E249: How LPs Unlock Liquidity Without Selling

Alex, so you allow LPs to loan against their illiquid positions. Tell me about this and how does one go about loaning against their illiquid position. Sure. So we essentially provide Nav loans where LPs in private fund interest can they can use it to service collateral. So we assist the underlying portfolio. We model the expected cash flows and structure credits. Facility or term loan against that. And this is essentially just the way to unlock liquidity without forcing a sale. And it's just designed to be efficient in discreet for the LPs. An LPs needs liquidity to have the option to do a secondary. Because this is a second option of getting a nav loan. In which case it's just somebody get a secondary versus a nav law. So same thing is at the discretion. I mean, with a secondary it's permanent. So you exit thing at a discount and using the future upside. With a loan allows LPs or potentially the GPs to assess the liquidity whilst rotating ownership in that particular fund position. And it's particularly attractive when someone has conviction on underlying assets. But something needs a liquidity for personal other business uses while the investment uses. Give me a sense for your scale and how many of these deals have you done? And who have been the early adopters or who have been the counterparties on these loans? So I mean, we've structured loans ranging from a few million up to about 15 million dollars. Our platform is designed many to scale for the needs of ultra high-neckwood family offices, small institutions. We haven't really focused on large institutions. So we've tailored more for high-neckwoods. They've got investments in olds and asfishers, also growing. The general need for liquidity has become more prominent both from the fund side and both from the investor side. So that's kind of like the vertical we've servicing. We see a massive demand through the wealth management channels. That's been a massive need and demand push from us. And that's where the main focus that we've focused on. Give me a sense for the rates in the market today. So from, it really depends on the quality of the underlying collateral. So we look at diversification, the maturity of the fund. The rates generally fall on a high single digits to low to routines depending on the quality. So your blue chip type finds will be on the lower side. And then you're more risky or you're a major type assets that we'd look at. We'll probably be on the low to routines. And the pricing rate just reflects both on the liquidity of the asset and the flexibility that we're providing. That's sort of how we price it but it's really depending on the underlying collateral. What are larger institutions doing versus smaller institutions? With the high-neckwood investors often, so from a use perspective, they're using it mainly for personal liquidity needs but institutions such as pension funds and diamonds, large family offices. They're using the these sort of nav loans for the portfolio management, capital calls, and rebalancing. So on the one side, we've seen ultra high-neckwoods are using it more like personal tax, etc. And then the large institutions and family offices, it's a lot of restructuring, optimizing the portfolio, potentially finding an arbitrage to retain the existing positions and receive the upside that they intended and to reinvest it elsewhere. That's where we think there's a massive difference in the use of fees. So large wirehouses, JP Morgan's common sacks, they enter and least provide these kind of loans. Are you competing against them as a different part of the market and telling me how you fit into the ecosystem? So directly and indirectly, a lot of the larger banks, such as JP Morgan, go and they focus a lot on their clients, we've noticed, and find that like on their platform, whereas we're a little bit more bespoke to a large extent. Also from a timing perspective, client onboarding, our main focus is the lending relationship. We're not trying to get into the wealth management space, etc. So we're trying to be as on the essence and flexible as possible. And that's kind of how we differentiate. Whereas when you go to bank, there's a lot more comprehensive services you can't receive as well. And that's sort of how we come in. But we get, yeah, we get a lot of bespoke requests, and if we depend on the clients, especially with speed, that's where you find there's a big differentiation in terms of the bespoke speed needs that they have. And how do you balance speed with doing enough diligence? And what exactly are you diligenceing on these assets? We get it overview of the underlying portfolio companies, but we don't do a deep dive into each single one. We rate it so we have a lower LTV to kind of cancel a little bit of the risk. Hence, while we're not taking much of a discount on the assets. But yeah, we've got an amazing team that goes through a deep dive in terms of like the documents that were received through the underwriting process. And then we take a conviction on that, based on giving them an LTV rinse of terms, as mentioned, but proved like previously. What are the LTV rates today? Anything between 20% up to 40% we've done. So depending on the the use of funds, depending on the unlike actual, we've stretched up between those depending on the interest rates that they're looking to get. We've changed it quite a bit. So we've got to whole standardize model, but we've also got very bespoke ones and that rate depends on the client by client face. So you may have 10 million in assets. You could loan out two to four million depending on various factors and depending on whether you could underwrite the underlying assets. Correct. And the idea being that if you have 10 million dollars, as you mentioned, sequir, a blue chip, Andrewson Horowitz, then you more or less know that it's unlikely to go down more than 60, 80%, you have that comfort for yourself and you're really looking to diligence the underlying, whether they own the assets, it's kind of like the ownership versus the actual portfolio. Correct. And we also have to have a look at that. We've got existing pledges or other credits liabilities. So we've got to just assist them from a personal perspective just to make sure that all of that is in place to make sure that we can retain the funds, the principle of the interest of the time. You mentioned high single digits, low teens, what are some of the drivers? So what do you need to see to get them the high single digits and what derisks it to you as a as a investor and as essentially a holder of these assets? Correct. We've got the funds, the ventures, the sort of quality so that we've kind of built our own analysis of a range of different funds in the markets and we work backwards from there. That's kind of our dictation. But every use case is different, like we've had clients with one or two fine positions and we've had a client with up to 30. So depending on the portfolio, that that's kind of why it becomes like more of a client for bespoke type solution from a cash redemption, private income, private credits would be easier to get towards those that price range and we work in towards getting on other other other asset classes like VC towards that price range of the time as well. Maybe because VC is more volatile and products. Yeah, longer term that we found that that sort of we are ranges fitted. But over time, we look it's bring down the price overall as much as possible for all asset forces. What should larger institutions do today in order to gain liquidity and how do they solve their liquidity issues? From the large institutions side, you've seen range of different uses. Like nav loans are very prevalent. This is not really a new concept. There's amazing players out there in the market, larger credit funds and banks that do this to for the institutions. But from like a rebalancing perspective, like nav loans can be quite a useful tool for them just to rebalance their portfolio, get some cash in, keep retain the positions that they've got. Just being aware of if they can pledge their assets, going into new investments or what they have on the existing portfolio, that would be quite a useful data point for them to understand. On the secondary funds, it's really on a case. I can't speak on whether they should go through a secondary process. But any sort of given liquidity situation, the premise of just knowing that you can attain liquidity, whether it be through the secondary market from a sale or through a loan, is quite a positive data point just to understand whether you can or cons. And then from there, it depends on through the process. Of course, if that day discretion, sometimes it's more preferable to get rid of the assets, go through a discount, the tax, etc. And then that process then, because if you go through general liquidity process, there's the opportunity class, there's a time, there's a process. That's why we've seen a lot of reception on the loan front because you don't have to go through and find a buyer or go through brokerage firm, etc. Whereas if the collateral fits certain criteria and you're happy with the pricing, you can keep the asset and just get a loan against it. We've seen quite a big speed difference on the nav loan perspective versus the sale. Are these typically recourse loans, non-recourse loans, and tell me about that dynamic? Certain breach of assets that we've extremely comfortable with, they'll form on a non-recourse side. For certain assets, they may have limited recourse for a full personal guarantee, which a lot of ultra-hunted ones are very comfortable with in the space, based on their background, especially working with facilities and credits. So yeah, every depends on the underlying collateral. But we've been negotiable with a lot of use cases and a lot of channels that we've built deep relationships with. And it's always been curious to me that these loans that underwriters aren't looking at the purpose of the loan, for example, buying a yacht on one side versus making an investment in theory, the investment has value, should go up, and oftentimes these are the best opportunities where people are willing to take out loans. Why do you think that the purpose of the loan doesn't play more into fact, and more as a factor, and perhaps I'm missing this point, is purpose of the loan kind of a big factor? As a massive driving fact, so we've seen most of our adoption happens through third parties who manage the wealth of a lot of these LPs, or sometimes GPs, where either from tax, accounting, or wealth management perspective, they see the opportunity to get leverage against illiquid assets. It's a very valuable tool for their clients. And so that's where the purpose is drive, whether it's for re-banancing a portfolio, being the CRO of a family office, whether it's just wealth management and diversity for an individual or a family office to get personal equity, or to make other investments that are very timely, to find an arbitrage or for tax, we've seen the purpose definitely drives the need. We've also seen just some use cases where we've given terms to individuals and families, just for them to understand what they can get. They may not need it at the point. They just want to have an indication of what funds would be accessible through us, and that they can get liquidity to make them a little bit more comfortable keeping the assets. At their feeding purpose drives the need for liquidity, but also just having this as sort of like an insurance policy to know that you can get it for certain assets that you have got an investment with, it gives you a little bit of insurance policy person needs to know that these can be leveraged if the need for liquidity comes. Set another way. It increases your risk tolerance, it decreases your fragility, knowing that you could always borrow media at a higher rate than you would like, but you could always borrow some standby loans if something happens if you have a capital call unexpectedly and things like that. It makes the investing less fragile. A big use case and specifically in venture, but also in other classes like private equity today, less so in private credit is, GPs are having trouble making their GP commits because the time to DPI is long amount of time. For the use case of a GP, let's say they're on a fund three, and their first two funds have not gone liquidity. Talk to me about how a GP can leverage their previous, both GP commits as well as carry in order to underwrite their GP commit in the third fund and just some lessons learned from that. Our main focus has been on the LP fund, but of course, naturally we've received a lot of demand from GPs, which is some GPs that are all P's of funds. We don't focus on carry, they're just not part of our call business model, so we focus on 40 funded positions. We've seen a range of different solutions in the GP fund. We try not to push just our products, so they've got a range of different solutions. I mean, some funds have got continuation vehicles, they've got existing subscription lines, so they're paying on the use of the funds, but the main use case is just more on the personal side, where GPs have come to us either to get a personal loan, personal reasons or making other investments, as a lot of their network is tired and they're illiquid vehicle that they started or co-funded, and they've also seen a lot of use cases where there isn't as much DPI as expected, which happens normally in the private markets, and a lot of GPs have come to us to kind of get the LP sum liquidity and the interim, which LP's consane for, what they would like, and they would like to retain the position of the fund. So we've seen a range of uses, so we're just a tool. We kind of like just an open-ended tool that they've been having hand for their use, but it's really, there's a range of uses that they might keep, and they sound like we probably don't know, so this data. And I want to stress test the model a little bit. So you said 20 to 40% LTVs, oftentimes for GP commits or, you know, it's like the house car baby, you know, it's like these small purchases that people need to make at some point in their life cycle. And take into the extreme, let's say you have a portfolio of 500 startups or many different assets. Is there always a amount of money that you would loan against? Could you push that down to like 5, 10%, so for somebody to fund their GP commit, or is it kind of binary, we like these assets and not, and then it's within this window of 20 to 40%. It's a mixture, so we do have a more standardised approach where it does fit within that 20 to 40, but we are flexible. So our loan ranges have been roughly between one up to 75 million dollars, we can take in. But for certain cases, we can lower the LTV, like you mentioned, to lower build the risk. So if we comfortable with the individual or the borrower, and so are the asset cars from an underwriting perspective, we can be a little bit more flexible on a bespoke basis. I know you're very asset driven, but behaviorally, it must matter to you, the borrower, their credit score, their track record of paying off their loans. How much does that factor into the process? It definitely has a strong factor. We don't go through, we don't change the credit school or anything like that, as these aren't one sum of loans, but we focus on just understanding, A, the use of funds, their history from a personal balance sheet perspective, that is important. So we do take a view on the personal financial statements or the statements of the family office to understand what existing leverage has happened, previously as we paid back. So there's a bit of a track record in terms of managing financing or what other pledges have been. So yeah, that is a good indication to understand the use of funds, even though we don't limit it, it's quite important. So whether it's to make another investment, to know whether investment is going to happen, or whether it's to for personal uses, God forbid, a divorce or if they need to put like a family emergency, it's important for us to know the use of funds to understand that all this principle might be used at the given time, all up front, all of your use over a period, and do that other, do they have other methods to bring in income, either to pay the interest, or we could do sort of like a reserve interest component whereby part of the principle we would reserve a proportion of interest up front, so that they're less stressed to pay at the end when they when they pay back the principle. So there's different structures that we happy to accommodate based on the borrowers. We're circling back to this use of funds for your investments. How positive of a use of fund is that if you were funding a new investment? How would you rank those range of uses? Like what's the best use and what's the worst use? I'm just I'm using more holistic language, we're really like from a risk standpoint, as as the creditor, what was your ideal use of funds be and what would be the worst use of funds? How would you rank them? I say more on the business side to make other investments, or capital course because then we know where the liquidity is being driven to from an asset allocation perspective. So those were to be seen as the collateral that quite for a bit we would need to seize in a collection perspective. Then we know what we can take conviction on. In on a personal side, those are we think a little bit more risky, but it depends on the case by case basis. Those are needed for personal uses, but then of course if we comfortable with the underlying collateral that he would use from if we were to take a personal recourse, it's hard to rank in too much, but I'd say when the business case perspective, it's easier to say to follow the flow of funds to understand like where funds are going, because we've got a little bit of a conviction on the assets they're looking to invest in, or the capital course they're looking to make for those certain underlying funds, or we've got a certain conviction on where those are driven to. That would help us just easy to manage as opposed to if the funds go elsewhere, I'll be confident we can receive the principle and the interest. How long on average, not the mean, but the median time that alone takes, and what's 80th percentile? So our average loan is roughly 24 months. We do loans between one to four years, and we can refinance it based on the need that they have, and loans can take relatively, if we comfortable with sort of the funds, they can take about two weeks to the from initiation legals to the point, to more complex cases can take up to truthfully about 14 weeks. I'd say lower, but to manage expectations, the longest we've done is like 14 weeks. So it could range between that, but if we comfortable with unlined, we can get just an history documented place, isn't to me, different legal structures from a trust perspective, it's a trail take on the shorter side. Last time we chatted, you said something extremely interesting, which is you're now partnering with funds to be stand by Nav loan lenders, essentially. You'll partner with the ABC Growth Equity Fund, and if any of their LPs need loans, you've under in the funder, you're up to date on the fund, and you could underwrite it quickly and provide that kind of standby liquidity. I think this is going to be a big trend in the industry. Talk to me about that, and do you have any examples you could talk about, whether named or unnamed? We are in the like discretion with the tools, like the actual names, but we have been approached by some private equity funds that I've got previous ventures, DC funds, and they would just like to have it on hand, so kind of saying the certain indication to the investors that it makes a little bit more evergreen. So we've seen a few of those approaches. It's a little bit difficult to do on like emerging managers in the VC space, but definitely in need, we would love to cater for, or we see the need arising more and more. To have illiquid funds, they've kind of been pre-screened, as you go through raising, to a certain extent we've received data and just the indication from a lot of GPs that it helps to a certain extent on the fund raising process, because then investors know that the fund can be leveraged, it's been pre-screened, and it can potentially help them raise more. We don't have specific data, so we don't want to overstate anything, but that is some feedback we received, and that is a channel that we are growing and helping with. We're active in the GP stakes field. We think it's a really interesting field, and it's one of those situations that's solving its liquidity needs just in time. You have these like 10-year funds that turn into 14-year funds, and now people are doing evergreen funds, and have you looked at that space, and what are your views on the space? Ever wanted to explore the world of online trading, but haven't dared to try? 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There's a lot of these small, larger funds, it's great funds, that kinds of point capital, and I think it really depends on just the need that they have. Sometimes as mentioned, there is the opportunity to buy arts, pay position, and it's more preferable than a loan. So it's great to have this as a customer in life just to have as much optionality as possible. It's really just important both from the supply side, like being the GP or the buy side, just to know you've got all these solutions in place. Because it really depends on the person at the end of the day. Sometimes from a financial standpoint, a loan or a secretary may make more sense, but their preference based on the personal relationship with the fund or the personal conviction on the asset, or their personal liquidity needs. So I think it's just really good from on the Eastern space position just to have flexibility in options. So we're just trying to fill that one gap, the one gap on the lending side. So I think both are critical in the market. Tell me about the origin story. How did you go about founding Liquid LP and how did you get into this business? Sure. So my background has been more than from like VC fund business space. I've started a few companies prior in South Africa, one in Australia, had some success, had a failure, but naturally just through kind of my entrepreneur progress, I've always been one that's had an actual loving and building relationship. So I had a lot of relationships in the in the final space and executive space of a lot of late stage PRPO companies and saw similar models providing liquidity against private shares. So we started the business originally supported to focus with city bank to focus on lending non-recourse loans as an employee benefits against executive shares in PRPO companies. And as we started to try push and grow their company, we find a lot more product market fits focusing on LPs. In one of our earlier backers, which was a great fund of Atlanta, they saw our growth and they would be amazing to work with. And then we kind of like reposition the business to focus on the LP segment based on a lot of internal and external fits for those markets. So they further backed us and they've been amazing and they've and it's kind of we grew more into the LP segment and we learned that we would rather focus on diverse more diverse portfolio of assets as opposed to single fund single company positions for range of reasons. And naturally our network was more in the LP and GP space both with the fund and ourselves personally. Those are naturally progressed but it I'd say came originally from seeing the opportunity with PRPO lending, which there were a lot of great players in the space. We just wanted to focus on more on the tech side and the platform approach. And then actually just based on a lot of conversations and product market fits, we shifted and to focus on this and that's kind of how we evolved. What are some unexpected risks in providing nav loans and what are some kind of tail risks that you encounter and then they solve around? I'd say the plaguing of the assets and disclosure is very important. So when underlying we've had a few cases in the past, we've we've underwritten a range of assets for a certain borrower that was that was inquiring. And only after like strong due diligence we find out that there was other assets that they didn't disclose that they've plagued that they still paying off or if there's like double plaguing which is of course illegal but that takes certain due diligence and there's there is technology but I think it's still growing in like the blockchain space where you can only pledge things once but right now a lot of its contractually based so that there was one challenge we did face in a few cases that we didn't go through but we had to uncover. In the private markets it's very hard to kind of just have conviction on assets especially based on like no name brands. You really just need to it really comes down to like the performance, the use of funds, the quality and the trust of the borrower. So these are all like lie touch factors that just take experience. We've been fortunate to work with a credit fund behind us to help us in underwriting perspectives that came in with a strong credit view to look at you know more venture private equity type assets. That's helped having a complement of a great team that comes from a private equity venture capital alongside a credit fund and an amazing advisory board including Microsoft came from Post-Republic Bank. I think that combination has been quite a blessing to approach the markets but naturally different things arise from a process that I'd say those were the factors. And you've built out a great advisory board around you, telling about that process, what are your lessons are and where are some mistakes or some key lessons from building your advisory board. From previous ventures it always great to have great names on your advisory board. I think it's just important from the fond of perspective and to manage expectations from their advisor to kind of have certain milestones or expectations in place. I have found based on the stage of the company's certain advisors brought on board too early with big names. They're physically quite do much in the beginning because they're at a certain level where their impact is really more effective at their level. So I think it's important to kind of not get too excited like a horse before the carriage that phrase to bring on really no name brands even if they're very willing to commit and help. At an earlier stage, like you should try meet them where they're at as much as possible or just manage expectations to be like cool. We'd love to have you on board in the beginning and we kind of did that really well with this company. Like we had a lot of expectations with advisory board but we knew that we had to get to a certain level and that's where they became more effective and we managed that really well on both sides. I said that was like one learning that I learned from my previous businesses that we applied here. What are the different vectors of value add that advisors could bring in and do you get them all in one person and just talk to me about putting together a holistic strategy around the advisory board. So I think definitely introduce them to each other even before they may have like signed fully to see if there's like a culture fits to understand like there's a compliment and just a good connection from an energy perspective. That was one thing that's that suggests based on learnings. In terms of like giving them always a full strategy of like where they see the business and also understanding like what is one of their goals. Aside from a time commitment, dealing with certain advisors they may have certain entrepreneurial goals they'd like to pursue in the future they may have certain personal goals with their families. So just really managing expectations from a timing perspective and a collective perspective is super important and just to be real with them. And yeah and certain advisors I think are crucial with opening doors. Some advisors are great just to have the names there and to give like sort of an insurance or comforts or credibility associated with the business. That's a subtle like quite touch but it is important. But really getting them involved in whatever capacity they can bring. So like never to force something like in general life you could take all the water you comic it drink but if you could just bring it close and then let it do its thing in anywhere form. I think that's naturally quite beautiful in anywhere form. So I think not four structures but there's highlights in the strategy of the company where we're looking to go how we see the future seeing if they align and get in their contribution. It's great and not forcing anything I think just that's one thing you're kind of meeting them where they are seeing their natural strengths. They're natural weaknesses playing around their strengths and not forcing a donkey to run in the Kentucky Derby meeting that exact the way they are. Yeah like they may be certain advisors especially those moments sure that it reaches a level of self-exualization where they just want to impact the world and they're not too focused on like money and commercial where as far as you're more focused on like profitability and just generating revenue. So you need to understand where they are and even though they may like you personally and they may like the business like they in sensitive is not to make money. It's great they can make advisory fees and they could be maybe worth something but if you can just personally meet them where they are even if it's helping on their on their on their their philanthropy sides and then come in and bring in just their perspective very likely but just affording them the time that they need to focus on what's important to them back that was quite important because when you get they when you do get their hour hour eight hours a month whatever it's very impactful because they just feel personally just make them where they are. So I think that just it's more like a life. Speaking of meeting them where they are do you find that the best advisors are kind of driven by impact and they use the money and the advisory shares as a way to be shown respect or are the best ones the ones that are quite operated they'll go to about for you and kind of do the most amount of work and how do you balance the mercenary versus a missionary. Yeah so it's yeah it really depends on like the the environment. There is that mercenary um it's transactional focus which is great and sometimes it's like a it's like a second win that they get after the pair that they can like dive into an entrepreneur journey back the energy of like the founding Swedes and just enjoy the ride and like I think that's that's a whole certain channel um is certain ones they want to do well commercially and impact or there's certain people they were found they will have like a sentiment towards the founders such as myself or others and they feel just that this fund in the future will do great things. There are a line with the impact that I like to do now so if I can empower him or her at this stage to do well but kind of guide them also on like a person's virtual perspective on how they run their business from an ethical and daddy perspective um essentially you're kind of creating um any impacts on their question that they can be better in the future in maybe non-business activities. So I've seen that so that'll see and sometimes they're very open with it and you can just feel it by the way that they advise you are not a casualty people who employees or direct the business and from an ethics perspective and that's quite a it's a great perspective that I've noticed. Through the podcasts and through my expanding network I've gotten to meet these really transformational entrepreneurs people like Blake Shoal who started supersonic yes I spent the entire day with the founder and CEO of a public who's trying to digitize assets and they'll have these drives to make these big changes and evolve society and sometimes I struggle to translate that to the finance world and how do you bring that kind of uh vision and how do you get people excited about something like making money or or putting in loans how are you able to frame that in a way that gets people excited to wake up every day morning. Truthfully it's also been a personal challenge to me um because realistically sometimes the narrative of okay we lending money to wealthy people or privileged people but what is the impact there so like there is that Christian that comes back and forth from a personal perspective um internet there's a need we're solving so as long as it's driven towards solving a genuine need or like it's like helping people especially in a personal financial position or just altering or growing a certain market like opening up the ultimate market to become more investable just being you know another liquidity option that adds value those are great if you can I think engaging with people like one of the fortunate things you've had the opportunities meets definitely over thousands types of investors that invest in the private markets and to learn through them and kind of like just exchange dialogue exchange energy um that's been quite special just to like transfer a certain sentiment to people even if 80% of the people that we've engaged with we don't actually do a deal with or work with we can just send a good a good vibration to them or work with them or connect them to other people they could do business anything like that we've seen a lot of motivation from that side from a culture perspective having a lot of banter and like just laugh it's like very important culture out from South Africa so we we used to tease each other and it all came from love so like just think tension behind doing things we all here to like make money do well you know have a good name um but I think just of course like a lot of a lot of my personal mentors always say to me like Alex you extremely hard in yourself like you know you saw young etc you need to enjoy the journey the one thing I've learned as I'm trying to enjoy the journey which I'm not always very very present on is the company you keep on the journey so like working with your friends or new friends is quite important especially like if you can I say where your strengths are where it's on like the business development side or the operation side or and like investment side that's been quite important and I think that energy transfers into like external conversations um yeah that's probably the best on second say I just I can't lie and say that lending directly impacts you know like good causes that I hope that I could do bigger things in the future but that's how we try to um how we stay in mode of it and it's lying as possible in the interim there's an Alex from those who quote in my 20s if that is about this destination my 30s I realize there's about the journey in my 40s now I realize it's about the company so there is something about that go your on the journey with that's oftentimes underplay kind of your 20s you're just trying to get get to that milestone the way that I kind of I kind of look at it a high level and the way that I look at it is from a leverage standpoint so if you're an employee at a company you have your thing that you work on so and you go in you work on you have your little piece and that's great if you're the CEO of the company you might have hundreds of people that you're leveraging your impact is across the entire organization and you have each individual person that works in theory if you're a great CEO you empower them to do a better job you allocate resources then you have on the GP level you have maybe 15 to 30 CEOs so now you're you're you're basically managing the CEOs that manage employees and then like we do GP staking so we're partnering with these GP stakers and you you provide loans to the people that are maybe investing into these GPs why does that matter is it just finance we live in a world where there's different polar views on different things so I believe there's like the state basically totalitarianism communism fascism and then there's capitalism and free markets these are kind of two polarities that fight against each other and the absence of a strong equitable like efficient capitalistic market you start to get this kind of totalitarianism we're seeing that a lot today from from both sides of the total itarianism and I like to think that by bringing more capitalistic and free markets into the world we're playing a small part in thousands of companies may perhaps not a large part in any one company but to drive this kind of positive force into the world it's making people happier healthier more unified versus this kind of dark dark totalitarian polarity that that's kind of how I how I view it then and that's become a good organizing principle for me I agree with you and I think just in principle essentially you are if you sort of underwriting lending or buying GP positions or lending against LP positions with certain funds you're probably going to be lending against certain assets so you're investing you're lending against good investors we're probably going to be promoting good companies that sort of the thesis so you're kind of getting jobs and you're intensive as in people to work with good companies that would hope you do well they're probably got good a good mission and solving a good, a good solution so yeah I think the proliferation of like growing the economy in different ways that is a motivating factor so I think from what you said that really shines and look there's a cathedral parable a a foreman asks three workers what are you doing and this is out of cathedral and the first replies I'm laying bricks the second says I'm building a wall the third says I'm building a cathedral so I think unifying principles and understanding the concepts behind what you're doing again most people in finance will say that's on the spreadsheets that's boo boo stuff that doesn't matter and yet it has a six gear to people's motivation it aligns people it makes them work the extra hour extra two hours every day it puts more focus and intensity into that work it helps them recruit it helps them build narratives all these things that are downstream of purpose and I belong with behavioral finance one of the most underrated aspects of finance there I agree I agree I mean I can get very deep with you like I love generic talk to me if it's the intention mind anything is super important even if it's a simple question like how are you in every yeah in every situation with its internal conversations external conversations just having just like an undertone of love as we was at Mason it's just super important because like we are on this earth for like a short time life is short so yeah I definitely agree with you on that well not know Alex many people I know not know we were friends for a while before we even before I even knew what you did you've always been a good friend friend to me and we had a great trip to Charlie Monger's last Berkshire meeting and I spent some good time there and you've been a great friend I appreciate you and I look forward to continuous conversation blackwas appreciated thank you 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