURGER: 22 years later — RITHOLTZ: That’s true. They don’t. HAMBURGER: 22 years later, we see that law firms now do that. They just didn’t do that in big numbers back then. And so, she said to me, she said, well, are you just going to keep doing this? And I said, well — RITHOLTZ: Meaning punching the pillow? HAMBURGER: Yes. Meaning punching the pillow. And I said, it’s probably my best option right now. And we looked at our situation. She was pregnant with our first child and we were expecting — RITHOLTZ: That’s the time to quit your job and sell your house. That’s the perfect time for that. HAMBURGER: So, she said, well, leave. And I said, how are we going to do that? We just bought this house. And she said, if not now, when? RITHOLTZ: So not even like a second mortgage. Sell the house and use that to fund the new company. HAMBURGER: We had to sell the house. We had to do a for sale by owner because if we sold it using a broker, we would have been way underwater. So, we literally printed up flyers, put them outside, put them all over town. We sold our house. We have — when I went to launch this firm, my daughter was six months old and my wife was pregnant with our second. RITHOLTZ: Second. Right. HAMBURGER: We had two large dogs. Lo and behold, no one wanted to rent to us. So, we ended up renting a log cabin on a vineyard in central New Jersey. I thought it was charming. My wife, not so much. RITHOLTZ: Wait. There are vineyards in New Jersey? HAMBURGER: There are vineyards in New Jersey. RITHOLTZ: That’s the news flash here. HAMBURGER: Yes, there are vineyards in New Jersey. RITHOLTZ: I had no idea, I can’t recall — HAMBURGER: Not many. RITHOLTZ: I can’t recall my last New Jersey Beaujolais. When is that harvest? HAMBURGER: It was a lovely place to live for a short period. And yes, we were all in. We literally sold the house to finance the business. RITHOLTZ: Wow. That’s a crazy story. HAMBURGER: Yes. (ADVERTISEMENT) RITHOLTZ: Prior to 2022, when rates were cheap, when rates were zero, when capital was plentiful, it seemed like the entire industry went through this wild merger frenzy. I thought 2022 would cool it off. I mean it seems to have slowed a bit, but it’s not like anybody threw a bucket of ice water. What’s going on in that space today? HAMBURGER: Listen, I think it has slowed down, I think interest rates are going to be probably the biggest driver there because, as you know, the capital becomes more expensive. But what shocked me more than the slowdown — the slowdown actually makes sense. What shocked me more than the slowdown was the intoxication of capital, right? And the fervor in which these firms, private capital, has been chasing investment advisors. RITHOLTZ: So, I have a theory as to why. I’m curious as to why you think that fervor was there. HAMBURGER: You know, I think that there is a strong investment thesis as to why to acquire these firms, right? We joked around about synergies before. RITHOLTZ: Right. HAMBURGER: They talk about synergies. They talk about economies of scale. There’s this foregone belief where people just like to jump to the fact that there is some type of scalable client experience out there that’s really special. People don’t necessarily describe how to get there, but they just say, with more resources, we can build a better client experience. You could probably build better digital tools. You could probably build a better communications strategy. Probably insert some AI. You could do some sophisticated things, but I’m not quite sure it’s just quantitatively or qualitatively better, right? Because how do you compete with the advisor who’s got a couple hundred million dollars, who knows the names of all their clients and all their kids, knows all their needs, goals, and objectives, is sitting down at the kitchen table with them every quarter. This is the career that we started in, right? I mean this was what it looked like. And so, I always ask, better from what perspective? You know, is it going to be better from the client perspective or better in terms of just more profitable business? And I don’t quite know the answer to that. RITHOLTZ: So, let’s take that apart. So, there’s really two issues there. The first is all the private money flowing in. I always looked at the private capital rushing into the RIA space, especially with — so there are a couple of different types of firms. There’s a small firm that has a very nice little lifestyle practice, then there’s the medium firm that’s been a decent chunk of capital, but for forever. They’ve been around for 20 years. They’re almost a billion dollars in assets. HAMBURGER: Those are pioneers. RITHOLTZ: Right? They’re not growing. They’re not losing clients. They’re kind of holding steady. To private equity, which is a big source of the money that was flowing in here, hey, this is a bond with a 7 percent or an 8 percent coupon and, theoretically, a capital, you know, an equity kicker if they’re acquired down the road, so we’re getting 2 percent in the bond market, or at least they were before 2022, let’s get 7 percent, 8 percent, and maybe things work out and someone takes them out. That was at least some of the interest when things were zero. HAMBURGER: It’s better than that, actually. RITHOLTZ: Oh, really? HAMBURGER: It’s — I think the private capital likens it to an equity indexed annuity, right? Where there’s no downside, because they put in a pick. They put in a preferred income — RITHOLTZ: Right. HAMBURGER: Clause that gives them the ability to get paid first. RITHOLTZ: Right. HAMBURGER: So, there’s no market downturn risk, or I should say very low market downturn risk. RITHOLTZ: Right. HAMBURGER: When the minority investor or the capital partner — RITHOLTZ: They get paid first. HAMBURGER: — is getting paid first, there’s a long way to go — RITHOLTZ: Right. HAMBURGER: — before that investment is affected. So, I think they look at it as having insured upside potential with that ongoing annuity stream. RITHOLTZ: Now, let’s talk a little bit about the roll-ups and the mergers and acquisitions that are going on. There’s no doubt in my mind, as having run a firm that was $90 million in assets, the one that is coming where $3 and eventually $4, when the last deal closes, a billion dollars is a lot of assets. HAMBURGER: Congratulations. RITHOLTZ: Well, a lot of work still to go, but there are clearly economies of scale, and I give full credit to my partners for seeing this before I did, and, hey, we need to hire a CFO or promote someone and say, you know, you don’t want Barry doing payroll and Josh doing the health care plan, but that’s literally what was going on. HAMBURGER: Sure. RITHOLTZ: So, we promoted a CFO. Hey, we need a head of compliance. Like, really? We’re not that big. You know what? Think of it as insurance. Okay. My best bet is — my best trait is I let smarter people than me convince me of things that I’m hesitant about. HAMBURGER: It’s a good call. RITHOLTZ: Hey, we need a head of HR because, you know, we need to hire people. We’re not hiring them fast enough. We need to make sure that nobody is saying or doing anything that doesn’t comply with the rules. We’re in 27 states. There’s a different rule in every state. And I’m not even talking about the crazy this will get you canceled stuff. I mean, just staying on the right side of regulatory and on and on. And so, yes, there’s no doubt scale helps, but it doesn’t help you with the client experience. It doesn’t help you with client acquisition. It doesn’t help you with your investment performance. All those things have to be right before you start scaling up, or at least that’s how I see the world. HAMBURGER: See, I agree that scale helps, but what does scale help with? Scale helps with reducing the complexity that’s largely come from growth, right? So, it’s a drug, right? If you want to grow quickly, you need to capture that scale in order to combat the complexity that comes with that growth. But for the advisor with a few hundred million of assets under management, they don’t need the scale. They’re running a profitable business as it is, right? They’re delivering outstanding service to their clients. If this is a lifestyle business, and I know that’s kind of a dirty word because people want to say, oh, I’m not in a lifestyle business, right? It’s okay. Where we always encourage people to do is start with their why. I know that sounds kind of corny. RITHOLTZ: No, but it’s a fair question. Why do you want to grow if you’re running a nice business, you’re happy, your clients are happy? HAMBURGER: If you’re happy, if your partner in life is happy with you, and you’ve got time to spend with the people you love, if your clients love what’s going on, if your employees are well cared for and they love working there, is growth an imperative? And if you read the trades, you would think everyone has to grow, right? You’re going to grow or you’re going to die, right? And — RITHOLTZ: Well, there are literally roll up shops that have, I’ve sat in the, I never sit in the audience. I’m usually in the green room, but if I’m sitting in the audience and someone comes out and says, grow or die, we’re a roll up and if you’re not going to be part of the roll up strategy, you’re going to get steamrolled. How much of that is just self-interest talking? HAMBURGER: My opinion is this is all self-interest, right? If someone, listen, you always start, I always start at the bottom of the article. I always look at the italicized print, right? RITHOLTZ: Right. HAMBURGER: Just like you started with the disclosures at the top of the show, right? Start with the italicized print. If I’m here from a roll up or an aggregator and I tell you, now’s the time for you to sell to me because prices are at all-time record highs, right? I got to like, you know — RITHOLTZ: Why are they at all time — HAMBURGER: — raise my eyebrows, say, well, why do you then want to buy my practice — RITHOLTZ: At all time high? HAMBURGER: If you believe that this is an all-time high, right? So, to me, you know, the truth is, is in the action, not the words. RITHOLTZ: Right. I can’t hear what you’re saying because what you’re doing is speaking so loudly. HAMBURGER: You are so much more eloquent than I am. RITHOLTZ: That’s not me. I stole that. That’s Longfellow or Wadsworth or somebody. I know I, I know I’m stealing that. My dad used to say that to me all the time. HAMBURGER: It’s a great one. RITHOLTZ: But really, it’s true. HAMBURGER: Yes. RITHOLTZ: Which raises the question, how big is that M&A market for RIAs? Nobody has, here’s the crazy thing. So, you take the like five biggest RIAs you can think of. They’re all 200 billion, Creative Planning, Edelman, Ken Fisher, they’re all giants. And I’m sure there’s a couple of more there, $200 billion is nothing in a 30, 40 by some measures $97 trillion space. Is anyone ever going to have market share here? HAMBURGER: So, you have a few questions. RITHOLTZ: Two questions, yes. HAMBURGER: You have two questions there. The first one is we’re in the early innings, right? Because even the giants of independent wealth management are small in comparison to the entire securities industry. RITHOLTZ: Right. HAMBURGER: Right? It’s not, it wouldn’t take much for one of these financial behemoths to become an aggregator themselves. And they’ve got far more financial might than any of these private capital providers out there. RITHOLTZ: None have gone public yet, right? They’re all still mostly private. Is that right? HAMBURGER: Well, I mean, you had focused financial, right? Go, you know, go public. RITHOLTZ: And they’re clearly a roll up there. How big are they? They’re like 300 billion, 400 billion, 500 billion. HAMBURGER: Yes, I think, but, but they’re, they’re actually going, they’re leaving the public markets and you know, it looks like they’re, you know, they’re heading back to, uh, to private. So that’s an interesting transaction, right? One of the few firms to make their way into the public markets is actually, you know, some would say retreating, you know, others would say, you know, recapitalizing within the, you know, the private markets. But you know, they’re the ones that have made their way over, arguably other firms like NFP have gone public, but there’s not really a peer wealth management — RITHOLTZ: NFP is what? HAMBURGER: National Financial Partners, right? RITHOLTZ: Okay. HAMBURGER: More an insurance, focus. But I think we’re in the early innings. I really do. I think that that there is a whole world that you and I can’t even sit here and fathom knowing where we’ve come from to imagine what this is going to become in the next 10 or 20 years. I really, I really think we’re in the early innings. RITHOLTZ: Really? So, so let, let’s, that’s surprising because when we launched our firm in 2013, I felt like we were a decade past the real launch of registered investment advisories. We were on the right side of passive, we were on the right side of fiduciary. It felt like, all right, this is the future. And that’s why I was surprised the big shops hadn’t bought on yet. But you’re saying, and here it is almost a decade later, you’re saying this is the this is still early days. The transition from transactional non fiduciary business is going to continue to ramp. HAMBURGER: I believe that’s the case. Yes. And then you said, you know, are there going to be dominant, you know, players in the space? And I don’t believe there ever will be. RITHOLTZ: Really? HAMBURGER: And the reason for that is because there’s such a low barrier to entry, right? Anyone you know, who takes a nice hot long shower, you know, has an idea, right? And most of those people have the wherewithal to pull off. RITHOLTZ: I told you that in confidence. HAMBURGER: Most people have the wherewithal to pull it off within the independent wealth management space, right? There’s not a high barrier to entry. There’s not significant licensing, you know, that that takes place. And with the help of an objective advisor, I mean, this is not a very complex endeavor. RITHOLTZ: So, you mentioned Focus Financial. Let’s talk about the platforms like Focus, like Dynasty. Shirl Penney was a guest of the show a couple of years ago, has a fascinating personal story. I think they’re down in St. Petersburg or Tampa. These platforms have developed, Hightower is another one, that essentially exists to pull out these billion-dollar teams from big firms and have been doing so very successfully. What is that sort of transaction like and how challenging is it for you as the attorney to deal with, I mean, nobody at a big firm is happy when a billion and a half dollars walks out the door? HAMBURGER: Well, the billion and a half walking out is happy, just to be clear. RITHOLTZ: Nobody who’s left behind is happy. HAMBURGER: So, I think the three examples you gave are three really different examples that probably satisfy a similar utility, a similar need or demand in the marketplace. When you look at firms like, you know, like Dynasty, right, they’re a single vendor platform provider, right? So, for that entrepreneur who doesn’t want to make so many of the decisions that naturally go with entrepreneurship, but they want all the features and the independence and autonomy of running their own business, right? Those firms are a great option for them, right? Suddenly within the independent space, you know, going out and being independent doesn’t mean that you have to go it alone, right? Whereas there are other firms or joint opportunities where you’re not going to have the autonomy of running your own firm, you’re going to go and you’re going to join these firms, you’re going to be a “partner in the firm” or you’re going to, you know, run one of these satellite affiliates within the firm, but make no mistake about it, right? This is all about this concept of control, right? And I think entrepreneurs really want to hone in on this. I think that’s going to be a theme over the next few years is control because we have so many minority investments happening within this space, but even with a minority investment, these minority investors are demanding control provisions, right? Control is like the big tug of war that’s happening nowadays. And when you look at a firm like Charles’ firm at Dynasty, you see a firm that helps enable folks to run their own independent autonomous practice without having to give up that degree of control. RITHOLTZ: I want to ask you about some of the deals you look at and review sometimes after the fact. One of the, you know, risks of being an attorney is people will always come up to you and ask you about a problem, and then two-thirds of the way through the conversation you find they already signed that document, oh, I’m sorry, but I can’t help you, you have a contract. How often do people come to you and say, hey, what can you tell me about this deal? And your answer is, oh, that’s a terrible deal. Don’t sign that. And they say, well, I already did a letter of intent, what do I do now? Is this a legitimate issue that happens time and again? HAMBURGER: So, you asked me before about the different practice areas we have, and that happens all the time within our business transactions group. RITHOLTZ: Really? HAMBURGER: Where I spend my time is really in two primary areas in my practice. One is having that ongoing relationship with CEOs within this wealth management space and talking to them about their objectives and helping them navigate a path. So, it doesn’t happen in those circumstances. The other part of where I spend my time is fixing problems, right? RITHOLTZ: This is a problem. Someone says, hey, I signed this, what do I do? HAMBURGER: This becomes a problem, right? And it’s actually, typically it’s like an LOI, right? So, it’s not a legally binding document, but it’s a goodwill problem, right? Because we work with so many other of these firms within the space, by the advisor signing that LOI, it’s really the equivalent of a handshake. RITHOLTZ: Right. HAMBURGER: Right? And if you’re going to be in business with this firm for the next few decades, at least, you don’t want to start off by your attorney calling saying, hey, I know they signed this, but what they really meant was that, right? So, I can tell you, it limits the ability for us to meaningfully affect the deal. We of course can continue to negotiate around the fringes and help mitigate risk and optimize the transaction to fit a more ideal tax structure. RITHOLTZ: Hey, the deal could always fall apart in legal. That happens, right? HAMBURGER: It can. Yes, no, it can. And I mean, that’s the typical, right? Blame the attorneys. RITHOLTZ: Right, right. Throw them right under the bus. HAMBURGER: Yes, we get that all the time, and that’s fine. RITHOLTZ: God damn Hamburger, it’s his fault. We had a handshake until Brian came along and saved me from myself. HAMBURGER: Perfectly, perfectly fine. But usually, my job is to call up the CEO with the contra firm and to say, hey, I know you guys slipped one by the goalie on this one. RITHOLTZ: Snuck it by. HAMBURGER: Yes. I said, you know, and it’s almost always met, Barry, with — RITHOLTZ: They laugh, they know. HAMBURGER: It’s almost always met with, oh, we had no idea that you were working with them. Of course, it’s not a problem. So — RITHOLTZ: That’s hilarious. Yes. Because I can’t tell you how often somebody will mention something and it’s like, oh, I’m a car guy. Hey, what do you think of this? Oh, you don’t want, I’ve learned not to say, you don’t want to buy that. HAMBURGER: You don’t want to touch that. RITHOLTZ: That’s a POS. It’ll cost you — HAMBURGER: I bought it last week, right? RITHOLTZ: And that’s always the answer. Oh, it was just delivered. Well, you know, send your mechanic a Christmas card because you’re going to be spending a lot of time with him. You know, I’ve learned not to stick my foot in my mouth after having done it a dozen times. So, you can work with people to erase a bad LOI. What happens if someone comes to you and said, hey, I got a phone call. These people offered me a ton of money. All I had to do is sign this, assigning all my AUM to them. And they gave me 10 percent of the value of the firm and I’ll work out the rest. What do you do with that? HAMBURGER: Listen, that doesn’t often happen. You know, what often happens is they come to us with this deal and my first call to them was, I didn’t even know you were in the market to sell. RITHOLTZ: Right. HAMBURGER: We — and by the way, the one firm that you’re talking to seems to have none of the qualities that were important to you when you left your firm five years ago. RITHOLTZ: Right. HAMBURGER: So, I’m a big fan of really understanding what the objectives are before we set out to do anything. RITHOLTZ: It’s more than just dollars. There’s a lot of other factors that make a big difference. Because most advisors don’t think of the fact that they’re going to have to be employed by this firm afterwards. RITHOLTZ: Right. HAMBURGER: This is not a one-time transaction. I think the other big misnomer that’s out there is people are fueled by these headline numbers, right? They’re looking at these headlines. This firm just sold for 18x. This firm just sold for 20x. And they don’t understand that deals are far more complicated than that. There’s a cash component. There are contingencies. There are retention components to any deal. And so, when we look at those headline numbers, we’re often looking at the total cost of ownership. Going back to your car model. What did the firm pay to successfully acquire and integrate this firm? It’s not how much did the original owner or founder put in their pocket. RITHOLTZ: Right. HAMBURGER: And then they don’t look at the tax structure, right? And for many of these transactions, the tax structure is the one thing that can dictate the success or failure of these deals. RITHOLTZ: Right. HAMBURGER: Right? Because it can make a thin deal work really well if structured in the right way. RITHOLTZ: Right, the LLC pass-through, especially if you’re New York or California-based, is a big advantage versus traditional C-corps or however else people are doing it in other states, I love hearing people say, we are absolutely not for sale. 20x? Really? Let me get back to you on that. It’s funny how money isn’t an issue until suddenly it becomes an issue. HAMBURGER: It’s the old Robert Redford quote, right? Everything’s for sale. RITHOLTZ: “Indecent Proposal.” HAMBURGER: Very good. RITHOLTZ: Demi Moore. I don’t remember who her husband was. HAMBURGER: Woody Harrelson. RITHOLTZ: That’s right. That’s right, Woody. Let’s talk a little bit about some of the fun terminology here. Teams, new launches, carve-outs. What’s going on in those spaces? HAMBURGER: So, you know, the interesting thing with teams, these are people who are typically employed by a brokerage firm. They have worked together for many, many years. They are under this false belief that they’re partners. RITHOLTZ: Right. They’re co-employees. They’re co-workers. HAMBURGER: Yes, they’re colleagues that are often seated next to one another. Often, they have some type of fee-sharing arrangement among them. RITHOLTZ: Right. HAMBURGER: But there’s this misnomer among them. They think they’re partners. And I’m not here to burst anyone’s bubble, but I force it out when we have some of our initial consults on the business startup. Because I’ll ask them, I’ll say, “Hey, Barry, do you know John’s time horizon until he wants to retire?” RITHOLTZ: No clue. HAMBURGER: No, no idea. RITHOLTZ: In other words, until there’s a partnership agreement, nobody’s a partner. HAMBURGER: No one’s really a partner. RITHOLTZ: Right. HAMBURGER: Right. And so, what we try to force them to do is really get to know one another. Because within this team are a whole bunch of different dynamics, right? Someone needs to come clean that they’re on the precipice of getting a divorce. Someone needs to come clean that their financial affairs are just in complete disarray, which when your colleagues in an office doesn’t really matter. RITHOLTZ: Right. HAMBURGER: But if that’s your business partner — RITHOLTZ: Makes it a bit — HAMBURGER: You damn well better know that they’re going to be declaring bankruptcy within the next few months. RITHOLTZ: Right. HAMBURGER: And so, these are the surprises we have to foresee — RITHOLTZ: Does that legitimately happen? HAMBURGER: It’s legitimately happening. RITHOLTZ: People launch a business and there’s a, oh, I got this bankruptcy pending. But don’t worry, it won’t affect what we do. HAMBURGER: What makes the hair go up on the back of my neck is when we get off, we’re about to close a call like that. And one of the people that are on the call will say, “Hey Brian, can you hang on the line for a minute?” RITHOLTZ: Uh-oh. HAMBURGER: I know what’s coming every single time. It’s a prior felony conviction that they haven’t disclosed. RITHOLTZ: Oh, really? HAMBURGER: Or some type of legal — RITHOLTZ: Does it matter if it’s out of the United States? Like a felony in South America. HAMBURGER: Asking for a friend? RITHOLTZ: Right. Yes, yes. Just asking for a friend. HAMBURGER: They want to talk about marital issues, and is there any way — RITHOLTZ: That’s a big one, by the way. HAMBURGER: Yes, yes. Is there any way to own this while protecting it? They want to talk about estate issues. So, any time that there’s that type of divide between would-be partners, big red flag. We have a whole service protocol to try and make sure that we can diffuse that. And that’s not our information to share, but it needs to be shared. RITHOLTZ: How often does someone come to you with a proposal and you look at it and say, I just can’t let you sign this. This is not a good deal. HAMBURGER: You know I’m from Jersey, right? RITHOLTZ: Right. HAMBURGER: We can’t not share our opinion. RITHOLTZ: Okay. HAMBURGER: It’s part of who we are. It’s how we’re brought up. But I won’t say that. What I’m going to say is, in a polite way, I’ll say, what are you thinking? Because I’ll say, what were your objectives? What do you think that this agreement — RITHOLTZ: So, you’re going to finesse your way around getting to, this is a bad deal. HAMBURGER: I mean, come on. You know our colleagues in this industry, right? They’re a very prideful group, right? RITHOLTZ: Right. HAMBURGER: Some may say that there’s a big ego about them. And they’re used to being the smartest folks in the room. And what shocks me, more than anything else that we’ve talked about today, what shocks me is how great investment advisors lose their shit when it comes to securities analysis of their own security. RITHOLTZ: Right. Because there’s no objectivity. They can’t separate themselves. HAMBURGER: Right. So, you know, this, I mean, really at the end of the day, what do you own? You have a concentrated securities position, right? You better than me, as the investment advisor, can analyze the value of that security, right? You have all sorts of methods for doing that. And so, my job is to redirect your skills to be able to do that. And most of the time they see that. RITHOLTZ: So, let me ask you this question, because I’m genuinely aghast. We talked earlier about people not making the phone call because they don’t want to run up the legal bill. Every now and then I’m horrified to see people not have attorneys, not have accountants, sign documents. Like, how much are you saving? You’re talking about millions of dollars in revenue, tens of millions of dollars in revenue, millions of dollars in salary. How can you sign a document without having a lawyer review it? Oh, you save $10,000? It’s going to cost you $3 million over the next decade. I’m apoplectic here. I see this all the time. I’m genuinely aghast. HAMBURGER: I, too, share your sentiments. I mean, you know, of course I’m biased. I think that you should never go into a novel financial transaction, particularly one that capitalizes the decades of goodwill and trust that you have developed throughout the course of your career without, number one, an objective party, right? Even if that’s a knowledgeable friend of yours to say, what the heck are you thinking? RITHOLTZ: Right. HAMBURGER: And an experienced party, right? Someone who’s been there before and knows what’s important, what needs to be handled urgently, and what’s everything else, right? What’s the noise that we can kind of set to the side? But it amazes me the transactions that people enter into without the benefit of objective, experienced counsel. It really does. And you know — RITHOLTZ: And this isn’t just self-interest speaking — HAMBURGER: It’s not. RITHOLTZ: — because the odds are they’re going to go to a different attorney than you. HAMBURGER: Sure. RITHOLTZ: Just statistically. But if you’re signing a contract that’s worth millions and millions of dollars, isn’t it just common sense to have an attorney look it over? I mean, I’m genuinely aghast when I see and hear about these things. And it happens more often than one would imagine. And it’s not like you’re a minor. It’s not like you’re going to be able to get that, you know, oh, no, they didn’t know what they were doing. Let’s just decay that. HAMBURGER: So, here’s the distinction that I’ve been able to call together over the years is that people that think of this as an investment, people that think of this as a business are apt to spend that money. RITHOLTZ: Sure. HAMBURGER: Right? They say, hey, there’s a transaction cost and it’s making sure I have good counsel to help optimize the transaction, mitigate risk, et cetera, et cetera. Think about brokers, even the most successful among them, who have been sitting in a wire house throughout, you know, for decades, throughout their whole career, they’ve never written a check for any business endeavor, right? RITHOLTZ: Right, right. HAMBURGER: The only attorneys they’ve ever hired is, you know, is probably to buy a house and maybe get divorced. RITHOLTZ: But you would hire an attorney to buy a house, right? You wouldn’t just go in and do the closings. Yes, I could figure it out. HAMBURGER: But that’s only because your realtor sent you to someone who’s charging a thousand dollars to do the closing for you, right? It’s not really because you would have found them on your own. Here, right, when you’re saying this is what objective counsel is going to cost, that’s a tough check to stroke, unless you’re thinking about the brighter road ahead. RITHOLTZ: I guess if you’re sitting in a place where you’re not paying for legal, you’re not paying for compliance, you’re not paying for marketing, you’re not paying for trading, you’re not trade execution, you’re not paying for any of that, it comes out of your gross revenue on a grid, so you don’t really recognize that these are actual costs? I mean, you’re giving up half of your comp or more to pay for that. I would think that’s intuitive, but I guess not. So, the last question about M&A that I have to ask is, I keep seeing these headlines. Is this the end of the small RIA? Again, it seems a little self-interested, but what do we think about whether you want to call it a lifestyle practice or a small local practice? These are people everybody in the town knows, and when they have a financial question, go to, am I wrong in thinking those aren’t going away, they’re going to be here for a while? HAMBURGER: Those small RIAs will be here throughout the duration of our lives. And the reason for that is probably not what you think. The reason for that is — RITHOLTZ: Technology. HAMBURGER: — is technology. RITHOLTZ: Okay. HAMBURGER: Yes. RITHOLTZ: Because what you could do as a solo practitioner or two or three people working in an office today is just so much more expansive than what you could do 20 years ago. HAMBURGER: That, but I think even more compelling is the scalability of that technology. Right. RITHOLTZ: Meaning? HAMBURGER: The fact that everything’s a cloud-based application. RITHOLTZ: Right. HAMBURGER: And you can scale it down to a single user license. Think of the CRMs. I mean, everyone knows the CRM. RITHOLTZ: Salesforce is a big, giant company. There’s a dozen of them, four RIAs. HAMBURGER: But to stand up a CRM, 20 years ago, to stand up a CRM like a Salesforce — RITHOLTZ: Huge costs, huge. HAMBURGER: You would have to buy a dedicated server. RITHOLTZ: Right. HAMBURGER: Host it in a cooled office, right? Have — RITHOLTZ: A full time tech manage it, right? HAMBURGER: Replicate the data, have backups all over the place, .....»»

Category: blogSource: TheBigPictureApr 25th, 2023

Inside Nike: Sources share claims of sexism, cheating, abuse at the world"s wokest brand

A new movie trumpets Nike's creation of the iconic Air Jordan sneakers in the 1980s. But the company's history has a darker side. Mike Pont/WireImage/Getty Images; Drew Angerer/Getty Images; Doug Pensinger/Getty Images; Andrew Weber/Getty Images; Kevin Morris/Corbis via Getty Images; Samantha Lee/Business InsiderNike has long positioned itself as a "woke" apparel company, a champion of progressive values that backed social-justice heroes like Colin Kaepernick. But the company's history exposes a darker reality, masked by a multibillion-dollar marketing apparatus.By the time Michael Jordan's first Nike commercial aired, in 1985, the company's annual revenues had climbed to nearly $950 million. Five years later it had hit $2.2 billion in sales each year. By 1993 that figure had climbed to nearly $4 billion.To spur a new generation of long-distance running in the US, Nike hired marathon champion Alberto Salazar to run the Oregon Project. But the program would become mired by allegations of abuse and doping.More recently, Nike has come under fire after allegations of sexual harassment at the company surfaced, along with harsh criticism of its labor practices.This story was originally published on May 4, 2020. It has been updated to reflect the release of "Air," a new movie about the creation of the Air Jordan shoe.On September 6, 2018, Nike CEO Mark Parker threw a party at his company's sprawling 400-acre world headquarters in Beaverton, Oregon. It was "Just Do It" day, when work grinds to a halt at the campus so that hundreds of employees can gather to eat, drink, and mingle with celebrity athletes. The unofficial company-wide holiday was held on a lush, well-manicured field beneath the afternoon sun, with staff from every rung of the corporate ladder rubbing elbows with Parker and Phil Knight, who had stepped down as CEO in 2004 and ceased duties as chairman of the board in 2016.Parker, who became Nike's third CEO in 2006, arrived at the party wearing black slacks, a black dress shirt, and a black jacket — a departure from his usual attire and an odd choice for a day when temperatures approached 90. Some guessed it was the CEO's attempt to align himself with Nike's guest of honor, Colin Kaepernick, who showed up in black shorts, a black shirt, and black Nike shoes.In 2016, Kaepernick became a civil-rights icon by kneeling in protest of social injustice during the playing of the national anthem. His actions infuriated the top brass at the NFL — which has an apparel deal with Nike estimated to be worth over a billion dollars — and got him and sidelined him from playing ever since the 2016 season. In Kaepernick's stand, Parker spied opportunity: He made him the new face of Nike's "Just Do It" campaign, originally conceived by Dan Wieden in 1988 as a paean to what he saw as the company's "willingness to f--- something up."The Kaepernick ad, which featured his image with the words "Believe in something, even if it means sacrificing everything," placed him alongside former Nike-sponsored icons, such as distance-running legend Steve Prefontaine, soccer star Ronaldinho, Roger Federer, and Michael Jordan, who is credited with rescuing Nike from irrelevance at the tail end of America's jogging boom."What Phil and Nike have done is turn me into a dream," Jordan said.Kaepernick would join their ranks, albeit through a campaign that accentuated not his athletic feats but his social-justice heroism.Nike's Kaepernick ad roiled conservatives. President Donald Trump said it sent "a terrible message," while the editorial board of The Wall Street Journal declared it a "patriotic fumble." The day after Kaepernick teased the ad on his Twitter account, Nike's share price slipped more than 3%. But Parker's gamble would pay off: The ad won an Emmy and Nike raked in a record $36.4 billion in 2018. The company had made loads of money even as it earned praise for placing principles over profit. The conservative blowback came as no surprise to Parker, who told Nike's board of directors to expect some short-term backlash.What he didn't anticipate was that some of Nike's own former athletes, who were paid to represent the brand, would take a principled stand against the company that had sponsored them, claiming they'd suffered abuse at the hands of Nike coaches, whose behavior was enabled or ignored by high-level employees at the company. Later, some of these same athletes would also take a stand against the company over allegations of gender-based discrimination and sexual harassment among its corporate ranks.The most significant of these athletes was Mary Cain. The prodigy first discovered her love of running in elementary school, when she astounded her classmates and teachers with her raw speed. By her freshman year at Bronxville High School in Westchester County, she won a state cross-country title. In the summer of 2012, she ran the 1,500 meter at the Junior World Championships in 4:11, a record for American high-school girls.But the life of a prodigy can be isolating, and her astounding success did not endear her to her competitors or their "helicopter parents," Cain, who declined to comment for this story, said on the Clean Sport Collective podcast. "I was kind of bullied on my high-school team," she added.In fall 2012, the family discussed whether she should put her running career on hold until college. The family, Cain's father said, was desperate for "divine intervention."When it arrived that October, it came in the form of an offer from legendary running coach Alberto Salazar, who managed an elite program called the Nike Oregon Project. Mary's performance at the Junior World Championships had blown him away, and he began coaching her from afar. Like Cain, he too had been a high-school running prodigy and dominated the sport at the University of Oregon in the late 1970s.The Cain family was elated. The miracle they'd been waiting on arrived just in time to spare their daughter the indignity of training with a local club until college."To say it was a savior swooping in would be an understatement," Cain said in an interview. "I got to join the greatest club in the world."In the beginning, Nike was a shoe company, conceived by Phil Knight in 1962. He once said his vision was to specialize in quality athletic shoes that "could be made in Japan and ... profitably imported for sale in the United States." That plan would take him to Japan, whose ruined postwar economy made it a mecca for cheap manufacturing for Blue Ribbon Sports, the upstart shoe distributor he founded in 1964. As the company flourished and gave birth to the Nike brand, Knight stuck with the model. Rather than paying his workers better wages as profits soared, he sought out cheaper workers in more economically despondent places.Even as Nike sprinted toward becoming a billion-dollar brand, it continued to seek ever-cheaper manufacturing opportunities, in poor nations with weak labor laws, to maximize already stunning profits. By 1982, the company imported 70% of its shoes from South Korea, then a military dictatorship; 16% from Taiwan; and 7 % from Thailand, Hong Kong, and the Philippines. (Nike eventually offshored the 7% of its production done in New England.)Through the 1980s and '90s, underage workers toiled in its plants in Indonesia. At factories in China, workers claimed they were coerced into putting in excessive overtime to meet Nike's demanding production schedule. And in 1997, 23-year-old Nguyen Thi Thu Phuong, a worker in Nike's factory in Bien Hoa, Vietnam, died after a sewing machine broke down and sprayed her body with metal parts.Nike claimed it bore no responsibility. The shoe company, which was by then one of the world's largest manufacturers, was no longer in the manufacturing business, according to Nike. It was in the marketing business."We don't make shoes," the company said in a statement.The goal, as Nike grew, became to spend as little as possible on manufacturing so that more money could be pumped into the company's advertising and marketing operations. By 1982, Nike's annual advertising budget had climbed to $20 million; eight years later, it had soared to more than $150 million.It proved to be a winning formula. By the time Jordan's first Nike commercial aired in 1985, the company's annual revenues had climbed to nearly $950 million. Five years later, it had hit $2.2 billion in sales each year. By 1993 that figure had climbed to nearly $4 billion. At the height of the Jordan era, when one out of every three pairs of shoes sold in the US were Nikes, profits grew nearly 1,000%. The story of the shoe, which pushed Nike to towering heights in American retail, was recently chronicled in "Air," a Ben Affleck-directed movie.In an interview, Rick Bakas, a former apparel designer at Nike, described what he saw as Knight's obsession with Nike's image and his steadfast belief in the power of marketing to displace reality — being No. 1 and seeming virtuous mattered more than being No. 2 and being virtuous.Drew Angerer/Getty Images; Samantha Lee/Business InsiderBakas worked on Nike's apparel team in the late '90s, when stories about sweatshops it was using emerged. The company handled the stories about its use of sweatshops "as a PR problem," he told me. "Nike's public-relations team had two jobs when it came to the sweatshop labor scandal: One was to create a response that would work on the media, and the other was to create a response that would work on Nike employees."According to Bakas, executives told their American employees, particularly those working on apparel manufactured in overseas sweatshops, to regard workers in those factories as fortunate to have a job with Nike. The company wasn't exploiting them — it was boosting the economy in their struggling nation."It's a culture of arrogance, and ultimately it is very cult-like," Bakas said. "Just like with Apple and Steve Jobs, you end up with Phil Knight as this cult leader who people want to associate with, even though he's a prick, because he had this amazing idea that spawned an amazing company and brand." Whenever labor groups, human-rights organizations, or governments called on Nike to reform its labor practices, the company resisted, treating these as image problems rather than supply-chain problems. (A spokesperson for the company told Business Insider that "Nike remains dedicated to ethical and responsible manufacturing and we are deeply committed to ensuring the people who make our product are respected and valued.")After years of scrutiny from the press, Nike appointed a corporate- and social-responsibility manager, who in May 2001 claimed that the company was "just a bunch of shoe geeks who expanded so much without thinking of being socially responsible that we went from being a very big sexy brand name to suddenly becoming the poster boy for everything bad in manufacturing."In April 2001, Nike CEO Phil Knight and his vice president, Tom Clarke, called distance-running legend Alberto Salazar. Knight and Clarke, both former distance runners, believed Salazar, who had coached Nike athletes and worked as a sports-marketing consultant for the company, could restore glory to American running. The three developed a vision: a training program funded by Nike, built around experimental training techniques and cutting-edge performance-tracking technology — led by Salazar, if he wanted the job. He accepted without reservation.As a young man, Salazar had broken the American indoor 5,000-meter record, and between 1980 and 1982 dominated the New York City Marathon with three consecutive victories. His narrow win over Dick Beardsley in the 1982 Boston Marathon, known as "the duel in the sun," has been called the most thrilling finish in the history of the event. But an asthma diagnosis would slow Salazar, leading him to try experimental, often unproven training techniques. Nothing worked. He came in 15th in the marathon at the 1984 Olympics, his last significant result.By the time Knight and Clarke recruited Salazar to run their program, dubbed the Oregon Project, his passion for sports science had only deepened. And with Nike's considerable resources, Salazar's methods grew increasingly experimental. It seemed that no idea was too wild, no approach too unconventional. The goal was simple: Give Salazar everything he needed to find an athlete who could do for running what Lance Armstrong had done for cycling, which went from niche to mainstream in the US after the Texan began dominating the Tour de France in 1999.The project began almost like a reality-TV show. Salazar recruited a handful of elite runners and housed them in a special five-bedroom house in northwest Portland, where hermetically sealed rooms and a special filtration system simulated the experience of living at a high altitude. Salazar and his team used advanced software to spot inefficiencies in their form, a controversial Russian algorithm to determine the intensity of their training regimen, and an enormous piece of workout equipment called Nemes, which supposedly stimulated electrical activity between the brain and certain targeted muscles, thereby boosting muscle power.Adam Goucher, who joined the Oregon Project with his wife, Kara, in 2004, said Salazar's philosophy was to "spare no expense to get his hands on the latest, newest thing that could help Oregon Project runners go faster." The coach carried "some kind of laser" around with him, Goucher recalled, and said it supposedly sped up the healing process.Goucher remembered thinking: Who else but Nike could spend that kind of money on unproven equipment that might only provide benefits on par with the placebo effect?The scientific basis for some of Salazar's innovations, including the house, appeared sound. But his approach could be improvisational and impulsive. Once, an Oregon Project runner, mystified by his sluggish condition, discovered that the oxygen level in the team house's recreation room had been set to simulate an altitude much higher than usual — a staggering 14,000 feet.One morning in 2003, a pair of 17-year-old runners, Stuart Eagon and Galen Rupp, stood outside their hotel room in Raleigh, North Carolina, preparing for the national 5,000-meter high-school championships. Salazar was advising both students, who trained with him in their off-seasons.When Salazar showed up for a morning run, he asked Rupp, "Have you taken your prednisone yet this morning?"Rupp stopped warming up and returned to the hotel room, presumably to take the drug. He returned 10 minutes later without saying a word about it, Eagon told me.The episode struck Eagon. His grandmother had taken prednisone, so he knew its purpose: to block pain and enhance oxygen consumption. The idea of a healthy 17-year-old taking the drug — a banned performance-enhancing substance under rules laid out by the World Anti-Doping Authority — surprised him.Doug Pensinger/Getty Images; Samantha Lee/Business InsiderSalazar, a family friend of the Eagons, had first taken an interest in their son two years earlier at the cross-country regional junior Olympic meet, where the 15-year-old had competed in the 2-mile race. If he wanted to improve, Salazar told his father, he needed to bulk up. Indeed, after committing himself to weight training, Eagon became a regional contender in his age group. "Alberto was always very perceptive in that way," Eagon said.While Eagon benefited from training with Salazar, it was Rupp who became the Oregon Project's prized recruit. In Rupp, Salazar saw his chance to correct earlier mistakes: Rather than rushing him into the program, he allowed him first to develop in high school and college before turning professional with the Nike Oregon Project in 2009. According to Eagon, part of Rupp's development seemed to involve taking prednisone, a banned substance.Eagon tried to forget the episode in North Carolina, but it haunted him. He'd never been offered performance-enhancing drugs, but had suffered from depression because of overtraining. He couldn't imagine how much worse it might be for runners taking illicit substances. Yet for a long time it was easier to pretend the incident never happened than it was to confront Rupp.In 2005, Eagon's conscience finally overwhelmed him. Rupp had by then broken the junior US 3,000-meter and 10,000-meter records, and was primed to be "America's next big runner," according to Salazar. But Eagon worried about the cost he might be paying to achieve that.While the two were at a race in France that year, he asked him point-blank: Was he still taking prednisone? At that point Rupp denied ever taking it, "which made it seem as though he had been told not to ever share that," Eagon said. The two soon grew apart. "It felt like our friendship disappeared, and not only was it strange, it was really sad." A representative for Rupp did not respond to requests for comment, while Nike said that it "does not condone the use of banned substances in any manner."Eagon wasn't the only one who found Rupp's performances suspicious. Adam Goucher had run against Rupp often enough to have a sense of both his raw talent and his limitations."Alberto thought Galen Rupp was this messiah of distance running and was so obsessed with his form that he couldn't see the reality which was that he wasn't that talented," Goucher said. "And after not winning at all he suddenly starts winning all these races, which to me suggests that Alberto decided doping was the answer to the problems that were going to arise if he didn't get Galen performing like he'd promised."As Rupp's friendship with Eagon crumbled, his bond with Salazar deepened, so much so that when Salazar suffered a serious heart attack in June 2007, he had just one request after waking up in the hospital with Phil Knight at his side: "Take care of Galen," he said, without mentioning a word about his two sons or his daughter, according to his autobiography.During Salazar's recovery, his doctors prescribed a course of statins, which help reduce cholesterol levels. But the statins also lowered his testosterone levels, a common side effect. He received testosterone-replacement therapy, even though it can be dangerous for people with heart conditions. Eventually, his testosterone levels normalized. Yet he continued filling prescriptions for his testosterone cream.Some former Oregon Project employees believed that a portion of that testosterone went to some of Salazar's athletes. Overtraining can lower the body's levels of the hormone, which helps build muscle mass and aid in recovery. Since Salazar's regimen inevitably led to overtraining, testosterone therapy might have effectively allowed his athletes to push past their limits without suffering the drawbacks.When Salazar needed supplements or medications for his athletes, he turned to Jeffrey Stuart Brown, a board-certified endocrinologist in Houston. It was simple: Oregon Project athletes who needed a boost were flown to Texas for IV drops, experimental supplements, or medications used to treat thyroid disorders, which Salazar believed would give runners an edge, according to the United States Anti-Doping Agency's (USADA) decision on the Salazar case.If that was the case, it worked beautifully. In 2012, after three years competing professionally for Nike's Oregon Project, Rupp won a silver medal in the men's 10,000 at the London Olympics, the sort of major American victory Clarke craved. Gold, meanwhile, went to his new Oregon Project teammate Mo Farah, who was lured from Adidas in 2011 by the prospect of working with Salazar. Brown did not respond to requests for comment sent to his personal email address, while Nike responded that there was "no finding that performance enhancing drugs have ever been used on Oregon Project athletes."Andrew Weber/Getty Images; Samantha Lee/Business InsiderFarah also won gold in the 5,000 at the London Olympics, which was a tremendous marketing coup for Nike: In Rupp it had a homegrown track superstar, and in Farah it had the kind of athlete whose excellence seemed to transcend the boundaries of his niche sport. His two gold medals gave Nike the tools to sidestep Olympic sponsorship rules, which dictated that only Adidas could mention the games in shoe and apparel advertisements since it had paid tens of millions of dollars for the exclusive rights. In the wake of Farah's win, Nike plastered London streets with ads showing a pair of muscular legs with the words "Twice the Guts, Double the Glory." (Nike did not respond to questions regarding this incident.)Soon after Farah's triumph, he and his coach received a call from a pair of investigative journalists at the BBC, working in partnership with ProPublica. Danny Mackey, a former scientist at Nike, had tipped them off to the Oregon Project and Salazar's experimental methods. In late 2014, the BBC sent a film crew to Portland to interview several former Oregon Project employees.Among those they sought to interview was Stuart Eagon, who by then had left distance running behind to become a documentary filmmaker. For days before the interview, he agonized over whether to go on the record about the prednisone incident with Galen Rupp. In the end, he felt he had to tell the truth. "I just felt that someone coming into this program so young should have all the information necessary to know what they were getting into," he said.For the rest of her high-school career, Cain trained under Salazar from afar, breaking one record after another. After graduating in 2014, she became the youngest member of the Oregon Project. Several days each week, Mary trained at Nike's track in Portland, amid hundreds of acres of pine trees and gleaming office buildings.The Oregon Project became a surrogate family for Cain. She viewed Salazar, a devout Catholic like the Cains, as a kind of father figure, calling him her "crazy uncle." She even came to believe that Salazar had recruited her partly to replace Kara Goucher, one of Salazar's star runners who had abruptly departed in 2011. After joining the Oregon Project in 2004, Goucher went on to win the silver in the 10,000-meter race at the 2007 World Championships.But things changed after Goucher gave birth to a son in late 2010. Months later, Salazar offered her Cytomel, a prescription thyroid medication that he said would help her lose weight as she prepared for the 2011 Boston Marathon, according to the USADA v. Salazar decision. She was already on a similar medication, so she declined. In the end she would finish fifth in the 2011 Boston Marathon, just six months after giving birth. But it was not good enough for Salazar. "She needs to lose her baby weight if she wants to be fast again," he told members of Goucher's family who had come to watch her race. During training sessions, Salazar made inappropriate comments about how her breasts had grown larger after giving birth to her son, the Gouchers said."He would be at the side of the track calling out runners' splits but wouldn't call Kara's out," Adam Goucher told me. "And when she'd ask him why he'd say, 'I'm sorry, I was staring at your boobs! They're so big — I couldn't take my eyes off them.'"Nike did not respond to questions concerning Salazar's comments about Goucher's breasts, nor did it respond to questions about the use of Cytomel at the Oregon Project.Goucher and her husband were also unnerved by the things they were seeing after Mo Farah joined the team in 2011."Things became very 'win at all costs' very quickly, and while we didn't suspect doping at first, that changed after the Prefontaine meet in 2011," Adam Goucher said. "We saw Mo looking like a completely different athlete. It just didn't add up how fast he went and how easy it was for him to run that 10K."In March, Farah told British media that untruthful answers he gave to anti-doping investigators had been due to misremembering what injections he'd been given; he maintains that he has not taken performance-enhancing drugs.One day Salazar told the Gouchers that he wanted to put Mo, Galen, and Kara on a new supplement that had helped "some British cyclist." When Adam asked whether it was legal, Salazar appeared to get angry but did not answer the question, Goucher said. The breaking point, however, came at the 2011 World Championships, in Daegu, South Korea, where Salazar asked her to take a strange pill he claimed was a supplement. When Farah asked why they couldn't just have an injection as usual, Goucher began to suspect that the substance was probably not legal.Kevin Morris/Corbis via Getty Images; Samantha Lee/Business InsiderTara Welling, who joined the Oregon Project in 2012 when she was 23, said that by the time Salazar sent her to see Jeffrey Brown, the doctor in Houston, she had learned not to question her coach, according to testimony given to USADA. The only woman on the team at the time, she found Salazar "intimidating" and felt she needed to "prove something every workout." When she didn't live up to his high standards, she immediately knew it. It was "kind of scary," she said.After a successful injury-free college-running career, she tore her Achilles tendon in 2013 and in late 2014 suffered a stress fracture of her hip so severe she required crutches to move around. Unless she was immobilized by an injury, she said, Salazar would tell her to "just run through it." His strenuous workouts left no time to recover, she felt.When Mary Cain moved to Oregon to train with Salazar, she too began seeing her body fall apart. Like other women running for Salazar, she faced constant pressure to lose weight, despite the fact that her fitness level and results indicated she was already in ideal physical condition. Salazar's obsession with Cain's weight wore her down: To shame her, he would weigh her in front of both teammates and competitors.When Cain did lose weight, her body rebelled. She didn't have her period for three years, which, because of her young age, increased the risk of lifelong problems such as osteoporosis. To please Salazar, she subjected herself to punishing dietary restrictions and would sometimes try to force herself to throw up. She also began cutting herself. When she described this behavior to an Oregon Project employee she believed was a sports psychologist — in reality the Oregon Project at that time did not have a licensed sports psychologist on staff — he told her to toughen up.Nike did not respond to specific questions about Cain's allegations of abuse against Salazar, but instead said that it had "identified areas where we can do better in supporting female athletes." These include "increasing women coaches in sports" and "investing in scientific research to understand the impact of elite athlete training of girls and women."After suffering a breakdown in 2015, Cain returned home and took some time away from the professional running circuit. She transferred to Fordham, where she earned a degree in business administration and took premed classes. Friends and colleagues from the running world reached out constantly to ask why she'd retired without at least making an announcement."I was like, uh, because I didn't," she said. When people asked why she left the Oregon Project, she said it was a "personal decision."For a time, Cain believed this, right up until last year, when the Court for Arbitration in Sport sided with the US Anti-Doping Agency over its decision to suspend Salazar for four years, which it backed up with a 140-page report.After reading it, she realized what Salazar had done to her.In December 2012, not long after Cain had committed to training under Salazar, Steve Magness sent an email to a USADA tip account: "Look into the Nike Oregon Project athletes."Magness had been an assistant coach at the Oregon Project from January 2011 to May 2012. In his short time there, he'd seen a lot of things that concerned him, and he worried how much more out of control things might get."I'm strongly suspicious of using testosterone cream as I saw it labeled in test results for Galen Rupp," Magness wrote in his email. "Their head coach has a prescription himself for testosterone cream."USADA CEO Travis Tygart, who led an investigation into Lance Armstrong and Tailwind Sports, the tiny company behind his US Postal Service cycling team, knew a powerful corporation like Nike would be formidable. But it would also offer Tygart a chance, he thought, to do something he'd failed to do in the Armstrong case: prove a major sponsor's complicity in systematic doping."While we never had any direct evidence of it [in the Armstrong case], you always worry and wonder about the sponsors," Tygart told me. "Because there's a lot of money in those who win, and for those whose sole existence is to make money you want to ensure that they're not putting athletes in a position to go and break the rules in order to have a better return on their investment."Nike's return on its investment in Salazar's Oregon Project was clear. During the fiscal quarter in which Rupp and Farah won medals at the London Olympics, Nike's revenues soared 10% from the previous year, to a record $6.7 billion.In 2013 Tygart found his next whistleblowers: Kara and Adam Goucher. They had already spoken to the FBI about what they'd seen going in at the Oregon Project, but Kara was reluctant to speak with anyone else about it. What changed her mind was seeing Tygart on a television news program. "It was right after Lance Armstrong finally got taken down, and we were in Colorado Springs watching Travis Tygart on CNN," Adam said. "Kara was like: 'If we can talk to that guy, I'll do it.'"Kevin Morris/Corbis via Getty Images; Samantha Lee/Business InsiderOne of the things they told Tygart was something he'd already been hearing from other whistleblowers: that Brown, the doctor in Houston, was a key figure in Salazar's doping enterprise. Another source who told this to Tygart was running coach Danny Mackey, who was told by a coworker that he should visit Brown in Houston to receive performance-enhancing testosterone therapy while working at Nike's sports-research lab in 2008. He told USADA investigators that the suggestion concerned him as a competitive athlete, so he asked for more detail and was told, according to the report, "This is what Alberto Salazar's athletes do, and they haven't gotten caught." Salazar did not respond to requests for comment.Years later, in 2015, Mackey filed a police report alleging that Nike executive John Capriotti had threatened him at a track meet in Eugene, Oregon, where he allegedly shouted: "You know what you f------ did. I'm going to f------ kill you." Nike, where Capriotti is still employed, did not respond to requests for comment on the alleged incident.Capriotti's role at Nike was theoretically to keep Salazar in line, according to Adam Goucher. But whenever he or Kara complained to Capriotti about their coach's behavior, he would tell them, "Well, what can I do? He has a direct line to Phil Knight. Alberto is going to do whatever he wants, and I can't stop him." Phil Knight did not respond to requests for comment, and Nike did not respond to requests for comment on his behalf.When I asked whether Goucher believed Capriotti had indeed threatened Mackey, he told me he was certain that he had; when I asked whether he thought Capriotti had gotten in trouble for it, he said he felt equally sure that he hadn't because "that would only happen if the people above Capriotti at Nike had a functioning moral compass."Nike, meanwhile, hired lawyers to represent anyone even remotely connected to the Oregon Project, which may have prevented more people from coming forward. "Nike paid for lawyers for the athletes, for the doctor, for the coach, for the other witnesses, for the pharmacy," Tygart told me. "They essentially drew up the drawbridge, lit the moat on fire, put sharpshooters on the towers, and signaled that they were going to do pretty much everything they could do to ensure that visitors didn't get inside the Nike castle to see what was going on in there and what the truth was."In the meantime, more people were getting fed up with life inside the walls of that castle.On March 5, 2018, the results of a damning survey landed on Parker's desk, a thick packet filled with documentary evidence and claims of systemic, company-wide sexual harassment and gender discrimination. It had been conducted by a handful of women working out of the Beaverton headquarters, where there was a growing sense that women felt like second-class citizens. They had conducted an informal survey to gather evidence of the individual and collective harm they believed women had endured at every level of Nike's corporate hierarchy. They gathered allegations of inappropriate sexual and romantic advances, gender-based wage disparity, and, relative to male peers within the company, fewer opportunities for advancement and promotion.Because some female employees who were alleging harassment and discrimination had already been talking to the media, Parker had little choice but to cull members of Nike's senior leadership, including his likely successor, Trevor Edwards. In total, about a dozen senior executives would leave the company amid the fallout from the survey. (Edwards, through his attorney, did not respond to a request for comment. Nike, where Parker is still employed, declined to comment on his behalf.)But that wasn't all. In August 2018, former longtime Nike employees Kelly Cahill and Sara Johnston filed a lawsuit against the company, where each woman had for years felt that their attempts to climb the corporate ladder had been unfairly thwarted. Nike's corporate hierarchy, they claimed, was "an unclimbable pyramid" for women, who faced a culture of sexual harassment and gender bias.Cahill, for example, alleged that she had been paid $20,000 less than a male colleague on her team, and was passed over for promotion despite her significant experience and expertise. She further alleged that, when she left Nike, she was replaced by a man who was paid a higher salary than she'd been earning. Johnston claimed she had received inappropriate messages and nude photos from a male coworker after a company party in 2015. "At Nike," they alleged, "the numbers tell a story of a company where women are devalued and demeaned."Ultimately, Cahill and Johnston sought class-action status, opening the door for more than 500 additional class members. It would make the matter far more costly and far more embarrassing for Nike, as there would presumably be more playing out in public rather than a more private resolution. The litigation is ongoing.Nike did not respond to questions about the lawsuit. But in response to questions about gender discrimination and sexual harassment within the company, the company said it "opposes discrimination of any type and has a long-standing commitment to diversity and inclusion," and will "accelerate our efforts to expand representation of women and under-represented groups."At the same time, Nike lawyers must grapple with another, more curious case. On August 31, 2018, three Nike shareholders filed a lawsuit against Phil Knight, Mark Parker, and Trevor Edwards. They alleged that these former top Nike executives had "facilitated and knowingly ignored the hostile work environment that has now harmed, and threatens to further tarnish and impair, the company's financial position." It represents a novel approach for activist investors, who typically go after board members on the basis of unsound investments, mergers, or acquisitions. Gustavo Bruckner, an attorney representing one of the investors, said that in times like these, when so much bad behavior is rewarded rather than punished, investors must be willing to "stand in the front lines policing corporate wrongdoing." (Nike did not respond to requests for comment on the lawsuit.)But there was still more wrongdoing. And not all of it was especially upsetting to Nike's investors.In 2007, after decades of searching for cheaper labor, Nike at last found just that in a manufacturing partner: The Qingdao Taekwong shoe factory, in China's Shangdong Province. At the time, it produced more than 7 million pairs of Nike shoes each year. Its workers do not strike, and they do not complain about their wages — perhaps because many of them are Uighurs who have been relocated from Xinjiang Province.For these ethnic Muslim minority workers, working in the factory is part of a reeducation designed to make them loyal to China's central government, according to a report by the Australian Strategic Policy Institute. There are watchtowers and barbed-wire fences to keep them from leaving the factory. When they are not working they endure "patriotic education." Another factory, in Anhui, China, operated by Haoyuanpeng Clothing Manufacturing, uses similarly exploitative Uighurs labor to produce clothing for Nike and claimed on its website to supply Adidas and Puma as well. At both factories, conditions "strongly suggest forced labor," according to the report.This is all very much at odds with the image Nike had sought to promote in the aftermath of its labor controversies in the '90s. Since then, it has portrayed itself as a global manufacturing leader that submits voluntarily to outside audits. But it may have simply wrested control of the auditing from any group that might find fault with its labor practices.Mike Pont/WireImage/Getty Images; Samantha Lee/Business InsiderThis image-management campaign began in early 1997, when Knight responded to calls for independent audits of Nike factories by hiring a firm called GoodWorks International, owned by Andrew Young, a former mayor of Atlanta and US ambassador to the United Nations. When Young issued his report on Nike's use of overseas labor, Knight was so pleased with his conclusions that he took out full-page newspaper advertisements highlighting them. "It is my sincere belief that Nike is doing a good job," one ad in The New York Times read. "But Nike can and should do better."Young had recommended that third-party monitoring of Nike's overseas factories should not be left to global labor and human-rights organizations. The benefits of this approach for Nike were evident: Young, for example, had relied entirely on Nike interpreters during his two weeks of interviews with workers making Nike shoes at factories in Asia.Confidence in Nike's ability to monitor its own overseas factories was further undermined in November of 1997, when a disgruntled employee leaked excerpts from a series of formal audits Nike had commissioned Ernst & Young to prepare. These audits, which the accounting firm had been tasked with creating in 1994, were far less-forgiving than the Young report. It found, for example, that workers at the factory where Nguyen Ti Tu Phuong died making Nike shoes did not all have sufficient safety equipment or training. Some were forced to work more hours than allowed by law, making them more likely to become injured or killed on the job. But instead of acting on information in that report, which outlined exactly which items needed to be addressed to ensure the safety of workers at its factories in Asia, Nike instead commissioned the Young report and promoted the rosier picture it painted.In the years to come, Knight fought hard to ensure that any monitoring of Nike's overseas factories be carried out by the Fair Labor Association, a relatively toothless organization that had executives from a number of apparel companies sitting on its board. He won that battle, and the result, irrespective of Nike's intent or knowledge, was that it took years for anyone to learn that Nike relied on forced labor to produce its shoes and apparel. Consequently, it took that much longer for the world to recognize the holocaust that has been carried out against the Uighur people in Xinjiang.Nike said it does not "directly" source products from Xinjiang and "does not have relationships with the Haoyuanpeng Clothing Manufacturing, Qingdao Jifa Group, or Esquel facilities" there. The company also said it "remains dedicated to ethical and responsible manufacturing" and is conducting "ongoing diligence with our suppliers in China to identify and assess potential risks related to employment of people from" the Xinjiang Uighur Autonomous Region.On September 30, 2019, Salazar received a four-year doping suspension. The next day, Mark Parker sent Nike employees an email that some found oddly defensive."As for Alberto, it's clearly a difficult time for him, his family and his athletes," Parker wrote. "We will continue to support him in his appeal as a four-year suspension for someone who acted in good faith is wrong."But Salazar is up against quite a lot in his appeal: Emails contained in the decision reached by antidoping authorities showed that Parker had been briefed on several occasions regarding medical experiments conducted by Salazar. One of these experiments, conducted at Nike's Beaverton headquarters, involved testing the effects of AndroGel, a topical testosterone product. Two squirts of the gel, Brown told Parker in an email, produced only a slight rise in an athlete's hormone levels, nothing that would trigger concern among antidoping authorities. Next, he wrote, they would repeat the experiment using three pumps of the performance-enhancing testosterone gel. In an email, Parker told Salazar it "will be interesting to determine the minimal amount of topical male hormone required to create a positive test."Three weeks after the news about Salazar's ban, Nike announced Parker would be stepping down from his role as CEO; he remains employed as the company's executive chairman. Nike did not respond to requests for comment from Parker.Adam Goucher doesn't think Parker's change in status will change much with regard to Nike's unwavering support for Salazar. "I don't think it has anything to do with who the CEO is," Goucher told me. "I think it's Phil. This all goes directly to Phil Knight, and I think he will spend whatever it takes to try and save Alberto. Personally, I hope it ends up worse for him. He should have got a lifetime ban. The arbitrators were very soft on him. Justice seems to be something that's a bit hard to find anymore."Phil Knight did not respond to requests for comment and Nike did not comment on his behalf."There's this rebellious 'we do things our own way' thing that's baked into the DNA of the company, and it seems like years and years of making up their own rule book has finally caught up with them in these changing times," Bakas said. "It's a culture of arrogance."One symptom of this culture, Bakas said, was that tendency to treat every problem as a matter of public relations. In the late '90s, this meant creating a PR narrative to counter unfavorable media coverage of the overseas sweatshops it used, while simultaneously creating a response tailored specifically to work on Nike's own employees. "The PR narrative that they drilled into those of us on the apparel team was basically that these people living in third-world countries were lucky to have a job at a Nike factory," Bakas said, "because they were getting paid so much more than the national average, and that we weren't exploiting them but helping their economy."Economists who have studied this phenomenon — which some have called "the Nike effect" — say it comes with a strong caveat. In countries such as Indonesia, they have found, workers at Nike factories tend to receive pay raises only in response to backlash generated by protests organized by human-rights groups and labor organizations. If it does, in the end, help the country's economy, these economists found that it does so at the expense of its workers, who often face extraordinary risks working in unsafe conditions. For its part, Nike said the company is "committed to conducting our business ethically and sustainably, which includes advancing respect for human rights in our supply chain."In December, the company's spell over its employees seemed to be losing its power. For the first time in its history, Nike employees protested on the grounds of the Beaverton campus after a building named for Alberto Salazar was reopened after renovations. Mary Cain, who had recently shared her story in an op-ed for The New York Times, thanked the protesters for supporting her.In the aftermath of the Cain story, the US became hostile territory for what was seen as Nike's "woke" posturing. The company took a more global approach. In December, it announced a full-body swimsuit, tunic, and leggings, designed for Muslim women athletes. The following month, Nike aired its first ad, which was tailor made for Chinese New Year, even as the country's ethnic minority Muslims toiled in the company's factories under conditions that have been described as forced labor.Nike hasn't said much of anything about this controversy except that it planned to review its supply chain in China. What it finds when it conducts the review may depend on what it goes looking for, and whether it's willing to sacrifice everything to stand for something.CREDITSStoryJoshua Hunt is an American journalist based in Brooklyn and Tokyo. His writing has appeared in The New Yorker, The California Sunday Magazine, The Atavist, and elsewhere. His first book, "University of Nike: How Corporate Cash Bought American Higher Education," was published in October 2018.Siddhartha Mahanta is a features editor at Business Insider.GraphicsSamantha Lee is the senior graphics editor for Business Insider.Hollis Johnson is the senior photo editor at Business Insider.Skye Gould is the design director for Business Insider.ResearchClaire Groden is a JD candidate at the NYU School of Law. If you're a Nike employee or someone with a story to share, email retail@businessinsider.comRead the original article on Business Insider.....»»

Category: topSource: businessinsiderApr 5th, 2023

ALFI’s European Asset Management Conference 2023 Report

The 2023 ALFI European Asset Management Conference report following the conference last week in Luxembourg. European Asset Management 2023 Report After A Difficult Year, Luxembourg’s Fund Industry Prepares To Seize New Opportunities Despite experiencing one of the most difficult years for investment funds in Luxembourg and worldwide – at least in terms of assets under […] The 2023 ALFI European Asset Management Conference report following the conference last week in Luxembourg. European Asset Management 2023 Report After A Difficult Year, Luxembourg’s Fund Industry Prepares To Seize New Opportunities Despite experiencing one of the most difficult years for investment funds in Luxembourg and worldwide – at least in terms of assets under management – since the sector began its dizzying expansion more than 30 years ago, members of the industry from the grand duchy. .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q4 2022 hedge fund letters, conferences and more   And beyond are convinced that new opportunities for growth are just starting to open up, according to speakers at ALFI’s European Asset Management Conference on March 21 and 22. In 2022, the assets of regulated Luxembourg funds declined from around €5.9 trillion to €5.1 trillion (although they rebounded in January this year), affected by the depressive impact on equity and bond markets of the outbreak of war in Ukraine, soaring energy prices and the prospect of shortages that did not in fact materialise, and central banks’ rapid raising of interest rates to head off a surge in inflation. But as Marco Zwick, head of fund supervision at financial regulator CSSF observed during the conference, Luxembourg funds deal with the issue of how to handle Russian and Ukrainian assets without major drama and with limited recourse to liquidity management tools. The Association of the Luxembourg Fund Industry was established in 1988, the year that Luxembourg became the first European Community member state to adopt the UCITS directive into national law – paving the way for the emergence of a European cross-border fund sector with the grand duchy its heart and driving force. “We little knew that UCITS would become a worldwide brand,” noted ALFI chairwoman Corinne Lamesch. “But even then, there were already around 500 funds with the equivalent of €53 billion in assets.” Seeds Of Future Growth As ALFI prepares to celebrate its 35th anniversary in July, Ms Lamesch argues that the seeds of the industry’s future growth have already been sown. Since the Alternative Investment Fund Managers Directive took effect in 2013, Luxembourg has benefited from the growing appetite among institutional investors for regulated alternative investment vehicles, especially private equity and real estate, and more recently also private debt. The next major opportunity could be the just-completed revision of the European Long-Term Investment Fund regime. The ELTIF 2.0 legislation looks like it will finally open up alternative strategies to non-professional investors, both expanding the range of options for the retail market at a time when traditional equity and bond assets have often delivered disappointing returns, and expanding the capital pool available to fund Europe’s infrastructure, including key aspects of the decarbonisation transition. As Ms Lamesch points out, Luxembourg is already home to a majority of the ELTIFs established so far. The country is also building an increasingly significant ecosystem of young, innovative fintech firms that are helping established institutions to address the challenges of digitalisation and automation everywhere from client relationships to compiling and analysing data to drive management decisions and for reporting to regulators and investors. Five-minute pitches interspersed through the conference highlighted the work of start-ups backed by the Luxembourg House of Financial Technology (LHoFT). The grand duchy’s finance minister, Yuriko Backes, injected a note of caution, observing that it’s only a matter of weeks since analysts were fretting about the possibility of recession and ‘stagflation’ in Europe. She says the government is committed to modernisation of the country’s funds legislation following consultations with ALFI, to maintain its proactive stance in EU negotiations, and to be an early adopter of European legislation where this makes sense, as well as promising to avoid ‘gold-plating’ of EU measures with additional national constraints. Liquidity Management Tools Ms Backes also promised to focus on other issues that affect the financial industry, especially its ability to attract needed skills from abroad. “Housing prices are not a new problem, but it is important to address to enable Luxembourg businesses to attract talent,” she said. “We have been working on more flexible expatriate and profit-sharing regimes, we have created more public international schools, and the foreign ministry is preparing rapid action on proposals regarding spouse visas.” Verena Ross, who chairs the European Securities and Markets Authority, says asset managers mostly coped well with market stress in 2022 as the assets of the EU fund industry fell by 11% to €16 trillion, while credit risk mounted in tandem with higher interest rates, money market funds were subjected to fresh stress, and an ill-fated government borrowing policy shift in the UK threw liability-driven investment strategies used by pension schemes into turmoil. Ms Ross says the market turbulence of the past year has underlined the importance of liquidity management tools to help funds ride out economic shocks and avoid undue risks to the financial system. “The Financial Stability Board says there is no need for new policy tools – instead we need to use existing ones in areas such as liquidity management,” she said, noting that ESMA is also prioritising revision of the rules governing money market funds “sooner rather than later”. Last year was a wake-up call for the global economy, observed Karen Ward, chief market strategist for EMEA at J.P. Morgan Asset Management. “The biggest result of the war and the energy price surge was the reawakening of inflation – we are permanently out of the low inflation, low interest rate rut,” she said. Ms Ward argues that this is not an unmitigatedly bad thing: “Zero inflation was not a sign of [economic] health but of weak demand.” Environment For Active Managers Despite the recent convulsions that engulfed Silicon Valley Bank and other small or specialised institutions in the United States and led to the collapse of Credit Suisse into the arms of UBS, Ms Ward insists that in general the financial sector, along with the overall economy, “is considerably more sound than in 2008” – not least because the past decade has seen no real economic boom that could turn to bust. The current environment, argued Ed Venner, chief operating officer for distribution at Franklin Templeton, “should create opportunities for active managers to demonstrate the value of stock-picking and asset allocation. And it creates a new core role for bonds in generating income and opens the door to multi-asset income products.” A great deal of the focus of Luxembourg’s fund industry, in terms of product design and investment strategy but especially regulatory compliance, is today related to sustainability. “We are at a much better place on the ESG journey than four years ago – it’s no longer about ticking boxes,” said Denise Voss, who chairs Luxembourg-based fund labelling agency LuxFLAG. Conference panellists agreed that the implementation over the past couple of years of the EU’s Sustainable Finance Disclosure Regulation has been extremely challenging for funds’ boards of directors, not least because the legislation leaves a great deal of discretion. For example regarding the definition of sustainable investments, according to Massimo Greco, head of European funds management at J.P. Morgan Asset Management: “SFDR article 9 funds require a completely different research and investment process, and they need absolute credibility.” Frustrations Of SFDR But Gaëtan Parchliniak, head of regulatory affairs at management company Fundrock, complained that the wideness of definitions in the legislation has led to a great deal of confusion. “We now have to take into account principal adverse impact statements, along with the lack of verified and harmonised data, and ESMA’s proposed guidelines on fund names could also be a challenge,” he said. “As things stand it’s impossible to compare two article 8 funds, even if their strategies are similar, because they use different definitions and methodologies.” Even the gradual introduction, from 2025, of data reporting requirements under the Corporate Sustainability Reporting Directive, will not resolve all the problems, Mr Parchliniak argued, because small companies can’t always provide the required data. Along with the issue of foreign companies not subject to reporting requirements, he warns that employing data specialists or outsourcing will entail huge costs for management companies or portfolio managers. The latest report by the United Nations’ Intergovernmental Panel on Climate Change, warning that without major emission reductions global temperatures are set to reach 1.5ºC above pre-industrial levels in the next decade and 2.5ºC by 2100 has highlighted the urgency of the green transition, according to Sarah Gordon, a senior advisor to the Impact Investing Institute. “Solutions exist, but the question is how quickly and broadly they can be applied,” she said. “Green investing represents a practical channel, although a just transition is essential – if it’s not socially inclusive, it won’t happen. This requires three elements: climate and environmental action, socioeconomic equity, for instance jobs, and community voice, which is often on the margins of investment decisions. But it will also provide amazing opportunities for financial returns. There are now many examples of successful transition investment.” Transition And Biodiversity Many fund industry professionals bemoan the failure of the SFDR to address the issue of how to incorporate high-emission businesses that are undertaking a decarbonisation transition. Said Henrik Pontzen, head of ESG at Union Investment Institutional: “Since there is no future sustainability rating system, we need to build one. It should incorporate strategy, not just their vision but how processes and products become more sustainable, money, whether the resources are there to make it happen, and governance, what incentives are in place for management to become sustainable.” Thomas O’Malley, head of policy at HSBC Asset Management, argued that the impact of nature on companies will drive increased focus on biodiversity in the coming years. “When fruit companies have to pay people to pollinate their crops, it is because a service previously provided by nature is no longer available,” he said. “We expect biodiversity to be considered alongside climate impact over the next 20 years.” Green issues are among the most critical elements that will shape fund products in the future, according to independent director and former fund industry executive Noel Fessey. He pointed out that sustainability criteria can be hard to implement because it’s not usually possible to boil it down to a single number or target: “There’s no intellectual corruption, it’s just hard to do it right.” Digitalising The Value Chain Asset managers are also having to grapple with the implications for their business of the digital asset revolution, not necessarily because they intend to offer crypto-currency products but because techniques such as tokenisation offer potential advances for processes throughout the fund value chain. LHoFT CEO Nasir Zubairi noted that 10 digital asset custodians are already authorised in Luxembourg, and the country is also a pioneer of tokenised bond issues thanks to its comprehensive legal framework. The vast majority of Luxembourg funds are highly unlikely to be caught up inadvertently by the OECD-sponsored measures to curb tax avoidance, arising from the organisation’s campaign against base erosion and profit shifting (BEPS), that notable include a minimum 15% tax rate for multi-jurisdiction groups, according to Keith O’Donnell, managing partner for international and corporate tax at ATOZ Tax Advisers. “A very small sub-set of a small sub-set of funds are liable to come into scope,” he said. Schroders group head of tax Tim McCann noted the OECD should be credited for its agreement from the outset on a carve-out for funds, although he noted that there could be some grey areas, such as insurance groups. He said: “Holding companies and SPVs in alternative fund structures might pose a problem, but unless your fund is very big it shouldn’t apply to you.” Ongoing and upcoming regulatory developments can be likened to a marathon – one where the finish line never actually arrives, observed lawyers Silke Bernard of Linklaters, Michèle Eisenhuth of Arendt & Medernach and Olivia Moessner of Elvinger Hoss Prussen in their review of changes ranging from the CSSF’s outsourcing circular to the rules surrounding the PRIIPs key information document – and ramifications for sales in markets outside the EU, notable the UK and Switzerland.   Removing ELTIF Obstacles Their review also highlighted the potential for Luxembourg’s financial industry of the introduction of the Pan-European Personal Pension regime, although take-up so far has been slow, limited to just two schemes in Slovakia. Ms Bernard also highlighted the finalisation of the ELTIF reform legislation, although its measures will take another nine months to apply to new funds. “Many barriers to its success have been removed or clarified, while offering easier access to retail investors and creating carve-outs for professional ones,” she said. The CSSF’s Mr Zwick, meanwhile, noted that the fund sector remains focused on ensuring compliance with the SFDR rules and their implications throughout the asset management process. “The concept of ESG is so fundamental that it entails a rethink of the whole risk management process,” he said. “It is a difficult exercise, and if we get it wrong, we will lose the trust of investors.” For the same reason, he warned the EU against repeated amendments to its sustainability rules, such as the addition of gas and nuclear energy to its category of sustainable fuels. After five years in charge of fund supervision, Mr Zwick concluded, “the Luxembourg industry is very dynamic and generates a great range of good ideas, many of which becomes reality”. His advice for the next five years? “Prepare to embrace more regulatory change, it’s not going away. Embrace technological change – we all need to do better, including the CSSF – and never under-estimate cyber-risk. And remember that serving investors is the ultimate goal, otherwise we will lose their confidence. The first one to get it wrong, gets it wrong for the whole industry.”.....»»

Category: blogSource: valuewalkMar 29th, 2023

‘Why Stop?’ Meet the 80 and 90-Somethings Who Want to Keep Working

These older workers are working well past their 60s and have no plans to stop Wilmar Jensen passed the California bar and started practicing law the same year that Dwight D. Eisenhower became President and Elizabeth II took the throne as Queen of the United Kingdom. Seventy years later, Jensen is still a practicing attorney in Modesto, California. He turned 95 in December and has no plans of stopping anytime soon. “I enjoy my work and I want to keep going,” he says. While a record number of younger workers in the U.S. have been quitting their jobs amid the Great Resignation, a number of older workers are staying put, with some working into their 80s and 90s. The reasons are varied: some don’t have the savings to retire, or need to stay on the payroll to keep receiving health insurance benefits. For others, it’s job satisfaction and the desire to stay mentally sharp that keeps them working. [time-brightcove not-tgx=”true”] Courtesy of Wilmar JensenWilmar Jensen, who is 95, receiving an award for being a member of his college fraternity for 75 years. Carmine Rende, Jr., an 85-year-old senior project engineer who recently relocated from Florida to Illinois, appreciated the mental stimulation working into his 80s provided him until he recently retired due to ill health. “It’s got to be a challenge, and it’s got to be meaningful. Otherwise, it isn’t worth it,” he says. For most of his career, Rende worked for other people, so he had little say in the projects he took on. But as his own boss, he was able to work on a contract basis and could pick and choose the assignments that interested him. His regular clients included the Four Seasons Hotels and Resorts and Ritz-Carlton Hotel Company, so he was on the road a lot, fortunately to mostly desirable destinations, such as Anguilla, the Cayman Islands, Jamaica, and Saint Martin. During the pandemic, both the Great Resignation and the Great Retirement were in the news constantly, with labor statistics indicating that unprecedented numbers of workers were leaving their jobs and older workers were leaving the workforce entirely. But another trend also emerged: The Great Return, with older workers re-entering the workforce to join those who never left, according to Martha J. Deevy, Stanford Center on Longevity’s Associate Director and Senior Research Scholar. Deevy expects that older workers’ desire to work longer will continue. Self-reported health rates indicate that the vast majority of people ages 65 to 84 feel healthy enough to work, she says. “But workers will want to work differently, more flexibly. I think the question is how quickly will employers respond and create opportunities,” she says. Some colleges are even offering courses catering to workers and retirees in their 50s and 60s to help them enter the next phase of their careers. It is the flexibility and autonomy that has kept Jensen in the legal field for seven decades, along with the daily interaction he has with different clients. Jensen started out as a trial lawyer, like many young lawyers do. But he hated it. “As soon as I could get away from it, I did,” he says. He moved into estate planning, trusts, and probate law and has never looked back. “I think it’s an easier and more enjoyable way to practice.” His son, Mark Jensen, joined the practice in 1987. Every once in a while, new clients or ones who haven’t seen the older Jensen in awhile, make the mistaken assumption that they will be meeting with his son. “There’s any number of people that figured I was dead,” Jensen says. “They would just be stunned to see me.” His advice to anyone starting out and hoping to have a lasting career as long running as his is threefold. First, figure out what you want to do—ideally something you are interested in. Second, work hard. “You have to get up in the morning, put on your pants and go to work and not monkey around,” he says. And thirdly, maintain a good relationship with your family. Without that, it will make getting ahead a lot harder. At 77, John Van Horn is a youngster compared to Jensen. Southern California-based Van Horn works 40 to 50 hours a week as editor and publisher of a small parking industry magazine and has no plans of slowing down anytime soon. He never even considered retiring. “I enjoy what I do, so why stop?” he says. Van Horn considers his work a part of his life, the same way family, hobbies, and travel are. “They all blur together.” Remembering his own father’s decline once he retired, Van Horn has decided to keep working to keep himself young. “He began a long slide downhill until he passed away,” he says. “I don’t want that.” A common refrain among older workers is that they might not be so eager to continue working if they had to answer to someone else. “That was one of the things that I was definite about,” says Jensen. “I didn’t want to be working for anybody else.” When Nina Shilling, 84, left her private therapy practice in New York and moved to Seattle nearly a decade and a half ago, she wasn’t quite sure how her career would evolve. She briefly considered working at a clinic. “I was very ambivalent about it,” she says. “I didn’t know if in my seventies I wanted to be commuting and if I wanted to be responsible to somebody else’s requirements. At that point, I think that [working for someone else] clearly became a disqualifier.” Sometimes, the disqualifier can be from the employer’s side. Older workers are not always appreciated, says Louise Aronson, geriatrician and professor of medicine at the University of California, San Francisco, and author of Elderhood: Redefining Aging, Transforming Medicine, Reimagining Life. “There are countries that have mandatory retirement ages, even as we have longevity,” she says. “That is insanity.” Some of the assumptions that underpin arguments against hiring older workers include the idea that they are slower and more expensive than younger workers. Aronson argues that there are huge benefits to having people with different skill sets and of varying ages. “We know that older people are more likely to make the right decision when presented with information. They are more likely to have emotional intelligence. And, at work teams that have people of varying ages tend to be particularly productive,” she says. Courtesy of Nina ShillingTherapist Nina Shilling isn’t planning on retiring anytime soon. Assigning arbitrary ages for retirement just doesn’t make sense, says Aronson. “If you pick an age, you’re going to really harm a huge percentage of people, and lose all kinds of opportunities for society and individuals.” Therapist Shilling remembers being asked about a decade ago how long she planned to keep working. “I said, ‘As long as people want to come to see me.’”.....»»

Category: topSource: timeMar 13th, 2023

Trump is fixated on Ron DeSantis" disloyalty. Jeb Bush saw what it was like to be upstaged by a protégé.

Trump's pursuit of loyalty hangs over the GOP primary as Ron DeSantis weighs his future. Another Floridian can relate to Trump's plight. SOPA Images, Scott Eisen, CNBC / Getty image; Arif Qazi / Insider Trump calls DeSantis "disloyal" as he seems to be mounting a challenge for the 2024 nomination. The dynamics are similar to 2016, when Sen. Marco Rubio and Jeb Bush were in the arena together. Insider dove into the similarities and differences between the duos.  Donald Trump needs loyalty.His Oval Office command to FBI Director James Comey became one of the defining moments of his presidency. Rejected by the American people in 2020, Trump lashed out at lawyers, Cabinet secretaries, and ultimately his vice president who had stuck with him through his chaotic term but wouldn't support his unconstitutional effort to cling to power.It is then fitting that the characteristic the former president says he prizes the most is already defining the 2024 Republican presidential nomination fight. One former Cabinet secretary, former UN Ambassador Nikki Haley, is opposing the former president. Another, former Secretary of State Mike Pompeo, is openly flirting with a run. So is former Vice President Mike Pence, who, in Trump's eyes, may have committed the most disloyal act imaginable.None of them has the story of Florida Gov. Ron DeSantis. Few Republicans tied their primary fortunes to Trump in the way the now two-term governor did. Trump is already fuming about the perceived betrayal, even though DeSantis has yet to formalize his intentions for 2024. Trump's team is even branding DeSantis as "the apprentice," a nod to the reality TV show where Trump once aimed to crown his next business consigliere.Trump's campaign paid minimal amounts for a series of ads bashing DeSantis, including this one that nods at Trump's "Apprentice" past.Team Trump Facebook/InsiderWhile Trump has been more open than most about how he sees the rivalry, he isn't the first politician living in Florida to go through this.Eight years ago, former Florida Gov. Jeb Bush found himself in a similar place. Like Trump, Bush has experienced what it's like to watch a younger man overshadow him, a man he worked hard to support. For Bush, that man was US Sen. Marco Rubio. Bush and Rubio were allies in Florida government, and Rubio was widely viewed as a Bush protége. Then, when both were in the ring for the 2016 Republican presidential nomination and Rubio outshined Bush, a complicated dynamic unfolded."It's not at all unusual for former allies to run against each other in presidential primaries — it happens virtually every cycle," Alex Conant, a founding partner at Firehouse strategies who was communications director for Rubio's 2016 presidential campaign, said. "There's no reason to think ambitious young politicians will 'wait their turn.'" To be sure, Rubio and Bush had a far warmer relationship than Trump and DeSantis. Also, Conant said Bush and Rubio attracted different primary voters, while operatives view Trump and DeSantis as being in the same "lane." But today, just like in 2016, both Florida men appear to have a path to the nomination. And despite differences, the underlying cliché is still stands: The student is becoming the master."It does feel like some archetypal plot lines are happening," Miami Beach Mayor Dan Gelber, who was the top Democrat in the Florida Senate when Bush was governor, told Insider. "It's almost Oedipal," he added, referring to the Greek tragedy in which a king unwittingly kills his father and marries his mother.  Then-Florida State Rep. Marco Rubio holds a sword presented to him by then-Gov. Jeb Bush in September 2005 in ceremonies marking Rubio's designation as the next speaker of the Florida House.Phil Coale/File/APA tale of two alliancesTwo decades ago, Bush was the leader of the Republican movement in Florida, spearheading school vouchers and fiscal conservatism. Rubio was a "lieutenant in Jeb's Army," skilled at articulating his positions, Gelber said.When Rubio became Florida's House speaker in 2005, Bush handed him a gold and silver sword and extolled him as a "great conservative warrior." Rubio, then 34, made history as the first Cuban American to lead Florida's lower chamber, and Bush said he was ready for the next generation of leaders. "To me it was beyond literal," Peter Schorsch, a former GOP political operative who's now the publisher of FloridaPolitics.com, told Insider. "It was King Arthur giving over a weapon to Lancelot. That was just the defining picture of that relationship."Bush encouraged Rubio to run for the US Senate and attended his victory party. When Mitt Romney was the 2012 GOP presidential nominee, Bush urged him to pick Rubio as his running mate. He told PBS he had a "close relationship" with Rubio and admired him. Despite this, Gelber told Insider he didn't think that either men believed Bush had been responsible for Rubio's ascent. "Jeb created a movement in Florida that Marco clearly was important in, and rose to prominence in, but you could say that about every Republican from 20 years ago who rose to prominence in Florida," he said. In contrast, the DeSantis-Trump alliance was more about political convenience, David Kochel, owner of Redwave Communications who was senior strategist on Bush's presidential campaign, said. "Jeb was much more of a mentor to Marco than Trump ever was to DeSantis," he said. "But that said, DeSantis definitely took advantage of Trump's standing within the primary electorate to help him." When Trump was in the White House and DeSantis was a congressman, he frequently defended the president on Fox News over the Russia investigation. When DeSantis decided to run for governor, he wanted Trump's support. In his book "The Courage to Be Free," DeSantis discloses little about the endorsement conversation with Trump. He credits the president for raising his name recognition, but then writes that a debate performance got him the GOP nomination against his better-known challenger. He also suggests Trump's name was a liability in the general election. Trump, for his part, describes DeSantis as having "begged" for his support, telling radio host Hugh Hewitt in February that the young, little-known congressman had tears in his eyes — a questionable account given that DeSantis is known for stoicism.Still, polling at the time showed that Trump's backing gave DeSantis a significant boost, and the president would go on to host numerous rallies for him. DeSantis ran a Trump-centric campaign that included a viral ad where he was teaching his children about Trumpism. "I can't think of a candidate in this country who has leaned in more to the presidential endorsement than Ron DeSantis," White House counselor Kellyanne Conway said on Fox and Friends in August 2018.When DeSantis became governor, he attended several events with Trump. Today, many political insiders still view DeSantis as Trumpian or working off the former president's playbook, pointing to examples such as his political stunt of flying migrants to Marthat's Vineyard."Trump was a cult of personality, and Jeb was a cult of policy," Gelber said. Rubio shrugged when Insider asked his thoughts about the changing-of-the-guard themes bubbling up now, in regards to Trump and DeSantis, and how that compared to 2016. "I haven't even analyzed it," he told Insider.Bush, through a representative, declined Insider's request for an interview, and the DeSantis team didn't respond to a request for comment. "President Trump's endorsement is the single, most power tool in political history and his America First movement has led to overwhelming victories across the country," Steven Cheung, Trump's campaign spokesman, told Insider "He received over 5.6 million votes in Florida alone in 2020, more than any other candidate or politician in the state's history. There is nobody who can even come close to generating the excitement and enthusiasm as President Trump has and will do in 2024."Florida Sen. Marco Rubio (left) embraces former Florida Gov. Jeb Bush during a Republican presidential primary debate in Iowa in January 2016.Chris Carlson/APFallout from presidential runs As member of the first family of Republican politics, Bush was an early big-dollar donor favorite in 2016. The political world readied for a showdown between two establishment candidates: Bush and former Secretary of State Hillary Clinton.In the end, Trump branding Bush as "low energy" wasn't the only thing standing between Bush and the nomination. The other was Rubio, who proved to be the better campaigner. It would be a bitter fight. Bush's team homed in on Rubio's missed votes. During a CNN town hall, Bush portrayed Rubio's youth as a vulnerability and called him a follower of his in Tallahassee.  Rubio hit back hard during a debate: "Someone has convinced you that attacking me is going to help you."Neither Rubio nor Bush would win the 2016 primary. The strategic misstep was that all the GOP candidates were attacking each other instead of Trump, Kochel said. "Somebody had to go take out Trump and nobody made the decision to do that because the consensus view — including in pundit class and media — was that Trump was going to blow himself up at some point," Kochel said. Assuming DeSantis formally gets into the race, the Trump-DeSantis rivalry is considered to be one of the most closely watched storylines for 2024. The breakage started between the two men after Trump left the White House. DeSantis gained the spotlight on his own, initially through bucking federal health advice on COVID-19 mitigation policies. By late 2021, articles citing anonymous sources began leaking that Trump was annoyed with DeSantis.The governor didn't seek Trump's endorsement for his reelection bid, and Trump nicknamed him "Ron DeSanctimonious." The back and forth has been heated since."No one has mastered the Trump relationship better than Ron DeSantis," said Schorsch, who supported DeSantis' Democratic challenger in the 2022 reelection race. "DeSantis is like the one person who has gotten more out of Trump than Trump has gotten out of them."Sam Nunberg, a former Trump 2016 campaign advisor who had a public falling out with Trump, laughed at the position the former president now finds himself in."Think about another time in Donald Trump's career when somebody in business that he really helped then outshined him, or in entertainment that he promoted or he brought up — then that person competed against him in the same arena and beat him," Nunberg told Insider. "Trump has always been the king of his own domain and the stage that he's put himself in."Read the original article on Business Insider.....»»

Category: worldSource: nytMar 11th, 2023

DLA Piper’s Kim Askew has "seen diversity make a difference" in law

Kim Askew is a partner for the Dallas branch of the law firm DLA Piper. She represents clients in employment matters involving claims of race, disability, gender and age discrimination and sexual harassment. She was also a Women in Business honoree for Dallas Business Journal this year.  As part of our statewide podcast Texas Business Minds, we talked to Askew about her career as the "first" for many legal things in DFW and her best advice for young lawyers. The following are excerpts from that….....»»

Category: topSource: bizjournalsDec 21st, 2022

Transcript: Dave Nadig

     The transcript from this week’s, MiB: Dave Nadig, Financial Futurist at VettaFi, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is… Read More The post Transcript: Dave Nadig appeared first on The Big Picture.      The transcript from this week’s, MiB: Dave Nadig, Financial Futurist at VettaFi, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have an extra special guest. His name is Dave Nadig. And if this sounds like two old friends just yammering about all sorts of market esoterica, well, that’s because it is. I know Dave for a long time, and we kind of fell in love with each other’s books, music, film, and financial history when we first met 100 years ago. And so if it sounds like just two idiots talking about really interesting stuff in great detail, and me probably speaking more than I usually do during the podcast, well, that’s probably because it is. Dave is really a fascinating person, with an incredible depth of knowledge about, well, he’s probably best known as the ETF guy. And we literally talk about during the show, I got a tag to present to the SEC, about their new single stock product. And my answer was, well, I get all my information about this from Nadig. Why don’t you speak to him? And they said, “We already do.” But he also has an incredible depth of knowledge about market structures, about what people get wrong about thinking about systems, about what we get wrong about humans, and capitalism and finance. And I find Dave to be really just an intriguing, fascinating guy, full of great humility and insights. And I think you’ll find this conversation to be really fascinating. With no further ado, my interview with VettaFi’s Dave Nadig. Let’s start in the 1990s when you were at Barclays, which eventually becomes BlackRock iShares. Tell us about what you did at Barclays. DAVE NADIG, FINANCIAL FUTURIST, VETTAFI: I mean, mostly I got coffee at the beginning. In 1992, when I joined, they gave me the highfalutin title of Managing Director of Corporate Strategy. What it really meant was I was picking up little businesses nobody else wanted to pay any attention to — RITHOLTZ: Right. NADIG: — through all the acquisitions they were doing. So for a while, I ran Wells Fargo’s 401(k) business because they had acquired that as part of Wells Fargo Nikko Investment Advisors. When we did the Barclays acquisition, when Barclays acquired Wells Fargo Nikko, I then spent most of my time in Asia shutting down Barclays de Zoete Wedd businesses which were brokered shops in Australia, Singapore, Hong Kong, and Japan. So I went around and sort of did some rationalization. They basically sent a young kid out to get his, you know, one hand to get fire — RITHOLTZ: Go get blood on your hands. NADIG: Yeah. Go fire a bunch of, you know, 69-year-old Japanese salarymen. RITHOLTZ: That had to be a crazy experience being in Australia and Japan in the ‘90s. NADIG: It was bonkers. To be clear, I was young and incredibly stupid. RITHOLTZ: Right. NADIG: Now, I’m just older and slightly less stupid. RITHOLTZ: Isn’t that a little redundant? I say this not to mock the young, but to reflect on my own youthful indiscretions and stupidity. NADIG: Well, the story of growing your career is recognizing how little you knew every previous move you made. RITHOLTZ: Five years or so, right? NADIG: Yeah, exactly. RITHOLTZ: That five-year review is like, wow, I had no idea what the hell I was doing. Now, I know, and then you find out you really don’t. NADIG: Yeah. So I started there. I was lucky enough to be on the edges of a product which became WEBS, which became iShares. I was absolutely not somebody driving the train on that. I was the one reviewing marketing copy and doing presentations to groups of institutions about how to use the darn things. RITHOLTZ: Who was driving the train on that? NADIG: Oh, my gosh, there were so many. I mean, you know, success has a thousand fathers at this point. RITHOLTZ: Right. NADIG: I mean, so the people I was working with on the Wells Fargo Nikko side, because this was a joint project with Morgan Stanley — RITHOLTZ: Right. NADIG: — and other folks like that, I was working with Don Luskin, Patti Dunn, Fred Grauer who were sort of the main group. Blake Grossman was the chief investment officer there. RITHOLTZ: Interesting. NADIG: He stuck around it, you know, posed into BGI for the rest of his career. RITHOLTZ: Right. NADIG: And so that was the crew that was really doing the hard work there. And then, you know, on the Morgan Stanley side, I was working with folks like Joanne Hill, who you know at Morgan Stanley, one of the quants there. And then, of course, all the folks who were coming in from the Amex like Nate Most. I mean, it was pretty big group of folks — RITHOLTZ: You left out Jim. Was he there at State Street — NADIG: Yeah, Jim Ross was at State Street a little bit after that. But that was, you know, when the SPDR build out. This was very much counter to SPY having been launched. RITHOLTZ: Oh, really? NADIG: We were the other side of the fence from that. RITHOLTZ: Wow. NADIG: Even though Amex was the key, you know, Amex was the glue holding it together because they’ve figured out how to do creation and redemption, and how to handle book. RITHOLTZ: So let me fast-forward a couple of years, you end up at ETF.com, which clearly at least at that time was a dominant force in the ETF space, when a lot of the world of finance looked at ETFs a little askance, a little skeptically. NADIG: Yeah. And that was really Jim Wiandt, he started something called IndexUniverse with Steven Schoenfeld, somebody else you know in the industry, who’s now working for, I believe, MarketVector Indexes. And you know, they had this vision of understanding that ETFs, which at that point, were still largely institutional vehicles, early 2000s, right? I mean, there were some advisor pickup, but you had to be kind of on the front edge of finance, or a quant, or running your own models, which in 2003, was not that common. They had the vision there that, oh, no, this is where all of wealth management is going to head, and built a business which eventually through, you know, acquiring the right names and URLs became ETF.com. And then, you know, we, myself, Matt Hogan, Jim Wiandt, a bunch of other folks built that business up into, you know, a pretty respective chunky business that had a big conference and a huge data. I was focused almost exclusively on the data side. And then we broke that into pieces, so I ended up — RITHOLTZ: That was sold, though. Wasn’t it broken? So when you say broke into pieces, acquires — NADIG: In a positive way. RITHOLTZ: Yeah. That wasn’t like — NADIG: Yeah. You know like the pieces ended up being worth more than the part — the whole. RITHOLTZ: Right, as a whole, which is not uncommon. NADIG: Not uncommon at all, especially when you’re bolting together businesses that do, in fact, have silos themselves. So the data business was a natural fit for FactSet, which needed U.S. ETF data. So Elisabeth Kashner — RITHOLTZ: And FactSet is a big, big operator in that space. NADIG: And now, we relicensed the data that I helped build over VettaFi, right. I mean, they are now I still think the go-to source for primary ETF data. So that business continues to run over there. And now, here I am at VettaFi, doing largely a lot of the same work, also pushing a big conference that we’re excited about, ExchangeF in Miami, in Florida. RITHOLTZ: We’re going to talk about VettaFi. We’re going to talk about Exchange, which is one of my favorite events every year. It’s always a blast. When you were running the conference beforehand — NADIG: The old conference. Yeah. RITHOLTZ: — this was at the Diplomat Hotel in Hollywood, Florida. It was always late January, early February, which occasionally would interfere with my vacation schedules. NADIG: I’m so sorry. RITHOLTZ: But, you know, to get out of New York in February and spend time with 3,000 people and just absolutely A-list speakers, you know, Derek Jeter. And I remember Joe Montana, like the sports figures were always fascinating, but so do were the finance figures, people that were very much rock stars in that space. NADIG: Yeah. And that was an interesting time. I think the 10-years pre-pandemic, so between GFC and pandemic, whatever you’re going to call that window, it’s not a lost decade. It was a great decade. But in that window, I mean, you were on it too. The conference circuit was elite. RITHOLTZ: Yeah, Absolutely. NADIG: There was a really interesting finance relevant event every other week, at least, all year long. RITHOLTZ: Well, keep in mind what was going on back then. So first, you had the rise of ETFs. You had a radical expansion of passive. My theory is post great financial crisis, mom and pop said, “You know, we’re done playing this game.” NADIG: Yeah. RITHOLTZ: We’re just going to put our money. Let Mr. Market do his thing and we’ll find out how we did when we get ready to retire. But you had that, you had ETFs. You have the rise of passive. But you also had this incredible, I’m reluctant to call it PTSD, but following the financial crisis, there was this pervasive negativity that lasted years and years and years, and to run around and say, “Hey, markets are positive here. You need to be more constructive because Dow 57% is a fantastic reset.” That was kind of a lonely voice for a few years. I think that’s a big part of why you had the hard metals people doing a lot of stuff. You had the rise of crypto. I mean, think about that — NADIG: But it’s a crypto. Crypto is where that enthusiasm went. Everybody who is finance-adjacent, tech positive, growth-oriented, all went into crypto, in that window, in that sort of GFC, the pandemic window. RITHOLTZ: That makes a whole lot of sense. So there’s a lot of other things I want to get to with you. But before we do, there’s a quote of yours that I think is a great leaping-off point for more discussion, “Finance is a problem that has been solved.” Explain. NADIG: Yeah. So you know, when we think about finance, particularly when we think about investing, which is what we spend most of our time talking about, right? How to take your wealth and turn it into more wealth through all of these tools out there from, you know, IPOs to derivatives? How those pieces fit together is no longer a mystery. I mean, that’s really the core of it. The academic side of how to build a portfolio, we can argue about the details, right? And certainly, we could have a whole conversation about, you know, okay, well, this combination of interest rates and inflation and expected returns on equities is different, and so maybe we need to adjust. But the tools to do that are largely baked. Anybody who has the curiosity and the basic intellectual capacity to learn about the markets can become a fairly sophisticated investor. So if you’re an advisor, and I spend most of my time talking to the wealth management institutional business, if you’re an advisor, you should not be spending a lot of your time trying to add alpha through understanding investing better than the rest of the market. That is a mug’s game, right? So don’t try to solve that problem. It’s largely solved. You can go get some turnkey asset management program. As an advisor, you could get somebody’s model portfolio, or you could hire some, you know, three CFAs and do it yourself. But it shouldn’t be your primary focus. Your primary focus should be solving the much harder problem, which is actually working with human beings, right? The advice part of being a financial adviser is the hard part. That’s the part where you should earn the money. We’re kind of upside down in how we compensate and how we think about markets, right? Some advisor that’s out there can say, “I have generally 1% alpha for the last three years in my model portfolio.” Everybody is going to talk about that. But when you talk to that same advisor, and they say, “Yeah, you know, they’re these five families I’ve worked with for 10 years. And because I’ve worked with them, generations of wealth are going to be preserved and these philanthropical exercises are going to be put forth. Like, that’s the real success story. I don’t need to tell you that. That’s your business, right? That’s the real success story, and that’s much harder than investing. RITHOLTZ: Really, really, quite, quite an interesting. You have to explain to me the name of this firm. I’ve given you grief about this. What is that VettaFi? NADIG: All right. So, well, the shortest answer about how to think about VettaFi is we’re Morningstar without a ratings business, right? RITHOLTZ: Okay. Sort of like a financial think tank? NADIG: Yeah. We’re in the business of sitting in between asset owners, financial advisors, institutions, retail and asset managers, right, the BlackRock, State Street, PIMCO’s of the world, and helping them understand each other. What I spend most of my time doing is helping advisor to understand the thousands of crazy ideas the asset management comes up with every year. And then I work with the asset management community to help them understand the hundreds of thousands of financial advisors and institutions who may or may not be interested in any of those products, whatsoever. And so what that entails is a lot of good data, understanding what both sides want of each other, and understand that it means having to understand markets. Because if you’re going to understand the asset management industry, you need to understand, well, why are managed futures part of the conversation here today, but not six months ago? And it means spending a lot of time talking to individual advisors and investors who are out there trying to do the real work. So that’s where VettaFi sits. The company like the meat and the bones underneath it, brands folks know ETF trends, ETF database. We recently merged with Advisor Perspectives, which is the largest advisor newsletter in the country. So we’ve sort of cornered the market on this dialogue between asset managers and financial advisors. And it goes both ways. We also do a lot of polling with financial advisors. We meet them at conferences. We do surveys of them. We track their behavior as they’re doing research using our data and analytics tools. And that lets us really get an interesting picture of, hey, what are advisors thinking this week? Well, we can kind of tell you because we know what they’re researching. We know how they answered poll questions last week. We know how they answered a survey two weeks again. And then we write about that. We produced 50 odd pieces of content today. RITHOLTZ: So here’s the question. Are your clients, the advisors, or are your clients, the institutional asset managers or both? NADIG: Both is the real answer. I think the way to think about this is we’re a business-to-business organization in terms of if you’re going to look at the revenue lines, but with B2C responsibilities, right? We take our relationship with the financial advisor very, very seriously. In my position, that’s really almost exclusively what I focus on. RITHOLTZ: All right. And this leads me to a question that I never in a million years thought I would get to ask on the show, but what the hell is a financial futurist? Your title is a financial futurist. NADIG: Yeah. RITHOLTZ: Who came up with that? What are the responsibilities? What does a financial futurist do? Like, I expect you to be in a one of little storefronts with the red light. And people go in, “Tell me my financial future.” NADIG: And they hand you a card — RITHOLTZ: Right. NADIG: — through the glass. RITHOLTZ: Right, exactly. NADIG: The Madam Zola with the — RITHOLTZ: Exactly. NADIG: — and the whole nine yards like big. RITHOLTZ: Zoltar. NADIG: Zoltar. Thank you. Yeah. RITHOLTZ: Right. I know my bet. NADIG: And I think it’s actually a dude in the movie. But anyway — RITHOLTZ: Yeah, it is. NADIG: — neither here nor there. So look, about a year ago, I had a conversation with the senior management of a company as we were putting VettaFi together, right? And one of the things we use as a hook when we talk about the companies, we’re trying to turn it from an industry to a community. What we mean by that is that we focus in finance a lot on rules, regulations, process, operations. None of which matter at all. And we’ve often just ignore the fact that they’re human beings at the end of this equation. Now, that’s changed because of a lot of what’s gone in behavioral finance, and I think that’s great. I don’t think if it goes nearly far enough. I think human-centered organizations are always going to win. So we really tried to skew the organization towards that. So with that context, I said, here’s a bunch of stuff I want to write about, which is the stuff we’ve been talking about, being how the how the markets work, how people fit into them. And I literally just started putting adjectives and nouns on piece of paper, trying to figure out like how do I describe the work that I think I should be doing, and that hopefully, people find at least entertaining, if not valuable? And a little from column A, a little column B, you know, I’ve spent most of my career writing and thinking about finance. Most of what I’ve done has been taking an understanding of the status quo, which is very brief, because tomorrow it’s gone. RITHOLTZ: Right. NADIG: And trying to help people understand what that means for next week, and the next year, and the next decade, to position products underneath it, like ETFs in 1992, or model portfolios in 2000, or direct indexing in 2010. Right,? Really trying to focus on that. Now, it would be tokenized asset management. It’s like, you can see these things if you’re paying attention. But it’s super easy to get really excited and spend lots of money chasing them. Having some context is important. RITHOLTZ: So you mentioned direct indexing. Let’s go there because I always disliked the broad context of direct indexing as how it was done previously. I couldn’t stand the 50 pages of stock holdings every month or every quarter. But I give you credit for the person who kind of turned me around on that. I don’t want to say it was 10 years ago, but it was probably like five years ago, maybe a little longer, that you pointed out there are a lot of things you can do with direct indexing in terms of, and you were way ahead of the software. You had talked about things before it was available, that you could tilt towards a variety of ESG things. Hey, show me companies where the board has at least two women on it, or you could tilt towards value, or you could tilt towards small cap, or you can use it for tax loss harvesting or philanthropy. And you kind of opened my eyes up. Full disclosure, we work with O’Shaughnessy’s Canvas, which was recently purchased by Franklin Templeton. And we’re the largest client to that, about a billion or $3 billion is in that. But I give you credit because if you hadn’t opened my eyes to the advantages of what you can do with that, we might not have stepped as aggressively into it as we did. I was primed and receptive to see the things that were possible. So full credit to you. Now tell us about what is tokenized financial investment? NADIG: Well, so you know, if you think about right now, I have a million dollars, I want to put the work. I wish I have $100,000backslash I want to put to work. I have lots of different ways I can get that number to go up. And ultimately, let’s be honest, that’s what you care about as an individual investor. I have $100,000, I would like to have $110,000, how do I get there? And right now we throw it into the stock market and we effectively use a tokenized system, right? I mean, nobody really carry shares around anymore. You got a ledger entry of Seton company down on Water Street, right? Like, it’s all just this fiction that we’ve created to keep track of notional ownership. And then we built this enormous infrastructure around it. So now we have payment for order flow in 17 market centers. And you know, Reg NMS got judging what has to get broadcast to who, when. We made all this up. I think it’s really important to remember that this is fiction. We just created this system out of whole cloth. You can trace why, and there’s lots of reasons. But you could invent another one. Inventing another one is what crypto has done. If you’re in Europe right now, for instance, and you open up an account it Ftx.De, which is you know FTX is European business in Germany. You can trade Tesla, but not as a stock. You can trade what is effectively a fungible token, right, a unit of Tesla. You and I can trade that in the FTX closed ecosystem all day long, with no trading costs, no settlement, no slippage, no nothing. It’s a bearer instrument. It’s like me handing you a pencil. You just now have the pencil, and I don’t. And the legal claim is the fact that you’ve got it and I don’t. That’s scary for all sorts of reasons. But it’s also incredibly powerful because if you imagine that world where instead of it being this closed ecosystem in Germany, it’s just sort of how global markets work. All of the sudden, almost any beta, any risk, any ownership stake that you want, as long as you can get two people to agree on what the tokens mean, and how they unwind to unlock some sort of underlying value, we can do all sorts of crazy stuff through the crypto rails that we could never have done before. You want to put together a portfolio? Great. Here’s a smart contract. It owns these 15 other tokens that happen to be stocks. That can be managed in real time by the contract itself. Creation redemption literally just becomes buying the thing, RITHOLTZ: Meaning creation redemption of ETFs, where you’re assembling all the individual holdings within in. NADIG: Right. You can create an ETF on the blockchain. People have already done this. This is not new. There’s a thing called the set protocol call. You can create a portfolio with a set of rules. And you can even put in a fee of how much you want to get paid because you came up with this smart contract. And there’s hundreds of thousands of these things out there already. So the rails for doing it, the smarts, people talking about a theory in being the world’s computer, right? There’s real truth to that. There’s work being done by a computer there to keep track of ledger entries and to move those ledger entries around, which is the entire stock market. It’s moving ledger entries around. RITHOLTZ: So we’re recording this on the same day that Matt Levine’s BusinessWeek — NADIG: (Inaudible) RITHOLTZ: Right. Dropped like this is the second time in BusinessWeek’s history where one writer has written the entire — NADIG: A book. Yeah. RITHOLTZ: — issue, right? It’s like 50,000 words. And it begins by saying everything in the world these days that reflects ownership is a database. NADIG: Is a database. RITHOLTZ: You remind me of that in what you were talking about at FTX, which really raises the question, if everything is a database and the blockchain is a public and verifiable, transparent database, the pushback to crypto continues to be, hey, it’s been around for 15 years. How come it isn’t doing anything yet substantially? Why is it still so experimental and so small? And I honestly don’t know how to answer that question. NADIG: It’s regulatory. That’s literally the one-word answer is it’s regulators. RITHOLTZ: That’s the thing that is keeping the entirety of normal markets from collapsing and being replaced by free crypto software is the rules that won’t let that happen. And they’re rules that are there for a very good reason, right? I mean, we have a lot of securities laws in this country, not because we’re obsessed with lawmaking, but because some bad stuff happened and we fixed it by making rules about it. Right? You know, going back to the ‘20s, actually going back to the 1400s, we have rules about how we engage in these transactions and the rule of law is a big deal. How that interacts with this sort of bearer bond instrument world, where literally ownership as the entirety of the law is unknown territory, right? We have to rewrite how we think about intellectual property, how we think about property rights themselves, how we think about ownership and escrow. RITHOLTZ: And security is a huge one. NADIG: And security is a huge one, knowing your customer is a big one, anti-money laundering. Those are real issues. I don’t want to pretend that those aren’t real issues, and they’re going to take years to solve. This is not something we’re not going to flip a switch tomorrow. But what I fear is going to happen is because the block is now regulatory, we’re going to end up in the world’s biggest regulatory arbitrage race. And we’ve already seen this, their jurisdictions where you can kind of get away with doing anything in crypto, and hey, I’m sorry if you lost a million dollars. Call Interpol, maybe they’ll figure it out for you, right? RITHOLTZ: Right. NADIG: And then there’s jurisdictions like the United States, which are quite locked down. The problem is that if I’m right, if the world does move more quickly towards this, and you start seeing capital follow it more than it even has already, you end up with these weird haves and have-nots world where the United States actually ends up on the sort of bud end of innovation, and plays catch up for the next 20 years. And another financial center will emerge, where the IPOs are happening, where private equity is really congealing, where interesting M&A activity is happening in any company in New York. I’d like to push against that. I’m kind of a fan of the United States. I wouldn’t mind us leading here. RITHOLTZ: I think you live here also. NADIG: I believe I do. Yeah. RITHOLTZ: So you would like to see leadership from the U.S. and it’s just there — NADIG: They’re hopping on. RITHOLTZ: There’s seems to be no interest in a crypto ETF. What’s that about? NADIG: Well, yes. RITHOLTZ: It’s just Gary Gensler? Is that more institutional? NADIG: So the Bitcoin ETF debate, right, and Grayscale is now suing the SEC, always a great move, suing your regulators. That always works out great. RITHOLTZ: They love to be sued. NADIG: They love to do that. RITHOLTZ: They love it. NADIG: So they just say yes after you sue them here nor there. Yeah. So people have been trying to put Bitcoin in ETF wrapper, frankly, since Bitcoin was invented. And the problem is it you have to define what Bitcoin is, because there’s certain things you can put into a mutual fund or ETF wrapper and certain things you can’t, right? You can’t put a steak dinner in an ETF wrapper. There are rules about it. And nobody has been able to agree yet whether or not Bitcoin belongs in those wrappers. So we’ve ended up with these weird edge cases where the futures-based products get approved, but the species finished product — RITHOLTZ: Right. NADIG: — I mean, the species products can’t be. And it’s an absolute mess. It’s the frontend of the problem we’re talking about, where crypto regulation is actually the largest problem in this space. RITHOLTZ: So let me push back a bit because I became dramatically enamored of an idea of smart contracts and using them. Let me preface this by saying I’m not a big fan of Ticketmaster and Live Nation, which is now a monopoly. There are some just ridiculous fees. And the whole thing is just an egregious affront to free market capitalism. Hold that aside. But the idea behind smart tickets that if Taylor Swift says, “I’m going to put all of my concert seats on a blockchain, and so therefore, I’m going to offer the first round to my hardcore fans who have been newsletter subscribers for years. And the next I’m going to give to my junior fans. And then the last one, I’ll open to the public. And by the way, built into this is if you decide to sell it at a markup, I get half of that markup. But in no case is going to be higher than X.” You know, you basically demolish the entire StubHub, SeatGeek, absolutely egregious. How do we use bots? You know, if they were just reselling tickets, it’s one thing. But they seem to have gained the system so — NADIG: Oh, yes. They buy all the tickets. Yeah. RITHOLTZ: They buy the tickets first. And you know, there’s a reason why artists offer their tickets at affordable prices, to their fans, and these rentiers in the middle are abusive. So all this comes back to if the technology exists for that, why haven’t we seen a major artist? Who was it? Was a Pearl Jam tried to buy — NADIG: They tried to, yes, get out of Ticketmaster. Yeah. RITHOLTZ: Way back when? Nobody seems to be able to come up with a way to do this. NADIG: So the reason is because, you know, when we look at how the corporate economy works, there are investments that you have to make. Like, the Ticketmaster one is a great example because the technology to do that is trivial. We could stand up on three of the computers here in this control room right now. RITHOLTZ: Right. NADIG: That’s the easy part. The hard part is it’s Madison Square Garden, Friday night. It’s 7 o’clock and you have 25,000 people you have to get through the gate in the next hour, to get to the Taylor Swift concert that’s about to go live. That infrastructure, having 45 guys standing there with the scanners, going through the network, confirming your ownership, but this ticket has already been used once, it hasn’t been used twice. That infrastructure — RITHOLTZ: But you use that right now. I saw Hadestown and they don’t even scan the ticket. You put your phone on the device. NADIG: And it goes big. Yeah. RITHOLTZ: Right. You’re not even looking at QR code. NADIG: All of that is a whole bunch of trust infrastructure — RITHOLTZ: Right. NADIG: — that says the digital signature coming off Barry Ritholtz’s wallet is the thing that says they can go see Hadestown. Right. That infrastructure is actually the hard part because implied in that is a whole lot of rule of law stuff. Like, wait a minute, Barry and I show up at the same time with the same ticket. How do we determine which one of us is the one that actually got to go in? How do we determine which one of us owns it? What’s the recourse if you stole it from me? RITHOLTZ: In other words, if someone took a scan of that QR code, that’s the problem with the code. NADIG: So enforcement and the last mile of all of these things, right? This is the part that I always sort of come back to. RITHOLTZ: Was it blockchain who solved that? I’ve been told over and over again, “Oh, Bitcoin fixes that.” NADIG: Bitcoin solves everything, except it’s not molecular, right? RITHOLTZ: Right. NADIG: It’s still digital. At the end of the day, most of the things we actually give a, “You know, what about” are molecular. We want the coffee cup. We want to go to the space to see the event. RITHOLTZ: Right. NADIG: The sound waves propagate through the air from another human being on stage. At the end of the day, you’ve got to have that interface between the virtual and the real. Otherwise, none of this matters at all. And it’s precisely that boundary that is the problem right now. RITHOLTZ: So let’s talk a little bit about a conference I have participated in ETF Exchange over the years. VettaFi just purchased this from Advisor Circle. I’m an investor and Advisor Circle. So — NADIG: I don’t know any of that. RITHOLTZ: Right. So for disclosure, we’re talking about something that I kind of have an interest in or used to have an interest in. But I’m still a participant in the event. NADIG: Well, we’ll see what they’ll get you in. RITHOLTZ: Right. That’s right. Listen, I always feel like more disclosure is better than less disclosure. NADIG: Fair enough. RITHOLTZ: So I’ll let the lawyers sort that part, but — NADIG: The part I pay attention to is the content. RITHOLTZ: So let’s talk a little bit about ETF Exchange. This has always been just a massive event, you mentioned earlier, in the heyday of financial conferences. This, I think, was one of the biggest events I went to each year. NADIG: Yeah. We probably need to point out that like this is, in some ways, the spiritual successor to the old Inside ETFs event. That event is still going on and I don’t want to pretend that it doesn’t exist. It is now owned by a big conference company named Informa and they still put on those events. WealthStack was an event that you all used to do with them. That’s now part of that event. RITHOLTZ: Right. Again, more disclosure, so Informa ran — NADIG: Wealth Stack, Inside ETFs. Yeah. RITHOLTZ: Right. We were partners with them for Wealth Stack, which ran one year. We were ready to do the next one when the pandemic hit. That’s the only reason that we didn’t do it at all. NADIG: And then everything got juggled. RITHOLTZ: And then after everything reopened, their staff had left. There was a whole craziness, the whole world sort of reset. And so we worked with Advisor Circle and Future Proof, not with Informa because they were in Europe, and they were a little skittish when the U.S. was reopening. But for all that nonsense aside, tell us a little bit about why have an ETF conference, you know, has an ETF settled area? Tell us a little bit about this event. NADIG: Well, no, because ETFs are where everything interesting in the world is still happening. And I think that’s part of the reason I’m still in the ETF business, although I don’t have it in my title anymore, is that regardless of what you’re trying to get done with that $100,000 you’re trying to make go up. ETFs are probably the right answer under the hood in terms of the structure. So whether you’re trying to get managed futures from an active manager or, you know, two months Treasuries, T bills, like the whole spectrum is now available in lose to 3,000 ETFs we are trading here in the U.S. It’s like the mutual fund business back in the 80s. RITHOLTZ: So you have more ETFs than there are stocks, just about. NADIG: Getting close. RITHOLTZ: Was it like 3,500 stocks to 5,000? NADIG: Yeah. Well, in the world, it’s like 30,000 actual tickers out there in the world. RITHOLTZ: Right. NADIG: But the point is there are more ETFs than you could ever possibly use in one portfolio. RITHOLTZ: Right. NADIG: Most people probably only need a handful to accomplish whatever objectives they’re going to do. But the reason why we have an event around it is because so much of the interesting innovation in finance happens through that structure. because the ETF structure lends itself naturally to this sort of movement of risk from bucket to bucket in a very retail-friendly package, it’s sort of like the best thing we’ve come up with. And so people ask like, “Well, why our train has a certain width?” Well, because history just sort of got us to this configuration, where now everything runs that way, and nobody is going to invent a new gauge of train track. RITHOLTZ: Right. NADIG: This ditch of the rails that we have at the moment, and probably for the rest of my career, the ETF still looks like the most efficient set of rails anybody has figured out how to put down. So why have a conference about it? Well, largely, because we want to get those interesting conversations going. My perspective on Exchange is I’m there to have interesting conversations. And when I’m talking to a bunch of financial advisors and a bunch of finance investment management types, that tends to be the most interesting conversation because you get the real human use in the room, and you get the real human smarts in the room. And that’s when the magic happens. So whether it’s getting a bunch of folks on stage to have a really interesting conversation about, you know, geopolitical concerns in Ukraine, or whether it’s just being able to have a small breakfast with four or five advisors and some academic, where we talk about behavioral finance, those are the interesting conversations. So Exchange is really all about creating that sense of community between groups of folks. And some of that is content that’s on the stage, and a lot of it isn’t. We learned that I think at Future Proof. This is a community event. RITHOLTZ: Yeah. NADIG: This is about people getting together and exchanging ideas. And I think that’s a lesson we’ve learned from the pandemic, not just from that conference. People want to get together and talk. RITHOLTZ: You know, it’s funny because financial conferences, and maybe conferences in general, everything is based on an academic model, and people took the big lecture halls out as their frame of reference. Hey, a bunch people on stage talking to a bunch of people in the audience taking notes. But the most interesting part of college wasn’t necessarily the big lecture halls, it was the class lets out and you start to talk to people about, “Hey, could you explain this? I don’t understand what’s going on here.” And then the subsequent conversations, that’s the really exciting driver, not, you know, the panel of people telling you, “Here’s why interest rate is going to go up or down.” NADIG: Yeah. RITHOLTZ: “And what’s wrong with inflation today?” So based on that, let’s dive a little bit into some of the innovations in finance and ETFs you referenced. Let’s start with active ETFs. They were looked at kind of skeptically a few years ago. Hey, ETFs are all about low cost passive indexing. Why do I want an active ETF? NADIG: Well, the short answer is because if you’re an active manager, it’s the only way you’re going to get any customers. RITHOLTZ: Right. NADIG: There’s just a bit of reality in that. I mean, at this point, we’re still something like 10%, 12% of the flows. The assets are inactive. It’s still a fairly small number. RITHOLTZ: How much of that is just ARKK and Cathie Woods versus everybody else? NADIG: A decent chunk. But remember, a lot of the fixed income complex is actively managed, right? RITHOLTZ: Right. NADIG: Most of the products — RITHOLTZ: I want to say most or the vast majority of it. NADIG: Well, I mean, there’s like TLT, with the big Treasury funds, LQD and HYG. And those are sort of big betas in fixed income, and that’s where the biggest funds are. But if you get below that tier, you know, all the PIMCO funds, anything sort of interesting that’d be done at the short end. Even like a lot of the short Treasury stuff is techn.....»»

Category: blogSource: TheBigPictureNov 15th, 2022

Logan Roy, Leslie Knope, Cersei Lannister, and 7 other of the most toxic bosses from TV shows

We often turn to TV to fantasize about having some of the wildest jobs imaginable. Yet even the coolest jobs can come with not-so-cool bosses. Brian Cox stars as Logan Roy on HBO's "Succession."Peter Kramer/HBO We often turn to TV to fantasize about having amazing jobs, but they can come with awful bosses. Ahead of the 75th Emmys, Insider rounded up 10 of the most toxic bosses from current and past shows. While this is a list of fictional characters, the tendencies many of them display are real. We might want their jobs, but not their bosses.Many of us turn to TV to fantasize about having some of the wildest jobs imaginable — from secret agent to vampire slayer. But few of us would want jobs working for some of the small screen's worst top dogs.In the past year of television, viewers have watched their beloved protagonists get terrorized by a crop of toxic bosses, from Logan Roy on "Succession" to Sylvie Grateau on "Emily in Paris." While these characters can make for bingeworthy escapism, they're examples of malevolent bosses who, in the real world, would make headlines or generate fodder for workplace-advice columns because of their abusive, cruel, and, sometimes, illegal behavior.Ahead of the 75th Emmys, Insider rounded up 10 of the most toxic bosses from television's past and present. The list includes characters from Emmy-nominated shows like "Succession," "Emily in Paris," and "Better Call Saul."While this is a list of fictional characters, the tendencies many of them display are very real for workers. If the behavior of those above you in the workplace food chain resembles that of any of these bad bosses, we offer some advice on how to respond.Warning: This post contains spoilers.Logan Roy — "Succession"Brian Cox as Logan Roy on "Succession."Graeme Hunter/HBOThere are many contenders for the most narcissistic boss at Waystar Royco, the fictional family-owned media empire on HBO's "Succession," which with 25 Emmy nods, is the most Emmy-nominated show of the year.There's Kendall Roy (Jeremy Strong), the self-destructive martyr with a fragile ego; Shiv Roy (Sarah Snook), the cunning political consultant; and Roman Roy (Kieran Culkin), the sniveling, entitled brat who thinks he's much smarter and capable than he is.In the end, though, it's the company's founder-CEO and Roy family patriarch, Logan Roy (Brian Cox), who wins the title. A self-made billionaire, Logan is an abusive and callous megalomaniac. He constantly undercuts and undermines his children by pitting them against each other in a series of twisted competitions to see who will succeed him as CEO. Recovering from an abusive boss isn't easy, but experts offer some ways to cope. As Logan's ex-wife Caroline, played by Harriet Walter, said, "He never saw anything he loved that he didn't want to kick, just to see if it would still come back."Sylvie Grateau — "Emily in Paris"Philippine Leroy-Beaulieu as Sylvie Grateau.NetflixSylvie Grateau, quelle horreur!The fictional former chief marketing officer for Savoir's Paris location has no patience for her American intern Emily Cooper (Lily Collins). Far from making the marketing firm a welcoming environment, Grateau (Philippine Leroy-Beaulieu) is arrogant and downright cruel to Cooper, who's desperately trying to adapt to a new culture and language. From the onset, Grateau sets the ice-cold tone for their relationship."Look, you come to Paris, you walk into my office, you don't even bother to learn the language," Grateau said to Cooper. "So, perhaps we'll work together but, no, we won't be friends."The boss snubs Cooper in front of her colleagues, mocks her difficulty with French, and even excludes her from important meetings. She's the adult version of a high-school mean girl, and her behavior is unacceptable. If you're dealing with an office bully like Grateau, here's how to speak up.Gus Fring — "Breaking Bad" and "Better Call Saul"Giancarlo Esposito as Gus Fring.Greg Lewis/AMC/Sony Pictures TelevisionGus Fring (Giancarlo Esposito) lives an immaculate double life running a fictional ruthless methamphetamine empire in Albuquerque, New Mexico, and a chain of chicken restaurants called Los Pollos Hermanos. The cold-hearted boss runs both businesses with an iron fist, often exerting control over employees and henchmen.Viewers see Fring murder both allies and rivals to maintain his public-facing image as a friend of the Drug Enforcement Administration and the approachable owner of the local eateries. But this image has crumbled at times and his mean, micromanaging tendencies have surfaced. One example is when he is overlooking one of his assistant managers at Los Pollos Hermanos, Lyle, closing up shop. Fring is unhappy with how one employee cleaned the deep fryers and demands that Lyle fix the job multiple times, while spitting demeaning comments.Demanding extremely high standards from employees is a major red flag among real managers. Micromanaging bosses with unrealistic standards usually see their expectations backfire as employees lose morale and become demotivated, studies have found.Marty Adler — "Partner Track"Matthew Rauch plays Marty Adler on "Partner Track."Charley Gallay/Stringer/Getty ImagesWhat's not to love about a romantic dramedy about a Korean American woman navigating her tumultuous love life and high-stakes career as a lawyer? Her boss.The new Netflix series "Partner Track," based on the 2013 novel of the same name, follows Ingrid Yun (Arden Cho) on her attempt to make partner in the mergers-and-acquisitions team at a prestigious law firm. Marty Adler (Matthew Rauch), her boss and the managing partner of mergers and acquisitions, is a walking example of toxic masculinity and fake allyship. He perpetuates a cliquey bro culture among the young male lawyers and uses Yun as a token woman of color to counteract public scrutiny over a racist incident at a company event. Adler displays several other signs of a bad boss. For example, he believes he is always right, assigns blame but never praise, practices favoritism, and never thinks his employees' efforts are enough. What's more, the firm where Yun and Adler work at could be described as a company that has not "done the work necessary to create a just workplace for people of color, according to Kim Roberts, founder and principal of Triangle Investigations, a group of lawyers conducting misconduct investigations.Cersei Lannister — "Game of Thrones"Lena Headey as Cersei Lannister.HBOCersei Lannister (Lena Headey) isn't just a bad boss on "Game of Thrones," she's a murderous villain. "A bad boss won't just jeopardize your career growth — they'll also negatively impact your personal life," Lynn Taylor, a national workplace expert, previously told Insider. With her scathing criticisms of her staff and loved ones and willingness to commit mass murder, it's impossible to find a moment when Lannister makes a leadership choice for her people and not for herself. What's more, lying and favoritism, which Lannister practices regularly, are two signs of a toxic boss.In fact, Lannister's favoritism of her children and her twin brother is what leads to many of her worst moments as queen. For example, rather than feeding the poor of the city with the leftovers from her son's wedding feast, as her new daughter-in-law instructs, Lannister gives the food to dogs.Leslie Knope — "Parks and Recreation"Amy Poehler as Leslie Knope.NBCUniversalHow could the relentlessly perky and plucky Leslie Knope land on a list of TV's worst bosses? Well, on the spectrum of bad managers, there's such a thing as toxic positivity. Knope (Amy Poehler) — a deputy director in the parks and recreation department of the fictional Pawnee, Indiana — is cheerful and optimistic to a fault. She believes herself to be a budding political star in the vein of her heroes Hillary Clinton, Nancy Pelosi, and Condoleezza Rice. In reality, she's a pushy, delusional town bureaucrat unaware that her colleagues mostly just humor her pie-in-the-sky plans and ambitions.While her can-do confidence and naivete are amusing for viewers, having a boss like Knope in real life would be tedious and invasive. For beneath her veneer of happy confidence, Knope is deeply controlling and self-centered.For instance, she once tried to plan the pregnancy of her colleague Ann (Rashida Jones) via color-coded binders and "uterine cartoons." And every year, she insists that her female colleagues attend a Galentine's Day brunch with her, where she give them bizarre, downright creepy gifts, including mosaic portraits of their likenesses made from the crushed bottles of their favorite diet soda. Here's how to handle someone's toxic positivity in the workplace.Charles Montgomery Burns — "The Simpsons"Charles Montgomery Plantagenet Schicklgruber Burns.FoxCharles Montgomery Plantagenet Schicklgruber Burns (Harry Shearer) has been terrorizing employees for decades on "The Simpsons," the longest-running US sitcom. As the owner of Springfield's nuclear-power plant and Homer Simpson's boss, Burns spends much of his time on the show trying to increase his wealth through devious schemes. When he's not firing or rehiring workers on a whim, or forgetting employees' names, he's usually monitoring them through closed-circuit cameras at the plant.A selfish boss, Burns does not care for employees' rights, as the plant is filled with obvious safety violations that endanger workers' health and safety. In an episode from 1993, Homer takes charge of Springfield Nuclear Power Plant's trade union. Disgusted by the basic rights requested by the union, Burns punishes workers by removing their dental plans, which prompts a strike. In response, Burns turns off the town's electricity. Bosses who disregard employee needs are facing a reckoning, especially as workers quit at record rates.Michael Scott — "The Office"Steve Carell as Michael Scott.Chris Haston/NBC/NBCU Photo BankMichael Scott (Steve Carell) is the self-proclaimed "best boss" of the fictional Dunder Mifflin Paper Co.'s branch in Scranton, Pennsylvania. But the often unhinged and almost always inept manager is wildly inappropriate in the workplace. Many of his comments, written to satirize self-absorbed bosses, are sexist, racist, and ableist. Whether he's discussing an employee's weight, sexual identity, or race, Scott never misses an opportunity to cause offense, thereby creating a working environment filled with harassment. Despite his good intentions in calling team meetings, they always end up in chaos. Whether it's his problematic impersonation of someone who's been formerly incarcerated as "Prison Mike" or his playing Santa Claus for a holiday party and inviting his colleagues to sit on his lap, Scott would likely have been fired by human resources in the real world.The Dunder Mifflin manager chooses favorites, calls employees in on weekends, and shows up uninvited to after-hours gatherings, all tell-tale signs of a terrible boss. Overall, Scott is an absolute mess of a business leader, even if he makes viewers cackle.Don Draper — "Mad Men"Jon Hamm as Don Draper.Michael Yarish/AMCDon Draper might look like the quintessential 1960s dreamboat, but the "Mad Men" character (Jon Hamm), is stoic, virile, and unapologetic in the wielding of his Anglo-American male dominance.As the creative director of the fictional Sterling Cooper ad agency, Draper's chauvinism is on prominent display in interactions with his protégé, Peggy Olson (Elisabeth Moss), whom he promotes from the secretarial pool only to spite his privileged arch nemesis, Pete Campbell (Vincent Kartheiser).For example, Olson, who struggles to find her footing as the only woman copywriter at the ad agency, feels the brunt of Draper's misogyny when she raises her hand to work on a coveted account. Despite Draper's verbal lashings at Olson's attempts to assert herself, he is also a champion for her career. Draper provides mentorship and rescues her from a disastrous personal and professional meltdown. Anyone who has experienced this Draper-esque brand of leadership might relate to the love-hate dynamic between the duo. If you're dealing with a boss who both advocates for and abuses you, here is some insight into the complicated dynamic.Richie Jerimovich — "The Bear"Ebon Moss-Bachrach as Richie Jerimovich.FX networksRichie Jerimovich (Ebon Moss-Bachrach) is a rough-around-the-edges yet lovable neighborhood tough guy who manages The Original Beef in "The Bear."The casual relationship between Jerimovich and the cooks, who've spent years razzing each other against the backdrop of buzzing ticket orders and restaurant regulars, creates a chaotic environment. What's more, Jerimovich's authority is threatened when Carmy Berzatto (Jeremy Allen White), a Michelin-starred chef, returns home to run the family business after his brother's death.As the two butt heads, staffers are forced to choose between Berzatto's desire to elevate the restaurant to its unrealized potential and Jerimovich's insistence on maintaining business as usual. Oftentimes, the dueling visions leads to aggressive arguments and confusion for workers.  If you find yourself in the crossfire of a Richie vs. Carmy power struggle, there might be a way to work it to your advantage. Here's how Harvard researchers say employees can win in the game of office politics.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 12th, 2022

7 therapists and lawyers offer keys to navigating the stresses of Big Law

Insider talked to more than a dozen psychologists and lawyers about the keys to surviving Big Law. Here are 7 ways they said lawyers can stay healthy. Insider Employees can use legal protections under the ADA and FMLA to seek help for mental health issues.  But lawyers say they rarely reach out for help for fear of professional repercussions. Attorneys shared how they sought treatment, took time off, and prioritized their health.  Insider recently chronicled the stresses of Big Law life. As part of this, we spoke with lawyers who have suffered from depression and, after having taken time to address their mental health issues, have continued to lead successful careers.They said that attrition is the No. 1 warning sign that a law firm's culture is placing a strain on the workforce. They also offered insights into how to navigate feelings of anxiety and helplessness that can come tumbling down on lawyers with outsized client responsibilities.Law firms have offered on-call psychologists and wellness initiatives, such as free access to Peloton's workout platform, to help their staff feel better about their work-life balance.But many lawyers said that these efforts go only so far, as a law firm's business model is built around billable hours, and lawyers are often expected to work 15 hour days or longer. Industry reviews also show the extent of cultural and structural obstacles that attorneys face in seeking help.A 2020 survey on lawyer well-being by the New York State Bar Association, which had more than 3,000 participants, indicated that only 8 percent of them had looked to employee assistance programs when dealing with issues including mental health concerns.Attorneys noted their concerns about whether such programs truly offered confidential services, and whether it would reflect on their abilities, according to an October report by the NY SBA's task force on attorney well-being. But there are legal protections for employees seeking accommodations or time off for mental health issues, under both, the Americans with Disabilities Act and the Family and Medical Leave Act.Many employees can use the ADA's protections, for instance, to seek accommodations for mental health issues, like trying to negotiate more time for assignments, make flexible work arrangements to seek treatment during work hours, and push for remote work options, said Mariette Clardy-Davis, a mental health attorney with her own practice, M.L. Clardy Law LLC. Beyond legal protections, companies can also work with their employees to offer arrangements that suit their needs, she said. "Just because the right resources may not be available, it doesn't mean you can't advocate for yourself to your employer," she said. Through the course of our reporting, several lawyers offered actionable pieces of advice that readers could find useful to think about when approaching work. Though they are all different, one theme remained consistent: It is never too late to find something else to do, or even just pick up the phone and seek counseling. Burying your problems with more work is a recipe for disaster, they said.       'Start early and don't wait'Gavin Alexander.Courtesy photo.Gavin Alexander, the wellness director of Jackson Lewis, says that when you're dealing with a mental breakdown at work, it only adds to the stress if you don't already have a therapist or psychologist who is covered by insurance. "You don't want to be looking when you are in a crisis," said Alexander.Alexander recommended starting to talk to a therapist even if you are doing pretty well, or reaching out to the state's lawyer assistance program to develop relationships.One thing that helped Alexander when he worked at Ropes & Gray as a corporate associate was working out a reduced hours work arrangement. He said that the firm was wholly supportive of the move."They would rather have some of you, than none of you," said Alexander.He also said that reduced hours work arrangements don't need to be permanent, but could even be for short periods of time. "I'm a big fan of saying, 'Hey, I need a month where I'm going to be working a little less," he said. "I've got some depression or some symptoms of anxiety where I need some time to recover." There are also intensive outpatient programs available for lawyers to learn coping mechanisms to help them deal with stress, he said."I say these things, as I really want to emphasize these are tools to help you recover and help you become incredible again. These are not to signal you are a failure or lost cause." Alexander flagged the Lawyers Depression Project as a resource for lawyers who are struggling with mental health. It's a non-profit organization that hosts and facilitates free online, confidential peer support groups for lawyers and legal professionals around the world.  Finding ways to say 'no'Ellen Ostrow.Courtesy photoEllen Ostrow says that law firms can be filled with lawyers who make an already stressful environment even more stressful. But that doesn't mean you should let those people affect your quality of life. Ostrow says that setting good boundaries, managing expectations, and developing effective ways to say "no" that don't burn bridges, can help a lawyer cope with a mountain of workplace demands that may exceed your resources. But if a "screamer" is making your life hell, Ostrow says it's important to talk to whoever supports associates in your workplace  - the head of the practice group or professional development staff members. "It's important NOT to continue to work with people who drive you into the ground," she said. She also said that it can be helpful to constantly assess whether the work you are doing is right for you - another contributor to burnout and feelings of depression. "Are you feeling badly because work has you sitting by yourself writing briefs when you thrive on being around other people?" she said.Ostrow also made the point that law firms tend to be "punishment avoidance" cultures, where lawyers spend their energy worrying about not meeting their hours, not making mistakes, and not making someone angry. But that kind of thinking can be detrimental to your wellbeing. She said that there are partners who are more focused on mentoring and rewarding improvements. "Try to find those people," she said.Get enough sleepAlejandro GuadarramaCourtesy photo.Alejandro Guadarrama says that not getting good rest is a warning sign of mental health issues. He remembers when he was a Skadden associate, he often woke up at 3 am, his mind buzzing about work responsibilities. "I didn't think about why I was waking up," said Guadarrama. "I didn't care."Guadarrama said that the constant grind of Big Law has desensitized many lawyers to the perils that such a hard-working lifestyle can bring. When he was an associate, before he became a counsel at Skadden in 2017, Guadarrama rarely saw colleagues taking vacations. And when they did, they continued to work. So when Guadarrama had to drum up the courage to let his colleagues know about his depression and multiple sclerosis diagnosis, it was the hardest thing he'd ever done in his life, he said. Most people think about going to the doctor in terms of physical check-ups, but Guadarrama said that mental check-ups should take place as well. But if you feel like you need help, Guadarrama stressed the importance of speaking to people about it and pointed to confidential lawyers assistance programs, which he said connects lawyers with assistance. Understand your agencyWill Meyerhofer.Courtesy photo.Will Meyerhofer, a therapist in New York City and former Sullivan & Cromwell lawyer, said that he likes to encourage clients to re-frame their thinking about work. Often lawyers feel trapped. But he says to remember that Big Law was a conscious choice lawyers made and they can think of it as a stepping stone. "Those partners working you to death aren't parent figures refusing to acknowledge your hard work and denying you appreciation," said Meyerhofer. "They're not your damn parents! They're just a law firm, in it to make money, and further their own careers." And just as lawyers placed themselves into Big Law roles, they can also change their mind, he said. "You're not in control of all the variables, but you can make choices, and one of them is to leave and do something else, even if there are obvious challenges in taking that step as well."  Consider taking a leave of absenceRegina Colantonio.Courtesy of Regina Colantonio.Lawyers acknowledge that taking extended time off work can be a logistical challenge, and that it comes with its own stress about future career prospects. But for some, it's offered a lifeline and a vision for what's possible beyond the pressures of billing hours. Regina Colantonio told Insider that she took a 12-week leave of absence in April 2020, after feeling pushed to the brink by a mental health crisis precipitated by working while caring for her two young sons, aged 3 and 6 at the time, all confined at home in Philadelphia early in the COVID-19 pandemic.  But Colantonio, who had been working at the time at Cozen O'Connor, had taken some preliminary steps well in advance, which made the move possible, she said. In 2018, she had joined the group Women Interested in Leaving Law, or WILL, through which she had met others who had taken similar sabbaticals. "The WILL group was so incredibly helpful," Colantonio said. "It helped me have the courage to reach out to the HR person first to tell them, 'I need to do this,' and second, ask them, 'how can that happen?'"Her firm's HR team helped her navigate the protocols for taking a leave of absence under those circumstances, like filling out paperwork and getting a medical provider to sign off, she said. She also reached out to the partner she was working with to inform him. The leave then had to be approved a few weeks at a time, per the company's insurance requirements, and with her medical provider's continued sign-off, she said. Taking that extended time off helped her find reprieve, seek help, and care for her children, she said. It also gave her a sense of professional clarity — she realized the line of work wasn't a good fit, and she and her firm decided to part ways mutually. "It's a difficult profession to leave, despite the terror and mental health problems it creates," she said. "The money, the years you've worked to get there, the level of status you feel in the profession." "But if I hadn't taken that time off, I don't know where I would be — it gave me the courage to not work as a lawyer since then, which is something I don't know that I could have done on my own," she said.     Communicate with the firmMichael Kasdan, partner at Wiggin and Dana LLP.Courtesy of Michael Kasdan.Michael Kasdan has been a practising lawyer for over two decades, internalizing the profession's productivity norms and codes of silence around issued deemed personal. But when an acute mental health crisis hit him in June last year, he knew he had to be upfront, he said. He spoke to his partner at Wiggin and Dana, who worked with him to figure out a solution — which in his case was time off work for months — and helped him communicate it to others at the firm, he said. "I would say, find a trusted colleague or supervisor, and just go to them and explain what's happening," Kasdan said. "We think we're the only ones struggling, but that's not going to be the first time that person has heard it from someone." Kasdan acknowledged that despite more attorneys being vocal about mental health issues, young attorneys in particular may have valid fears about the potential repercussions of speaking up. The onus is on firm leadership and partners to demonstrate an understanding of mental health issues, and to speak out about it themselves, he said. "There's a lot of pressure on young attorneys, and there are different pressures on senior attorneys," Kasdan said. "I've come to believe after going through that, that it's really important for leaders to be open about it."     Look to lawyer assistance programsLawyer assistance programs, or LAPs, are often linked to state bar associations and usually led by mental health professionals trained to offer support and resources to attorneys, said Joseph Milowic, a partner at Quinn Emanuel.In his role as director of wellbeing at the firm, Milowic encourages attorneys to seek out LAPs, which can refer attorneys to therapists and psychiatrists who work with people in the legal profession. Such programs are also a network for attorneys to meet others in their profession with similar mental health and substance abuse issues. LAP groups also periodically conduct surveys on attorneys' mental health. In 2016, the American Bar Association's commission on LAPs issued a report based on a study of 13,000 practicing attorneys that found that up to 36 percent could be termed 'problem drinkers' and that 28 percent were dealing with depression. Milowic, who is also the co-founder of the peer support network The Lawyers Depression Project, described LAPs as an underutilized resource. "I think that sometimes people are afraid that their job will be in jeopardy if they seek help," he said. "My general message to young attorneys is to prioritize yourself — your health and well being are more important than any project or case you'll work on." If you or someone you know is experiencing depression or has had thoughts of harming themself or taking their own life, get help. The 988  Suicide and Crisis Lifeline (dial 988) provides 24/7, free, confidential support for people in distress, as well as best practices for professionals and resources to aid in prevention and crisis situations. Help is also available through the Crisis Text Line — just text "HOME" to 741741. For lawyer-specific inquiries, you can find confidential, live assistance through Lawyer Assistance Programs offered through your state bar, as well as through the Lawyers Depression Project.   Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 1st, 2022

The 20 best books by John Grisham, the bestselling author of legal thrillers like "A Time to Kill" and "The Pelican Brief"

From the Jake Brigance books to "The Firm," these are John Grishman's best courtroom thrillers, according to Goodreads. When you buy through our links, Insider may earn an affiliate commission. Learn more.From the Jake Brigance books to "The Firm," these are John Grishman's best courtroom thrillers, according to Goodreads.Amazon/Insider John Grisham is the master of the courtroom thriller. He's written 28 number-one bestselling novels. You'll find his 20 best books below, according to their Goodreads ratings. Read more: The best new beach reads for 2022 If you think of a heart-pumping legal thriller, you probably picture John Grisham, one of the most successful authors in modern history.Since his debut novel, "A Time to Kill," earned him mainstream popularity, Grisham has written dozens of courtroom thrillers  — including 28 consecutive number-one fiction bestsellers. "The Firm," Grisham's second book, once spent 47 weeks on The New York Times best-seller list. And, for the next two decades, he was the author of one of the 10 bestselling novels of the year. Below, you'll find Grisham's 20 most unmissable books, ranked by Goodreads readers. It's worth noting that this list is ranked by rating, so sequels may be out of chronological order. Beware of unwanted spoilers, and if you're looking for the most recent book, check out Grisham's 2022 novel, "Sparring Partners."The 20 best John Grisham books, ranked by their Goodreads ratings: Descriptions provided by Amazon and lightly edited for clarity and length.20. "The Reckoning"Amazon"The Reckoning," available on Amazon and Bookshop, from $9.29October 1946, Clanton, Mississippi.Pete Banning was Clanton, Mississippi's favorite son — a decorated World War II hero, the patriarch of a prominent family, a farmer, father, neighbor, and a faithful member of the Methodist church. Then one cool October morning he rose early, drove into town, and committed a shocking crime. Pete's only statement about it — to the sheriff, to his lawyers, to the judge, to the jury, and to his family — was: "I have nothing to say." He was not afraid of death and was willing to take his motive to the grave.John Grisham takes us on an incredible journey, from the Jim Crow South to the jungles of the Philippines during World War II; from an insane asylum filled with secrets to the Clanton courtroom where Pete's defense attorney tries desperately to save him. 19. "A Painted House"Amazon"A Painted House," available on Amazon and Bookshop, from $9.29Until that September of 1952, Luke Chandler had never kept a secret or told a single lie. But in the long, hot summer of his seventh year, two groups of migrant workers — and two very dangerous men — came through the Arkansas Delta to work the Chandler cotton farm. And suddenly mysteries are flooding Luke's world.A brutal murder leaves the town seething in gossip and suspicion. A beautiful young woman ignites forbidden passions. A fatherless baby is born... and someone has begun furtively painting the bare clapboards of the Chandler farmhouse, slowly, painstakingly, bathing the run-down structure in gleaming white. And as young Luke watches the world around him, he unravels secrets that could shatter lives — and change his family and his town forever....18. "The Brethren"Amazon"The Brethren," available on Amazon and Bookshop, from $9.29They call themselves the Brethren: three disgraced former judges doing time in a Florida federal prison. One was sent up for tax evasion. Another, for skimming bingo profits. The third for a career-ending drunken joyride.Meeting daily in the prison law library, taking exercise walks in their boxer shorts, these judges-turned-felons can reminisce about old court cases, dispense a little jailhouse justice, and contemplate where their lives went wrong. Or they can use their time in prison to get very rich — very fast.And so they sit, sprawled in the prison library, furiously writing letters, fine-tuning a wickedly brilliant extortion scam — while events outside their prison walls begin to erupt. A bizarre presidential election is holding the nation in its grips, and a powerful government figure is pulling some very hidden strings. For the Brethren, the timing couldn't be better. Because they've just found the perfect victim.17. "Rogue Lawyer"Amazon"Rogue Lawyer," available on Amazon and Bookshop, from $9.29On the right side of the law — sort of — Sebastian Rudd is not your typical street lawyer. His office is a customized bulletproof van, complete with Wi-Fi, a bar, a small fridge, and fine leather chairs. He has no firm, no partners, and only one employee: his heavily armed driver, who also so happens to be his bodyguard, law clerk, confidant, and golf caddie. Sebastian drinks small-batch bourbon and carries a gun. He defends people other lawyers won't go near: a drug-addled, tattooed kid rumored to be in a satanic cult; a vicious crime lord on death row; a homeowner arrested for shooting at a SWAT team that mistakenly invaded his house. Why these clients? Because Sebastian believes everyone is entitled to a fair trial — even if he has to bend the law to secure one.16. "Camino Island"Amazon"Camino Island," available on Amazon and Bookshop, from $9.29A gang of thieves stage a daring heist from a vault deep below Princeton University's Firestone Library. Their loot is priceless, impossible to resist.Bruce Cable owns a popular bookstore in the sleepy resort town of Santa Rosa on Camino Island in Florida. He makes his real money, though, as a prominent dealer in rare books. Very few people know that he occasionally dabbles in unsavory ventures.Mercer Mann is a young novelist with a severe case of writer's block who has recently been laid off from her teaching position. She is approached by an elegant, mysterious woman working for an even more mysterious company. A generous monetary offer convinces Mercer to go undercover and infiltrate Cable's circle of literary friends, to get close to the ringleader, to discover his secrets.But soon Mercer learns far too much, and there's trouble in paradise.15. "The Chamber"Amazon"The Chamber," available on Amazon and Bookshop, from $9.99In the corridors of Chicago's top law firm: 26-year-old Adam Hall stands on the brink of a brilliant legal career. Now he is risking it all for a death-row killer and an impossible case.Maximum Security Unit, Mississippi State Prison: Sam Cayhall is a former Klansman and unrepentant racist now facing the death penalty for a fatal bombing in 1967. He has run out of chances — except for one: the young, liberal Chicago lawyer who just happens to be his grandson.While the executioners prepare the gas chamber, while the protesters gather and the TV cameras wait, Adam has only days, hours, minutes to save his client. For between the two men is a chasm of shame, family lies, and secrets — including the one secret that could save Sam Cayhall's life... or cost Adam his.14. "The Racketeer"Amazon"The Racketeer," available on Amazon and Bookshop, from $9.29In the history of the United States, only four active federal judges have been murdered. Judge Raymond Fawcett has just become number five.His body is found in his remote lakeside cabin. There is no sign of forced entry or struggle. Just two dead bodies: Judge Fawcett and his young secretary. And one large, state-of-the-art, extremely secure safe — opened and emptied.Who is the Racketeer? And what does he have to do with the judge's untimely demise? His name, for the moment, is Malcolm Bannister. Job status? Former attorney. Current residence? The Federal Prison Camp near Frostburg, Maryland.On paper, Malcolm's situation isn't looking too good these days, but he's got an ace up his sleeve. He knows who killed Judge Fawcett, and he knows why. The FBI would love to know. And Malcolm Bannister would love to tell them. But everything has a price — especially information as explosive as the sequence of events that led to Judge Fawcett's death. And the Racketeer wasn't born yesterday.13. "The Street Lawyer"Amazon"The Street Lawyer," available on Amazon and Bookshop, from $9.29Michael Brock is billing the hours, making the money, rushing relentlessly to the top of Drake & Sweeney, a giant DC law firm. One step away from partnership, Michael has it all. Then, in an instant, it all comes undone.A homeless man takes nine lawyers hostage in the firm's plush offices. When it is all over, the man's blood is splattered on Michael's face — and suddenly Michael is willing to do the unthinkable. Rediscovering a conscience he lost long ago, Michael is leaving the big time for the streets where his attacker once lived — and where society's powerless need an advocate for justice.But there's one break Michael can't make: from a secret that has floated up from the depths of Drake & Sweeney, from a confidential file that is now in Michael's hands, and from a conspiracy that has already taken lives. Now Michael's former partners are about to become his bitter enemies. Because to them, Michael Brock is the most dangerous man on the streets.12. "The Confession"Amazon"The Confession," available on Amazon and Bookshop, from $9.29An innocent man is about to be executed. Only a guilty man can save him.In 1998, in the small East Texas city of Sloan, Travis Boyette abducted, raped, and strangled a popular high school cheerleader. He buried her body so that it would never be found, then watched in amazement as police and prosecutors arrested and convicted Donté Drumm, a local football star, and marched him off to death row.Now nine years have passed. Travis has just been paroled in Kansas for a different crime; Donté is four days away from his execution. Travis suffers from an inoperable brain tumor. For the first time in his miserable life, he decides to do what's right and confess. But how can a guilty man convince lawyers, judges, and politicians that they're about to execute an innocent man?11. "The Testament"Amazon"The Testament," available on Amazon and Bookshop, from $9.29In a plush Virginia office, a rich, angry old man is furiously rewriting his will. With his death just hours away, Troy Phelan wants to send a message to his children, his ex-wives, and his minions — a message that will touch off a vicious legal battle and transform dozens of lives.Because Troy Phelan's new will names a sole surprise heir to his 11-billion-dollar fortune: a mysterious woman named Rachel Lane, a missionary living deep in the jungles of Brazil.Enter the lawyers. Nate O'Riley is fresh out of rehab, a disgraced corporate attorney handpicked for his last job: to find Rachel Lane at any cost. As Phelan's family circles like vultures in D.C., Nate goes crashing through the Brazilian jungle, entering a world where money means nothing, where death is just one misstep away, and where a woman — pursued by enemies and friends alike — holds a stunning surprise of her own.10. "The Rainmaker"Amazon"The Rainmaker," available on Amazon and Bookshop, from $4 In a courtroom thriller, John Grisham tells the story of a young man barely out of law school who finds himself taking on one of the most powerful, corrupt, and ruthless companies in America — and exposing a complex, multibillion-dollar insurance scam. In his final semester of law school, Rudy Baylor is required to provide free legal advice to a group of senior citizens, and it is there that he meets his first "clients," Dot and Buddy Black.Their son, Donny Ray, is dying of leukemia, and their insurance company has flatly refused to pay for his medical treatments. While Rudy is at first skeptical, he soon realizes that the Blacks really have been shockingly mistreated by the huge company, and he just may have stumbled upon one of the largest insurance frauds anyone's ever seen — and one of the most lucrative and important cases in the history of civil litigation. The problem is, Rudy's flat broke, has no job, hasn't even passed the bar, and is about to go head-to-head with one of the best defense attorneys — and powerful industries — in America.9. "The Runaway Jury"Amazon"The Runaway Jury," available on Amazon and Bookshop, from $7.46They are at the center of a multimillion-dollar legal hurricane: 12 men and women who have been investigated, watched, manipulated, and harassed by high-priced lawyers and consultants who will stop at nothing to secure a verdict. Now the jury must make a decision in the most explosive civil trial of the century, a precedent-setting lawsuit against a giant tobacco company. But only a handful of people know the truth: that this jury has a leader, and the verdict belongs to him.He is known only as Juror #2. But he has a name, a past, and he has planned his every move with the help of a beautiful woman on the outside. Now, while a corporate empire hangs in the balance, while a grieving family waits, and while lawyers are plunged into a battle for their careers, the truth about Juror #2 is about to explode in a crossfire of greed and corruption — and with justice fighting for its life.8. "The Pelican Brief"Amazon"The Pelican Brief," available on Amazon and Bookshop, from $9.29To Darby Shaw, it was no more than a legal shot in the dark — a brilliant guess. To the Washington establishment, it was political dynamite. Suddenly Darby is witness to a murder — a murder intended for her. Going underground, she finds there is only one person she can trust — an ambitious reporter after a newsbreak hotter than Watergate — to help her piece together the deadly puzzle.Somewhere between the bayous of Louisiana and the White House's inner sanctums, a violent cover-up is being engineered. For someone has read Darby's brief. Someone who will stop at nothing to destroy the evidence of an unthinkable crime.7. "The Client"Amazon"The Client," available on Amazon and Bookshop, from $9.2911-year-old Mark Sway and his younger brother were sharing a forbidden cigarette when a chance encounter with a suicidal lawyer left Mark with knowledge of a bloody and explosive secret: the whereabouts of the most sought-after dead body in America.Now Mark is caught between a legal system gone mad and a mob killer desperate to cover up his crime. And his only ally is a woman named Reggie Love, who has been a lawyer for all of four years. Prosecutors are willing to break all the rules to make Mark talk. The mob will stop at nothing to keep him quiet. And Reggie will do anything to protect her client — even take a last, desperate gamble that could win Mark his freedom... or cost them both their lives.6. "Sycamore Row" (Jake Brigance, #2)Amazon"Sycamore Row," available on Amazon and Bookshop, from $9.29"A Time to Kill" is one of the most popular novels of our time. Now we return to that famous courthouse in Clanton as Jake Brigance once again finds himself embroiled in a fiercely controversial trial — a trial that will expose old racial tensions and force Ford County to confront its tortured history.Seth Hubbard is a wealthy man dying of lung cancer. He trusts no one. Before he hangs himself from a sycamore tree, Hubbard leaves a new, handwritten will. It is an act that drags his adult children, a Black maid, and Jake into a conflict as riveting and dramatic as the murder trial that made Brigance one of Ford County's most notorious citizens, just three years earlier.The second will raises far more questions than it answers. Why would Hubbard leave nearly all of his fortune to his maid? Had chemotherapy and painkillers affected his ability to think clearly? And what does it all have to do with a piece of land once known as Sycamore Row?5. "A Time to Kill" (Jake Brigance, #1)Amazon"A Time to Kill," available on Amazon and Bookshop, from $9.29The life of a 10-year-old Black girl is shattered by two drunken and remorseless white men. The mostly white town of Clanton in Ford County, Mississippi, reacts with shock and horror at the inhuman crime — until the girl's father acquires an assault rifle and takes justice into his own hands.For 10 days, as burning crosses and the crack of sniper fire spread through the streets of Clanton, the nation sits spellbound as defense attorney Jake Brigance struggles to save his client's life — and then his own.4. "The Guardians"Amazon"The Guardians," available on Amazon and Bookshop, from $9.27In the small Florida town of Seabrook, a young lawyer named Keith Russo was shot dead at his desk as he worked late one night. The killer left no clues. There were no witnesses, no one with a motive. But the police soon came to suspect Quincy Miller, a young Black man who was once a client of Russo's. Quincy was tried, convicted, and sent to prison for life. For 22 years he languished in prison, maintaining his innocence. But no one was listening. He had no lawyer, no advocate on the outside. In desperation, he writes a letter to Guardian Ministries, a small nonprofit run by Cullen Post, a lawyer who is also an Episcopal minister.Guardian accepts only a few innocence cases at a time. Cullen Post travels the country fighting wrongful convictions and taking on clients forgotten by the system. With Quincy Miller, though, he gets far more than he bargained for. Powerful, ruthless people murdered Keith Russo, and they do not want Quincy Miller exonerated.3. "The Firm"Amazon "The Firm," available on Amazon and Bookshop, from $7.45When Mitch McDeere signed on with Bendini, Lambert & Locke of Memphis, he thought he and his beautiful wife, Abby, were on their way. The firm leased him a BMW, paid off his school loans, arranged a mortgage, and hired him a decorator. Mitch McDeere should have remembered what his brother Ray — doing 15 years in a Tennessee jail — already knew. You never get anything for nothing.Now the FBI has the lowdown on Mitch's firm and needs his help. Mitch is caught between a rock and a hard place, with no choice — if he wants to live.2. "The Judge's List" (The Whistler #2)Amazon "The Judge's List," available on Amazon and Bookshop, from $13.80In "The Whistler," Lacy Stoltz investigated a corrupt judge who was taking millions in bribes from a crime syndicate. She put the criminals away, but only after being attacked and nearly killed. Three years later, and approaching forty, she is tired of her work for the Florida Board on Judicial Conduct and ready for a change.Then she meets a mysterious woman who is so frightened she uses a number of aliases. Jeri Crosby's father was murdered 20 years earlier in a case that remains unsolved and that has grown stone cold. But Jeri has a suspect whom she has become obsessed with and has stalked for two decades. Along the way, she has discovered other victims.Suspicions are easy enough, but proof seems impossible. The man is brilliant, patient, and always one step ahead of law enforcement. He is the most cunning of all serial killers. He knows forensics, police procedure, and most important: he knows the law.He is a judge, in Florida — under Lacy's jurisdiction.He has a list, with the names of his victims and targets, all unsuspecting people unlucky enough to have crossed his path and wronged him in some way. How can Lacy pursue him, without becoming the next name on his list?1. "A Time for Mercy" (Jake Brigance, #3)Amazon"A Time for Mercy," available on Amazon and Bookshop, from $9Clanton, Mississippi. 1990. Jake Brigance finds himself embroiled in a deeply divisive trial when the court appoints him as the attorney for Drew Gamble, a timid 16-year-old boy accused of murdering a local deputy. Many in Clanton want a swift trial and the death penalty, but Brigance digs in and discovers that there is more to the story than meets the eye. Jake's fierce commitment to saving Drew from the gas chamber puts his career, his financial security, and the safety of his family on the line.In what may be the most personal and accomplished legal thriller of John Grisham's storied career, we deepen our acquaintance with the iconic Southern town of Clanton and the vivid cast of characters that so many readers know and cherish. The result is a richly rewarding novel that is both timely and timeless, full of wit, drama, and — most of all — heart.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJul 27th, 2022

Here are all the famous people Jeffrey Epstein was connected to

Ghislaine Maxwell, Epstein's ex-girlfriend and madam, was sentenced to 20 years in prison on Tuesday for sex-trafficking girls for the late disgraced financier. American financier Jeffrey Epstein (L) and then-real-estate developer Donald Trump (R) pose together at the Mar-a-Lago estate, Palm Beach, Florida, 1997.Davidoff Studios/Getty Images Jeffrey Epstein was known for jet-setting with the likes of Bill Gates, President Bill Clinton, and Prince Andrew. Wall Street billionaire Leon Black paid Epstein at least $50 million in consulting and other fees, The New York Times reported. Epstein was found dead of an apparent suicide in a Manhattan jail on August 10, 2020, as he awaited trial on charges of sex trafficking minors. Visit Business Insider's homepage for more stories. Former L Brands CEO Les Wexner may have been Jeffrey Epstein's only confirmed client, but he was far from the only billionaire paying the convicted sex offender.Epstein, who pleaded guilty to charges of solicitation of prostitution and procurement of minors for prostitution in Florida in 2007, ran a years-long "trafficking pyramid scheme" from the US Virgin Islands, prosecutors alleged in a lawsuit against the former wealth manager's estate in January 2020.Meanwhile, the convicted sex offender maintained a vast social and professional network both on and off the Islands, which even included the wife of the US Virgin Islands' former governor. In October 2020, Wall Street billionaire Leon Black acknowledged to The New York Times through a spokesperson that he hired Epstein as an advisor and paid Epstein at least $50 million in consulting and other fees between 2012 and 2017.Epstein, a former hedge-fund manager, kept his client list under wraps, but he often bragged of his elite social circle that included presidents and Hollywood stars."I invest in people — be it politics or science," Epstein was known to say, according to New York Magazine. "It's what I do."Epstein, 66, died by apparent suicide in a Manhattan jail on August 10, 2020, as he awaited trial on charges of sex trafficking of minors. He had been in police custody since his arrest on July 6, shortly after exiting his private jet in New Jersey's Teterboro Airport. He pleaded not guilty on July 8 and was being held without bail in New York City, where he was already on suicide watch after an earlier reported suicide attempt that had led to his hospitalization, at the time of his death. Here's what we know about the famous people who crossed paths with Epstein.Socialite Ghislaine Maxwell, Epstein's ex-girlfriend and madam, was sentenced to 20 years in prison for sex-trafficking young girls for Epstein.Epstein with Maxwell.Joe Schildhorn/Patrick McMullan via Getty ImagesMaxwell is a British socialite and the daughter of media tycoon Robert Maxwell.She started dating Epstein shortly after moving to New York in 1991, Business Insider previously reported. After they broke up, court documents allege that Maxwell started recruiting underage girls for him to have sex with.The FBI began investigating Maxwell's relationship with Epstein in 2019 as the British heiress hit out with armed guards in the United States or the United Kingdom.Maxwell was ultimately found in New Hampshire, where she was arrested on charges of sex trafficking and perjury in New Hampshire on July 2, 2020.A federal jury in December 2021 convicted the former socialite of five sex trafficking and conspiracy charges. Prosecutors alleged Maxwell worked with Epstein to "recruit, groom, and ultimately abuse" children. In June 2022, a federal judge sentenced Maxwell to 20 years in prison for trafficking girls to have sex with Epstein and sexually abusing them herself. She was also fined $750,000, the judge said, and will have to remain on probation for five years following her time in prison.  Outgoing L Brands CEO Les Wexner is Epstein's only confirmed client.AP Photo/Matt SullivanEpstein became a trusted confidant of Wexner's while Epstein managed the CEO's fortune, according to Vanity Fair. Wexner has a net worth of $7.15 billion, Bloomberg reported. The magazine reported that Wexner allowed Epstein to take an active role in L Brands, which owns Bath & Body Works, Express, and Victoria's Secret.In 1989, Wexner used a trust to buy an Upper East Side townhouse that is believed to be the largest private residence in Manhattan for $13.2 million, Vanity Fair reported. Epstein moved in after Wexner and his wife, Abigail Koppel, moved to Ohio in 1996. Wexner's trust transferred ownership of the house to Epstein in 2011 for $0, Bloomberg reported.Wexner later fired Epstein as his money manager. "Mr. Wexner severed ties with Mr. Epstein more than a decade ago," an L Brands spokesperson told Forbes in July 2019.In February, L Brands announced that Wexner would step down after nearly six decades as the company's CEO. L Brands also announced that it would sell the majority stake in Victoria's Secret to private equity firm Sycamore Partners and spin-off Bath & Body Works into a separate company. The company has been marred in controversy following reports of the mistreatment of models and plummeting sales.More information about Wexner's relationship with Epstein may soon be revealed after US District Judge Loretta Preska ordered that Wexner's correspondence with Epstein's former lawyer Alan Dershowitz be unsealed as a part of Dershowitz and Giuffre's defamation suits against each other, Business Insider reported on August 11.Former President Donald Trump once considered Epstein a friend.From left, Donald Trump and his girlfriend (and future wife), former model Melania Knauss, financier (and future convicted sex offender) Jeffrey Epstein, and British socialite Ghislaine Maxwell pose together at the Mar-a-Lago club, Palm Beach, Florida, February 12, 2000.Davidoff Studios/Getty ImagesThe future president claimed in 2002 that he had a long friendship with Epstein. "I've known Jeff for 15 years. Terrific guy," Trump said, according to New York Magazine. "He's a lot of fun to be with. It is even said that he likes beautiful women as much as I do, and many of them are on the younger side. No doubt about it — Jeffrey enjoys his social life."According to Counselor to the President Kellyanne Conway, Trump now believes the crimes Epstein was charged with are "completely unconscionable and obviously criminal." She also labeled them "disgusting," according to a July report from the Associated Press."The president told me this morning he hasn't talked to Epstein, he doesn't think he's talked to him or seen him in 10 or 15 years," Conway added.Prince Andrew and Epstein were close friends, the Guardian reported in 2015.WPA Pool / Getty ImagesMaxwell introduced Epstein and the Duke of York in the 1990s, the Guardian reported, and the two became close friends.The Duke is the son of the UK's Queen Elizabeth. He has also been criticized for frequently taking flights on the taxpayer's dime while serving as the country's special representative for international trade. This earned him the nickname "Airmiles Andy," according to the Washington Post.Court documents reviewed by the Guardian allege that Epstein instructed Virginia Roberts Giuffre, a 15-year-old employee at Trump's Mar-a-Largo resort, to have sex with Prince Andrew on three separate occasions. Buckingham Palace said in 2015 that the allegations against Prince Andrew were "false and without any foundation," according to the Guardian.According to a July 22 article from NY Magazine's Intelligencer, a number of royals and royal connections were among Epstein's contacts. That includes Prince Andrew's then-wife, Sarah Ferguson, the Duchess of York; and Charles Althorp, Princess Diana's brother. According to Intelligencer, all three were named in Epstein's black book; Ferguson and Prince Andrew were also named in his private jet log.In a interview with the BBC in November, Prince Andrew said his relationship with Epstein brought him "opportunities," and that his slowness in ditching Epstein as a friend was because of his tendency to be "too honorable." The interview was widely criticized over Prince Andrew's lack of sympathy with Epstein's victims and his defense of his friendship with the convicted sex offender, Business Insider reported.Prince Andrew resigned from public royal duties in November, Business Insider reported.Former President Bill Clinton traveled with Epstein in 2002 and 2003, a Clinton representative confirmed.Andrew Chin/Getty Images, Rick Friedman Photography/Corbis via Getty ImagesA statement released in July 2019 by Clinton spokesperson Angel Ureña said the former president traveled to Europe, Asia, and twice to Africa on Epstein's private jet. Clinton's staff and Secret Service agents also went on these trips, which were to further the work of the Clinton Foundation, according to the statement.Court documents unsealed on July 31 show Epstein accuser Virginia Giuffre testified that Clinton also visited Epstein's island — something the former president has denied.Last year, Clinton told New York Magazine through a spokesperson that Epstein was "both a highly successful financier and a committed philanthropist with a keen sense of global markets and an in-depth knowledge of twenty-first-century science."Ureña also said that Clinton and Epstein hadn't spoken in "well over a decade" and that Clinton "knows nothing about the terrible crimes" Epstein was charged with.Actor Kevin Spacey and comedian Chris Tucker also took trips with Epstein.Kevin Spacey attends the 2017 Tony Awards at Radio City Music Hall on June 11, 2017 in New York City.Dimitrios Kambouris/Getty Images for Tony Awards ProductionsEpstein, Clinton, Spacey, and Tucker spent a week in 2002 touring AIDS project sites in South Africa, Nigeria, Ghana, Rwanda, and Mozambique for the Clinton Foundation, according to a New York Magazine report.Spacey was also charged with sexual assault, but in December, The New York Times reported that the case had been dropped by the plaintiff's estate. The plaintiff, a 62-year-old massage therapist, had died in September.Former Secretary of Labor Alexander Acosta worked with Epstein's legal team to arrange a plea deal after Epstein was charged with solicitation of prostitution and procurement of minors for prostitution in Florida in 2007.Alexander Acosta.Joe Raedle/Getty ImagesAn investigation by the Miami Herald revealed that Acosta, then a US attorney, had enough evidence against Epstein to request a life sentence. Instead, he reportedly met with one of Epstein's lawyers, who happened to be a former colleague of Acosta's.In the resulting plea deal, Epstein served 13 months in a private wing of a county prison, which he was allowed to leave six days a week to work in his office.Business Insider previously reported that Acosta said he was "pleased that NY prosecutors are moving forward with a case based on new evidence," on Twitter.—Secretary Acosta (@SecretaryAcosta) July 9, 2019Acosta resigned on July 12, 2019.Film publicist Peggy Siegal planned a star-studded dinner party for Epstein and Prince Andrew at Epstein's New York mansion in 2010.Evan Agostini/Invision/AP ImagesSiegal, known for hosting events to promote films including "The Big Short," "Argo," and "The Revenant" to Oscar voters, invited Epstein to screenings after he was released from prison in 2010, according to The New York Times."I was a kind of plugged-in girl around town who knew a lot of people," Siegal told The New York Times. "And I think that's what he wanted from me, a kind of social goings-on about New York."Siegal also planned a dinner party for Epstein and Prince Andrew at his Upper East Side home. The event was attended by Katie Couric, George Stephanopoulos, and Chelsea Handler. "The invitation was positioned as, 'Do you want to have dinner with Prince Andrew?'" Siegal said. Many of the guests didn't know who the host was or about his criminal history, The New York Times reported.A spokesperson for Siegal told Business Insider that Siegal's relationship with Epstein was social, not professional. Siegal told The New York Times that she ended her relationship with Epstein at the height of the #MeToo era in 2017.Netflix, FX and Annapurna Pictures severed their ties with Siegal in July 2019 after her connection to Epstein became public, Variety reported.Epstein also told the Times that he spoke often with Saudi crown prince Mohammed bin Salman.Saudi Arabia Deputy Crown Prince Mohammed bin Salman attends the G20 opening ceremony at the Hangzhou International Expo Center on September 4, 2016 in Hangzhou, China. World leaders are gathering for the 11th G20 Summit from September 4-5.Nicolas Asfouri - Pool/Getty ImagesEpstein said that MBS had visited Epstein's Manhattan mansion many times and had a framed photo of the crown prince hanging on the wall, according to New York Times reporter James B. Stewart.Representatives of MBS did not respond to Business Insider's request for comment.According to the New York Times, Epstein claimed to have advised Tesla CEO Elon Musk.Tesla CEO Elon Musk was photographed at a 2014 Oscars after-party next to Ghislaine Maxwell, the British socialite accused of being Epstein's madam in media reports and legal documents.Kevin Mazur/VF14/Contributor/Getty ImagesIn an interview published in the New York Times on August 12, Epstein claimed that Elon Musk had sought him out to help manage the trouble he had gotten into with the SEC a year earlier, in August 2018.Epstein told reporter James B. Stewart that he had promised to keep his work for Tesla private because of his prior conviction. Epstein also warned that both Musk and Tesla would deny their connection to Epstein if it ever became public, the Times reported. In a statement to Business Insider, a spokesperson for Musk denied Epstein's claims of having served as an adviser to the CEO.Musk and Maxwell were photographed at an Oscars after-party hosted by former Vanity Fair editor Graydon Carter on March 2, 2014, in West Hollywood. The same Musk spokesperson told Business Insider that "Ghislaine simply inserted herself behind him in a photo he was posing for without his knowledge."Musk has confirmed crossing paths with Epstein at least once, Business Insider reported. Musk, Epstein, and Facebook CEO Mark Zuckerberg were all guests at a dinner hosted by LinkedIn CEO Reid Hoffman sometime after he was released from jail in 2008.MIT Media Lab director Joi Ito quietly worked with Epstein to secure anonymous donations, Vanity Fair reported.Phillip Faraone/Getty ImagesIto worked with other directors and staff at the MIT Media Lab to quietly receive large anonymous donations from Epstein after he was convicted of soliciting underage girls for prostitution, a New Yorker exposé published on September 6 reports. The article contains emails sent between Ito and Epstein.The emails show Epstein also worked as an in-between for other wealthy donors, including Bill Gates and Leon Black, and that Epstein had a role in determining what his donations would be used for at MIT, contradicting previous statements from Ito and the university.Ito resigned from his posts at MIT, The New York Times Company, and the MacArthur Foundation on September 7, Business Insider reported.Epstein worked as a go-between for the MIT Media Lab and Bill Gates to arrange donations, Vanity Fair reported.Bill Gates speaks ahead of former U.S. President Barack Obama at the Gates Foundation Inaugural Goalkeepers event on September 20, 2017 in New York City.Yana Paskova/Getty ImagesEmails obtained and published by The New Yorker show former MIT Media Lab Director Joi Ito wrote that Gates was "directed by" Epstein to donate $2 million to the research lab in October 2014.Gates also met with Epstein at least once in New York in 2013, and flew on one of his private planes to Palm Beach, Business Insider previously reported. "Bill attended a meeting in New York with others focused on philanthropy. While Epstein was present, he never provided services of any type to Bill," a Gates spokesperson told Business Insider.A spokesperson for Gates told Business Insider that "Epstein was introduced to Bill Gates as someone who was interested in helping grow philanthropy. Although Epstein pursued Bill Gates aggressively, any account of a business partnership or personal relationship between the two is simply not true. And any claim that Epstein directed any programmatic or personal grantmaking for Bill Gates is completely false."A New York Times investigation published in October found that Gates met with Epstein multiple times after Epstein's conviction in 2011, including at least three meetings at Epstein's Manhattan townhouse. Following the publication of that story, a spokesperson for Gates said Gates regretted the association, but Gates himself hadn't publicly addressed it until November, Business Insider's Aaron Holmes reported.Gates said at The New York Times' Dealbook Conference in November that he believed "billions of dollars" would come from his meetings with Jeffrey Epstein. "I made a mistake in judgment in thinking those discussions would go to global health," Gates said. "That money never appeared.""I gave him the benefit of my association," Gates said.Reid Hoffman defended Ito after news of Epstein's connections to the MIT Media Lab broke.REUTERS/Brian SnyderA "few years ago," Epstein attended a dinner Hoffman hosted to honor an MIT neuroscientist, Vanity Fair reported in July. Mark Zuckerberg and Elon Musk were also in attendance. Both denied having had ongoing relationships with Epstein to Vanity Fair through spokespeople.Hoffman also implicated himself in the cover up of Epstein's donations to the MIT Media Lab. As pressure mounted on Media Lab director Joi Ito to resign, Hoffman defended Ito to author and fellow MIT Media Lab Disobedience Award jury member Anand Giridharadas in a private email, Giridharadas tweeted in September. "Hoffman basically hid behind bureaucracy and the old 'ongoing investigation' excuse," Giridharadas said in the now-unavailable tweet. "He said it would be complicated to release the correspondence publicly because other names might get dragged in. Someone should tell him about redaction."According to Giridharadas, Hoffman wrote in a second email that Giridharadas was making the situation "all about you" by threatening to resign. In the end, Giridharadas resigned from the Disobedience Award jury.Hoffman not only sits on the Disobedience Award's jury, but funds it personally, according to the Media Lab's website. In 2017, MIT awarded Epstein and other donors "orbs" to thank them for their support, according to The Boston Globe. The orb looks similar to the trophy given to winners of the Disobedience Award.A lawsuit has also shined light on Epstein's connection to former U.S. Virgin Islands Gov. John P. de Jongh while he was in office.U.S. Virgin Islands Gov. John P. de Jongh participates in a meeting dealing with healthcare at the Southern Governors' Association convention in Little Rock, Ark., Saturday, Aug. 16, 2014.AP Photo/Danny JohnstonGov. John P. de Jongh's wife Cecile de Jongh served on the board of Epstein's Financial Trust Co. for most of her husband's time in office, Business Insider's Becky Peterson and John Cook reported. Cecile de Jongh held the titles of secretary and vice president in her decade-long tenure with the company, even staying on board after Epstein was first charged with sexual assault in 2007.Prosecutors in the US Virgin Islands alleged that Epstein was trafficking women and children through the US territory during that same time, as stated in a January lawsuit. The lawsuit describes one 15-year-old victim who was "forced into sexual acts with Epstein and others and then attempted to escape by swimming off the Little St. James island."In a statement, a lawyer representing Epstein's estate told Business Insider that some of the allegations in the lawsuit were inaccurate — particularly allegations that the estate to this day engages in "a course of conduct aimed at concealing the criminal activities of the Epstein Enterprise.""The Estate is being administered in accordance with the laws of the US Virgin Islands and under the supervision of the Superior Court of the US Virgin Islands," the statement said.Barclays CEO Jes Staley is under investigation by British authorities because of his friendship with Epstein.Jes Staley, CEO Barclays, arrives at Downing Street for a meeting in London on January 11, 2018. Britain's Prime Minister Theresa May mets with business leaders from the financial services sector at Downing Street. / AFP PHOTO / Tolga Akmen (Photo credit should read TOLGA AKMEN/AFP/Getty Images)TOLGA AKMEN/AFP/Getty ImagesStaley had a "professional relationship" with Epstein that dated back to "early in his career," Barclays said in a statement. "In the summer of 2019, in light of the renewed media interest in the relationship, Mr. Staley volunteered and gave to certain executives, and the Chairman, an explanation of his relationship with Mr. Epstein," Barclays stated. "Mr. Staley also confirmed to the Board that he has had no contact whatsoever with Mr. Epstein at any time since taking up his role as Barclays Group CEO in December 2015."The relationship is the subject of an investigation by the UK's Financial Conduct Authority, according to the bank.Apollo Global Management CEO Leon Black hired Epstein as an advisor.Leon Black.LUCY NICHOLSON/ReutersIn August 2019, Black said that he had only consulted Epstein on financial matters "from time to time" and that his relationship with the convicted sex offender was "limited," Business Insider previously reported.However, Black had engaged Epstein as an advisor and paid him at least $50 million, The New York Times reported on October 12. Two of the Times' sources said the total may actually be closer to $75 million.The two financiers also regularly dined together at Epstein's New York mansion, per the Times report.A spokesperson for Black confirmed that between 2012 and 2017, Black had received "personal trusts and estates planning advice as well as family office philanthropy and investment services from several financial and legal advisors" including Epstein. A spokesperson for Black also told the Times that the relationship ended after a "fee dispute" in 2018.Black "continues to be appalled by the conduct that led to the criminal charges" against Epstein, the spokesperson said, adding that Black "deeply regrets having any involvement" with Epstein.   If you are a survivor of sexual assault, you can call the National Sexual Assault Hotline at 800.656.HOPE (4673) or visit their website to receive confidential support.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJun 28th, 2022

Check out these 45 pitch decks fintechs disrupting trading, investing, and banking used to raise millions in funding

Looking for examples of real fintech pitch decks? Check out pitch decks that Qolo, Lance, and other startups used to raise money from VCs. Check out these pitch decks for examples of fintech founders sold their vision.Yulia Reznikov/Getty Images Insider has been tracking the next wave of hot new startups that are blending finance and tech.  Check out these pitch decks to see how fintech founders sold their vision. See more stories on Insider's business page. Fintech funding has been on a tear.In 2021, fintech funding hit a record $132 billion globally, according to CB Insights, more than double 2020's mark.Insider has been tracking the next wave of hot new startups that are blending finance and tech. Check out these pitch decks to see how fintech founders are selling their vision and nabbing big bucks in the process. You'll see new financial tech geared at freelancers, fresh twists on digital banking, and innovation aimed at streamlining customer onboarding. Pay-as-you-go compliance for banks, fintechs, and crypto startupsNeepa Patel, Themis' founder and CEOThemisWhen Themis founder and CEO Neepa Patel set out to build a new compliance tool for banks, fintech startups, and crypto companies, she tapped into her own experience managing risk at some of the nation's biggest financial firms. Having worked as a bank regulator at the Office of the Comptroller of the Currency and in compliance at Morgan Stanley, Deutsche Bank, and the enterprise blockchain company R3, Patel was well-placed to assess the shortcomings in financial compliance software. But Patel, who left the corporate world to begin work on Themis in 2020, drew on more than just her own experience and frustrations to build the startup."It's not just me building a tool based on my personal pain points. I reached out to regulators. I reached out to bank compliance officers and members in the fintech community just to make sure that we're building it exactly how they do their work," Patel told Insider. "That was the biggest problem: No one built a tool that was reflective of how people do their work."Check out the 9-page pitch deck Themis, which offers pay-as-you-go compliance for banks, fintechs, and crypto startups, used to raise $9 million in seed fundingDeploying algorithms and automation to small-business financingJustin Straight and Bernard Worthy, LoanWell co-foundersLoanWellBernard Worthy and Justin Straight, the founders of LoanWell, want to break down barriers to financing for small and medium-size businesses — and they've got algorithms and automation in their tech arsenals that they hope will do it.Worthy, the company's CEO, and Straight, its chief operating and financial officer, are powering community-focused lenders to fill a gap in the SMB financing world by boosting access to loans under $100,000. And the upstart is known for catching the attention, and dollars, of mission-driven investors. LoanWell closed a $3 million seed financing round in December led by Impact America Fund with participation from SoftBank's SB Opportunity Fund and Collab Capital.LoanWell automates the financing process — from underwriting and origination, to money movement and servicing — which shaves down an up-to-90-day process to 30 days or even same-day with some LoanWell lenders, Worthy said. SMBs rely on these loans to process quickly after two years of financial uncertainty. But the pandemic illustrated how time-consuming and expensive SMB financing can be, highlighted by efforts like the federal government's Paycheck Protection Program.Community banks, once the lifeline to capital for many local businesses, continue to shutter. And demands for smaller loan amounts remain largely unmet. More than half of business-loan applicants sought $100,000 or less, according to 2018 data from the Federal Reserve. But the average small-business bank loan was closer to six times that amount, according to the latest data from a now discontinued Federal Reserve survey.Here's the 14-page pitch deck LoanWell used to raise $3 million from investors like SoftBank.Helping small businesses manage their taxesComplYant's founder Shiloh Johnson wants to help people be present in their bookkeeping.ComplYantAfter 14 years in tax accounting, Shiloh Johnson had formed a core philosophy around corporate accounting: everyone deserves to understand their business's money and business owners need to be present in their bookkeeping process.She wanted to help small businesses understand "this is why you need to do what you're doing and why you have to change the way you think about tax and be present in your bookkeeping process," she told Insider. The Los Angeles native wanted small businesses to not only understand business tax no matter their size but also to find the tools they needed to prepare their taxes in one spot. So Johnson developed a software platform that provides just that.The 13-page pitch deck ComplYant used to nab $4 million that details the tax startup's plan to be Turbotax, Quickbooks, and Xero rolled into one for small business ownersHelping LatAm startups get up to speedKamino cofounders Guto Fragoso, Rodrigo Perenha, Benjamin Gleason, and Gonzalo Parejo.KaminoThere's more venture capital flowing into Latin America than ever before, but getting the funds in founders' hands is not exactly a simple process.In 2021, investors funneled $15.3 billion into Latin American companies, more than tripling the previous record of $4.9 billion in 2019. Fintech and e-commerce sectors drove funding, accounting for 39% and 25% of total funding, respectively.  However, for many startup founders in the region who have successfully sold their ideas and gotten investors on board, there's a patchwork of corporate structuring that's needed to access the funds, according to Benjamin Gleason, who was the chief financial officer at Groupon LatAm prior to cofounding Brazil-based fintech Kamino.It's a process Gleason and his three fellow Kamino cofounders have been through before as entrepreneurs and startup execs themselves. Most often, startups have to set up offshore financial accounts outside of Brazil, which "entails creating a Cayman [Islands] holding company, a Delaware LLC, and then connecting it to a local entity here and also opening US bank accounts for the Cayman entity, which is not trivial from a KYC perspective," said Gleason, who founded open-banking fintech Guiabolso in Sao Paulo. His partner, Gonzalo Parejo, experienced the same toils when he founded insurtech Bidu."Pretty much any international investor will usually ask for that," Gleason said, adding that investors typically cite liability issues."It's just a massive amount of bureaucracy, complexity, a lot of time from the founders. All of this just to get the money from the investor that wants to give them the money," he added.Here's the 8-page pitch deck Kamino, a fintech helping LatAm startups with everything from financing to corporate credit cards, used to raise a $6.1M pre-seed round 'A bank for immigrants'Priyank Singh and Rohit Mittal are the cofounders of Stilt.StiltRohit Mittal remembers the difficulties he faced when he first arrived in the United States a decade ago as a master's student at Columbia University.As an immigrant from India, Mittal had no credit score in the US and had difficulty integrating into the financial system. Mittal even struggled to get approved to rent an apartment and couch-surfed until he found a roommate willing to offer him space in his apartment in the New York neighborhood Morningside Heights.That roommate was Priyank Singh, who would go on to become Mittal's cofounder when the two started Stilt, a financial-technology company designed to address the problems Mittal faced when he arrived in the US.Stilt, which calls itself "a bank for immigrants," does not require a social security number or credit history to access its offerings, including unsecured personal loans.Instead of relying on traditional metrics like a credit score, Stilt uses data such as education and employment to predict an individual's future income stability and cash flow before issuing a loan. Stilt has seen its loan volume grow by 500% in the past 12 months, and the startup has loaned to immigrants from 160 countries since its launch. Here are the 15 slides Stilt, which calls itself 'a bank for immigrants,' used to raise a $14 million Series A Saving on vendor invoicesHoward Katzenberg, Glean's CEO and cofounder.GleanWhen it comes to high-flying tech startups, headlines and investors typically tend to focus on industry "disruption" and the total addressable market a company is hoping to reach. Expense cutting as a way to boost growth typically isn't part of the conversation early on, and finance teams are viewed as cost centers relative to sales teams. But one fast-growing area of business payments has turned its focus to managing those costs. Startups like Ramp and established names like Bill.com have made their name offering automated expense-management systems. Now, one new fintech competitor, Glean, is looking to take that further by offering both automated payment services and tailored line-item accounts-payable insights driven by machine-learning models. Glean's CFO and founder, Howard Katzenberg, told Insider that the genesis of Glean was driven by his own personal experience managing the finance teams of startups, including mortgage lender Better.com, which Katzenberg left in 2019, and online small-business lender OnDeck. "As a CFO of high-growth companies, I spent a lot of time focused on revenue and I had amazing dashboards in real time where I could see what is going on top of the funnel, what's going on with conversion rates, what's going on in terms of pricing and attrition," Katzenberg told Insider. See the 15-slide pitch deck Glean, a startup using machine learning to find savings in vendor invoices, used to raise $10.8 million in seed fundingBetter use of payroll dataAtomic's Head of Markets, Lindsay Davis.AtomicEmployees at companies large and small know the importance — and limitations — of how firms manage their payrolls. A new crop of startups are building the API pipes that connect companies and their employees to offer a greater level of visibility and flexibility when it comes to payroll data and employee verification. On Thursday, one of those names, Atomic, announced a $40 million Series B fundraising round co-led by Mercato Partners and Greylock, alongside Core Innovation Capital, Portage, and ATX Capital. The round follows Atomic's Series A round announced in October, when the startup raised a $22 million Series A from investors including Core Innovation Capital, Portage, and Greylock.Payroll startup Atomic just raised a $40 million Series B. Here's an internal deck detailing the fintech's approach to the red-hot payments space.Data science for commercial insuranceTanner Hackett, founder and CEO of Counterpart.CounterpartThere's been no shortage of funds flowing into insurance-technology companies over the past few years. Private-market funding to insurtechs soared to $15.4 billion in 2021, a 90% increase compared to 2020. Some of the most well-known consumer insurtech names — from Oscar (which focuses on health insurance) to Metromile (which focuses on auto) — launched on the public markets last year, only to fall over time or be acquired as investors questioned the sustainability of their business models. In the commercial arena, however, the head of one insurtech company thinks there is still room to grow — especially for those catering to small businesses operating in an entirely new, pandemic-defined environment. "The bigger opportunity is in commercial lines," Tanner Hackett, the CEO of management liability insurer Counterpart, told Insider."Everywhere I poke, I'm like, 'Oh my goodness, we're still in 1.0, and all the other businesses I've built were on version three.' Insurance is still in 1.0, still managing from spreadsheets and PDFs," added Hackett, who also previously co-founded Button, which focuses on mobile marketing. See the 8-page pitch deck Counterpart, a startup disrupting commercial insurance with data science, used to raise a $30 million Series BCrypto staking made easyEthan and Eric Parker, founders of crypto-investing app Giddy.GiddyFrom the outside looking in, cryptocurrency can seem like a world of potential, but also one of complexity. That's because digital currencies, which can be traded, invested in, and moved like traditional currencies, operate on decentralized blockchain networks that can be quite technical in nature. Still, they offer the promise of big gains and have been thrusted into the mainstream over the years, converting Wall Street stalwarts and bankers.But for the everyday investor, a fear of missing out is settling in. That's why brothers Ethan and Eric Parker built Giddy, a mobile app that enables users to invest in crypto, earn passive income on certain crypto holdings via staking, and get into the red-hot space of decentralized finance, or DeFi."What we're focusing on is giving an opportunity for people who otherwise couldn't access DeFi because it's just technically too difficult," Eric Parker, CEO at Giddy, told Insider. Here's the 7-page pitch deck Giddy, an app that lets users invest in DeFi, used to raise an $8 million seed roundAccess to commercial real-estate investing LEX Markets cofounders and co-CEOs Drew Sterrett and Jesse Daugherty.LEX MarketsDrew Sterrett was structuring real-estate deals while working in private equity when he realized the inefficiencies that existed in the market. Only high-net worth individuals or accredited investors could participate in commercial real-estate deals. If they ever wanted to leave a partnership or sell their stake in a property, it was difficult to find another investor to replace them. Owners also struggled to sell minority stakes in their properties and didn't have many good options to recapitalize an asset if necessary.In short, the market had a high barrier to entry despite the fact it didn't always have enough participants to get deals done quickly. "Most investors don't have access to high-quality commercial real-estate investments. How do we have the oldest and largest asset class in the world and one of the largest wealth creators with no public and liquid market?" Sterrett told Insider. "It sort of seems like a no-brainer, and that this should have existed 50 or 60 years ago."This 15-page pitch deck helped LEX Markets, a startup making investing in commercial real estate more accessible, raise $15 millionHelping streamline how debts are repaidMethod Financial cofounders Jose Bethancourt and Marco del Carmen.Method FinancialWhen Jose Bethancourt graduated from the University of Texas at Austin in May 2019, he faced the same question that confronts over 43 million Americans: How would he repay his student loans?The problem led Bethancourt on a nearly two-year journey that culminated in the creation of a startup aimed at making it easier for consumers to more seamlessly pay off all kinds of debt.  Initially, Bethancourt and fellow UT grad Marco del Carmen built GradJoy, an app that helped users better understand how to manage student loan repayment and other financial habits. GradJoy was accepted into Y Combinator in the summer of 2019. But the duo quickly realized the real benefit to users would be helping them move money to make payments instead of simply offering recommendations."When we started GradJoy, we thought, 'Oh, we'll just give advice — we don't think people are comfortable with us touching their student loans,' and then we realized that people were saying, 'Hey, just move the money — if you think I should pay extra, then I'll pay extra.' So that's kind of the movement that we've seen, just, everybody's more comfortable with fintechs doing what's best for them," Bethancourt told Insider. Here is the 11-slide pitch deck Method Financial, a Y Combinator-backed fintech making debt repayment easier, used to raise $2.5 million in pre-seed fundingSmarter insurance for multifamily propertiesItai Ben-Zaken, cofounder and CEO of Honeycomb.HoneycombA veteran of the online-insurance world is looking to revolutionize the way the industry prices risk for commercial properties with the help of artificial intelligence.Insurance companies typically send inspectors to properties before issuing policies to better understand how the building is maintained and identify potential risks or issues with it. It's a process that can be time-consuming, expensive, and inefficient, making it hard to justify for smaller commercial properties, like apartment and condo buildings.Insurtech Honeycomb is looking to fix that by using AI to analyze a combination of third-party data and photos submitted by customers through the startup's app to quickly identify any potential risks at a property and more accurately price policies."That whole physical inspection thing had really good things in it, but it wasn't really something that is scalable and, it's also expensive," Itai Ben-Zaken, Honeycomb's cofounder and CEO, told Insider. "The best way to see a property right now is Google street view. Google street view is usually two years old."Here's the 10-page Series A pitch deck used by Honeycomb, a startup that wants to revolutionize the $26 billion market for multifamily property insuranceRetirement accounts for cryptoTodd Southwick, CEO and co-founder of iTrustCapital.iTrustCapitalTodd Southwick and Blake Skadron stuck to a simple mandate when they were building out iTrustCapital, a $1.3 billion fintech that strives to offer cryptocurrencies to the masses via dedicated individual retirement accounts."We wanted to make a product that we would feel happy recommending for our parents to use," Southwick, the CEO of iTrustCapital, told Insider. That guiding framework resulted in a software system that helped to digitize and automate the traditionally clunky and paper-based process of setting up an IRA for alternative assets, Southwick said. "We saw a real opportunity within the self-directed IRAs because we knew at that point in time, there was a fairly small segment of people that was willing to deal with the inconvenience of having to set up an IRA" for crypto, Southwick said. The process often involved phone calls to sales reps and over-the-counter trading desks, paper and fax machines, and days of wait time.iTrustCapital allows customers to buy and sell cryptocurrencies using tax-advantaged IRAs with no monthly account fees. The startup provides access to 25 cryptocurrencies like bitcoin, ethereum, and dogecoin — charging a 1% transaction fee on crypto trades — as well as gold and silver.iTrustCapital, a fintech simplifying how to set up a crypto retirement account, used this 8-page pitch deck to raise a $125 million Series AA new way to assess creditworthinessPinwheel founders Curtis Lee, Kurt Lin, and Anish Basu.PinwheelGrowing up, Kurt Lin never saw his father get frustrated. A "traditional, stoic figure," Lin said his father immigrated to the United States in the 1970s. Becoming part of the financial system proved even more difficult than assimilating into a new culture.Lin recalled visiting bank after bank with his father as a child, watching as his father's applications for a mortgage were denied due to his lack of credit history. "That was the first time in my life I really saw him crack," Lin told Insider. "The system doesn't work for a lot of people — including my dad," he added. Lin would find a solution to his father's problem years later while working with Anish Basu, and Curtis Lee on an automated health savings account. The trio realized the payroll data integrations they were working on could be the basis of a product that would help lenders work with consumers without strong credit histories."That's when the lightbulb hit," said Lin, Pinwheel's CEO.In 2018, Lin, Basu, and Lee founded Pinwheel, an application-programming interface that shares payroll data to help both fintechs and traditional lenders serve consumers with limited or poor credit, who have historically struggled to access financial products. Here's the 9-page deck that Pinwheel, a fintech helping lenders tap into payroll data to serve consumers with little to no credit, used to raise a $50 million Series BA new data feed for bond tradingMark Lennihan/APFor years, the only way investors could figure out the going price of a corporate bond was calling up a dealer on the phone. The rise of electronic trading has streamlined that process, but data can still be hard to come by sometimes. A startup founded by a former Goldman Sachs exec has big plans to change that. BondCliQ is a fintech that provides a data feed of pre-trade pricing quotes for the corporate bond market. Founded by Chris White, the creator of Goldman Sachs' defunct corporate-bond-trading system, BondCliQ strives to bring transparency to a market that has traditionally kept such data close to the vest. Banks, which typically serve as the dealers of corporate bonds, have historically kept pre-trade quotes hidden from other dealers to maintain a competitive advantage.But tech advancements and the rise of electronic marketplaces have shifted power dynamics into the hands of buy-side firms, like hedge funds and asset managers. The investors are now able to get a fuller picture of the market by aggregating price quotes directly from dealers or via vendors.Here's the 9-page pitch deck that BondCliQ, a fintech looking to bring more data and transparency to bond trading, used to raise its Series AA trading app for activismAntoine Argouges, CEO and founder of Tulipshare.TulipshareAn up-and-coming fintech is taking aim at some of the world's largest corporations by empowering retail investors to push for social and environmental change by pooling their shareholder rights.London-based Tulipshare lets individuals in the UK invest as little as one pound in publicly-traded company stocks. The upstart combines individuals' shareholder rights with other like-minded investors to advocate for environmental, social, and corporate governance change at firms like JPMorgan, Apple, and Amazon.The goal is to achieve a higher number of shares to maximize the number of votes that can be submitted at shareholder meetings. Already a regulated broker-dealer in the UK, Tulipshare recently applied for registration as a broker-dealer in the US. "If you ask your friends and family if they've ever voted on shareholder resolutions, the answer will probably be close to zero," CEO and founder Antoine Argouges told Insider. "I started Tulipshare to utilize shareholder rights to bring about positive corporate change that has an impact on people's lives and our planet — what's more powerful than money to change the system we live in?"Check out the 14-page pitch deck from Tulipshare, a trading app that lets users pool their shareholder votes for activism campaignsThe back-end tech for beautyDanielle Cohen-Shohet, CEO and founder of GlossGeniusGlossGeniusDanielle Cohen-Shohet might have started as a Goldman Sachs investment analyst, but at her core she was always a coder.After about three years at Goldman Sachs, Cohen-Shohet left the world of traditional finance to code her way into starting her own company in 2016. "There was a period of time where I did nothing, but eat, sleep, and code for a few weeks," Cohen-Shohet told Insider. Her technical edge and knowledge of the point-of-sale payment space led her to launch a software company focused on providing behind-the-scenes tech for beauty and wellness small businesses.Cohen-Shohet launched GlossGenius in 2017 to provide payments tech for hair stylists, nail technicians, blow-out bars, and other small businesses in the space.Here's the 11-page deck GlossGenius, a startup that provides back-end tech for the beauty industry, used to raise $16 millionPrivate market data on the blockchainPat O'Meara, CEO of Inveniam.InveniamFor investors in publicly-traded stocks, there's typically no shortage of company data to guide investment decisions. Company financials are easily accessible and vetted by teams of regulators, lawyers, and accountants.But in the private markets — which encompass assets that range from real estate to private credit and private equity — that isn't always the case. Within real estate, for example, valuations of a specific slice of property are often the product of heavily-worked Excel models and a lot of institutional knowledge, leaving them susceptible to manual error at many points along the way.Inveniam, founded in 2017, is a software company that tokenizes the business data of private companies on the blockchain. Using a distributed ledger allows Inveniam to keep track of who is touching the data and what they are doing to it. Check out the 16-page pitch deck for Inveniam, a blockchain-based startup looking to be the Refinitiv of private-market dataHelping freelancers with their taxesJaideep Singh is the CEO and co-founder of FlyFin, an AI-driven tax preparation software program for freelancers.FlyFinSome people, particularly those with families or freelancing businesses, spend days searching for receipts for tax season, making tax preparation a time consuming and, at times, taxing experience. That's why in 2020 Jaideep Singh founded FlyFin, an artificial-intelligence tax preparation program for freelancers that helps people, as he puts it, "fly through their finances." FlyFin is set up to connect to a person's bank accounts, allowing the AI program to help users monitor for certain expenses that can be claimed on their taxes like business expenditures, the interest on mortgages, property taxes, or whatever else that might apply. "For most individuals, people have expenses distributed over multiple financial institutions. So we built an AI platform that is able to look at expenses, understand the individual, understand your profession, understand the freelance population at large, and start the categorization," Singh told Insider.Check out the 7-page pitch deck a startup helping freelancers manage their taxes used to nab $8 million in funding Shopify for embedded financeProductfy CEO and founder, Duy Vo.ProductfyProductfy is looking to break into embedded finance by becoming the Shopify of back-end banking services.Embedded finance — integrating banking services in non-financial settings — has taken hold in the e-commerce world. But Productfy is going after a different kind of customer in churches, universities, and nonprofits.The San Jose, Calif.-based upstart aims to help non-finance companies offer their own banking products. Productfy can help customers launch finance features in as little as a week and without additional engineering resources or background knowledge of banking compliance or legal requirements, Productfy founder and CEO Duy Vo told Insider. "You don't need an engineer to stand up Shopify, right? You can be someone who's just creating art and you can use Shopify to build your own online store," Vo said, adding that Productfy is looking to take that user experience and replicate it for banking services.Here's the 15-page pitch deck Productfy, a fintech looking to be the Shopify of embedded finance, used to nab a $16 million Series AReal-estate management made easyAgora founders Noam Kahan, CTO, Bar Mor, CEO, and Lior Dolinski, CPO.AgoraFor alternative asset managers of any type, the operations underpinning sales and investor communications are a crucial but often overlooked part of the business. Fund managers love to make bets on markets, not coordinate hundreds of wire transfers to clients each quarter or organize customer-relationship-management databases.Within the $10.6 trillion global market for professionally managed real-estate investing, that's where Tel Aviv and New York-based startup Agora hopes to make its mark.Founded in 2019, Agora offers a set of back-office, investor relations, and sales software tools that real-estate investment managers can plug into their workflows. On Wednesday, Agora announced a $9 million seed round, led by Israel-based venture firm Aleph, with participation from River Park Ventures and Maccabee Ventures. The funding comes on the heels of an October 2020 pre-seed fund raise worth $890,000, in which Maccabee also participated.Here's the 15-slide pitch deck that Agora, a startup helping real-estate investors manage communications and sales with their clients, used to raise a $9 million seed roundCheckout made easyBolt's Ryan Breslow.Ryan BreslowAmazon has long dominated e-commerce with its one-click checkout flows, offering easier ways for consumers to shop online than its small-business competitors.Bolt gives small merchants tools to offer the same easy checkouts so they can compete with the likes of Amazon.The startup raised its $393 million Series D to continue adding its one-click checkout feature to merchants' own websites in October.Bolt markets to merchants themselves. But a big part of Bolt's pitch is its growing network of consumers — currently over 5.6 million — that use its features across multiple Bolt merchant customers. Roughly 5% of Bolt's transactions were network-driven in May, meaning users that signed up for a Bolt account on another retailer's website used it elsewhere. The network effects were even more pronounced in verticals like furniture, where 49% of transactions were driven by the Bolt network."The network effect is now unleashed with Bolt in full fury, and that triggered the raise," Bolt's founder and CEO Ryan Breslow told Insider.Here's the 12-page deck that one-click checkout Bolt used to outline its network of 5.6 million consumers and raise its Series DHelping small banks lendCollateralEdge's Joel Radtke, cofounder, COO, and president, and Joe Beard, cofounder and CEO.CollateralEdgeFor large corporations with a track record of tapping the credit markets, taking out debt is a well-structured and clear process handled by the nation's biggest investment banks and teams of accountants. But smaller, middle-market companies — typically those with annual revenues ranging up to $1 billion — are typically served by regional and community banks that don't always have the capacity to adequately measure the risk of loans or price them competitively. Per the National Center for the Middle Market, 200,000 companies fall into this range, accounting for roughly 33% of US private sector GDP and employment.Dallas-based fintech CollateralEdge works with these banks — typically those with between $1 billion and $50 billion in assets — to help analyze and price slices of commercial and industrial loans that previously might have gone unserved by smaller lenders.On October 20th, CollateralEdge announced a $3.5 million seed round led by Dallas venture fund Perot Jain with participation from Kneeland Youngblood (a founder of the healthcare-focused private-equity firm Pharos Capital) and other individual investors.Here's the 10-page deck CollateralEdge, a fintech streamlining how small banks lend to businesses, used to raise a $3.5 million seed round Quantum computing made easyQC Ware CEO Matt Johnson.QC WareEven though banks and hedge funds are still several years out from adding quantum computing to their tech arsenals, that hasn't stopped Wall Street giants from investing time and money into the emerging technology class. And momentum for QC Ware, a startup looking to cut the time and resources it takes to use quantum computing, is accelerating. The fintech secured a $25 million Series B on September 29 co-led by Koch Disruptive Technologies and Covestro with participation from D.E. Shaw, Citi, and Samsung Ventures.QC Ware, founded in 2014, builds quantum algorithms for the likes of Goldman Sachs (which led the fintech's Series A), Airbus, and BMW Group. The algorithms, which are effectively code bases that include quantum processing elements, can run on any of the four main public-cloud providers.Quantum computing allows companies to do complex calculations faster than traditional computers by using a form of physics that runs on quantum bits as opposed to the traditional 1s and 0s that computers use. This is especially helpful in banking for risk analytics or algorithmic trading, where executing calculations milliseconds faster than the competition can give firms a leg up. Here's the 20-page deck QC Ware, a fintech making quantum computing more accessible, used to raised its $25 million Series BSimplifying quant modelsKirat Singh and Mark Higgins, Beacon's cofounders.BeaconA fintech that helps financial institutions use quantitative models to streamline their businesses and improve risk management is catching the attention, and capital, of some of the country's biggest investment managers.Beacon Platform, founded in 2014, is a fintech that builds applications and tools to help banks, asset managers, and trading firms quickly integrate quantitative models that can help with analyzing risk, ensuring compliance, and improving operational efficiency. The company raised its Series C on Wednesday, scoring a $56 million investment led by Warburg Pincus with support from Blackstone Innovations Investments, PIMCO, and Global Atlantic. Blackstone, PIMCO, and Global Atlantic are also users of Beacon's tech, as are the Commonwealth Bank of Australia and Shell New Energies, a division of Royal Dutch Shell, among others.The fintech provides a shortcut for firms looking to use quantitative modelling and data science across various aspects of their businesses, a process that can often take considerable resources if done solo.Here's the 20-page pitch deck Beacon, a fintech helping Wall Street better analyze risk and data, used to raise $56 million from Warburg Pincus, Blackstone, and PIMCOInvoice financing for SMBsStacey Abrams and Lara Hodgson, Now cofounders.NowAbout a decade ago, politician Stacey Abrams and entrepreneur Lara Hodgson were forced to fold their startup because of a kink in the supply chain — but not in the traditional sense.Nourish, which made spill-proof bottled water for children, had grown quickly from selling to small retailers to national ones. And while that may sound like a feather in the small business' cap, there was a hang-up."It was taking longer and longer to get paid, and as you can imagine, you deliver the product and then you wait and you wait, but meanwhile you have to pay your employees and you have to pay your vendors," Hodgson told Insider. "Waiting to get paid was constraining our ability to grow."While it's not unusual for small businesses to grapple with working capital issues, the dust was still settling from the Great Recession. Abrams and Hodgson couldn't secure a line of credit or use financing tools like factoring to solve their problem. The two entrepreneurs were forced to close Nourish in 2012, but along the way they recognized a disconnect in the system.  "Why are we the ones borrowing money, when in fact we're the lender here because every time you send an invoice to a customer, you've essentially extended a free loan to that customer by letting them pay later," Hodgson said. "And the only reason why we were going to need to possibly borrow money was because we had just given ours away for free to Whole Foods," she added.Check out the 7-page deck that Now, Stacey Abrams' fintech that wants to help small businesses 'grow fearlessly', used to raise $29 millionInsurance goes digitalJamie Hale, CEO and cofounder of Ladder.LadderFintechs looking to transform how insurance policies are underwritten, issued, and experienced by customers have grown as new technology driven by digital trends and artificial intelligence shape the market. And while verticals like auto, homeowner's, and renter's insurance have seen their fair share of innovation from forward-thinking fintechs, one company has taken on the massive life-insurance market. Founded in 2017, Ladder uses a tech-driven approach to offer life insurance with a digital, end-to-end service that it says is more flexible, faster, and cost-effective than incumbent players.Life, annuity, and accident and health insurance within the US comprise a big chunk of the broader market. In 2020, premiums written on those policies totaled some $767 billion, compared to $144 billion for auto policies and $97 billion for homeowner's insurance.Here's the 12-page deck that Ladder, a startup disrupting the 'crown jewel' of the insurance market, used to nab $100 millionEmbedded payments for SMBsThe Highnote team.HighnoteBranded cards have long been a way for merchants with the appropriate bank relationships to create additional revenue and build customer loyalty. The rise of embedded payments, or the ability to shop and pay in a seamless experience within a single app, has broadened the number of companies looking to launch branded cards.Highnote is a startup that helps small to mid-sized merchants roll out their own debit and pre-paid digital cards. The fintech emerged from stealth on Tuesday to announce it raised $54 million in seed and Series A funding.Here's the 12-page deck Highnote, a startup helping SMBs embed payments, used to raise $54 million in seed and Series A fundingAn alternative auto lenderDaniel Chu, CEO and founder of Tricolor.TricolorAn alternative auto lender that caters to thin- and no-credit Hispanic borrowers is planning a national expansion after scoring a $90 million investment from BlackRock-managed funds. Tricolor is a Dallas-based auto lender that is a community development financial institution. It uses a proprietary artificial-intelligence engine that decisions each customer based on more than 100 data points, such as proof of income. Half of Tricolor's customers have a FICO score, and less than 12% have scores above 650, yet the average customer has lived in the US for 15 years, according to the deck.A 2017 survey by the Federal Deposit Insurance Corporation found 31.5% of Hispanic households had no mainstream credit compared to 14.4% of white households. "For decades, the deck has been stacked against low income or credit invisible Hispanics in the United States when it comes to the purchase and financing of a used vehicle," Daniel Chu, founder and CEO of Tricolor, said in a statement announcing the raise.An auto lender that caters to underbanked Hispanics used this 25-page deck to raise $90 million from BlackRock investorsA new way to access credit The TomoCredit team.TomoCreditKristy Kim knows first-hand the challenge of obtaining credit in the US without an established credit history. Kim, who came to the US from South Korea, couldn't initially get access to credit despite having a job in investment banking after graduating college. "I was in my early twenties, I had a good income, my job was in investment banking but I could not get approved for anything," Kim told Insider. "Many young professionals like me, we deserve an opportunity to be considered but just because we didn't have a Fico, we weren't given a chance to even apply," she added.Kim started TomoCredit in 2018 to help others like herself gain access to consumer credit. TomoCredit spent three years building an internal algorithm to underwrite customers based on cash flow, rather than a credit score.TomoCredit, a fintech that lends to thin- and no-credit borrowers, used this 17-page pitch deck to raise its $10 million Series AAn IRA for alternativesHenry Yoshida is the co-founder and CEO of retirement fintech startup Rocket Dollar.Rocket DollarFintech startup Rocket Dollar, which helps users invest their individual retirement account (IRA) dollars into alternative assets, just raised $8 million for its Series A round, the company announced on Thursday.Park West Asset Management led the round, with participation from investors including Hyphen Capital, which focuses on backing Asian American entrepreneurs, and crypto exchange Kraken's venture arm. Co-founded in 2018 by CEO Henry Yoshida, CTO Rick Dude, and VP of marketing Thomas Young, Rocket Dollar now has over $350 million in assets under management on its platform. Yoshida sold his first startup, a roboadvisor called Honest Dollar, to Goldman Sachs' investment management division for an estimated $20 million.Yoshida told Insider that while ultra-high net worth investors have been investing self-directed retirement account dollars into alternative assets like real estate, private equity, and cryptocurrency, average investors have not historically been able to access the same opportunities to invest IRA dollars in alternative assets through traditional platforms.Here's the 34-page pitch deck a fintech that helps users invest their retirement savings in crypto and real estate assets used to nab $8 millionConnecting startups and investorsHum Capital cofounder and CEO Blair Silverberg.Hum CapitalBlair Silverberg is no stranger to fundraising.For six years, Silverberg was a venture capitalist at Draper Fisher Jurvetson and Private Credit Investments making bets on startups."I was meeting with thousands of founders in person each year, watching them one at a time go through this friction where they're meeting a ton of investors, and the investors are all asking the same questions," Silverberg told Insider. He switched gears about three years ago, moving to the opposite side of the metaphorical table, to start Hum Capital, which uses artificial intelligence to match investors with startups looking to fundraise.On August 31, the New York-based fintech announced its $9 million Series A. The round was led by Future Ventures with participation from Webb Investment Network, Wavemaker Partners, and Partech. This 11-page pitch deck helped Hum Capital, a fintech using AI to match investors with startups, raise a $9 million Series A.Payments infrastructure for fintechsQolo CEO and co-founder Patricia Montesi.QoloThree years ago, Patricia Montesi realized there was a disconnect in the payments world. "A lot of new economy companies or fintech companies were looking to mesh up a lot of payment modalities that they weren't able to," Montesi, CEO and co-founder of Qolo, told Insider.Integrating various payment capabilities often meant tapping several different providers that had specializations in one product or service, she added, like debit card issuance or cross-border payments. "The way people were getting around that was that they were creating this spider web of fintech," she said, adding that "at the end of it all, they had this mess of suppliers and integrations and bank accounts."The 20-year payments veteran rounded up a group of three other co-founders — who together had more than a century of combined industry experience — to start Qolo, a business-to-business fintech that sought out to bundle back-end payment rails for other fintechs.Here's the 11-slide pitch deck a startup that provides payments infrastructure for other fintechs used to raise a $15 million Series ASoftware for managing freelancersWorksome cofounder and CEO Morten Petersen.WorksomeThe way people work has fundamentally changed over the past year, with more flexibility and many workers opting to freelance to maintain their work-from-home lifestyles.But managing a freelance or contractor workforce is often an administrative headache for employers. Worksome is a startup looking to eliminate all the extra work required for employers to adapt to more flexible working norms.Worksome started as a freelancer marketplace automating the process of matching qualified workers with the right jobs. But the team ultimately pivoted to a full suite of workforce management software, automating administrative burdens required to hire, pay, and account for contract workers.In May, Worksome closed a $13 million Series A backed by European angel investor Tommy Ahlers and Danish firm Lind & Risør.Here's the 21-slide pitch deck used by a startup that helps firms like Carlsberg and Deloitte manage freelancersPersonal finance is only a text awayYinon Ravid, the chief executive and cofounder of Albert.AlbertThe COVID-19 pandemic has underscored the growing preference of mobile banking as customers get comfortable managing their finances online.The financial app Albert has seen a similar jump in activity. Currently counting more than six million members, deposits in Albert's savings offering doubled from the start of the pandemic in March 2020 to May of this year, from $350 million to $700 million, according to new numbers released by the company. Founded in 2015, Albert offers automated budgeting and savings tools alongside guided investment portfolios. It's looked to differentiate itself through personalized features, like the ability for customers to text human financial experts.Budgeting and saving features are free on Albert. But for more tailored financial advice, customers pay a subscription fee that's a pay-what-you-can model, between $4 and $14 a month. And Albert's now banking on a new tool to bring together its investing, savings, and budgeting tools.Fintech Albert used this 10-page pitch deck to raise a $100 million Series C from General Atlantic and CapitalGRethinking debt collection Jason Saltzman, founder and CEO of ReliefReliefFor lenders, debt collection is largely automated. But for people who owe money on their credit cards, it can be a confusing and stressful process.  Relief is looking to change that. Its app automates the credit-card debt collection process for users, negotiating with lenders and collectors to settle outstanding balances on their behalf. The fintech just launched and closed a $2 million seed round led by Collaborative Ventures. Relief's fundraising experience was a bit different to most. Its pitch deck, which it shared with one investor via Google Slides, went viral. It set out to raise a $1 million seed round, but ended up doubling that and giving some investors money back to make room for others.Check out a 15-page pitch deck that went viral and helped a credit-card debt collection startup land a $2 million seed roundBlockchain for private-markets investing Carlos Domingo is cofounder and CEO of Securitize.SecuritizeSecuritize, founded in 2017 by the tech industry veterans Carlos Domingo and Jamie Finn, is bringing blockchain technology to private-markets investing. The company raised $48 million in Series B funding on June 21 from investors including Morgan Stanley and Blockchain Capital.Securitize helps companies crowdfund capital from individual and institutional investors by issuing their shares in the form of blockchain tokens that allow for more efficient settlement, record keeping, and compliance processes. Morgan Stanley's Tactical Value fund, which invests in private companies, made its first blockchain-technology investment when it coled the Series B, Securitize CEO Carlos Domingo told Insider.Here's the 11-page pitch deck a blockchain startup looking to revolutionize private-markets investing used to nab $48 million from investors like Morgan StanleyE-commerce focused business bankingMichael Rangel, cofounder and CEO, and Tyler McIntyre, cofounder and CTO of Novo.Kristelle Boulos PhotographyBusiness banking is a hot market in fintech. And it seems investors can't get enough.Novo, the digital banking fintech aimed at small e-commerce businesses, raised a $40.7 million Series A led by Valar Ventures in June. Since its launch in 2018, Novo has signed up 100,000 small businesses. Beyond bank accounts, it offers expense management, a corporate card, and integrates with e-commerce infrastructure players like Shopify, Stripe, and Wise.Founded in 2018, Novo was based in New York City, but has since moved its headquarters to Miami. Here's the 12-page pitch deck e-commerce banking startup Novo used to raise its $40 million Series ABlockchain-based credit score tech John Sun, Anna Fridman, and Adam Jiwan are the cofounders of fintech startup Spring Labs.Spring LabsA blockchain-based fintech startup that is aiming to disrupt the traditional model of evaluating peoples' creditworthiness recently raised $30 million in a Series B funding led by credit reporting giant TransUnion.Four-year-old Spring Labs aims to create a private, secure data-sharing model to help credit agencies better predict the creditworthiness of people who are not in the traditional credit bureau system. The founding team of three fintech veterans met as early employees of lending startup Avant.Existing investors GreatPoint Ventures and August Capital also joined in on the most recent round.  So far Spring Labs has raised $53 million from institutional rounds.TransUnion, a publicly-traded company with a $20 billion-plus market cap, is one of the three largest consumer credit agencies in the US. After 18 months of dialogue and six months of due diligence, TransAmerica and Spring Labs inked a deal, Spring Labs CEO and cofounder Adam Jiwan told Insider.Here's the 10-page pitch deck blockchain-based fintech Spring Labs used to snag $30 million from investors including credit reporting giant TransUnionDigital banking for freelancersJGalione/Getty ImagesLance is a new digital bank hoping to simplify the life of those workers by offering what it calls an "active" approach to business banking. "We found that every time we sat down with the existing tools and resources of our accountants and QuickBooks and spreadsheets, we just ended up getting tangled up in the whole experience of it," Lance cofounder and CEO Oona Rokyta told Insider. Lance offers subaccounts for personal salaries, withholdings, and savings to which freelancers can automatically allocate funds according to custom preset levels. It also offers an expense balance that's connected to automated tax withholdings.In May, Lance announced the closing of a $2.8 million seed round that saw participation from Barclays, BDMI, Great Oaks Capital, Imagination Capital, Techstars, DFJ Frontier, and others.Here's the 21-page pitch deck Lance, a digital bank for freelancers, used to raise a $2.8 million seed round from investors including BarclaysDigital tools for independent financial advisorsJason Wenk, founder and CEO of AltruistAltruistJason Wenk started his career at Morgan Stanley in investment research over 20 years ago. Now, he's running a company that is hoping to broaden access to financial advice for less-wealthy individuals. The startup raised $50 million in Series B funding led by Insight Partners with participation from investors Vanguard and Venrock. The round brings the Los Angeles-based startup's total funding to just under $67 million.Founded in 2018, Altruist is a digital brokerage built for independent financial advisors, intended to be an "all-in-one" platform that unites custodial functions, portfolio accounting, and a client-facing portal. It allows advisors to open accounts, invest, build models, report, trade (including fractional shares), and bill clients through an interface that can advisors time by eliminating mundane operational tasks.Altruist aims to make personalized financial advice less expensive, more efficient, and more inclusive through the platform, which is designed for registered investment advisors (RIAs), a growing segment of the wealth management industry. Here's the pitch deck for Altruist, a wealth tech challenging custodians Fidelity and Charles Schwab, that raised $50 million from Vanguard and InsightPayments and operations support HoneyBook cofounders Dror Shimoni, Oz Alon, and Naama Alon.HoneyBookWhile countless small businesses have been harmed by the pandemic, self-employment and entrepreneurship have found ways to blossom as Americans started new ventures.Half of the US population may be freelance by 2027, according to a study commissioned by remote-work hiring platform Upwork. HoneyBook, a fintech startup that provides payment and operations support for freelancers, in May raised $155 million in funding and achieved unicorn status with its $1 billion-plus valuation.Durable Capital Partners led the Series D funding with other new investors including renowned hedge fund Tiger Global, Battery Ventures, Zeev Ventures, and 01 Advisors. Citi Ventures, Citigroup's startup investment arm that also backs fintech robo-advisor Betterment, participated as an existing investor in the round alongside Norwest Venture partners. The latest round brings the company's fundraising total to $227 million to date.Here's the 21-page pitch deck a Citi-backed fintech for freelancers used to raise $155 million from investors like hedge fund Tiger GlobalFraud prevention for lenders and insurersFiordaliso/Getty ImagesOnboarding new customers with ease is key for any financial institution or retailer. The more friction you add, the more likely consumers are to abandon the entire process.But preventing fraud is also a priority, and that's where Neuro-ID comes in. The startup analyzes what it calls "digital body language," or, the way users scroll, type, and tap. Using that data, Neuro-ID can identify fraudulent users before they create an account. It's built for banks, lenders, insurers, and e-commerce players."The train has left the station for digital transformation, but there's a massive opportunity to try to replicate all those communications that we used to have when we did business in-person, all those tells that we would get verbally and non-verbally on whether or not someone was trustworthy," Neuro-ID CEO Jack Alton told Insider.Founded in 2014, the startup's pitch is twofold: Neuro-ID can save companies money by identifying fraud early, and help increase user conversion by making the onboarding process more seamless. In December Neuro-ID closed a $7 million Series A, co-led by Fin VC and TTV Capital, with participation from Canapi Ventures. With 30 employees, Neuro-ID is using the fresh funding to grow its team and create additional tools to be more self-serving for customers.Here's the 11-slide pitch deck a startup that analyzes consumers' digital behavior to fight fraud used to raise a $7 million Series AAI-powered tools to spot phony online reviews Saoud Khalifah, founder and CEO of Fakespot.FakespotMarketplaces like Amazon and eBay host millions of third-party sellers, and their algorithms will often boost items in search based on consumer sentiment, which is largely based on reviews. But many third-party sellers use fake reviews often bought from click farms to boost their items, some of which are counterfeit or misrepresented to consumers.That's where Fakespot comes in. With its Chrome extension, it warns users of sellers using potentially fake reviews to boost sales and can identify fraudulent sellers. Fakespot is currently compatible with Amazon, BestBuy, eBay, Sephora, Steam, and Walmart."There are promotional reviews written by humans and bot-generated reviews written by robots or review farms," Fakespot founder and CEO Saoud Khalifah told Insider. "Our AI system has been built to detect both categories with very high accuracy."Fakespot's AI learns via reviews data available on marketplace websites, and uses natural-language processing to identify if reviews are genuine. Fakespot also looks at things like whether the number of positive reviews are plausible given how long a seller has been active.Fakespot, a startup that helps shoppers detect robot-generated reviews and phony sellers on Amazon and Shopify, used this pitch deck to nab a $4 million Series ANew twists on digital bankingZach Bruhnke, cofounder and CEO of HMBradleyHMBradleyConsumers are getting used to the idea of branch-less banking, a trend that startup digital-only banks like Chime, N26, and Varo have benefited from. The majority of these fintechs target those who are underbanked, and rely on usage of their debit cards to make money off interchange. But fellow startup HMBradley has a different business model. "Our thesis going in was that we don't swipe our debit cards all that often, and we don't think the customer base that we're focusing on does either," Zach Bruhnke, cofounder and CEO of HMBradley, told Insider. "A lot of our customer base uses credit cards on a daily basis."Instead, the startup is aiming to build clientele with stable deposits. As a result, the bank is offering interest-rate tiers depending on how much a customer saves of their direct deposit.Notably, the rate tiers are dependent on the percentage of savings, not the net amount. "We'll pay you more when you save more of what comes in," Bruhnke said. "We didn't want to segment customers by how much money they had. So it was always going to be about a percentage of income. That was really important to us."Check out the 14-page pitch deck fintech HMBradley, a neobank offering interest rates as high as 3%, used to raise an $18.25 million Series ARead the original article on Business Insider.....»»

Category: topSource: businessinsiderMay 17th, 2022

Transcript: Luana Lopes Lara

     Transcript: Luana Lopes Lara The transcript from this week’s, MiB: Luana Lopes Lara, Kalshi, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This… Read More The post Transcript: Luana Lopes Lara appeared first on The Big Picture.      Transcript: Luana Lopes Lara The transcript from this week’s, MiB: Luana Lopes Lara, Kalshi, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This week on the podcast, I have an extra special guest, Luana Lopes Lara is a co-founder of Kalshi. They are a derivatives trading marketplace, where you can go and trade event contracts on such disparate occurrences such as COVID-19, economic outcomes, interest rates, Federal Reserve, politics, climate and weather, culture, the Oscars, the Grammys, science and technology, all sorts of really fascinating places. They are the only such marketplace that has been approved for the sort of events trading by the Commodity Futures Trading Commission, the CFTC, which makes them both fascinating and — and unique. There’s nothing else like them. This provides a way for individuals and institutions to hedge all sorts of really interesting events. And as opposed to having think about, well, if this happens, what’s the ramification in gold, or oil, or inflation, or interest rates, you can actually bet on that exact event and hedge your business or your portfolio. It’s really quite fascinating. I thought this was really interesting conversation, and I think you will also. So with no further ado, my conversation with Kalshi Co-Founder, Luana Lopes Lara. ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. RITHOLTZ: My special guest this week is Luana Lopes Lara. She is the co-founder of Kalshi, one of the only derivative trading marketplaces that allows the trading of event contracts in order to hedge against major business and political events. Kalshi is the only marketplace to receive approval from the Commodity Futures Trading Commission, who regulates the trillion-dollar derivatives industry. Luana Lopes Lara, welcome to Bloomberg. LARA: Thank you so much. I’m very happy to be here. RITHOLTZ: So — so let’s start just with that unusual intro, you’re the only CFTC-approved way to trade on the outcome of events. Explain that a little bit. LARA: Right, exactly. Kalshi is a financial exchange that allows people to trade on the outcome of a lot of different events. So things from, will inflation keep going as high as it is right now, will the Fed raise rates to like, well, 2020 with the hottest year on record? And what really sets us apart is that we’re the only — the first and only ones regulated by the CFTC to do this in the United States. RITHOLTZ: So — so let’s talk about that because I love the story about you guys. You and your co-founder, you start calling attorneys, and one day, you end up calling like 60 or 70 lawyers in a single day. And pretty much every one of them said, “People have been trying to do this since the 1980s. It’s never been approved. Just forget about it, it’s not happening.” Tell us about that. LARA: Right. So we really wanted to build Kalshi the right way. So to view the exchange that is sustainable and — and can be a pillar of the financial world, we wanted to make this really big, get the right partners on board, and really try to build something that’s going to outlast CME. You know, like, CME is around there for like 150 years. RITHOLTZ: Right. LARA: And the way to do that, for us, was to build a proper financial exchange, to build this right. And we knew that getting regulated was the first step and like figuring out how to do it right. But obviously, me and my co-founder were both computer scientists, we knew nothing about regulation. So we sat down and put on a spreadsheet the names and — and emails of – of 65 different lawyers that we thought maybe could be related to this, and we called one by one. I think we split who was going to call who. And all of them were just like, “That’s not going to happen. The CFTC won’t allow this. It has already — they already said no to this in the past.” But because of a friend of a friend of a friend, we ended up getting to Jeff Bandman, who works with us till today. He’s an ex-official of the CFTC, and he really understood the Commission and – and helped us — started — helping us start navigating the entire situation. And yeah, it was two years of — of — of that entire engagement and iteration of the CFTC with all their core principles and concerns that they had, to address them and — and really ended up getting regulated in November 2020. RITHOLTZ: So it sounds like it wasn’t so much that the CFTC was against the idea of event contracts in order to hedge on these circumstances. They just didn’t like what was presented them previously, over the previous 40 years, or — or did something change that they suddenly said, “Oh, we used to think this was a bad idea. Now, we think it’s a good idea.” LARA: I think it was — it’s more of the first. I think it was about presenting to them why we thought event contracts were so important, and how they could really be used for hedging. And every day hedging like — like retail, and Americans every day can hedge things like inflation, like rates, risks that we see and read about like in the news or on TV every day. And it was really like presenting to them and getting them to comfort with how these markets work, how they weren’t easy to manipulate, how the rules could — could operate. So really getting them to comfort with how the exchange, the markets, and all of our contracts could — could operate, and that’s what took that long. It wasn’t — in my opinion, it was more like explaining what we wanted to do. They were fantastic from the beginning to really listening and working with us. It wasn’t that they were just like, “No, we’re never going to do this.” RITHOLTZ: I — I think it’s interesting that it took people from outside of the world of finance to bring an idea into finance from a technology perspective and say, “Whatever the logistical hurdles we have to meet in order to receive regulatory approval,” that wasn’t like an ideological problem. To you, it was a, “Well, this is a logistical problem that we have to solve. And once we solve it, we can get this going.” So how long did the back and forth with the CFTC take to get approval? LARA: Yeah. No, it was two years or two years and a half. RITHOLTZ: Wow. LARA: And yeah, we used to say it’s like we were climbing a very high mountain, and then as we started climbing more, we would see it’s actually twice as high and it would keep – and it would keep multiplying. Because the thing is we would go to them and — and they would have concerns and issues, so we would go back and solve the issues. A lot of it, as you mentioned, was related to technology. We did analysis on similar markets on what we could do, and viewed the surveillance systems and all of those things, and going back to them, and then they were like, “Okay, that’s fine.” But we have all these other issues now, and then we would go back and — and figure them out and — and — and do that one by one. It was like walking in the desert a little bit. We didn’t know where — where the end was. But it ended up working out. RITHOLTZ: So — so let’s talk a little bit about your platform. This is unlike futures and it’s unlike derivatives, and that when you are purchasing a contract, you are putting up the full dollar amount. It’s not like where you’re putting up 10 cents on the dollar, or one cent on the dollar. If you’re making a $1,000 bet, you are posting a $1,000. How much did that factor influenced the CFTC that this wasn’t just going to be reckless speculation and — and people fooling around, this was really hedging? LARA: Right. So we are fully cash collateralized. So every — as you said, every dollar that you can lose or every dollar that you — you trade, you have to have it with us before. And I think this really helps with the safety of the platform and it really started from us. We really want to start in a way that is very safe for everyone, and we can really understand the system before going like too far ahead. And we really see this as very important. So all the funds are fully cash collateralized. But obviously from — from the CFTC perspective, it adds to their comfort to the fact that there can’t be like leverage or margin or more risk added to the system, that all the money is collateralized, and the retail is protected because of that. RITHOLTZ: So equities, you can put up half the – the dollar amount, 2 to 1, futures or something like 10 to 1. Options, if you go out of — out of the money and far enough into the future, it’s — it’s a 100 to 1. Is there ever a plan to move away from the 1 to 1, dollar for dollar, maybe not option 100 to 1? But certainly, margin and equity market seems to be pretty reasonable at 2 to 1. LARA: At the moment, we’re really focused on retail and fully cash collateralization — fully cash — being fully cash collateralized. But at — in the future, I think our goal is to be like the New York Stock Exchange for events. So having — being really the — the central place of the ecosystem, and having like different brokers and institutions, hedge funds, market makers plugged into us, the exchange. At that point, it would make sense to start considering something like that. But right now, we’re completely focused on retail and having it fully cash collateralized as well. RITHOLTZ: Right. So once — once it becomes a big institutional exchange, then — then you can explore that. LARA: Right. RITHOLTZ: So since it’s retail, let’s talk a little bit about retail. Gamification is a real big issue. We’ve seen Robinhood do this. We’ve seen a number of other sports gambling platforms doing this. What are your thoughts about gamification when it comes to events trading? LARA: Yeah. I think the gamification question is a very interesting one, because I think it’s less about the asset class and more about the actual platform and the mechanics. So for example, you can trade equities on Robinhood, or Charles Schwab. The conversation about gamification is a lot more on Robinhood than on Charles Schwab, even though the underlying like is the same, you’re trading equities. So we really believe event contracts are — have a very big economic purpose and can be used for hedging and all of those things that we — we talked about. And the gamification would come only in the platform. But we’re very, very focused on building a platform that’s safe, easy to understand and to use, but not — not gamified. RITHOLTZ: So let’s go over some of the type of events that you guys trade. You could — you can make bets on COVID-19 and vaccination, on economics, inflation, mortgage rates, politics, climate and weather, world culture, science and technology. Let — let’s — let’s take some examples from this. I’d love the idea, will the 30-year fixed rate mortgage be above 3.9% on April 15? In other words, if I’m buying a house and closing on it, and concerned that rates might rise, I could take a trade against that and hedge that position. And I don’t have to be a billion-dollar hedge funds. I could just be someone buying a house. LARA: Exactly. I think all of our contracts have economics purpose, and they can really be used for hedging. For example, all of our COVID markets, during the Omicron wave, you could really see like even before the news started reporting it, the amount that it was taking up of. And then we’ve talked to the users, and they are, “Oh, wow, like I — I might not be able to go back to school. I want to hedge like that — that situation and all of that.” So a lot of the contracts I’m very interested in, for example, is the half point rate hike for — for March. I think it’s — it’s a market that went up a lot during, I think, one of the — there was some news that that it was going to go up … RITHOLTZ: Right. LARA: … by that. And then it went down again. And — and other ones are GDP and inflation, really just getting into the economic situation we have nowadays. RITHOLTZ: Number of Americans — so these are all “yes or no” contracts that — that’s … LARA: Right. RITHOLTZ: … pretty clearly determined. It’s black and white. Will 254 million Americans be vaccinated by May 1st? But I saw a contract, will America achieve herd immunity by September 1st? Who is the determiner of whether or not herd immunity — how do you define those terms? LARA: Yeah, that’s a great question. All of our markets are like legal binding documents. So they’re like 40 pages determining what the real rules are, to really make sure that there’s no room for indeterminacy or anything of the sort. So this market, specifically, I’m not exactly sure. I think it’s definitely the CDC or some number around there. But if you – like, all of our rules, if you go to our rulebook, it has very specifically defining where — which number we’re using, how we’re using, which target, if it has to be above or below a certain number, and it ends up being very determined. But for COVID markets, we’re using CDC numbers for — for some of our sources. RITHOLTZ: So I mentioned world culture, that’s kind of interesting. Is there a lot of activity in who’s going to win Best Picture or who’s going to be the Best Actress at the Oscars? How — is that a seasonal thing when — each year or how does that trade? LARA: Yeah. Launching the Oscar markets were – it was very important for us because they were the very – very first regulated derivatives, I guess, in the entertainment industry and Academy Awards. We have traded more than 150,000 contracts … Ryan Wyrtzen: Really? LARA: … in the Oscars so far. RITHOLTZ: Wow. LARA: … and it’s only been a couple of weeks. And we really expect the — the trading there to — to be a lot higher, closer to — to the ceremony … RITHOLTZ: Right. LARA: … or during the ceremony. But it’s interesting, a lot of people say that the Oscars are — are dead or irrelevant. But the movie industry is so big too nowadays, that there’s so much — so many people that are so impacted by the results of these awards, and things of that sort. And yeah, on the seasonality point, I think that the interesting thing about the entertainment industry is that you have awards, for example, like the Oscars or the Grammys, and we also have markets on. But you have weekly things, for example, album, sales numbers … RITHOLTZ: Right. LARA: … Billboard charts, and things like that, that we offer markets on every week and have a lot of room for like modeling and alpha, and things of that sort. RITHOLTZ: So — so I know studios spend a lot of money on marketing and promoting, leading up to the Oscars. Because if a — let’s say a small independent film wins Best Oscar, it seems a huge — it gets a huge uptick in subsequent box office and — and other sales or streaming rights. I’m wondering if part of their marketing plan is going to include hedging on Best Oscar. They can not only spend, you know, a million dollars on promotion, they could buy a contract that offsets not winning Best Oscar. LARA: Yeah, that’s our goal, is to get all of them to come and really hedge all this risk that they have. RITHOLTZ: So — so where’s the volume today? Where are you seeing the most amount of activity? Is it — is it inflation and Fed activity? Is it GDP? What — where — where’s all the money flowing in on your platform? LARA: Right. It’s actually interesting, because when we launched, we really expected it to be category specific or concentrated in specific categories or economics, entertainment, transportation, technology. But it really is about what — what the news are. So what’s top of the New York Times? What’s in the newspaper the whole day? And what’s in the news? And right now, as you mentioned, the Fed March meeting is — is very — is a very — it’s a market with a lot of … RITHOLTZ: It’s live. It’s hot. LARA: Right. It’s very hot. Yeah, for sure. But for us, we’ve — we’ve seen this, like news-based activity lot, like the Omicron wave, as I told you. When the infrastructure bill was passing, there was a lot of activity over there; or when Jay Powell was going to get renominated, there was a lot of activity in that market. So it’s really about what’s in the news and what people see their risks associated with, and where they think there’s most room to make money. And right now, the Fed rates, people are really disagreeing on that. And there’s a lot of volume and volatility on that market. RITHOLTZ: So — so you guys didn’t exist when Brexit had come up. That was before your time. But you have been around with Russia and Ukraine, and I noticed there’s not a lot of activity there. Why not do a futures contract on will Russia — it’s obviously too late today. But in January or December, you could have done a “Will Russia invade Ukraine by February 1st, March 1st, April 1st?” LARA: Right. We avoid any contract that’s related to war, terrorism, assassination or — or violence of any kind. We don’t want to have those — those markets on our platform. But we do have markets that are adjacent to that. So for example, markets on the price of ruble or — or the price of oil, natural gas in the U.S. and Europe. So we have markets that are adjacent. We just don’t want to have markets directly related to war, terrorism, assassination, or those things. RITHOLTZ: Makes sense. You don’t want to incentivize anybody to misbehave. LARA: Right. Exactly. RITHOLTZ: In the past, I’ve heard futures described as a marriage between hedgers and speculators. So if you’re an airline, you want to hedge the price of oil. But someone got to be on the other side of that trade, so incomes speculators. Are you seeing that same sort of relationship amongst Kalshi clients? LARA: Yeah. I think Kalshi is one of the most pure forms of exactly this hedging and speculation match. I think one – a very simple example to understand this, if you think of rain in New York City, right? Like, you can have like an ice cream truck buying – an ice cream truck will be really — really hit if — if it rains for like a lot of days, because people will buy less ice cream. So they can buy a “yes” contract to really hedge that offset that they have. On the other side, there can be someone that is going to speculate, and seeing there’s a forecast for 20% rain in the next couple of days and they are willing to take the — the “no” side because they think that there’s only a 20% chance it’s going to rain and — and it seems like they can make money. So then you can really have a match of like people that actually need to have a contract for hedging, almost like insurance, and people who – who because of forecasting and probability and — and what they think the fair value is, is going to take the other side. And then at the settlement, for example, if it does rain, it ends up being that everyone is happy because the speculator makes money, because they were correct. No. RITHOLTZ: Right. LARA: Right. RITHOLTZ: The — the hedger is protected against the event. LARA: Right. Yes. Right. RITHOLTZ: And the speculator won the trade. LARA: Right. Exactly. And exactly, you — you got it totally right. RITHOLTZ: So — so let – that raises a really interesting question. Who are your clients? Are they hedge funds and institutions? Are they retail investors, or is it a whole spectrum of people? LARA: We really focus now on — on retail. And our — our biggest amount of users right now is the traditional option trader, like informed retail options traders. But the way that we see this — this growing is we want to keep growing within the retail trading and options trading community. And then our next step is getting brokerages on board so that you can now go and trade on event contracts through your interactive brokers or e-trade account. And then after that, building enough liquidity to start bringing more prop shops in and — and smaller firms and then hedge funds and — and then institutions, and maybe we can have maybe a Burger King hedging, I don’t know, price of plastic straws or something like that. RITHOLTZ: So — so the platform eventually becomes an exchange? LARA: Exactly, exactly. I think we — we see it as a buildup of liquidity from — from retail that’s like smaller amounts, but — but — but higher velocity to — to hire bigger and bigger institutions, all the way to become like a full-fledged financial exchange like the New York Stock Exchange or CME. RITHOLTZ: So let’s talk a little bit about how you guys, you and your co-founder, created Kalshi. You kind of were the opposite of Facebook. You know, Mark Zuckerberg famously said, “Move fast and — and break things.” Companies like you and Coinbase and BlockFi spent a lot of time getting approval from the regulators. Tell us a bit about why you took that approach as opposed to moving fast and breaking things. LARA: Yeah. I think a lot of times people are making the short-term trade-off for speed. And in finance, I think it’s different. You can – obviously, you go to market faster if you choose the unregulated route. But with finance, there’s been like a lot of historical examples of unregulated platforms getting meaningful volume and then being shut down by regulators, because they weren’t properly regulated and doing things right from the start. We really think that the opportunity really shrinks if — if you don’t take regulation into account, because then you can’t get real money in the platform. You can’t get real good partners, as we just talked about brokers, market makers, hedge funds onboard. Sometimes you can’t even offer products to U.S. customers. It really boxes into something small, very quickly. And that’s — for us to be the New York Stock Exchange for events, because that’s our goal, the only way to do that was to do it right from the start, going through the regulated path, and — and eating on the cost of the two years and a half waiting, but — but making sure that we’re set for success. RITHOLTZ: So your — your co-founder, Tarek Mansour, he was an equity derivatives intern at Goldman Sachs in 2016. The same year you were a quantitative trader at Citadel Securities. So you guys both had a pretty bright career path. Had you not decided to go out and launch this whole new platform? Tell us what motivated you to say, “Goldman, Citadel, that looks too easy. Let’s — let’s launch a — a new startup.” LARA: Well, that — that’s funny because actually most of our MIT time, we were both very focused on just getting finance jobs and never even thought about starting a company. But yeah, we were both very interested in math, financial history, finance from — from the very start of — of our school years and — and we worked with various financial firms. As you mentioned, Tarek worked at Goldman. I worked at Bridgewater, Five Rings Capital, which is a small prop shop, and then Citadel Securities. At those internships, we really saw the behavior that we say is the Kalshi behavior over and over again. It’s like firms making trading decisions based on events. As we think the European Central Bank is going to raise rates, let’s take this massive position, or really find the structure to make that work. But the idea really crystallized in our heads when we were working, both together, at Five Rings. And there, we were playing this game almost the whole day. It’s called the “maker market” game that people — that everyone would be putting like bids and offers in the probability of something. And then the other person could only tighten the spread or — or trade against you. And there was a single — there was a day that we were just trading — playing this game the entire day. And then I — I don’t remember exactly what market it was, but I took a massive position on Trump doing something. I don’t remember exactly what it was. And everyone thought I was crazy and debated me a lot on that. But I ended up being right. And then when I was — we were walking back to — to where the interns were staying, it was stuck in my head, like why isn’t there a place for people to do this? Like, we love doing this? We do this the whole day. Like, we see in every place we work at, like very big positions, people are trading based on events. Like, why is there no place to do this? And then I sat down and started talking to Tarek about it. Like, why isn’t there — why don’t — why don’t we do it? And we stayed the whole night up talking about it. And it was just something we were so passionate about from the finance side, the product side, everything we always loved. And if there was going to be someone to figure it out, it was going to be us. It just then leaves us the idea for another six months, up until we were like, OK, like, this is a calling, we have to do it. RITHOLTZ: So — so when you say your desks are – and you guys are trading back in 2016, trading events, you couldn’t credibly bet any sort of volume on events like Kalshi does today. You had to go to secondary or tertiary markets. So you’re betting on gold if you’re thinking about inflation. LARA: Exactly. RITHOLTZ: You’re betting on oil if you’re concerned about war. It’s – it’s always once removed, which raises the issue. Even if you’re right, you may not express itself in a market the same way that the bet was supposed to go. LARA: Right. Exactly. I think that in the beginning of COVID, you had this exact thing happening with — with the economy and how you would think about the S&P. And the beauty about event contracts is that it’s direct exposure in what you think. There’s not like a lot of variables for you to keep track of or — or think about of things that can go wrong. That’s why we also think it’s very – it’s the most like natural way of investing, especially if you think for retail. They can’t like keep track or have full desks of people trying to understand what’s going on. It’s a lot easier to do when you have one opinion, and you have a very clear way to get exposure on what you believe in being right or wrong. RITHOLTZ: So — so you’ve spoken about the gambling industry and how incentives are somewhat cloudy. How does your platform correct for that? LARA: Right. The key part about gambling is that the house takes a position in the bets. So the house has an interest on the outcome of — of the bet or — or the market, if you want to call it that, but it’s more just the bet. We are just a financial exchange. So we — you can think of Kalshi a matching agent. We match people that believe something will happen with people that believe something will not happen. If they have equivalent prices, we match them. So we have no interest in whether the market will go away a certain way. We do have an affiliate trader that’s there to provide liquidity so that people can trade, especially as we start the exchange. But the exchange doesn’t take any positions ever. We’re simply matching other participant orders. So there’s no conflict of interest between us and our members. RITHOLTZ: So — so when you look at a racetrack and the odds are set on horses, those odds don’t quite add up and the shortfall is the house take. So it’s never quite 50/50. What does it cost to trade on this platform? What — what’s the — so in other words, if I’m betting a $100 that something is going to happen and I win, do I get $200 back or how — how does that work? LARA: Right? So — so the way that it works is that the “yes” and the “no” prices are from 1 to 99 cents, and whoever is right gets $1. So let’s say I’m buying a “yes” for 40 cents, it means there’s someone buying a “no” for 60 cents. And if I am correct, I make $1, which means I’m profiting 60 cents which is from my counterparty, RITHOLTZ: Right. What – what’s the cost of that trade? Meaning, how does Kalshi make money, and I assume since it’s fully collateralized, there’s a float. That’s going to be a good source of revenue over time. LARA: We don’t make money on float. All of our — our — all of them, user member funds are in a fully regulated CFTC Clearinghouse, which is FTX derivatives, the U.S. derivatives, they are clearinghouse. And we make money on a transaction fee. So we have a small transaction fee that varies on the price of the contract. RITHOLTZ: But what is it averaged ballpark? What does that cost? LARA: I think it’s less than 1%. RITHOLTZ: All right. So, we will have a conversation after we’re done, and I will show you that – I think it was Schwab. When they moved to free trading, their float became 57% of the revenue. So we’ll have a conversation. We’ll see if we can help raise your — your revenue target and – and we’ll go from there. Because especially — it’s one thing if you’re looking at events that are days and weeks out. But if you’re making bets on will 2020 be the hottest year in history, hey, you’re sitting with that money for 12, 11, 10 months. There’s a lot of top line to be gained from — from a little float. We’ll — we’ll work that out with the CFTC. That will be — that will be easy. You guys raised $36 million in a Series A. Sequoia Capital was the lead, probably the most storied venture capital firm in Silicon Valley. Charles Schwab, not the entity I was talking earlier about Charles Schwab in the float. But Mr. Charles Schwab was an investor. Henry Kravis is an investor. Silicon Valley Angel is one of the early investors. And were you with Y Combinator when you were first launching? LARA: Yeah. RITHOLTZ: So — so that’s quite an esteemed list of — of people who said, “Hey, there’s some value here.” Tell us a little bit about the experience at Y Combinator and then doing an A round with some really boldface names. LARA: Yeah. Our experience at Y Combinator was actually very different from most of the other startups. Like, we were measuring regulatory traction, and other startups are measuring user growth, or revenue or — or things — things of that sort. Yeah, and about the Series A, getting a DCM was — was a key part of — of that Series A. I think Kashi is really one of those asymmetric type of investments. We are going to face obviously a lot of challenges and — but we — if we execute against those challenges, we’re going to have massive outlier potential. And we were really trying to find partners and investors that really understood the long-term vision of the company, and share that obsession that we have with event contracts and — and building this entire trading ecosystem. So Alfred from Sequoia is one of those people. He — he did a PhD in these types of markets. He really, really understands it and sees the potential. And obviously, it’s — it’s a Sequoia Sequoia, as you said. RITHOLTZ: Right. LARA: So that was – that was definitely something we thought about. But — but Alfred, specifically, has historically invested in a lot of like paradigm shifting companies like Airbnb and DoorDash. So we really thought it was a good — it was a good fit. And then after Sequoia was our lead investor, we were really trying to fill the round of – with Wall Street investors that could really help us navigate this industry. So yeah, Tarek, my co-founder, he’s obsessed with barbarians at the gate. So — so when … RITHOLTZ: Hence, Henry Kravis. LARA: Right. So when — when one of our seed investors, Ali Partovi, said he could intro and — and we could talk to Henry, I think Tarek was just like absolutely fascinated. And they had a fantastic conversation. He was very interested from — from the very beginning. And with — with Charles Schwab, it was something similar. It was also Ali Partovi introing us to — to him, also very interested in from the start, and he actually told us that our early days at Kalshi looked very similar to his early days starting Charles Schwab. So that was very exciting. And — and yeah, they help us so much till today so it’s fantastic. RITHOLTZ: The funny thing about Schwab is people don’t realize the guy you see with the gray hair in commercials, that’s Charles Schwab. That’s not an actor. LARA: Right. RITHOLTZ: He really exists and has been running the company. Now, I think he’s chairman. But that was really him for — for a long time. So — so let’s talk a little bit about event hedging. And I like this quote, “These markets are a little like an aggregator of public opinion in real time.” So — so what are the implications of this? And is that the sort of stuff your lead investor at Sequoia was studying when he went to school? LARA: Right. Yeah, this is a very important part of our vision. Over time, we really want Kalshi to become the source of truth for forecasting these events that we have markets on. Because of the prices at Kalshi go from 1 to 99 cents, they directly translate to the probability of the event happening. So let’s say the market might be saying there’s a 20% chance there’s a recession this year. It means that 20 cents means that there’s a 20% chance that the market believes there’s a 20% chance … RITHOLTZ: Right. LARA: … that there will be a recession this year. And the amazing thing is that there’s a lot of theoretical and empirical evidence that they are the most effective and most accurate ways of forecasting the future. They’re way better than polls, way better than like pundits on — on the news, trying to say what’s going on. And it’s mainly for two reasons. I think the first one is because when people put money where their mouth is, they are more — more likely to say what they really think and actually do research and everything. And the second one is that markets really aggregate the wisdom of the crowds. You’re getting a lot of different people’s opinions, when they put money behind their opinion, and really aggregating data, and which makes this a very powerful tool. And I mean, any market lover understands what I’m saying. And yeah, making — and — and part of our — our vision and what we really want to do long — long term is make these forecasts core to people’s lives. It’s really part of our mission. With — with event contracts becoming more widespread, we really hope that people will use data in their lives to prepare better for the future, address uncertainty, inform themselves better, and like try to address a little bit of the very biased world and not very data-driven world that we live in nowadays. So we’re trying to get started with that. We’re really trying to get — we have market tickers like any other equity or things like that. We have tickers for all of our markets. So we’re trying to have tickers and prices to be used by news and things of that sort. So we really try to get this very important data, that we believe is very important data out there. But for Alfred specifically, I think he was doing more than like mathematical and like research. He was doing a stats PhD, so somewhat related to this, but not really on the — on the — on this side, but yeah. RITHOLTZ: So — so let’s — let’s talk a little bit about prediction markets that are out there. Historically, they’ve only done a so-so job, partly because they’re not very broad. They’re not that very deep, and the dollar amounts that are traded had been modest. I saw an overlay of about half a dozen different prediction markets before the Russian invasion of Ukraine. And you would think they would all be kind of similar, but they weren’t. They were all over the map. Do you have to get to a certain scale that will fix that problem of prediction markets being kind of thin and easily — I don’t want to say manipulated, but one big trade really has an impact on — on how those markets trade. LARA: Right. Exactly. I think we need a — a base level of liquidity and — and volume for — for the forecast to really work and be really useful. And a lot of these like other prediction markets out there, as — as we talked about, they’re unregulated. They have — they’re very new. They just pop up, especially the crypto ones every other day. And it’s hard to build liquidity and real proper volume like that. But we really think that prediction markets are the way to go to have these — these very good forecasts of — of events, but it needs liquidity and needs volume, and that’s what we’re working on. RITHOLTZ: Really kind of interesting, which raises the question, how are you going to scale this up? How are you going to get to 100 million and then a billion, and then who knows what from there? LARA: Right. We have a lot of ways to — to scale the exchange. It’s kind of what we talked about with — with building up liquidity. Right now, we’re really focused on retail. So getting — we have a lot of option traders, or like what we call informed retail traders in the platform, trying to go in more – deeper into different communities, and trying to get them in to test the platform, things of that sort. And then the next step for us is getting brokers in to offer our markets in their platform, so e-trade, interactive brokers, all of those. And then bringing up the volume, we can bring up like actual liquidity providers, prop shops, hedge funds, and then up until, I guess, insurance companies even offloading some risk or — or like actually big institutions, natural hedgers, bringing them in. So the way that we’re seeing it is really starting to build of retail with getting more and more of the current users that we have, which are option traders, and having more retail as we go to the — to the, I guess, brokers. RITHOLTZ: So — so how big can this get? I mean, is this ever a billion dollars a month? How — how large can this sort of event hedging scale up to? LARA: Right. So event contracts are a lot more like tangible, relatable and — and more direct, as we talked about, then all these other assets that — that preceded it. So we really think when we actually plug it in the financial ecosystem, it can properly scale. Obviously, it takes a lot of time to get there because we need to view the entire ecosystem around events. RITHOLTZ: Right. LARA: It’s a completely new thing. But once it’s properly plugged in the financial system, I can give you some numbers to give some idea, right? I think you mentioned that in the beginning of the CFTC regulating a trillion-dollar industry, like grain futures are $7 trillion industry. RITHOLTZ: Wow. LARA: Commodities, 20 trillion. Interest rate swaps are around, I think, $500 trillion. So not exactly how big the market is, but I think as we expand event contracts, it definitely has a potential to be one of these. RITHOLTZ: Right. Interest rate swaps are $500 billion or trillion? LARA: Trillion. RITHOLTZ: Really? LARA: Right. RITHOLTZ: That’s the notational, nothing is going to get offered? LARA: Right. Yes. You got that point. RITHOLTZ: That — that’s a giant amount of money. LARA: Right. RITHOLTZ: So — so really, startups have a tendency to have this defining moment in their lifespans, where they sort of either pivot or just a moment of clarity, and you could see the whole roadmap laid out. Did you guys have that sort of defining moment at Kalshi? LARA: I would say the biggest — the earliest defining moment we had was actually — before we really started the company, we went to a Y Combinator hackathon. Because before we were like fascinated by it, but we didn’t think it was like going to work. It’s like — it seems so complicated, and like, are we crazy? I think that was the big question in our head, like are we going crazy over here? Then we went to Y Combinator for a hackathon. And there were like these teams with like bunch of servers, crazy computers like — and it was just me and Tarek with our like Macbooks, like try to — to code like a demo of what we were talking about. And then we first presented to Michael then, the CEO of YC and he really didn’t like what we were saying from the beginning. He cut us. Like the first five seconds, he’s like that, like “This is illegal,” like, “What are you doing?” And then we will get very upset. We went in like we – I think we — Tarek even started drinking beer. He’s like, “There’s no way we’re going to be in the Top 10,” which had to present again. And we ended up being in the Top 10. We presented again, and then we ended up being in the Top 3, which were the winners of the hackathon. And I remember that night, when we were going back to — to our friend’s place where we were staying in San Francisco for the hackathon, we were like, “Wow, like maybe we aren’t crazy. Like, we should — like maybe like people believe in what we’re doing.” And it was a very like happy moment for us. And I think right after that, we actually got into the Y Combinator batch. And it was one of the happiest moments we’ve — we’ve had — we’ve had of the company. So that was really like motivating and encouraging, because as I told you, we never thought about being founders. We thought about being like he was going to be — we were both going to be traders full time. So it was like a big shift for us. So that was a very exciting moment. RITHOLTZ: Really interesting. Let me throw a couple of curveballs at you. You and your co-founder, Tarek, both were named to the Forbes 30 Under 30 list in — in the finance category. Tell us a little bit about that. What was that experience like? LARA: Yeah. No, it was very excited. We were very honored to be — to be — to be nominated, especially being like the head up of the — of the finance category. We were really excited after all the work we’ve done. And actually, a funny story is that because of the Forbes 30 Under 30, I went viral in Brazil for a little bit, because the Brazilian Forbes wrote a — wrote a piece about how a Brazilian was in the American Forbes 30 Under 30 and that — because it’s very rare to have Brazilians in the list here. So that was — that was — that was a funny story. But yeah, because of the Forbes 30 Under 30, we also ended up ringing the opening bell at the NASDAQ, which was very exciting. RITHOLTZ: Interesting. LARA: Yeah. RITHOLTZ: And one more — one more curveball. You were a ballet dancer with the Bolshoi. You studied ballet. Tell us about that. LARA: Right. So very different from what I do now, for sure. But I’m from Brazil, originally, and I just came to the U.S. for college. And most of my life before college, I was split between ballet and school. What — what I really loved about ballet was intensity of it all. It was extremely hard to get to the top. It’s extremely competitive. And there’s nowhere to hide, you need to be completely on, you need to give it your all. And yeah, and I — I studied at the Bolshoi Ballet School and it was extremely intense. And — and we had to be extremely disciplined, like measuring our food down to like a four puffs of strawberry before this rehearsal, to be able to get there. But that was –that was one part. And the other part, my — my parents are both engineers and have stem backgrounds. So I was surrounded by that outside of ballet, doing like Math Olympiad and all of that, I also had to get 100 on everything on the math and science side. So I used to do like normal school, I guess, from like 7:00 a.m. because Brazil school’s hours are different. so 7:00 a.m. to like 1:00 p.m., and then ballet from 1 – like 1:30 p.m. to like 9:00 – 10:00 p.m. And then I would actually go study. So that was a very intense part of my life, but I think it really set me up for — for being able to go to MIT and — and — and enjoy everything there. And it’s something that Tarek is very similar to me, he was actually a professional skier before going to college. And — and we have very similar backgrounds. And I think that level of intensity and — and discipline is really what helped us get through the regulatory process and be where we are today. So tough times, but it’s good now. RITHOLTZ: I — do the same thing. I measure my food input down to the quarter strawberry. And you could see it’s how I maintain my girls. So — so we only have certain amount of time left. Let me jump to my favorite questions that I asked all of our guests, starting with what kept you entertained during lockdown? What were you streaming, watching or — or listening to? LARA: Right. I listened to all and — and I’m very into American politics nowadays. So I’m finishing up the 10 American Presidents podcast. But on TV, I think I’m more mainstream. So I just love Succession, House of Cards, West Wing, and so on. RITHOLTZ: Let’s talk about your mentors who helped shape your career. LARA: Right. So I think at MIT, I had two professors that were very impactful in my career and to me. I think the first one was Patrick Winston. He was my advisor and professor, a lot of artificial intelligence classes. He really helped me navigate MIT and set me up to — and set my mindset to where I wanted to be, to like really psychology. And the other great mentor was Peter Kempthorne. He’s also professor of stats, and really, I started being interested in finance in his glasses. And funnily enough, he’s actually one of directors of — of Kalshi nowadays, because we kept very close contact. And we talk a lot to him about like the dynamics of markets and all the stuff we talked about. And since we started the company, I think our biggest mentors have been Michael, the CEO of YC. Up until today, he’s helped us so much. And Ali Partovi, who’s — who runs Neo, he’s one of our seed investors. And they have been really instrumental in like making us better founders, not just like making the company succeed, but better founders and how to like deal with employees, growing — like growing pains, negotiation, all of those things that, you know, like MIT nerds didn’t really know what to do. RITHOLTZ: So let’s talk about books. What are some of your favorites and what are you reading right now? LARA: Right. Some of my favorite – my favorite book is this book called “Americana,” but it’s not the novel. It’s actually the 400-year history of American capitalism. But whenever I say Americana, everyone thinks is the novel. And the other one is this book called predict — “Predictably Irrational,” which is … RITHOLTZ: Dan — Dan Ariely? LARA: Right. Yeah. And it’s — it’s very — some — it has a lot to do with what Kalshi does and I think it’s one of the early books I read on — on prediction markets and decision-making, and I thought it was a fantastic book. And at the moment, I’m finally — Tarek will be very happy to hear this. I’m finally reading “Barbarians at the Gate” after he told me for years that I should, but I barely started, so yeah. RITHOLTZ: And Americana is a Bhu Srinivasan, am I pronouncing it right? LARA: Right. He’s that. RITHOLTZ: He was a guest here a couple of years ago. I love that book. That book is just amazing. LARA: That’s book is fantastic. Yeah, it – yeah. RITHOLTZ: Those people think that, oh, all these companies were, you know, freestanding. It was a public private partnership … LARA: Right. RITHOLTZ: … for a long time. That — that is a fascinating book and I’m surprised someone, as young as you, has found it. It’s sort of off the beaten path. LARA: Yeah. No. It’s — it’s a fascinating book. It made me — especially not being American, I think it made me understand the country and how it works so well, I think, way better. RITHOLTZ: So — so this is the first time I’m going to ask this question of somebody who is so recently out of college, but you’re 25 now, is that right? LARA: Right. RITHOLTZ: So what sort of advice would you give to a college student or a recent college grad who is interested in a career in either startups and technology, or finance and derivative training? LARA: Right. I think the finance industry is very — there’s a very traditional path that people can take. And what really helped me and — and Tarek understand and — and really come up with the Kalshi idea and — and — and understand it and work on it was that we got a lot of exposure to a lot of different types of firms and a lot of different types of roles as well, like we did. I did more of the engineering side, then a little bit of the trading, then a bit of research. And Tarek did like all types of different trainings, because he also worked at Citadel, and Five Rings, and Goldman. And I think that giving yourself a lot of breadth, especially when you’re in college is very important to just understand the industry as a whole, understand when there are gaps, and — and seeing — like finding patterns, like how we found the Kalshi behavior. So I really think it’s about putting yourself out there, trying to learn different things, do different things and — and trying to get a global vision of — of what the industry is and why you want to do, and — and not be too tied to like the traditional path of like entering as like this level and then going up in a big firm and — and things like that. RITHOLTZ: And our final question, what do you know about the world of trading, and hedging, and investing today that you didn’t know, what do I say, four years ago when you guys were first starting out? You’ve been doing it since 2016, so let’s call it six years ago. LARA: Right. Yeah. So what we’re really doing is — is enabling trading and investing. But if I were an investor, what I think I would have liked to know a couple of years ago is that bold bets are — I would take a lot of bold bets. I think generally that’s – the bets that seem ridiculous at first and there’s a lot of debate, then there’s no way that it’s going to work, are usually the ones that are achieved, like the large outlier results. Definitely, I’m biased because Kashi is hopefully one — is going to be one of those bets for a lot of our investors. But I really think it’s about seeing what the world can be in the future and — and taking bold bets to get there. I think a couple years ago, I’ll be very — if I were an investor a couple years ago, I would be very scared to do that. But now, I would think that’s the way to go to really do meaningful investing. RITHOLTZ: Quite fascinating. We have been speaking to Luana Lopes Lara. She is the co-founder of derivatives trading marketplace, Kalshi. If you enjoy this conversation, be sure and check out any of our previous 400 interviews we’ve done over the past eight years. You can find those at iTunes, Spotify, wherever you get your podcast fix. We love your comments, feedback, and suggestions. Write to us at mibpodcast@bloomberg.net. You can sign up for my daily reads at ritholtz.com. Follow me on Twitter @ritholtz. I would be remiss if I did not thank the crack staff that helps put these conversations together each week. Sean Russo is my research assistant. Mohamad Rimawi is my audio engineer. Paris Wald is my producer. Atika Valbrun is our project manager. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.   ~~~   The post Transcript: Luana Lopes Lara appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureApr 19th, 2022

Check out these 44 pitch decks fintechs disrupting trading, investing, and banking used to raise millions in funding

Looking for examples of real fintech pitch decks? Check out pitch decks that Qolo, Lance, and other startups used to raise money from VCs. Check out these pitch decks for examples of fintech founders sold their vision.Yulia Reznikov/Getty Images Insider has been tracking the next wave of hot new startups that are blending finance and tech.  Check out these pitch decks to see how fintech founders sold their vision. See more stories on Insider's business page. Fintech funding has been on a tear.In 2021, fintech funding hit a record $132 billion globally, according to CB Insights, more than double 2020's mark.Insider has been tracking the next wave of hot new startups that are blending finance and tech. Check out these pitch decks to see how fintech founders are selling their vision and nabbing big bucks in the process. You'll see new financial tech geared at freelancers, fresh twists on digital banking, and innovation aimed at streamlining customer onboarding. Deploying algorithms and automation to small-business financingJustin Straight and Bernard Worthy, LoanWell co-foundersLoanWellBernard Worthy and Justin Straight, the founders of LoanWell, want to break down barriers to financing for small and medium-size businesses — and they've got algorithms and automation in their tech arsenals that they hope will do it.Worthy, the company's CEO, and Straight, its chief operating and financial officer, are powering community-focused lenders to fill a gap in the SMB financing world by boosting access to loans under $100,000. And the upstart is known for catching the attention, and dollars, of mission-driven investors. LoanWell closed a $3 million seed financing round in December led by Impact America Fund with participation from SoftBank's SB Opportunity Fund and Collab Capital.LoanWell automates the financing process — from underwriting and origination, to money movement and servicing — which shaves down an up-to-90-day process to 30 days or even same-day with some LoanWell lenders, Worthy said. SMBs rely on these loans to process quickly after two years of financial uncertainty. But the pandemic illustrated how time-consuming and expensive SMB financing can be, highlighted by efforts like the federal government's Paycheck Protection Program.Community banks, once the lifeline to capital for many local businesses, continue to shutter. And demands for smaller loan amounts remain largely unmet. More than half of business-loan applicants sought $100,000 or less, according to 2018 data from the Federal Reserve. But the average small-business bank loan was closer to six times that amount, according to the latest data from a now discontinued Federal Reserve survey.Here's the 14-page pitch deck LoanWell used to raise $3 million from investors like SoftBank.Helping small businesses manage their taxesComplYant's founder Shiloh Johnson wants to help people be present in their bookkeeping.ComplYantAfter 14 years in tax accounting, Shiloh Johnson had formed a core philosophy around corporate accounting: everyone deserves to understand their business's money and business owners need to be present in their bookkeeping process.She wanted to help small businesses understand "this is why you need to do what you're doing and why you have to change the way you think about tax and be present in your bookkeeping process," she told Insider. The Los Angeles native wanted small businesses to not only understand business tax no matter their size but also to find the tools they needed to prepare their taxes in one spot. So Johnson developed a software platform that provides just that.The 13-page pitch deck ComplYant used to nab $4 million that details the tax startup's plan to be Turbotax, Quickbooks, and Xero rolled into one for small business ownersHelping LatAm startups get up to speedKamino cofounders Guto Fragoso, Rodrigo Perenha, Benjamin Gleason, and Gonzalo Parejo.KaminoThere's more venture capital flowing into Latin America than ever before, but getting the funds in founders' hands is not exactly a simple process.In 2021, investors funneled $15.3 billion into Latin American companies, more than tripling the previous record of $4.9 billion in 2019. Fintech and e-commerce sectors drove funding, accounting for 39% and 25% of total funding, respectively.  However, for many startup founders in the region who have successfully sold their ideas and gotten investors on board, there's a patchwork of corporate structuring that's needed to access the funds, according to Benjamin Gleason, who was the chief financial officer at Groupon LatAm prior to cofounding Brazil-based fintech Kamino.It's a process Gleason and his three fellow Kamino cofounders have been through before as entrepreneurs and startup execs themselves. Most often, startups have to set up offshore financial accounts outside of Brazil, which "entails creating a Cayman [Islands] holding company, a Delaware LLC, and then connecting it to a local entity here and also opening US bank accounts for the Cayman entity, which is not trivial from a KYC perspective," said Gleason, who founded open-banking fintech Guiabolso in Sao Paulo. His partner, Gonzalo Parejo, experienced the same toils when he founded insurtech Bidu."Pretty much any international investor will usually ask for that," Gleason said, adding that investors typically cite liability issues."It's just a massive amount of bureaucracy, complexity, a lot of time from the founders. All of this just to get the money from the investor that wants to give them the money," he added.Here's the 8-page pitch deck Kamino, a fintech helping LatAm startups with everything from financing to corporate credit cards, used to raise a $6.1M pre-seed round 'A bank for immigrants'Priyank Singh and Rohit Mittal are the cofounders of Stilt.StiltRohit Mittal remembers the difficulties he faced when he first arrived in the United States a decade ago as a master's student at Columbia University.As an immigrant from India, Mittal had no credit score in the US and had difficulty integrating into the financial system. Mittal even struggled to get approved to rent an apartment and couch-surfed until he found a roommate willing to offer him space in his apartment in the New York neighborhood Morningside Heights.That roommate was Priyank Singh, who would go on to become Mittal's cofounder when the two started Stilt, a financial-technology company designed to address the problems Mittal faced when he arrived in the US.Stilt, which calls itself "a bank for immigrants," does not require a social security number or credit history to access its offerings, including unsecured personal loans.Instead of relying on traditional metrics like a credit score, Stilt uses data such as education and employment to predict an individual's future income stability and cash flow before issuing a loan. Stilt has seen its loan volume grow by 500% in the past 12 months, and the startup has loaned to immigrants from 160 countries since its launch. Here are the 15 slides Stilt, which calls itself 'a bank for immigrants,' used to raise a $14 million Series A Saving on vendor invoicesHoward Katzenberg, Glean's CEO and cofounder.GleanWhen it comes to high-flying tech startups, headlines and investors typically tend to focus on industry "disruption" and the total addressable market a company is hoping to reach. Expense cutting as a way to boost growth typically isn't part of the conversation early on, and finance teams are viewed as cost centers relative to sales teams. But one fast-growing area of business payments has turned its focus to managing those costs. Startups like Ramp and established names like Bill.com have made their name offering automated expense-management systems. Now, one new fintech competitor, Glean, is looking to take that further by offering both automated payment services and tailored line-item accounts-payable insights driven by machine-learning models. Glean's CFO and founder, Howard Katzenberg, told Insider that the genesis of Glean was driven by his own personal experience managing the finance teams of startups, including mortgage lender Better.com, which Katzenberg left in 2019, and online small-business lender OnDeck. "As a CFO of high-growth companies, I spent a lot of time focused on revenue and I had amazing dashboards in real time where I could see what is going on top of the funnel, what's going on with conversion rates, what's going on in terms of pricing and attrition," Katzenberg told Insider. See the 15-slide pitch deck Glean, a startup using machine learning to find savings in vendor invoices, used to raise $10.8 million in seed fundingBetter use of payroll dataAtomic's Head of Markets, Lindsay Davis.AtomicEmployees at companies large and small know the importance — and limitations — of how firms manage their payrolls. A new crop of startups are building the API pipes that connect companies and their employees to offer a greater level of visibility and flexibility when it comes to payroll data and employee verification. On Thursday, one of those names, Atomic, announced a $40 million Series B fundraising round co-led by Mercato Partners and Greylock, alongside Core Innovation Capital, Portage, and ATX Capital. The round follows Atomic's Series A round announced in October, when the startup raised a $22 million Series A from investors including Core Innovation Capital, Portage, and Greylock.Payroll startup Atomic just raised a $40 million Series B. Here's an internal deck detailing the fintech's approach to the red-hot payments space.Data science for commercial insuranceTanner Hackett, founder and CEO of Counterpart.CounterpartThere's been no shortage of funds flowing into insurance-technology companies over the past few years. Private-market funding to insurtechs soared to $15.4 billion in 2021, a 90% increase compared to 2020. Some of the most well-known consumer insurtech names — from Oscar (which focuses on health insurance) to Metromile (which focuses on auto) — launched on the public markets last year, only to fall over time or be acquired as investors questioned the sustainability of their business models. In the commercial arena, however, the head of one insurtech company thinks there is still room to grow — especially for those catering to small businesses operating in an entirely new, pandemic-defined environment. "The bigger opportunity is in commercial lines," Tanner Hackett, the CEO of management liability insurer Counterpart, told Insider."Everywhere I poke, I'm like, 'Oh my goodness, we're still in 1.0, and all the other businesses I've built were on version three.' Insurance is still in 1.0, still managing from spreadsheets and PDFs," added Hackett, who also previously co-founded Button, which focuses on mobile marketing. See the 8-page pitch deck Counterpart, a startup disrupting commercial insurance with data science, used to raise a $30 million Series BCrypto staking made easyEthan and Eric Parker, founders of crypto-investing app Giddy.GiddyFrom the outside looking in, cryptocurrency can seem like a world of potential, but also one of complexity. That's because digital currencies, which can be traded, invested in, and moved like traditional currencies, operate on decentralized blockchain networks that can be quite technical in nature. Still, they offer the promise of big gains and have been thrusted into the mainstream over the years, converting Wall Street stalwarts and bankers.But for the everyday investor, a fear of missing out is settling in. That's why brothers Ethan and Eric Parker built Giddy, a mobile app that enables users to invest in crypto, earn passive income on certain crypto holdings via staking, and get into the red-hot space of decentralized finance, or DeFi."What we're focusing on is giving an opportunity for people who otherwise couldn't access DeFi because it's just technically too difficult," Eric Parker, CEO at Giddy, told Insider. Here's the 7-page pitch deck Giddy, an app that lets users invest in DeFi, used to raise an $8 million seed roundAccess to commercial real-estate investing LEX Markets cofounders and co-CEOs Drew Sterrett and Jesse Daugherty.LEX MarketsDrew Sterrett was structuring real-estate deals while working in private equity when he realized the inefficiencies that existed in the market. Only high-net worth individuals or accredited investors could participate in commercial real-estate deals. If they ever wanted to leave a partnership or sell their stake in a property, it was difficult to find another investor to replace them. Owners also struggled to sell minority stakes in their properties and didn't have many good options to recapitalize an asset if necessary.In short, the market had a high barrier to entry despite the fact it didn't always have enough participants to get deals done quickly. "Most investors don't have access to high-quality commercial real-estate investments. How do we have the oldest and largest asset class in the world and one of the largest wealth creators with no public and liquid market?" Sterrett told Insider. "It sort of seems like a no-brainer, and that this should have existed 50 or 60 years ago."This 15-page pitch deck helped LEX Markets, a startup making investing in commercial real estate more accessible, raise $15 millionHelping streamline how debts are repaidMethod Financial cofounders Jose Bethancourt and Marco del Carmen.Method FinancialWhen Jose Bethancourt graduated from the University of Texas at Austin in May 2019, he faced the same question that confronts over 43 million Americans: How would he repay his student loans?The problem led Bethancourt on a nearly two-year journey that culminated in the creation of a startup aimed at making it easier for consumers to more seamlessly pay off all kinds of debt.  Initially, Bethancourt and fellow UT grad Marco del Carmen built GradJoy, an app that helped users better understand how to manage student loan repayment and other financial habits. GradJoy was accepted into Y Combinator in the summer of 2019. But the duo quickly realized the real benefit to users would be helping them move money to make payments instead of simply offering recommendations."When we started GradJoy, we thought, 'Oh, we'll just give advice — we don't think people are comfortable with us touching their student loans,' and then we realized that people were saying, 'Hey, just move the money — if you think I should pay extra, then I'll pay extra.' So that's kind of the movement that we've seen, just, everybody's more comfortable with fintechs doing what's best for them," Bethancourt told Insider. Here is the 11-slide pitch deck Method Financial, a Y Combinator-backed fintech making debt repayment easier, used to raise $2.5 million in pre-seed fundingSmarter insurance for multifamily propertiesItai Ben-Zaken, cofounder and CEO of Honeycomb.HoneycombA veteran of the online-insurance world is looking to revolutionize the way the industry prices risk for commercial properties with the help of artificial intelligence.Insurance companies typically send inspectors to properties before issuing policies to better understand how the building is maintained and identify potential risks or issues with it. It's a process that can be time-consuming, expensive, and inefficient, making it hard to justify for smaller commercial properties, like apartment and condo buildings.Insurtech Honeycomb is looking to fix that by using AI to analyze a combination of third-party data and photos submitted by customers through the startup's app to quickly identify any potential risks at a property and more accurately price policies."That whole physical inspection thing had really good things in it, but it wasn't really something that is scalable and, it's also expensive," Itai Ben-Zaken, Honeycomb's cofounder and CEO, told Insider. "The best way to see a property right now is Google street view. Google street view is usually two years old."Here's the 10-page Series A pitch deck used by Honeycomb, a startup that wants to revolutionize the $26 billion market for multifamily property insuranceRetirement accounts for cryptoTodd Southwick, CEO and co-founder of iTrustCapital.iTrustCapitalTodd Southwick and Blake Skadron stuck to a simple mandate when they were building out iTrustCapital, a $1.3 billion fintech that strives to offer cryptocurrencies to the masses via dedicated individual retirement accounts."We wanted to make a product that we would feel happy recommending for our parents to use," Southwick, the CEO of iTrustCapital, told Insider. That guiding framework resulted in a software system that helped to digitize and automate the traditionally clunky and paper-based process of setting up an IRA for alternative assets, Southwick said. "We saw a real opportunity within the self-directed IRAs because we knew at that point in time, there was a fairly small segment of people that was willing to deal with the inconvenience of having to set up an IRA" for crypto, Southwick said. The process often involved phone calls to sales reps and over-the-counter trading desks, paper and fax machines, and days of wait time.iTrustCapital allows customers to buy and sell cryptocurrencies using tax-advantaged IRAs with no monthly account fees. The startup provides access to 25 cryptocurrencies like bitcoin, ethereum, and dogecoin — charging a 1% transaction fee on crypto trades — as well as gold and silver.iTrustCapital, a fintech simplifying how to set up a crypto retirement account, used this 8-page pitch deck to raise a $125 million Series AA new way to assess creditworthinessPinwheel founders Curtis Lee, Kurt Lin, and Anish Basu.PinwheelGrowing up, Kurt Lin never saw his father get frustrated. A "traditional, stoic figure," Lin said his father immigrated to the United States in the 1970s. Becoming part of the financial system proved even more difficult than assimilating into a new culture.Lin recalled visiting bank after bank with his father as a child, watching as his father's applications for a mortgage were denied due to his lack of credit history. "That was the first time in my life I really saw him crack," Lin told Insider. "The system doesn't work for a lot of people — including my dad," he added. Lin would find a solution to his father's problem years later while working with Anish Basu, and Curtis Lee on an automated health savings account. The trio realized the payroll data integrations they were working on could be the basis of a product that would help lenders work with consumers without strong credit histories."That's when the lightbulb hit," said Lin, Pinwheel's CEO.In 2018, Lin, Basu, and Lee founded Pinwheel, an application-programming interface that shares payroll data to help both fintechs and traditional lenders serve consumers with limited or poor credit, who have historically struggled to access financial products. Here's the 9-page deck that Pinwheel, a fintech helping lenders tap into payroll data to serve consumers with little to no credit, used to raise a $50 million Series BA new data feed for bond tradingMark Lennihan/APFor years, the only way investors could figure out the going price of a corporate bond was calling up a dealer on the phone. The rise of electronic trading has streamlined that process, but data can still be hard to come by sometimes. A startup founded by a former Goldman Sachs exec has big plans to change that. BondCliQ is a fintech that provides a data feed of pre-trade pricing quotes for the corporate bond market. Founded by Chris White, the creator of Goldman Sachs' defunct corporate-bond-trading system, BondCliQ strives to bring transparency to a market that has traditionally kept such data close to the vest. Banks, which typically serve as the dealers of corporate bonds, have historically kept pre-trade quotes hidden from other dealers to maintain a competitive advantage.But tech advancements and the rise of electronic marketplaces have shifted power dynamics into the hands of buy-side firms, like hedge funds and asset managers. The investors are now able to get a fuller picture of the market by aggregating price quotes directly from dealers or via vendors.Here's the 9-page pitch deck that BondCliQ, a fintech looking to bring more data and transparency to bond trading, used to raise its Series AA trading app for activismAntoine Argouges, CEO and founder of Tulipshare.TulipshareAn up-and-coming fintech is taking aim at some of the world's largest corporations by empowering retail investors to push for social and environmental change by pooling their shareholder rights.London-based Tulipshare lets individuals in the UK invest as little as one pound in publicly-traded company stocks. The upstart combines individuals' shareholder rights with other like-minded investors to advocate for environmental, social, and corporate governance change at firms like JPMorgan, Apple, and Amazon.The goal is to achieve a higher number of shares to maximize the number of votes that can be submitted at shareholder meetings. Already a regulated broker-dealer in the UK, Tulipshare recently applied for registration as a broker-dealer in the US. "If you ask your friends and family if they've ever voted on shareholder resolutions, the answer will probably be close to zero," CEO and founder Antoine Argouges told Insider. "I started Tulipshare to utilize shareholder rights to bring about positive corporate change that has an impact on people's lives and our planet — what's more powerful than money to change the system we live in?"Check out the 14-page pitch deck from Tulipshare, a trading app that lets users pool their shareholder votes for activism campaignsThe back-end tech for beautyDanielle Cohen-Shohet, CEO and founder of GlossGeniusGlossGeniusDanielle Cohen-Shohet might have started as a Goldman Sachs investment analyst, but at her core she was always a coder.After about three years at Goldman Sachs, Cohen-Shohet left the world of traditional finance to code her way into starting her own company in 2016. "There was a period of time where I did nothing, but eat, sleep, and code for a few weeks," Cohen-Shohet told Insider. Her technical edge and knowledge of the point-of-sale payment space led her to launch a software company focused on providing behind-the-scenes tech for beauty and wellness small businesses.Cohen-Shohet launched GlossGenius in 2017 to provide payments tech for hair stylists, nail technicians, blow-out bars, and other small businesses in the space.Here's the 11-page deck GlossGenius, a startup that provides back-end tech for the beauty industry, used to raise $16 millionPrivate market data on the blockchainPat O'Meara, CEO of Inveniam.InveniamFor investors in publicly-traded stocks, there's typically no shortage of company data to guide investment decisions. Company financials are easily accessible and vetted by teams of regulators, lawyers, and accountants.But in the private markets — which encompass assets that range from real estate to private credit and private equity — that isn't always the case. Within real estate, for example, valuations of a specific slice of property are often the product of heavily-worked Excel models and a lot of institutional knowledge, leaving them susceptible to manual error at many points along the way.Inveniam, founded in 2017, is a software company that tokenizes the business data of private companies on the blockchain. Using a distributed ledger allows Inveniam to keep track of who is touching the data and what they are doing to it. Check out the 16-page pitch deck for Inveniam, a blockchain-based startup looking to be the Refinitiv of private-market dataHelping freelancers with their taxesJaideep Singh is the CEO and co-founder of FlyFin, an AI-driven tax preparation software program for freelancers.FlyFinSome people, particularly those with families or freelancing businesses, spend days searching for receipts for tax season, making tax preparation a time consuming and, at times, taxing experience. That's why in 2020 Jaideep Singh founded FlyFin, an artificial-intelligence tax preparation program for freelancers that helps people, as he puts it, "fly through their finances." FlyFin is set up to connect to a person's bank accounts, allowing the AI program to help users monitor for certain expenses that can be claimed on their taxes like business expenditures, the interest on mortgages, property taxes, or whatever else that might apply. "For most individuals, people have expenses distributed over multiple financial institutions. So we built an AI platform that is able to look at expenses, understand the individual, understand your profession, understand the freelance population at large, and start the categorization," Singh told Insider.Check out the 7-page pitch deck a startup helping freelancers manage their taxes used to nab $8 million in funding Shopify for embedded financeProductfy CEO and founder, Duy Vo.ProductfyProductfy is looking to break into embedded finance by becoming the Shopify of back-end banking services.Embedded finance — integrating banking services in non-financial settings — has taken hold in the e-commerce world. But Productfy is going after a different kind of customer in churches, universities, and nonprofits.The San Jose, Calif.-based upstart aims to help non-finance companies offer their own banking products. Productfy can help customers launch finance features in as little as a week and without additional engineering resources or background knowledge of banking compliance or legal requirements, Productfy founder and CEO Duy Vo told Insider. "You don't need an engineer to stand up Shopify, right? You can be someone who's just creating art and you can use Shopify to build your own online store," Vo said, adding that Productfy is looking to take that user experience and replicate it for banking services.Here's the 15-page pitch deck Productfy, a fintech looking to be the Shopify of embedded finance, used to nab a $16 million Series AReal-estate management made easyAgora founders Noam Kahan, CTO, Bar Mor, CEO, and Lior Dolinski, CPO.AgoraFor alternative asset managers of any type, the operations underpinning sales and investor communications are a crucial but often overlooked part of the business. Fund managers love to make bets on markets, not coordinate hundreds of wire transfers to clients each quarter or organize customer-relationship-management databases.Within the $10.6 trillion global market for professionally managed real-estate investing, that's where Tel Aviv and New York-based startup Agora hopes to make its mark.Founded in 2019, Agora offers a set of back-office, investor relations, and sales software tools that real-estate investment managers can plug into their workflows. On Wednesday, Agora announced a $9 million seed round, led by Israel-based venture firm Aleph, with participation from River Park Ventures and Maccabee Ventures. The funding comes on the heels of an October 2020 pre-seed fund raise worth $890,000, in which Maccabee also participated.Here's the 15-slide pitch deck that Agora, a startup helping real-estate investors manage communications and sales with their clients, used to raise a $9 million seed roundCheckout made easyBolt's Ryan Breslow.Ryan BreslowAmazon has long dominated e-commerce with its one-click checkout flows, offering easier ways for consumers to shop online than its small-business competitors.Bolt gives small merchants tools to offer the same easy checkouts so they can compete with the likes of Amazon.The startup raised its $393 million Series D to continue adding its one-click checkout feature to merchants' own websites in October.Bolt markets to merchants themselves. But a big part of Bolt's pitch is its growing network of consumers — currently over 5.6 million — that use its features across multiple Bolt merchant customers. Roughly 5% of Bolt's transactions were network-driven in May, meaning users that signed up for a Bolt account on another retailer's website used it elsewhere. The network effects were even more pronounced in verticals like furniture, where 49% of transactions were driven by the Bolt network."The network effect is now unleashed with Bolt in full fury, and that triggered the raise," Bolt's founder and CEO Ryan Breslow told Insider.Here's the 12-page deck that one-click checkout Bolt used to outline its network of 5.6 million consumers and raise its Series DHelping small banks lendCollateralEdge's Joel Radtke, cofounder, COO, and president, and Joe Beard, cofounder and CEO.CollateralEdgeFor large corporations with a track record of tapping the credit markets, taking out debt is a well-structured and clear process handled by the nation's biggest investment banks and teams of accountants. But smaller, middle-market companies — typically those with annual revenues ranging up to $1 billion — are typically served by regional and community banks that don't always have the capacity to adequately measure the risk of loans or price them competitively. Per the National Center for the Middle Market, 200,000 companies fall into this range, accounting for roughly 33% of US private sector GDP and employment.Dallas-based fintech CollateralEdge works with these banks — typically those with between $1 billion and $50 billion in assets — to help analyze and price slices of commercial and industrial loans that previously might have gone unserved by smaller lenders.On October 20th, CollateralEdge announced a $3.5 million seed round led by Dallas venture fund Perot Jain with participation from Kneeland Youngblood (a founder of the healthcare-focused private-equity firm Pharos Capital) and other individual investors.Here's the 10-page deck CollateralEdge, a fintech streamlining how small banks lend to businesses, used to raise a $3.5 million seed round Quantum computing made easyQC Ware CEO Matt Johnson.QC WareEven though banks and hedge funds are still several years out from adding quantum computing to their tech arsenals, that hasn't stopped Wall Street giants from investing time and money into the emerging technology class. And momentum for QC Ware, a startup looking to cut the time and resources it takes to use quantum computing, is accelerating. The fintech secured a $25 million Series B on September 29 co-led by Koch Disruptive Technologies and Covestro with participation from D.E. Shaw, Citi, and Samsung Ventures.QC Ware, founded in 2014, builds quantum algorithms for the likes of Goldman Sachs (which led the fintech's Series A), Airbus, and BMW Group. The algorithms, which are effectively code bases that include quantum processing elements, can run on any of the four main public-cloud providers.Quantum computing allows companies to do complex calculations faster than traditional computers by using a form of physics that runs on quantum bits as opposed to the traditional 1s and 0s that computers use. This is especially helpful in banking for risk analytics or algorithmic trading, where executing calculations milliseconds faster than the competition can give firms a leg up. Here's the 20-page deck QC Ware, a fintech making quantum computing more accessible, used to raised its $25 million Series BSimplifying quant modelsKirat Singh and Mark Higgins, Beacon's cofounders.BeaconA fintech that helps financial institutions use quantitative models to streamline their businesses and improve risk management is catching the attention, and capital, of some of the country's biggest investment managers.Beacon Platform, founded in 2014, is a fintech that builds applications and tools to help banks, asset managers, and trading firms quickly integrate quantitative models that can help with analyzing risk, ensuring compliance, and improving operational efficiency. The company raised its Series C on Wednesday, scoring a $56 million investment led by Warburg Pincus with support from Blackstone Innovations Investments, PIMCO, and Global Atlantic. Blackstone, PIMCO, and Global Atlantic are also users of Beacon's tech, as are the Commonwealth Bank of Australia and Shell New Energies, a division of Royal Dutch Shell, among others.The fintech provides a shortcut for firms looking to use quantitative modelling and data science across various aspects of their businesses, a process that can often take considerable resources if done solo.Here's the 20-page pitch deck Beacon, a fintech helping Wall Street better analyze risk and data, used to raise $56 million from Warburg Pincus, Blackstone, and PIMCOInvoice financing for SMBsStacey Abrams and Lara Hodgson, Now cofounders.NowAbout a decade ago, politician Stacey Abrams and entrepreneur Lara Hodgson were forced to fold their startup because of a kink in the supply chain — but not in the traditional sense.Nourish, which made spill-proof bottled water for children, had grown quickly from selling to small retailers to national ones. And while that may sound like a feather in the small business' cap, there was a hang-up."It was taking longer and longer to get paid, and as you can imagine, you deliver the product and then you wait and you wait, but meanwhile you have to pay your employees and you have to pay your vendors," Hodgson told Insider. "Waiting to get paid was constraining our ability to grow."While it's not unusual for small businesses to grapple with working capital issues, the dust was still settling from the Great Recession. Abrams and Hodgson couldn't secure a line of credit or use financing tools like factoring to solve their problem. The two entrepreneurs were forced to close Nourish in 2012, but along the way they recognized a disconnect in the system.  "Why are we the ones borrowing money, when in fact we're the lender here because every time you send an invoice to a customer, you've essentially extended a free loan to that customer by letting them pay later," Hodgson said. "And the only reason why we were going to need to possibly borrow money was because we had just given ours away for free to Whole Foods," she added.Check out the 7-page deck that Now, Stacey Abrams' fintech that wants to help small businesses 'grow fearlessly', used to raise $29 millionInsurance goes digitalJamie Hale, CEO and cofounder of Ladder.LadderFintechs looking to transform how insurance policies are underwritten, issued, and experienced by customers have grown as new technology driven by digital trends and artificial intelligence shape the market. And while verticals like auto, homeowner's, and renter's insurance have seen their fair share of innovation from forward-thinking fintechs, one company has taken on the massive life-insurance market. Founded in 2017, Ladder uses a tech-driven approach to offer life insurance with a digital, end-to-end service that it says is more flexible, faster, and cost-effective than incumbent players.Life, annuity, and accident and health insurance within the US comprise a big chunk of the broader market. In 2020, premiums written on those policies totaled some $767 billion, compared to $144 billion for auto policies and $97 billion for homeowner's insurance.Here's the 12-page deck that Ladder, a startup disrupting the 'crown jewel' of the insurance market, used to nab $100 millionEmbedded payments for SMBsThe Highnote team.HighnoteBranded cards have long been a way for merchants with the appropriate bank relationships to create additional revenue and build customer loyalty. The rise of embedded payments, or the ability to shop and pay in a seamless experience within a single app, has broadened the number of companies looking to launch branded cards.Highnote is a startup that helps small to mid-sized merchants roll out their own debit and pre-paid digital cards. The fintech emerged from stealth on Tuesday to announce it raised $54 million in seed and Series A funding.Here's the 12-page deck Highnote, a startup helping SMBs embed payments, used to raise $54 million in seed and Series A fundingAn alternative auto lenderDaniel Chu, CEO and founder of Tricolor.TricolorAn alternative auto lender that caters to thin- and no-credit Hispanic borrowers is planning a national expansion after scoring a $90 million investment from BlackRock-managed funds. Tricolor is a Dallas-based auto lender that is a community development financial institution. It uses a proprietary artificial-intelligence engine that decisions each customer based on more than 100 data points, such as proof of income. Half of Tricolor's customers have a FICO score, and less than 12% have scores above 650, yet the average customer has lived in the US for 15 years, according to the deck.A 2017 survey by the Federal Deposit Insurance Corporation found 31.5% of Hispanic households had no mainstream credit compared to 14.4% of white households. "For decades, the deck has been stacked against low income or credit invisible Hispanics in the United States when it comes to the purchase and financing of a used vehicle," Daniel Chu, founder and CEO of Tricolor, said in a statement announcing the raise.An auto lender that caters to underbanked Hispanics used this 25-page deck to raise $90 million from BlackRock investorsA new way to access credit The TomoCredit team.TomoCreditKristy Kim knows first-hand the challenge of obtaining credit in the US without an established credit history. Kim, who came to the US from South Korea, couldn't initially get access to credit despite having a job in investment banking after graduating college. "I was in my early twenties, I had a good income, my job was in investment banking but I could not get approved for anything," Kim told Insider. "Many young professionals like me, we deserve an opportunity to be considered but just because we didn't have a Fico, we weren't given a chance to even apply," she added.Kim started TomoCredit in 2018 to help others like herself gain access to consumer credit. TomoCredit spent three years building an internal algorithm to underwrite customers based on cash flow, rather than a credit score.TomoCredit, a fintech that lends to thin- and no-credit borrowers, used this 17-page pitch deck to raise its $10 million Series AAn IRA for alternativesHenry Yoshida is the co-founder and CEO of retirement fintech startup Rocket Dollar.Rocket DollarFintech startup Rocket Dollar, which helps users invest their individual retirement account (IRA) dollars into alternative assets, just raised $8 million for its Series A round, the company announced on Thursday.Park West Asset Management led the round, with participation from investors including Hyphen Capital, which focuses on backing Asian American entrepreneurs, and crypto exchange Kraken's venture arm. Co-founded in 2018 by CEO Henry Yoshida, CTO Rick Dude, and VP of marketing Thomas Young, Rocket Dollar now has over $350 million in assets under management on its platform. Yoshida sold his first startup, a roboadvisor called Honest Dollar, to Goldman Sachs' investment management division for an estimated $20 million.Yoshida told Insider that while ultra-high net worth investors have been investing self-directed retirement account dollars into alternative assets like real estate, private equity, and cryptocurrency, average investors have not historically been able to access the same opportunities to invest IRA dollars in alternative assets through traditional platforms.Here's the 34-page pitch deck a fintech that helps users invest their retirement savings in crypto and real estate assets used to nab $8 millionConnecting startups and investorsHum Capital cofounder and CEO Blair Silverberg.Hum CapitalBlair Silverberg is no stranger to fundraising.For six years, Silverberg was a venture capitalist at Draper Fisher Jurvetson and Private Credit Investments making bets on startups."I was meeting with thousands of founders in person each year, watching them one at a time go through this friction where they're meeting a ton of investors, and the investors are all asking the same questions," Silverberg told Insider. He switched gears about three years ago, moving to the opposite side of the metaphorical table, to start Hum Capital, which uses artificial intelligence to match investors with startups looking to fundraise.On August 31, the New York-based fintech announced its $9 million Series A. The round was led by Future Ventures with participation from Webb Investment Network, Wavemaker Partners, and Partech. This 11-page pitch deck helped Hum Capital, a fintech using AI to match investors with startups, raise a $9 million Series A.Payments infrastructure for fintechsQolo CEO and co-founder Patricia Montesi.QoloThree years ago, Patricia Montesi realized there was a disconnect in the payments world. "A lot of new economy companies or fintech companies were looking to mesh up a lot of payment modalities that they weren't able to," Montesi, CEO and co-founder of Qolo, told Insider.Integrating various payment capabilities often meant tapping several different providers that had specializations in one product or service, she added, like debit card issuance or cross-border payments. "The way people were getting around that was that they were creating this spider web of fintech," she said, adding that "at the end of it all, they had this mess of suppliers and integrations and bank accounts."The 20-year payments veteran rounded up a group of three other co-founders — who together had more than a century of combined industry experience — to start Qolo, a business-to-business fintech that sought out to bundle back-end payment rails for other fintechs.Here's the 11-slide pitch deck a startup that provides payments infrastructure for other fintechs used to raise a $15 million Series ASoftware for managing freelancersWorksome cofounder and CEO Morten Petersen.WorksomeThe way people work has fundamentally changed over the past year, with more flexibility and many workers opting to freelance to maintain their work-from-home lifestyles.But managing a freelance or contractor workforce is often an administrative headache for employers. Worksome is a startup looking to eliminate all the extra work required for employers to adapt to more flexible working norms.Worksome started as a freelancer marketplace automating the process of matching qualified workers with the right jobs. But the team ultimately pivoted to a full suite of workforce management software, automating administrative burdens required to hire, pay, and account for contract workers.In May, Worksome closed a $13 million Series A backed by European angel investor Tommy Ahlers and Danish firm Lind & Risør.Here's the 21-slide pitch deck used by a startup that helps firms like Carlsberg and Deloitte manage freelancersPersonal finance is only a text awayYinon Ravid, the chief executive and cofounder of Albert.AlbertThe COVID-19 pandemic has underscored the growing preference of mobile banking as customers get comfortable managing their finances online.The financial app Albert has seen a similar jump in activity. Currently counting more than six million members, deposits in Albert's savings offering doubled from the start of the pandemic in March 2020 to May of this year, from $350 million to $700 million, according to new numbers released by the company. Founded in 2015, Albert offers automated budgeting and savings tools alongside guided investment portfolios. It's looked to differentiate itself through personalized features, like the ability for customers to text human financial experts.Budgeting and saving features are free on Albert. But for more tailored financial advice, customers pay a subscription fee that's a pay-what-you-can model, between $4 and $14 a month. And Albert's now banking on a new tool to bring together its investing, savings, and budgeting tools.Fintech Albert used this 10-page pitch deck to raise a $100 million Series C from General Atlantic and CapitalGRethinking debt collection Jason Saltzman, founder and CEO of ReliefReliefFor lenders, debt collection is largely automated. But for people who owe money on their credit cards, it can be a confusing and stressful process.  Relief is looking to change that. Its app automates the credit-card debt collection process for users, negotiating with lenders and collectors to settle outstanding balances on their behalf. The fintech just launched and closed a $2 million seed round led by Collaborative Ventures. Relief's fundraising experience was a bit different to most. Its pitch deck, which it shared with one investor via Google Slides, went viral. It set out to raise a $1 million seed round, but ended up doubling that and giving some investors money back to make room for others.Check out a 15-page pitch deck that went viral and helped a credit-card debt collection startup land a $2 million seed roundBlockchain for private-markets investing Carlos Domingo is cofounder and CEO of Securitize.SecuritizeSecuritize, founded in 2017 by the tech industry veterans Carlos Domingo and Jamie Finn, is bringing blockchain technology to private-markets investing. The company raised $48 million in Series B funding on June 21 from investors including Morgan Stanley and Blockchain Capital.Securitize helps companies crowdfund capital from individual and institutional investors by issuing their shares in the form of blockchain tokens that allow for more efficient settlement, record keeping, and compliance processes. Morgan Stanley's Tactical Value fund, which invests in private companies, made its first blockchain-technology investment when it coled the Series B, Securitize CEO Carlos Domingo told Insider.Here's the 11-page pitch deck a blockchain startup looking to revolutionize private-markets investing used to nab $48 million from investors like Morgan StanleyE-commerce focused business bankingMichael Rangel, cofounder and CEO, and Tyler McIntyre, cofounder and CTO of Novo.Kristelle Boulos PhotographyBusiness banking is a hot market in fintech. And it seems investors can't get enough.Novo, the digital banking fintech aimed at small e-commerce businesses, raised a $40.7 million Series A led by Valar Ventures in June. Since its launch in 2018, Novo has signed up 100,000 small businesses. Beyond bank accounts, it offers expense management, a corporate card, and integrates with e-commerce infrastructure players like Shopify, Stripe, and Wise.Founded in 2018, Novo was based in New York City, but has since moved its headquarters to Miami. Here's the 12-page pitch deck e-commerce banking startup Novo used to raise its $40 million Series ABlockchain-based credit score tech John Sun, Anna Fridman, and Adam Jiwan are the cofounders of fintech startup Spring Labs.Spring LabsA blockchain-based fintech startup that is aiming to disrupt the traditional model of evaluating peoples' creditworthiness recently raised $30 million in a Series B funding led by credit reporting giant TransUnion.Four-year-old Spring Labs aims to create a private, secure data-sharing model to help credit agencies better predict the creditworthiness of people who are not in the traditional credit bureau system. The founding team of three fintech veterans met as early employees of lending startup Avant.Existing investors GreatPoint Ventures and August Capital also joined in on the most recent round.  So far Spring Labs has raised $53 million from institutional rounds.TransUnion, a publicly-traded company with a $20 billion-plus market cap, is one of the three largest consumer credit agencies in the US. After 18 months of dialogue and six months of due diligence, TransAmerica and Spring Labs inked a deal, Spring Labs CEO and cofounder Adam Jiwan told Insider.Here's the 10-page pitch deck blockchain-based fintech Spring Labs used to snag $30 million from investors including credit reporting giant TransUnionDigital banking for freelancersJGalione/Getty ImagesLance is a new digital bank hoping to simplify the life of those workers by offering what it calls an "active" approach to business banking. "We found that every time we sat down with the existing tools and resources of our accountants and QuickBooks and spreadsheets, we just ended up getting tangled up in the whole experience of it," Lance cofounder and CEO Oona Rokyta told Insider. Lance offers subaccounts for personal salaries, withholdings, and savings to which freelancers can automatically allocate funds according to custom preset levels. It also offers an expense balance that's connected to automated tax withholdings.In May, Lance announced the closing of a $2.8 million seed round that saw participation from Barclays, BDMI, Great Oaks Capital, Imagination Capital, Techstars, DFJ Frontier, and others.Here's the 21-page pitch deck Lance, a digital bank for freelancers, used to raise a $2.8 million seed round from investors including BarclaysDigital tools for independent financial advisorsJason Wenk, founder and CEO of AltruistAltruistJason Wenk started his career at Morgan Stanley in investment research over 20 years ago. Now, he's running a company that is hoping to broaden access to financial advice for less-wealthy individuals. The startup raised $50 million in Series B funding led by Insight Partners with participation from investors Vanguard and Venrock. The round brings the Los Angeles-based startup's total funding to just under $67 million.Founded in 2018, Altruist is a digital brokerage built for independent financial advisors, intended to be an "all-in-one" platform that unites custodial functions, portfolio accounting, and a client-facing portal. It allows advisors to open accounts, invest, build models, report, trade (including fractional shares), and bill clients through an interface that can advisors time by eliminating mundane operational tasks.Altruist aims to make personalized financial advice less expensive, more efficient, and more inclusive through the platform, which is designed for registered investment advisors (RIAs), a growing segment of the wealth management industry. Here's the pitch deck for Altruist, a wealth tech challenging custodians Fidelity and Charles Schwab, that raised $50 million from Vanguard and InsightPayments and operations support HoneyBook cofounders Dror Shimoni, Oz Alon, and Naama Alon.HoneyBookWhile countless small businesses have been harmed by the pandemic, self-employment and entrepreneurship have found ways to blossom as Americans started new ventures.Half of the US population may be freelance by 2027, according to a study commissioned by remote-work hiring platform Upwork. HoneyBook, a fintech startup that provides payment and operations support for freelancers, in May raised $155 million in funding and achieved unicorn status with its $1 billion-plus valuation.Durable Capital Partners led the Series D funding with other new investors including renowned hedge fund Tiger Global, Battery Ventures, Zeev Ventures, and 01 Advisors. Citi Ventures, Citigroup's startup investment arm that also backs fintech robo-advisor Betterment, participated as an existing investor in the round alongside Norwest Venture partners. The latest round brings the company's fundraising total to $227 million to date.Here's the 21-page pitch deck a Citi-backed fintech for freelancers used to raise $155 million from investors like hedge fund Tiger GlobalFraud prevention for lenders and insurersFiordaliso/Getty ImagesOnboarding new customers with ease is key for any financial institution or retailer. The more friction you add, the more likely consumers are to abandon the entire process.But preventing fraud is also a priority, and that's where Neuro-ID comes in. The startup analyzes what it calls "digital body language," or, the way users scroll, type, and tap. Using that data, Neuro-ID can identify fraudulent users before they create an account. It's built for banks, lenders, insurers, and e-commerce players."The train has left the station for digital transformation, but there's a massive opportunity to try to replicate all those communications that we used to have when we did business in-person, all those tells that we would get verbally and non-verbally on whether or not someone was trustworthy," Neuro-ID CEO Jack Alton told Insider.Founded in 2014, the startup's pitch is twofold: Neuro-ID can save companies money by identifying fraud early, and help increase user conversion by making the onboarding process more seamless. In December Neuro-ID closed a $7 million Series A, co-led by Fin VC and TTV Capital, with participation from Canapi Ventures. With 30 employees, Neuro-ID is using the fresh funding to grow its team and create additional tools to be more self-serving for customers.Here's the 11-slide pitch deck a startup that analyzes consumers' digital behavior to fight fraud used to raise a $7 million Series AAI-powered tools to spot phony online reviews Saoud Khalifah, founder and CEO of Fakespot.FakespotMarketplaces like Amazon and eBay host millions of third-party sellers, and their algorithms will often boost items in search based on consumer sentiment, which is largely based on reviews. But many third-party sellers use fake reviews often bought from click farms to boost their items, some of which are counterfeit or misrepresented to consumers.That's where Fakespot comes in. With its Chrome extension, it warns users of sellers using potentially fake reviews to boost sales and can identify fraudulent sellers. Fakespot is currently compatible with Amazon, BestBuy, eBay, Sephora, Steam, and Walmart."There are promotional reviews written by humans and bot-generated reviews written by robots or review farms," Fakespot founder and CEO Saoud Khalifah told Insider. "Our AI system has been built to detect both categories with very high accuracy."Fakespot's AI learns via reviews data available on marketplace websites, and uses natural-language processing to identify if reviews are genuine. Fakespot also looks at things like whether the number of positive reviews are plausible given how long a seller has been active.Fakespot, a startup that helps shoppers detect robot-generated reviews and phony sellers on Amazon and Shopify, used this pitch deck to nab a $4 million Series ANew twists on digital bankingZach Bruhnke, cofounder and CEO of HMBradleyHMBradleyConsumers are getting used to the idea of branch-less banking, a trend that startup digital-only banks like Chime, N26, and Varo have benefited from. The majority of these fintechs target those who are underbanked, and rely on usage of their debit cards to make money off interchange. But fellow startup HMBradley has a different business model. "Our thesis going in was that we don't swipe our debit cards all that often, and we don't think the customer base that we're focusing on does either," Zach Bruhnke, cofounder and CEO of HMBradley, told Insider. "A lot of our customer base uses credit cards on a daily basis."Instead, the startup is aiming to build clientele with stable deposits. As a result, the bank is offering interest-rate tiers depending on how much a customer saves of their direct deposit.Notably, the rate tiers are dependent on the percentage of savings, not the net amount. "We'll pay you more when you save more of what comes in," Bruhnke said. "We didn't want to segment customers by how much money they had. So it was always going to be about a percentage of income. That was really important to us."Check out the 14-page pitch deck fintech HMBradley, a neobank offering interest rates as high as 3%, used to raise an $18.25 million Series ARead the original article on Business Insider.....»»

Category: topSource: businessinsiderApr 18th, 2022

Transcript: Samara Cohen

     The transcript from this week’s, MiB: Samara Cohen, BlackRock CIO for ETF and Index Investments, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ:… Read More The post Transcript: Samara Cohen appeared first on The Big Picture.      The transcript from this week’s, MiB: Samara Cohen, BlackRock CIO for ETF and Index Investments, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This week on the podcast, I have yet another special guest — extra special guest. Samara Cohen is the Chief Investment Officer at BlackRock where she manages ETFs and index investing. BlackRock is $10 trillion. Their ETF business is over $3 trillion. Their index business is also over $3 trillion. Samara is consistently on everybody’s list of most influential women in finance, but that’s not why you want to listen to this. You want to listen to this because there really are very few people in the world more knowledgeable about managing ETFs, managing indexes, what passive really means, how people should be thinking about the actual engineering of products if you want to have broad market exposure or specific types of beta. Really, I’m going to stop talking and just say with no further ado, my conversation with Samara Cohen. ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. RITHOLTZ: My extra special guest this week is Samara Cohen. She is BlackRock’s Chief Investment Officer for ETFs and index investments. BlackRock manages up about $10 trillion. The ETF business is about $3.27 trillion. Samara Cohen, welcome to Bloomberg. COHEN: Thank you so much, Barry. I’m happy to be here. RITHOLTZ: I’m happy to have you here. I have so many questions to ask you, but I have to start out with your education, which we usually skim over. So, you graduated UPenn with a B.S. in Economics and — and Finance at — at Wharton, but you also had a B.A. in Theatre Arts. How has theater training helped in your financial career? COHEN: First, Barry, when you hear theater, a lot of people might think that — that I was an actor, so I feel like I need to start with the fact that I was decidedly a backstage kid. My love of theater was very much on the production, design, directing, you know, behind-the-scene side, and that has definitely helped me across the course of my career. But I have to tell you, I came to the University of Pennsylvania to be a theater major, and I left with a dual degree in Finance and Theater. So, finance was something I discovered because I knew I was good at math, in fact, when I started college I didn’t really need to take any math classes because I had all of this credit. And I missed it, and so I discovered markets and economics, and it felt like math with a purpose, so — and I got to combine the financial degree with the theatre degree, which made my parents much more comfortable with the fact that I was spending all of my summers working for regional theater companies basically, but it was a big part of learning who I am. And — and today in my role, I often remember being told that casting is 95 percent of directing, and putting the right person in the right seat is a lot about leading any business, so it definitely has played a part throughout. RITHOLTZ: Really interesting. So, you — you end up interning at Goldman Sachs on the trading floor pretty early in your career. Tell us what that was like and — and how theatrical was that. COHEN: Well, actually I came to Goldman out of business school. I — well, my first job was actually at BlackRock. That’s where I came out of college. I was at BlackRock for four years, went to business school. And part of why I went back to school after BlackRock was in my head I thought, “Maybe I could further combine this love of finance and love of theater. And how might I do that?” And I loved the idea of going back to school. I’m kind of a voracious learner, and I’d work hard and I liked the idea of meeting other people and seeing what was out there after four years of — of working. And in that summer and actually in the process of figuring out where I wanted to work for the summer, I visited the trading floor. And I walked onto the trading floor, and I thought this is it. It’s a lot like theater. It’s a lot like that like multi-tasking, high-energy collaborative environment where lots of things are happening at the same time. And I thrive in that. And so, actually, the theater — the — the trading floor I found pretty theatrical, and that really worked for me. RITHOLTZ: Yeah, there’s a — there’s a buzz, there’s an electricity on a big trading floor, which I think is one of the things that’s lost from old Wall Street. You can replace it with more efficient algorithms and technology. But man, when you walk onto a big floor, you just feel there’s nothing like that. And ever … COHEN: Right. RITHOLTZ: … have a desire to become a trader? Was that — did that ever appeal to you? COHEN: Until I walked onto the trading floor, the idea really scared me. And you know what? I — actually, I don’t think I’ve ever told anybody this. I did not proactively send my résumé to the Securities Division. They reached out to me as part of a diversity hiring effort to get more women onto the trading floor. And the reason I didn’t send my résumé was it sounded really intimidating to me. And so, I think that’s just an important thing to — to note is that sometimes if something’s interesting, even if it’s intimidating, it’s worth checking out because I knew. And yes, there weren’t a lot of women on the floor when I walked out there, but it was really clear to me that I would, you know, once I got my bearing and learned to speak the language, it can be an intimidating place at first, but — but I knew it would be a great fit for me. RITHOLTZ: So, let me make sure I understand the chronology of your career. So, you intern at BlackRock, then you work at Goldman for like 16 years, something like, then you boomerang back to BlackRock. Did I — did I get that right? COHEN: Yeah, pretty much. I went to BlackRock out of college, and then business school from BlackRock, and then Goldman from business school, and then back to BlackRock. RITHOLTZ: That’s really, really interesting. I — I heard the phrase BlackRock boomerang. Is this a thing to people like work at BlackRock, leave, and then, you know, magnetically get drawn back? What’s that about? COHEN: In my case, it was definitely a thing. I don’t know the — like with the total stats are, but it’s definitely true for other people. I mean, people’s careers are marathons and — and not sprints. And — and, you know, part of my marathon — an important part of my marathon actually was that 16 years at Goldman. I think had it not been for that, I wouldn’t have the seat I currently occupy at BlackRock, so I’m pretty grateful for it. But also, I think my — my history with BlackRock and my passion for the firm and its purpose did draw me back as well. RITHOLTZ: So, let’s talk about that seat you have at BlackRock. You recently were promoted to Chief Investment Officer of ETFs and index investments. That sounds like a pretty serious job, especially when we consider at BlackRock, you know, that’s well over $3 trillion in assets. Tell us a little bit about your new job responsibilities. COHEN: I’m really excited about the new job. And — and even more than — than me being in the job, I’m excited about the fact that we have a Chief Investment Officer role for ETFs and index. And it actually is broader than the ETF book. It’s our whole indexing book. And in the — and — and what it means in short is that I’m accountable for — for investment performance in our ETFs and index book, which I love telling people because sometimes they look at me and they say, “Well, I don’t really understand that. Isn’t investment performance the outperformance of a benchmark? And aren’t you, Samara, ETF and index person the benchmark?” So, what is investment performance? And we’ve done a lot of work really in partnership with our clients and articulating what that is. And in the case of ETFs and index, it’s two things. It’s first what we call market quality. What do you expect an ETF? It’s how it trades in the market, secondary market volumes, market quality in stress scenarios, premium discount behavior. There’s a bunch of metrics that we monitor with respect to ETF market quality. Part of my job is to be accountable for performing on those, and the other part is delivering on those index outcomes, which in a world where what we can index is evolving as more markets and more strategies are indexed. It’s also important that we deliver to investors what they had signed on for with that index objective. And so, that’s what it means to be the CIO of an ETF and index book. RITHOLTZ: So you mentioned market quality and — and performing within the market, you know, was only less than two years ago we had the big COVID selloff in March, and people were concerned that ETFs were not going to be able to manage the — the pressure, they wouldn’t be able to deal with all of the stress, you know, all the usual criticisms of indexing plus additional criticisms of ETFs. How did ETFs perform during that 34 percent collapse from February to April of — of 2020? COHEN: The people who were concerned before the COVID bout of volatility had a huge and rich set of data to draw from when we emerge from those volatile markets that show that actually ETFs have really supported stressed markets, added liquidity, added transparency. And that was on a full display over the COVID volatility period, particularly in the bond market, where if you think about what was happening across the world, there were traders who were, you know, setting up their — their home desks, their — their home, you know — you know, hundreds of — that one trading floor that we talked about that came thousands and thousands of — of home office trading floors. And the bond market, in particular, still has largely operated in an over-the-counter bilateral basis in the bond market for — for that reason and a whole lot of other reasons. You know, and the treasury market, in particular, became very hard to access while ETF, you could see on your phone they were transparent, they were trading. RITHOLTZ: Right. COHEN: One of the stats that I love to quote that I think is quite indicative of what was happening over that period is, you know, we had an investment grade ETF that traded on one of those volatile days in March — March 24th 90,000 times on exchange. And, of course, every time something prints on an exchange is price formation where its — its underlying bonds — the top holdings of that underlying bond portfolio traded, on average, 30 times. So, 90,000 versus 30. There just wasn’t price formation happening in the bond market, but it was happening in the ETF market with buyers and sellers meeting on exchange, which meant that there wasn’t a whole lot that needed to happen in the underlying bond market to — to support that. And so, really — and — and what’s interesting is you can see a whole lot’s been written by policymakers around the world about this supportive role that ETFs have effectively played in — in stressed markets. The, you know, SEC has written about it, the BOE, IOSCO, so it’s been exciting to have this really rich dataset to draw and looking back at that period. RITHOLTZ: The bond discussion is really interesting, and — and I was referring to equities, but we’ll circle back to that. You know, a lot of people have complained that bond markets are thin. You know, you have a few 1,000 stocks, but there are just countless, countless numbers of bonds — many, many more times of bonds than there are stocks. It seems like the bond ETF universe handled the crash — or plunged maybe is a more accurate word because it was so short — handled it pretty well. Everybody — we saw a lot of money rotate out of stocks into bonds. As a safe harbor, didn’t seem like there were a lot of dislocations or wild price anomalies or an inability to get an execution. The bond ETF universe seemed to behave really well. COHEN: The bond ETF universe behaved well. And as a result, the bond market behaved better. And that’s one of the things that I get really excited about because the fact is I’m really a lifelong markets reformer. That’s the passion that I have. I’ve spent my entire career in the markets and — and my desire, at this point, is to contribute to making them better, making them safer, more efficient, more transparent, and we can measure how bond ETFs actually did that in the bond market. And, in fact, interestingly, as a result of the — the demand for bond ETFs that came out of the COVID period, we had seen the bond market start to trade more electronically big pieces of the bond market portfolios in the bond market. Bond dealers have started to really invest in algorithmic pricing, which creates more transparency, more trading, and more liquidity. So, we’ve written about and we’ve observed this what we call a real virtuous cycle of how ETFs have been integrated into the fabric of — of capital markets across the board. And we can definitely talk about equities, but how in the bond market it has been good for bond ETFs and also good for bonds. RITHOLTZ: So, when we had the great financial crisis since ’08, ’09, I thought that was pretty much the end of the argument that indexing is problematic for markets or ETFs aren’t going to be able to handle pressure. That — that should have been the last word in that. I was kind of surprised to see those same arguments still hanging around. And then March 20202, the execution seemed to go off without a problem. There were a handful of individual stocks that’s sort of pricing get a little wacky. But is this the end of the passivist destroying the markets and ETFs are dangerous argument or is there — are they just going to throw this out every time there’s something else to complain about. COHEN: I love your thoughts on that, Barry. I would hope that it’s a — it’s — it’s closer to the end where we — where we can kind of look forward to — to numerous things that can improve the markets. But look you make an excellent point. I mean, to be fair, in 2008, I was — I was on the bond trading floor actually at Goldman and I didn’t know what an ETF was, like in 2008, you know, in — in the fixed income markets, you didn’t — you know, you — we weren’t talking about what ETFs were. But to your point, it is true. If we look back at the data during those weeks and months when what was so valued by investors was transparency and was so feared was the lack of transparency when all this information was coming out about bank balance sheets and what was on balance sheets, we did see a real pick up in volume and velocity of ETF trading in 2008 and in 2009. And we have repeated stressed market events like the big energy selloff that happened at the end of 2015, the — you know, what we call Volpocalypse that happened in February of 2018 where we have repeatedly seen ETFs perform well under pressure and actually add support to high-velocity markets. And yet this still, you know, comes out from time to time, which feels like kind of the language that comes out around any sort of disruptive technology. But I do think like we talked about that the — the data is pretty clear. (COMMERCIAL BREAK) RITHOLTZ: You are definitely responsible for a lot of capital, and that leads me to a quote of yours that I — I need an explanation on. At BlackRock, there is absolutely nothing passive about index investing. Explain. COHEN: I am on a mission, Barry, to replace the word passive with the word index when people talk about ETFs and index investing because how we manage our portfolios is extremely active. And it goes back to that conversation we had about what investment performance is in the context of an ETF and index investment book. It is delivering the index outcomes, which the reason ETFs and – and index ones exist is that indexes aren’t often easily investable. They could have thousands and thousands of securities in them. And so, depending on how much you — you, you know, are investing, you can’t perfectly replicate the index, and so you need to optimize to deliver that index outcome with as little friction as possible. So that’s delivering the index outcomes. And then there is that huge dimension of ETF market quality, ensuring that the ETFs track the underlying portfolios with, you know, we call it premium discount behavior, ensuring that they’re strong secondary market quality, transparency, and liquidity in the ETFs. So, we have teams of people, not robots, but actual people. And a lot of them, by the way, are women around the world who are actively managing our market quality and investment performance in our ETF and index book. So that’s why there is absolutely nothing passive about it. RITHOLTZ: Really interesting. We’ve gone through these periods whether these spasms of anti-indexing sentiment, and it goes all the way back to Jack Bogle and — and the early days of indexing in the 1970’s. Indexing is un-American. It’s — we’ve heard people call it Marxist. It’s going to lead to market crashes. What — what’s your perspective when you hear these things crop up? The – by the way, the latest one is it’s anti-competitive and it’s going to lead to price fixing and a lack of competition due to all this ownership. How do you respond to those sort of backwater, low review silliness? COHEN: I — I begin with — and we’ve written on this this year in — in something we call the Investor Progress Report, but we estimate that there’s about 120 million people around the world who are accessing our ETF and index capabilities. There are more people accessing the markets, and investing in the markets, and participating in economic growth on their terms than never before in history. And from my perspective, there’s really nothing that’s more American than that. So that’s how I think about it. I think ETFs bring markets. They bring the market access. They bring transparency. And increasingly, they bring choice to lots of individual investors who are saving for retirement and thinking about their financial futures with the help of ETFs in ways that they couldn’t before. And a lot of the — you know, one of the pieces that we — that we put out recently points out to the fact that a lot of the households who own ETFs in the United States have — have median incomes of $125,000. So, you’re talking about investors who simply didn’t have market access before who, as a result of ETFs and indexation, can — can get diversified strategies to manage their risk the way more sophisticated institutional investors have and participate in the markets. RITHOLTZ: So, let’s talk a little bit about product engineering. Tell us a little bit about what that means. What sort of projects are these teams working on? It’s one of those phrases that definitely resonates. COHEN: I’m glad that it resonates. It’s something that we’ve been using for — for a few years now. And that team, which is global, there are product engineers in — in really every major region of the world. And they do two things. First, they help design the operating models and the investment process for — for new ETFs, how will creation redemption work, what are the characteristics of the index. What — you know, how will the index rebalance? Those types of things when it comes to new ETFs. And the second piece of what they do, which is actually really critical, is they continue to manage the structure of the product over its lifetime. So sometimes, we will identify something in one of those market quality statistics that, you know, let’s say it seems to be trading a little bit wide in the secondary market, and we’ll go out and we’ll talk to market makers and ask what’s happening. And they’ll say, well, it’s a little tricky to hedge because of X, Y, and Z. And sometimes, we can change something structurally and how the market interacts with the ETF to improve its investment performance in market quality. And that’s the purview of our product engineering group. So, I tell all of our teams, you know, I want all of our teams to be able to explain how they contribute to the active management of our ETF and index book, and that’s how the product engineering does by — by identifying the operating model and by continuously assessing and improving it. RITHOLTZ: So, let’s talk about the rest of your team. You have portfolio engineers, risk managers, platform architects, market structure developers, and product operating model designers. That sounds like some very intriguing job descriptions. Tell us about what a market structure developer does or some of those other really interesting titles. COHEN: I think they’re all exciting jobs, and I do have to make a plug for — for anybody who is — is considering going into investing. It’s never a dumb question to ask what — what is the job, but because there are so many different jobs. And I remember when I was in college, I was almost scared to ask that. But — but as you just pointed out, and it’s — it’s, you know, fun for me to kind of hear you walk through it, there are so many different types of ways to be an investor and to participate in an investment platform. So really, we do three things. Number one, we manage day in and day out. We are responsible for the investment performance of our funds, how we’re managing the portfolios through rebalances, through corporate actions, and how we’re managing ETF market quality. That’s number one. Number two is we are continuously improving our platform in the Aladdin technology that we use to manage our portfolios to make things that can be lower touch — lower touch to give us capacity to spend more time on, you know, new markets and new strategies so that platform architecture piece, how we create scale that’s kind of bucket two of what we do. And the third part is ecosystem leadership. And you talked about — you know, we talked about how we engage with liquidity providers, with stock exchanges. Earlier, you talked about the — the COVID volatility. And I think it’s really important and — and was a really interesting case study in the U.S. that a lot of the volatility guardrails that had been put in place by the U.S. stock exchanges over the five years preceding March 2020, market-wide circuit breakers, limit up/limit down, like the whole limit up/limit down framework was really only 10 years old had been tested a few times and had its biggest test in March of 2020. We engaged very deeply with stock exchanges. Remember in the U.S., ETFs are between 30 and 40 percent of daily trading volume, so those volatility guardrails really matter from a market quality perspective. So, focusing on the external environment for our ETFs, that’s what we mean by ecosystem developer. RITHOLTZ: You mentioned Aladdin. I just finished a couple of months ago the book, “Trillions” by Robin Wigglesworth, and he describes the Aladdin system really as the technological backbone of — of BlackRock from the very beginning and the secret sauce to that successful scaling. Tell us a little bit about — for — for a person who may be not familiar with Aladdin, tell us a little bit about that. COHEN: Aladdin is how we — we arm our investment managers, both BlackRock’s investment managers and the investment managers who are — who are Aladdin clients outside of BlackRock with best-in-class risk management tool. And it is the — the DNA of the firm. And I can say that actually because as I’ve shared with you, I was at the firm pretty much at its — at the beginning. BlackRock was started in — in 1988, and — and I started there in — in 1993. And the reason BlackRock was founded really was a group of fixed income markets, specifically mortgage-backed security experts who said, “We can take this technology that’s been built on the sell-side and deliver it directly to clients as a fiduciary to help them create better outcomes.” So, giving — putting better risk management tools directly in the hands of — of clients was really BlackRock’s founding mission. And — and that’s what Aladdin has grown in today. First, it was the system that all of BlackRock’s portfolio managers used, and then it became a system that — that other asset managers wanted to — to access as well, and it is really the — the backbone of how we — we look at risk and we run our portfolios. RITHOLTZ: Really intriguing. So, let’s talk a little bit about ESG generally, and then we’ll — we’ll — we’ll dig down a little more specifically. Your boss, Larry Fink, famously pens a — a letter each year to Corporate America’s. Tell us a little bit about why we do that and — and what — what’s the thinking behind that. COHEN: Larry writes a letter to start a conversation, and it’s really a conversation with our clients who are owners in all of these companies across Corporate America and — and what we think are — are the top of mind themes for the year ahead. And it’s a good integration of everything we’ve heard from clients, and how we’re thinking about the markets, and how we’re thinking about risk. And it becomes really a — a point of — of bringing people together us inside the firm and us with our clients to — to take a look at the world and what we’ve learned over the past year, and — and what we want to bring to — to the year in front of us. RITHOLTZ: Very interesting. Let’s talk a little bit about corporate governance. How do you think about that in terms of affecting risk? COHEN: The conversation about corporate governance is one we’ve spent a lot of time thinking about because, as — as you know, but it probably bears, you know, speaking to explicitly, in a lot of cases, we vote the shares on behalf of the clients whose money we manage. RITHOLTZ: Right. COHEN: And the question is do those clients want to vote the shares themselves? And something we did in December and it’s actually gone live this month or it went live at the beginning of 2022 was work to give our institutional clients and some of our comingled fund clients, but a — a good portion of our assets the option whether they’d want to vote their shares or not. So, it’s early to say are they going to take it us up on it or not, but that will be very instructive to us because our job is to help them create better financial futures, create better portfolio outcomes. In some cases, they may want to participate in the corporate governance process themselves. In other cases, they may want to intentionally delegate it to us, and we had a very big what we call investment stewardship function where we, you know, were very transparent. We publish the criteria in terms of what we think is important when we engage with companies, but some investors feel like, well, that — that engagement with companies is part of the value proposition that I hire my asset manager for. And some investors may feel, nope, I’d like them to manage my assets, but I want the votes. And we are really hopeful of increasingly being able to give those investors choice. (COMMERCIAL BREAK) RITHOLTZ: Let’s talk a little bit about ESG generally. You know, for a long time, it’s captured a lot of mindshare. People have talked about it, especially with climate change and the focus on the environment, but it doesn’t seem like ESG is captured as many inflows as it has, you know, sort of mindshare. What are your thoughts on that? Is this going to be a persistent gap or are we seeing more people, especially younger generations more interested in ESG investing? COHEN: I think flows are actually the tip of the ESG iceberg, and what you don’t see below the surface is the integration and evaluation of ESG risk across portfolios. And that has captured a huge amount of time and attention from investors and — and certainly from us. And it’s actually really exciting from — from an investor perspective that reminds me again dating myself here. But when I started at BlackRock, I — it was in — in, you know, 1993, and I think in the five years since BlackRock was founded, interest rates had dropped something like 300 basis points, right, like late 80’s call it 10 percent on the bond to — to seven percent. And one of the big topics of risk in the fixed income market was mortgage prepayments. And so, figuring out how to model that, articulate that, make that transparent better than anybody else, again a big part of BlackRock’s value prop that it was bringing to investors, and we are doing the same thing today with climate risk and with ESG integration. And we have integrated ESG metrics across our portfolios and transition risk metrics, so we can assess what sort of risks are there. And that’s the really the first step. It’s measurement, and transparency, and then decisions around capital commitment, and — and risk taking. RITHOLTZ: So — so I want to restate a little bit of what you’re saying. I’ve traditionally heard ESG described as I want to invest in a way that parallels my personal values, but you’re really describing ESG as a risk management tool, as a way to screen out potentially problematic concerns, sectors, companies, whatever. Am I — am I overstating that or is that a fair translation? COHEN: Both statements are actually true. It’s a spectrum, so what we need to do is give our clients choice and — and clarity, and — and help them articulate because often they’re not even sure where they want to be in that spectrum, but I would say the majority of the conversations that we have right now are much more understanding. Looking at my portfolio today, what are my ESG risks broadly? What are my climate risks? What are my risks to a net zero transition? And then the second question is how do I want to manage those. RITHOLTZ: Really, really intriguing. Let’s talk a little bit about no carbon and low carbon. That was kind of a — a hot topic a couple of years ago. I’ve always been a little perplexed by that because if you back out the big carbon producers in the S&P 500 everybody else who’s left are giant carbon consumers. How should we think about something like carbon? Is that the most attractive approach to dealing with I’m concerned about climate change or — or — or global warming? COHEN: It depends on what your goal is. And again, I think a big part of what our work has been is to offer a spectrum for investors who are trying to do different things. And even more importantly and this has been meaningful to me as a personal investor, offer transparency around what it all means. So, something we did in December is we published a metric for all of our public index and all of our ETFs called the ITR Metric, Implied Temperature Rise. And the beauty of this metric is it’s really easy to understand. You can pull up anything on our website. You can see the ITR Metric, and you can see is it Paris-aligned or not, meaning is it, you know, 1.5 degrees or lower or is it higher? And — and we show the spectrum of — of bands and ranges. And — and what you can see is, you know, to your point, 90 percent of — of companies in — in MSCI ACWI are not Paris-aligned … RITHOLTZ: Right. COHEN: … but step number one is — is getting transparency in terms of your book, and then deciding do you want to take the first step and move to something that is a screen diversion of — of that index or go much further and — and take more targeted exposures. And what we hear from clients is, you know, they want different things, so putting out that spectrum and putting out those measurements really, you know, looking to be champions of transparency in this world, which as it emerges can kind of become a Tower of Babel in terms of the different languages and different metrics. So arming investors, both institutional and personal investors, with the tools to understand what does this mean for me, that’s really been the priority. RITHOLTZ: That’s really interesting, the old Peter Drucker line is if you can’t measure it, you can’t manage it. And having metrics sounds like a great, great start. So, let’s talk a little bit about what it’s been like the past couple of years with the pandemic, and then last summer delta, it felt like it was ending, and then omicron hit. I keep hearing all these firms are trying to get their staffers back into the office and on the trading desks. Tell us what — what you guys are doing. Are you going to have everybody back in the office? Are you going to be remote? Are you going to be hybrid? What’s your thinking about the world going forward? COHEN: We are going to pilot a hybrid model, and we actually started piloting it in certain parts of the world, including New York City, prior to omicron. And what it was was you are welcome to back — to come back to the office for five days. If you would like to take two remote days, take two remote days, and — and we’ll see how that plays out. And then omicron happened and we kind of, you know, pulled back on the pilot and — and we’ll put it back in hopefully in a few weeks. I’m — I’m in the office right now. RITHOLTZ: I see. COHEN: I like being in the office. And I think we’ve had a whole bunch of learning. So, I mean, of course, our number one priority is making sure that people are safe and that people are healthy, but healthy doesn’t just mean, you know, being safe from the — from — from the virus. It means being mentally healthy. RITHOLTZ: Right. COHEN: And — and one of the things we’ve learned is — is a lot of us really missed the connection with other people. So, creating an environment where you can have those moments of human connection in the office. And, of course, there were moments of human connection that people, you know, particularly with kids of different ages we’re — we’re having at home that they didn’t have before, so trying to take those learnings from the pandemic and employ them in a way that makes people healthier physically and healthier mentally, that’s what the goal is. But I imagine we will be experimenting for a while both based if conditions in the world change and — and as we see how it works in our offices. RITHOLTZ: Yeah, the — the challenge has been how do you manage corporate culture over Zoom or remotely. And BlackRock has a very specific corporate culture. Lots of other firms are trying to maintain that. Finding that right balance seems to be a work in progress that we’re all going to be dealing with over the next couple of quarters or years for all we know. COHEN: Absolutely. RITHOLTZ: So, let’s talk a little bit about the rising demand for ETFs. It seems that lots of institutional traders are driving ETF demand. Can — can you talk to that a little bit? I’m curious as to your perspectives. COHEN: What might surprise you to hear is one of the biggest adopters of — of ETFs has been other asset managers. So institutional asset managers, you know, like, you know, BlackRock’s own asset managers outside of the index business who are integrating ETFs into their own pursuit as alpha generally to, you know, use ETFs as a cash equitization tool to look at ETFs alongside other sources of market beta like futures contracts or swap contracts, to look at options on ETFs. Often, we’ve seen — and — and this was actually a very interesting story going into the Brexit referendum, there weren’t a lot of volatility place out there, but there were some U.K. — we had a U.K. equity market ETF and — with options — with options ecosystem around it. An options open interest went up 1,800 percent … RITHOLTZ: Wow. COHEN: … into the referendum because it was a way to play volatility, and sometimes that would be an asset manager’s first experience of an ETF because they were looking for some sort of non-linear payout. And then they would become more interested in integrating ETFs as another wrapper, another tool in their overall toolkit in — in making money. So that has been one of the largest sources of — of adoption of ETF. RITHOLTZ: I have a very vivid recollection, I want to say 15 or 20 years ago. Hearing certain institutions say — or institutional fund managers say, “Look, we want to get exposure either to broad equity market or to the specific sector, but our due diligence and our research process takes so long that by the time we pick a particular company, a particular manager, a particular investment, the move is half over, I could just use the ETF and get instant exposure to X. Do you still see that sort of behavior or am I going too far back in history? COHEN: No, we absolutely see that behavior. Often, you know, people will use the ETF as a placeholder as they do that research and figure out where they want that exposure to be specifically. So sometimes they have longer-term horizon, sometimes they have shorter-term horizons, but again, this is actually a key reason why we see that increase in ETF trading during high velocity markets as they are very convenient and transparent way to manage risk and pivot exposures during fast-moving markets. So, you can make quick changes to adapt your risk profile and work into what your longer-term target state might be, and we do continue to see that. RITHOLTZ: Really interesting. Let’s talk about thematic ETFs. They seem to have exploded in popularity the past couple of years. How exciting is that for you guys to work on? And what do you see coming down the pipe? What — what’s new and interesting? COHEN: It’s so exciting that we can increasingly index new types of strategies and access new types of markets, and — and that’s really what we’re about, bringing the markets to investors on their terms. And, you know, one of the things that really brought it home for me with some of our climate-focused ETFs was being able to find something that my kids connected to. My daughter is a big environmentalist. She’s a part of her school’s Environmental Action Committee, and I think she never thought that ETFs were — or investing was particularly relevant to her. And talking to her about a climate-focused ETF, it was a conversation. So, part of how we are bringing more people into the markets is helping them connect to the themes that are important to them and then helping them use those as a way to start to construct the portfolios that will deliver the outcomes they’re looking for. RITHOLTZ: So, one of the big things that we’ve seen has been the rise of direct indexing. What are your thoughts on that? Is this a challenge to ETFs? And we’ve seen a lot of big institutions buy direct indexing shop. Tell us a little bit about your thoughts with that. COHEN: Direct indexing is a — is a very important part of the index and — and ETF ecosystem. About half of our book actually is direct indexing versus ETFs. Increasingly actually, there’s also been attention to what — to — to smaller direct indexing opportunities more for individual investors where we — we acquired Aperio to — to offer that service as well. So, I think direct indexing for individuals, for institutions fits nicely into that overall ecosystem. When you come to those things we talked about around what value the ETF wrapper brings, that secondary market liquidity, the transparency, that’s the role that ETFs play, but there’s certainly a role for a — a very important role for direct indexing, too. RITHOLTZ: Really intriguing. Your bio mentions that you’re an advocate for employee networks. Can you speak a little bit towards that? I — I know this is like a total subject change, but I don’t want to not get to this question. Tell us a little bit about employee networks, and — and what are they? And — and what role do you play with those? COHEN: I’ve been a big beneficiary over the course of my career of the networking and visibility that comes from being part of, you know, in my case, women’s networks. It’s an opportunity to meet and connect with people you wouldn’t otherwise know and an opportunity to — to think more intentionally and — and strategically about your career and — and maybe expand your universe of role models. So that’s how I participated in employee networks. And at BlackRock, one of the things I love about being a — a senior advocate for — for many of the networks is I really believe that you can’t do your best work unless you can talk about your challenges both inside and outside the office. And a lot of times these networks create safe spaces for people to talk about what they’ve struggled with, how they’ve overcome that. And — and — and I find that really inspiring and — and it helps me recruit great people. So — so it’s something that’s very important to me. RITHOLTZ: So, let’s stay with that topic, finance is notorious for not having a lot of diversity or inclusion. I know BlackRock has a couple of initiatives in that space. Tell us about them. COHEN: I’ve spent my career, you know, being asked the question of — of, well, what’s it like being a woman in finance. And — and we could talk about this for — for a really long time, what’s it like being a woman, what’s it like being a mother, what’s it like being a parent. And — and it’s always hard when you feel different no matter what. No matter what the source of the differences, I think it can be very hard to — to feel safe and to feel secure amid differences. And — and that is what we try to sell for, whether it’s with employee networks, whether it’s, you know, creating mentorships and role models, although I’ll have to say a lot of my — my most memorable mentors weren’t necessarily women. But again, thinking about those challenges, which are different for — for different people, talking about them and making people feel safe and raising what they are, that’s what we try to focus on the most. And — and probably, I think that’s what’s changed the most over the course of my career. I think early in my career I felt the imperative was to, you know, not — not address the fact that there were differences and just get out there and — and try to act like everybody else, and — and that didn’t necessarily work for me. But, you know, it was sometimes hard to talk about that. And so, talking about it like — and having transparency to those things has — you know, has really been the first step and — and one that we have to take again and again. So, I think it’s — it’s not an old conversation, it’s not a dated conversation. I am incredibly proud, Barry, that the leadership team of the ETF and index platform is majority female. And we talk all the time about how to increase our diversity — diversity of thought, racial diversity, geographic diversity because we think if we bring our differences to the table we’ll perform better. (COMMERCIAL BREAK) RITHOLTZ: So, let me throw you a curveball. You’re short of a bicoastal, New York and Boca. How do you split your time? And — and given what we’ve learned about working from home, can you operate from anywhere you have an internet connection? COHEN: I — I live in New York, Barry. I live in New York. I’m in the New York City office right now. I have a home in Florida. And — and I’ll tell you a funny story. My — my husband loves Florida, so we’ve always — we’ve had a home in Florida for a while. He — he’s a — he’s an investment manager, a triathlete. He cycles a lot. He plays a lot of golf. He, you know, does some work from down there. But I was always in Florida for vacations and weekends until the pandemic when during that 2020 spring lockdown I spent about six weeks there and — and liked it more than — than — than I had. So — but now Florida is — is — is really weekends and — and vacations for me. But last night, you’ll like the story. My daughter texted my husband and said, “Hey, dad, I’m wondering. Are you coming home tonight or are you going to be in New York City?” And, by the way, my husband and I were at a restaurant in New York City. So, the kids like to joke that my husband lives in Florida, but — but actually, we are — I am mostly here. And — and between May and November, he is mostly in — in New York City as well. RITHOLTZ: Really, really interesting. So, I know I only have you for so much time. Let me jump to my favorite questions that we ask all of our guests starting with tell us what you’re streaming these days. What have been keeping you entertained when everybody has been stuck at home? COHEN: I have three categories of — of things I stream, and I’m sure you’ve heard this before, Barry, the things I watch with my husband, the things I get my kids to sit down and watch with me, and — and the stuff I watch for myself. So — so in each category, my husband and I, we love Ted Lasso. That was one of our favorite things of the pandemic. And we also love Yellowstone. My — my kids will not sit down to watch the same shows together no matter how much I try. So, with my son, we’re watching Boba Fett and the Mandalorian. With my daughter, it’s been Emily in Paris. They are 15 and 13. And, you know, I’ll tell you for myself, I finished the — the sequel to Sex and the City and Just Like That, and I loved it. It was, you know, women around my age talking about dealing with their teenage kids and finding meaning in their lives. And I know the reviews were — were pretty mixed, but I really loved it. RITHOLTZ: We talked briefly, but you didn’t give us any names about some of the mentors who helped shape your career. Tell us about those folks. COHEN: I have had great mentors and sponsors, and I think it’s important to talk about both. I don’t think until more recently in my career I understood what a sponsor was, a sponsor being somebody who will actually work intentionally to — to move your career forward. But the — at Goldman Sachs, I had the, you know, privilege of working with John Rogers who asked me to testify to Congress in front of the House Banking Committee on — to represent Goldman, which was the scariest thing I had ever done. And what John told me, which I will never forget, it — it’s the scariest things that once you do, you are the proudest of — of having done. Marty Chavez, who I also worked for Goldman, was a tremendous mentor. And I think importantly, as I said, I’ve had — I’ve had some great female role models, but I’ve had some awesome male mentors. I think my high school calculus teacher Judy Conan (ph) probably changed the course of my career. So those three are my biggest mentors. At BlackRock, my — my boss Salim Ramji, our Head of H.R. Manish Mehta who was the — you know, had this job before me, they’ve been great sponsors. And I think being intentional about providing sponsorship as well as mentorship is something we think about a lot. RITHOLTZ: Really interesting. I know you read a lot. Tell us some of your favorite books and — and what are you reading right now. COHEN: I am — I’m sure you are as well, I am a voracious reader and I’m usually reading multiple books at a time. So, the two I am reading right now I kind of usually have something fiction, something non-fiction. The nonfiction book I’m reading is “Digital Body Language,” which in the, you know, situation that we’re in right now, it’s fascinating how — how — how we create a digital body language, how people respond to it and what you need to think about it. That’s my non-fiction book right now. And my fiction book, I’m — I’m a few chapters in and I’m loving it, it’s called “The Louding Voice,” and it’s about a young woman, a young teenager in a rural Nigerian village who gets married very young, and — and is thirsting for an education because she wants to find her louding voice, and that’s probably a theme in everything I read about women — people in general, but often women finding their voices and using them. And one of the books I read recently that — that had a big impact on me, a colleague of mine actually gave it to me when I was promoted to CIO, it was Indra Nooyi’s memoir, “My Life in Full.” And I absolutely love that book. She started out by saying, “I intended to write a book about my career as CEO of PepsiCo and not write about my life as a mother and a wife. I didn’t want to write that book. And what I ended up writing was exactly that book,” because when you’re a mom or a parent and a wife and — and how you show up with that to the office, you know, as a CEO weaving all of that together, she did brilliantly and it was really moving. RITHOLTZ: Really interesting. I have a book recommendation for your daughter. This is a fascinating book called “Windfall: The Booming Business of Global Warming” by McKenzie Funk that describes, since your daughter is interested in ESG investing … COHEN: Yeah. RITHOLTZ: … it describes how the entire world to finance slowly started recognizing investment opportunities both at, you know, the individual company level, the ESG level, but also at the venture capital and startup level, and how Wall Street has arms into all these industries that are working on either climate change or, you know, electric cars. And — and — and that book is ready about five years old. So, when they talk about firms like Tesla, they’re still fairly nascent. Maybe it’s seven years old, 2014-2015. But if she’s interested in that, it’s a really well-written book and it’s really fascinating. She may really, really enjoy it. Let’s go on to our next question. Speaking of younger people, what sort of advice would you give to a recent college grad who is interested in a career in either finance or investment management? COHEN: Ask all of your questions. Find people, ask your questions. There are no dumb questions. And — and if it sounds interesting to you, it’s worth having a conversation about it. I wish I had done that more. In a lot of ways, I feel like I — I got lucky. I — I told you I was the product of actually a diversity recruiting effort that led me to the — to the trading floor at Goldman. But if it sounds interesting, it’s worth doing the exploration. And — and networking and finding friends and just saying, hey, can I spend 10 minutes and ask you about your job? Doing that a lot, I think, is an awesome idea. RITHOLTZ: Really interesting. And our final question, what do you know about the world of investing today you wish you knew 25, 30 years ago when you were first getting started? COHEN: If you asked me 30 years ago what I thought about the world of investing, I probably would have said Gordon Gekko. I mean, I was really thinking Wall Street. And — and even, you know, when I was in college, that was the — that was the vision that I had. That’s what you had to look like to be — to be an investor. Now what I know is excellence looks like lots of different things in the world of investing. And, you know, if you’re a woman, if you’re a person of color, it’s — you can be excellent. And, in fact, if you’re a theater major, you can find a path. I think there is a superpower in being different. And my mother always suggested that to me 30 years ago, so — so maybe I should say that’s what I wish I’d believe 30 years ago when I was told. Now I know it’s true. RITHOLTZ: Really interesting. Samara, thank you for being so generous with your time. We have been speaking with Samara Cohen. She is the Chief Investment Officer for ETFs and index investments at BlackRock. If you enjoy this conversation, be sure and check out any of the previous several hundred we’ve done over the past eight years. You can find that at iTunes, Spotify, Google, Bloomberg, wherever you feed your podcast fix. Check out my daily reads at ritholtz.com. Follow me on Twitter @ritholtz. I would be remiss if I did not thank the crack staff that helps put these conversations together each week. Mark Siniscalchi is my Audio Engineer. Paris Wald is my Producer. Shawn Russo (ph) is my Researcher. Atika Valbrun is our Project Manager. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.   ~~~     The post Transcript: Samara Cohen appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureMar 29th, 2022