Exploring ETA in New and Emerging Markets

Hello, and welcome to this edition of the ETA Insider podcast sponsored by the Polsky Center for Entrepreneurship at the University of Chicago Booth School of Business. I'm Brian O'Connor, adjunct professor of entrepreneurship at Chicago Booth, and joining me today, I have the pleasure of speaking with my good friend, Rob LeBlanc. Rob is the co-founder and managing partner of Ambit partners, a very unique and interesting search fund and ETA investment firm that we'll explore a little bit in today's conversation. Rob, thank you so much for joining us. Pleasure to be here, Brian. Thanks for having me. It's great to finally connect on LeBlanc. Yeah, I'm super excited for our conversation as I'm sure our listeners are as well. Rob, I think a great place to start would be just a little bit on your unique background and how you found your way into this world of entrepreneurship through acquisition. Sure, I'll try to gloss over sort of 20 plus years in a couple minutes. I grew up in Vancouver in Canada originally, and studied back east. I did my undergrads at a school in Montreal called McGill, and I studied business there, and also international development and environmental studies, kind of a weird fusion of things back in the day. But I was always interested in the intersection of sort of profit with purpose and impact through business. And from there, I started a pretty conventional corporate career, building my skillset first in management consulting based in Toronto, all those staffed internationally, and then in mid-market private equity also based in Toronto, but investing around North America. And that's where I sort of cut my chops in the investing world. And then from there, I went back to business school. I went to HBS back in 2010, and that was my first exposure to ETA and the world of search funds. And I think they're learning about that. I think two things struck me, one was I grew up in a family of small business owners, both sort of both parents, both sets of grandparents, even with, you know, succession issues between a grandfather and an uncle and sort of observing all that small business life, stumbling into the ETA world at business school felt a little bit like dinner table conversation. So in that sense, it was like, oh, you know, very familiar and interesting to me. And then I think secondly, my roommate from business school went back to Canada and did one of the first search funds there back in the day. In fact, the first search fund out of Quebec, the first francophone sort of search fund back in 2012, it would have been our 13, I guess at the time. And Rob, just for our listeners benefit, who was that and what acquisition was effectuated? Sure, that was my roommate was Leroy Haddad, and he launched noting partners with his partner, Dan Chaitrete, and actually going way back in time, we were all in undergrad, B.com, at McGill together back in 2005, not to put a date stamp on it, but it's been a minute since we've all known each other. And anyway, he went back, they bought a series of actually travel businesses and it's sort of a built a travel platform there since they're still running it. Actually, they exited all their investors seven or eight years later by way of a leverage recap and kept going and they're still building a platform there today and also now actively reinvesting in search and lower middle market private equity a lot in Canada, but throughout North America. So still sort of running their search platform, but then also now actively investing in the community as well. So like I said, I mean, rewinding sort of 10 or 15 years, there was a front row seat to that. It's sort of like one of your best buddies from business school, like doing the search fun thing. But I actually also concurrently at school, I studied emerging market venture capital and private equity and the emerging idea of impact investing or social enterprise. And it's actually the confluence of those ideas, sort of ETA emerging markets and impact that I decided to move over to South Africa after school and work on an ETA type platform, but in a way that at the time in Africa, no one had searched. So we took the similar constituent parts of sort of the ETA cocktail, namely usually older retiring seller, but good asset, no succession plan, capital, young capable operator that maybe didn't have capital and lacked experience. But at the time, there was no searcher. So in the conventional sense in North America, where you have jockey seeking out their own horse, acquiring it and riding off from there, we flipped it in South Africa and we effectively raised capital, bought horses, and then found appropriate jockeys. So very interesting. So mixed the ETA cocktail in reverse, just simply by the fact that no one was aware of or willing to launch a search fund in Africa. Sure, sure, 2012. First one was in Kenya launched in 2015. So, you know, years later, and then the first traditional search fund in South Africa was only last year, January, about 11 months ago, 12 months ago now. So you can see that sort of arc of the proliferation of the idea. It's taken a while for talent to latch on to the traditional opportunity. So at the time, we realized the ETA opportunity, you just, we had to sort of flip it. And so myself and my South African colleagues there worked on that business and bought about 30 businesses over the course of about 10 years. And when I decided to exit that is when I transitioned back into traditional ETA, North American ETA started investing in search personally, first in North America, and then actually stumbled into investing in search overseas, not by design, like not on purpose at all. It was sort of there and it put us actually searchers finding me looking for someone crazy enough to have studied search and invested in search in North America, but then lived and worked most their life in emerging markets. So it was actually credit searchers for somehow tracking me down and convincing me to take early units and early search funds overseas in new places like Africa and Southeast Asia. And then that stumbled into what Ambit is today. We realized, oh, what if, like other asset classes or business opportunities that start in the States and sort of build some momentum in Europe. There's sort of this migration of the concept abroad. Wouldn't it be fun to play a part in that evolution? And when I say we, it's two of my former sort of colleagues in the impact investing platform that we built in South Africa, Neil and Andrew, who you know, as well now, you know, years later, but they had studied traditional search and ETA at INSEAD. And we're similar sort of emerging market SME, ETA, Dorks, like myself. And I was going to use the word enthusiasts, but you know, yeah, enthusiasts. It's much more, you can call it what you will, Rob. And we just thought, you know, what if great young talent, just like that's pioneered the model in North America, what if similar folks wake up to this opportunity overseas? Wouldn't it be fun to play a part in that? So we threw 2020, it's all been a bit of a blur and quite fast. We, we started investing personally, just the three of us sort of in a little syndicate to build conviction that that was a real thing. And when we were convinced of the deal flow, and in particular, the acquisition opportunities in these countries, we decided to formalize, you know, format, but raise a fund. And we did that, our first fund in 2021, we raised it. And it's about $30 million to do 60 to 80 searches in markets, sort of 80 to 90% out of North America, and particularly new and frontier markets, as you mentioned. And we've been doing that ever since. And learning a lot as we go, having a lot of fun. And concurrent to that also, you know this, because we've overlapped in these circles to academically, but we also started teaching the first MBA level search fund courses in South Africa as well to start, you know, evangelizing at least the knowledge and the career opportunity and some of the fundamentals that a lot of MBA students in the US obviously benefit from in classes like yours. I am aware of the work that you all are doing in South Africa. And I think it's fantastic. I mean, from my perspective, what's happened around the MBA programming, the top tier MBA programming here in the US and in North America has been tremendous in the building of awareness and skill sets and network that is necessary to have a robust ecosystem in and around entrepreneurship through acquisition. So I suspect that the work that you're putting in with your colleagues in South Africa is going to go a long way for this model in other geographies. So I applaud you for what you're doing. Yeah, I appreciate it. I mean, we all know that the sort of MBA or at least the business school toehold is sort of often how it takes off in any new place, right? So hopefully a little bit of the early work in South Africa can get the talent flywheel turning there too. And for the rest of the continent, there's obviously an overlap too with a lot of those students on an expat basis being over in North America or Europe and already maybe in your class that might happen to be from Southern Africa somewhere. So there's already a bit of an overlap of people studying in North America or Europe and hopping back across to places like Africa and Asia to learn search funds, but teaching locally will help even more. Yeah. So I want to go deep into the ambit thesis and explore a few different nuances of your very unique and interesting model. But before I do, you've left, Rob, and I'm not surprised that you left out of your background because you're such a humble guy, your experience in playing for the Canadian Football League. And I really, for the sports enthusiasts on the podcast, I want to make sure that we mention this and it's relevance or not in the world of ETA. Can we talk a little bit about your professional sports career? Sure. I can tell I've put you on the spot that... No, it's cool. I just think, you know, after 10 or 15 years abroad, most of it in Africa where it's the wrong football and no one cares. It just gets the irrelevance of it gets beaten into a little bit. But no, I did. I played football on scholarship all four years at McGill. And then in my senior year, I was lucky enough to get selected in the 2005 entry draft of the CFL by the now Edmonton Elks. At the time, they were the Edmonton Eskimos, one of the sort of headline franchises in the CFL. And I was lucky enough to make the team as a rookie. And I played some receiver and special teams that season and was lucky enough to sneak into a gray cup with that team and actually win. That's like the Super Bowl in Canada. So very, very lucky as a rookie to sneak onto the roster and into that game. And went back and played a second season in 2006 and then got cut. I was, concurrently, had started my corporate career in the off season management consulting. And for anyone who knows management consulting, the sort of travel and 80, 90 hour weeks, you know, getting slides aligned left at 2am, did not lend themselves to, you know, lifting four times a week and being on the track, you know, three days a week and plyometric workouts. I remember actually, I think of Chicago Fonda, it was one of my first cases was in Chicago. And I remember at the Weston Riverfront, Weston, right on the river there, I used to run the stairs every morning at 5am. That was like my off season training in the fire escape stairs. So not very glamorous, a lot of fun, a very cool first job. I think more relevance in day to day work today and search investing, I wouldn't say search in particular, but just investing and working with and relating to people and understanding how to build teams that can communicate and perform under high pressure from varied backgrounds. So that was an early theme, you know, fitting into a locker room at 21 of folks from different walks of life, different skill sets, brought different things, different pieces to the team puzzle and just playing a small part in observing how everyone performed under that pressure has been invaluable later on in sort of more conventional corporate stuff. Rob, I apologize for putting you on the spot on that one, but I knew that there was some relevance in your athletic career with the firm that you're building at Ambit. So it's a nice segue for us to get back to Ambit and what you all are building. Sports analogies are super powerful for search investing. So I'm along on sports analogies. All right, great. You mentioned Fund 1 and the vintage of that. And I am closely familiar with what you've done there, fortunately. That has since been deployed as you've shared across a number of different search opportunities, geographies. Can you give us a little bit of the composition if we can zoom out on that investing activity that it sounds like initiated in 2021? And I am aware that you all are endeavoring to raise another fund on the back of some of the early success that you've had in your first endeavor. Let's talk a little bit about how that first fund was deployed and how you thought about the strategy and how, if at all, the strategy has evolved. Sure. So I think first and foremost, our bet on the first fund was great talent will want to launch traditional search funds in new places, you know, particularly emerging markets and frontier markets. And I think that has proven true at sort of faster pace and higher volume and higher quality than we anticipated. And that's actually the prime mover of why we deployed our first fund quickly is that there were just more exciting, inspiring searchers wanting to go in more places faster than we thought. Sure. There's a couple downstream assumptions is that we were betting in our thesis, some of which have proven true, some of which I think the sample size and sort of duration of time is still too small to tell. But one was that on some level, the types of searchers that would want to go do this created a bit of a talent arbitrage where you have sort of a big fish small pond dynamic, right? This is usually a person who's gone overseas, studied at a top MBA program, often worked for, you know, global firms that give the best possible training and networks and skill sets, etc. And often when those individuals of that background go to their home market, they're one of the most highly trained, well networked, you know, capable to call it people under 40 in the economy. And I think that's overstating it in some cases. And it's sort of very true in other smaller markets in which we've invested. So first and foremost, there's this idea of like the person and them being sort of advantaged just in wanting to go do this. Sure. Sure. And potentially, the network attached to that person, right? So to go back to one of the analogies that you used earlier, you're making the bet in that case on the jockey. And it's highly likely that that jockey through their studies, through their early career experiences have built, you know, a collection of trainers, right, to stick with this analogy, that they can also bring into these, you know, ponds that you're describing as small ponds, I don't know that they're necessarily small, but perhaps untapped, you know, there's just a lot of white space in some of these ponds that have not seen the type of activity from private equity or, you know, strategic buyers or, you know, search funds or independent sponsors, you name it, right? Any other form, yeah, any other form of lower middle market investing, there's just less of it, right? And in that sense, the core part of the thesis is almost like turning back the clock on search, if you take like a North American directive, which is, you know, the handful of early movers in the lower middle market in a space that no one else is paying attention to. So in that sense is like, when that person then launches a search fund, and I think your observation is fair, networks generally tend to be shallower and smaller and tighter. So your ability to cover the market and kick up good looking leads is almost faster. And that's getting really into the nuts and the bolts of the thesis. But in general, no one else has the capital or the resources or the skill set or like the investor bench strength, looking for a company of that size in these markets. So you're almost going it alone, right? And when you then buy it, there are a few CEOs of small businesses in these markets that are equally trained, resourced networks, ability to with the similar ability to attract talent. And then it's also tends to be more fragmented and less competitive. So once the searcher owns it, capitalized it has a strong board, there's an opportunity to outperform operationally in a less competitive market. The last piece of the thesis is still very much improving. But there's a lot of later stage capital in a lot of these markets that is looking for that like great professionally run six million EBITDA business that frankly just doesn't exist. It's like a division of a multinational or it's a family owned division of a family owned conglomerate, or it's like a venture backed startup that's not for sale. And so you have these later stage private equity vehicles that we think in time like dying for assets that will be like a searcher acquired, operated firm five years from now that we think will maybe traded to premium. And if they don't, we think there's a greater opportunity to build long term hold opportunities by building regional leaders, right? Like the difference we helped with the first search fund acquisition in Africa back in 2021, I think could have been 2020. But that was an electronic security business in Ivory Coast. So looking after movable assets through telematics and looking after fixed assets through video monitoring, pretty like basic business, obviously great search fundamentals with high recurring revenue, low capyx, high margin, etc. But that business when we bought was already a market leader. And you can scale that in entry new countries, you can build a regional leader. And in the US, that's just not, you buy a search scale asset, you've got to go through four or five rungs of the capital markets and scale. And then the large strategic in your space probably already exists three or four deep, right? There's probably competitor A, competitor B, competitor C. So even what you build, there are rare instances and huge successes in search where people have actually built a category leader in the US, and those are some of the biggest outcomes ever. But in general, you're sort of building something relatively small into something relatively bigger and getting subsumed by something, you know, even much, much bigger in the local context. In some of these markets we invest in, there is nothing bigger. The search company is the leader. Yep, player. And in that sense, if you build a regional leader in electronic security and could spit dividends forever. Sounds a great asset to own. And whether you have a viable exit path or not, right? I think that's kind of your point. And I would agree. Yeah. So all those things, just to sort of summarize, it's sort of like the person, the search phase, the operating phase, the exit phase. We think there's reason to believe all of those things could be advantaged. Sure. And let me, by the way, yeah, and that's where I was going to go. And also not without risk and headwinds and challenges, right? And so you have to believe that there is a compelling risk-adjusted return available for all of that opportunity that you just walked us through. Totally. So let's maybe talk about that for a minute, right? Because I think risk is such an important component to this. And, you know, I would love your perspective, Rob, on how you all think about risk. Because, of course, the way that you think about it needs to be different than a US-based investor that's exclusively investing capital into the continental 48 states, or, well, heck, let's include Hawaii and Alaska too. The 50 US states and it's all in, you know, dollar-denominated currency. It's all in the same geopolitical environment, you know, for the most part. Your suppliers and your customers are in the sort of the same ecosystem. A familiar tax regime. You've got all sorts of things that are just sort of known and relatively easy to get one's arms around from a risk assessment standpoint when it is the scenario that I just described, which is, you know, US-based investor largely investing in entrepreneurs and assets that are domiciled in the United States. You're opening up the investing universe to just a wide variety of additional variables into the equation. What are the big ones that you think about and how do you think about getting comfortable with them or not? Well, I think there are several extra layers to risk assessment. On a fundamental level, there's a lot that's the same too, right? It's a bet on the person and their ability to first raise capital, find something great to buy, close it, operate it, etc. So there's the bet on the person. Then once you come into the asset or the target company, that's still pretty fundamental analysis, right? Looking at like what a good asset looks like in a good industry. So that sort of asset and industry analysis is also consistent across markets. I think where there's layers on top of it when you go into a new country is first and foremost, there's like a country itself, right? So there's a host of political factors, as you mentioned, geopolitical, socio-political. There's also the nuts and bolts of like tax structure, exchange control, structuring in and out of the country. And then the elephant in the room is often FX, right? So once you leave US dollars on the way out of our fund pocket, which is a US dollar fund, you go into that currency and then of course, you're taking all of that currency risk in the deal over time. And of course, when you want to exit, you could have done great nominally, but the whole thing could be collapsed by an FX move. And that's the reality of the game we play. So we think that there's outsize returns still to be made, even against those headwinds. There is an element too of it might never outperform the US, actually, but it's still an interesting endeavor and highly impactful. Well, I was going to go to the third leg of this tool that you shared with us, the impact element, right? I mean, that's enormous. When you start to talk about the entrepreneurs and the skills and the training and the networks that you're bringing to business environments in destinations that have not enjoyed those sorts of things, I mean, you can start to really appreciate the social good and the impact that all of that new business activity would bring to a new destination like that. Totally. I mean, we have a sort of theory of change or impact in our fund that we think is quite exciting. We don't really trumpet it as an impact fund or worry too much about it. What we focus on is great people running great assets and hard to reach markets, and that just has a natural multiplier effect. But it happens on a few levels. Once again, it starts at that talent level. If you take a young post MBA person that could stay at a top investment bank in New York or London or whatever, versus going back to a market like in Africa or Southeast Asia, we feel like there's a talent nudge there or a talent intervention, which is like he or she could keep making slides at Goldman. They could, and that's fine. Or they could come run a small business. For us, our lived experience of impact working for 15 or 20 years as a team in these more emerging markets is the small business, the SME itself is the greatest engine room of economic development because they grow revenue. They promote people. They pay people more. They give bonuses. They increase scope of responsibility, dignity, accomplishment. They hire more people. Those people get empowered and trained and hire more people. And practically, the business is paying its tax. It's paying down its debts. It's opening facilities. It's investing, etc., etc. So even the search is like you nudge the talent. One of the corollaries of the search model, of course, is it does never lead, lead, lead investor. It's 10 or 15 folks on the cap table. So that's another thing. If we do some of the work pioneering in a new place, and we're 15% of the cap table, well, there's 85 cents on the equity dollar that's also being crowded in, right? Often from the US, from Europe or places where they wouldn't be finding SMEs to buy in, for example, West Africa. So that's interesting. There's often leverage, right? And banks in these markets would never be doing a lower-middle-market LBO loan ever, right? So there's the mobilization of the debts into it. And there's also the business itself, right? If you buy an education business or a healthcare business or something that's actually delivering great services and scaling in these markets, that's good. And then we think of fourth order or flywheel effect, which is if you play a multi-round game, and it's not just the first searcher, but it's like, who were those searchers' interns? And then who was their VP corporate development that they hired? Who was the associate that they brought in that did three years before going to booth themselves for their MBA? And then what do you think they do? They take your class, fire it up about search funds, and then it's a long loop. It might only be seven or eight years later. But we think then all of a sudden, you plant the seeds in each of these places to develop a little microcosm of the search ecosystem. And you can see what's happened in the US, hopefully flourish in dozens of other countries and have all of that knock-on value creation and impact on people's careers and livelihoods, which is super, super exciting. So even if we sacrifice 100 beats on NetIRR and our funds, we still think it's awesome to work on every day. And time will tell. But maybe that perhaps is not even a trade that you need to make. I mean, maybe the case that there are such attractive risk-adjusted returns available to what you're doing because of the growth in some of these emerging markets and because of the fact that it is the case that there are good assets everywhere and really talented entrepreneurs everywhere. And when you can put the two together in a place that is less picked over and less competitive than, say, the United States, gosh, it could be the case that there's very, very attractive returns. And obviously, your model has proven that that is the case, and it will continue to do so in all of the additional impact elements of what you're doing. I mean, it's going to be no surprise to you, Rob, or probably our listeners at this point, but I'm just an enormous fan of what you all are doing. And you're truly pioneering, evangelizing, exploring new frontiers and helping this amazing opportunity for really talented people to become a reality and a possibility. I think it's really special. Cool. I appreciate it. And if you want a wet blanket thrown on your enthusiasm, you can come work through a tax structure and opinion in a new country every time we do it. Temporary or enthusiasm. Yeah, right. Well, no, I am sure it's not without its complexities. So you all have a very rewarding, but at the same time challenging task ahead of you. All right. Time flies when the conversation is engaging as this one is. A couple minutes left in the show. I'd love to just maybe give a few observations. And I start to go down this path and we've got sidetracked. But in fund one, any themes around the destination of the capital invested, if you want to talk about it from a specific country standpoint or from parts of the world, however you think about it, I'd love to just understand where you're seeing some of this activity really gain momentum and where you see it headed. As you all are embarking on your next vehicle that will have a very similar, it sounds like, strategy to the investment thesis that you founded the firm on. Where is it going? Because we have listeners all over the globe. And I think they might be interested in understanding that a little bit better. And gosh, maybe there are some frontier, frontier markets that you're sort of willing to kind of bet on. Yeah, for sure. There's layers to it. Definitely. There's years of first search funds in new countries still to do. So in that sense, there's always a lot of pioneering to keep working on it could keep us busy for a lifetime anyway. But I think in fund one, maybe I'll step back before giving the quick answer and just talk about portfolio construction. Because one of the things people often ask is, you know, what countries do you like to invest in? And the truth is, that's a dummy runner. Like it's not the right question. It's what searchers decide to launch search funds, right? It's all about the searcher first. And so in that sense, we don't we've never had and nor do we ever have a sort of top down prescriptive, you know, 40% of the fund in East Asia and 30% of the fund in Latin America, because it's you don't know who's going to be good when and where they're going to go, right? So in that sense, we sort of start at the top very agnostic. It's about a great person in a viable, compelling market. And then it's about the quality of the asset that he or she finds, right? So it's a little bit organic in how it plays out. But in fund one, the two for sure headline stories were in year one for us of really deploying, which was like 2021 Brazil, tons of momentum, really high quality searchers, really high quality deal flow, early deals performing really well, you know, and getting the local investor community excited about the potential there. An increasing number of international investors with vehicles set up there and sort of comfort with the market and the structures. And so just a ton of exciting momentum coming out of there, where that's the only country where we've bumped up against our we have a geographic limit in our sort of fund guardrails. And sure, that's the only country we've had a conversation about internally. Some of those elements that you just mentioned that are, you know, I'll just call them like the components that might create a flywheel in a place like Brazil. I think there's some learning for the listeners in that because those are some of the raw ingredients of a healthy and robust investment community and an entrepreneurial ecosystem. So as we think about, let's keep going in sort of the deployment because I'm curious to hear some of the other geographic trends. But these are the components of an ecosystem that really build upon themselves and create an environment that is conducive for this type of investing and business growth. Totally. It's a snowball effect. And the antecedent conditions are quite clear or like the constituent parts you need to get the ecosystem going are quite clear. And that's what we love participating in and observing in these different places because you can see it's a bit of a playbook. You know, the different things come together and then there's momentum that starts building. I think sometimes get sidefold or sort of short circuited by a first in market or first two or three in market may be failing. You know, there's a view of search doesn't work in that country. Our house view on that is that it's, you know, you sort of need any equals 30, you need statistical significance in any market to really build, you know, reliable conviction of whether or not search will work there. But there's no question that if the first couple don't go great that the investor, especially international investor community, will pause and then maybe local investors will think, hey, this was a dud or, you know, the idea doesn't translate here. But I think just to go back to fund one that the sort of second country on the back of Brazil that really surprised us was Italy. Italy was sort of maybe one searcher when we kicked off the fund. And it's I think it's now on its sixth or seventh search fund. Three or four assets have closed. Really exciting opportunities. You know, just over the horizon, we're working on another one now with the search fund there. It's just cool to see these snowballs starting to roll. And they roll in slightly different ways, too. Like Brazil, something that shocks people from the US is in Brazil, 90% of transactions so far have been brokered. So, you know, there's different ways to put the parts together, but they often come together. And I think, you know, Italy's another country that we've noticed picking up momentum. A third is probably Australia. And we see very, very early leading indicators in Southeast Asia. So Singapore, Malaysia, as examples of searchers we're talking more and more to, we get a really interesting leading indicator or sort of telltale, because we start chatting to searchers that are in these geographies interested about the viability of it and could it work? And what do we think about launching here? And we all we're always happy to act as a thought partner there because we have no business unless searchers are launching in new places. So we're always up for a chat about a new country. And in that sense, those telltales are blowing, I would say, in Southeast Asia. So for fund two, it might be a little bit more Asia-Africa oriented, but we'll see. Sure. And how much of fund one was actually deployed? And maybe it's still too earlier, it's a negligible amount at this point, like into some of these more frontier places like Southeast Asia, or is that set to be a priority in fund two potentially? Well, again, going back to our comment earlier, it's all about the searcher, really. It's hard to predict the country. But from a search perspective, we're like 85% out of North America and sort of 60% out of North America and Europe. So a lot of Latin sort of Eastern Europe, Asia, Africa. So in that sense, we're pretty heavily weighted, like almost I would say a half weighted to these new and frontier markets at the search stage. Of course, you appreciate the dollar weighted tickets that acquisition come later. And there were done 18 acquisitions now of what fund one was always sort of designed to be about 24 to maybe 30. So you were a good sort of two thirds ish, maybe three quarters built on the acquisition side. So it's hard to say. But so far, we've invested in companies that reflect kind of largely the same geographic dispersion. Yep. Last question on this topic, Rob, and then we're going to wrap up. But listeners and students of mine or yours or others that come from large economies that like come to my mind like China or India, what sort of activity is going on in some of those economies? And you have any thoughts on maybe why there isn't as much as one might think when thinking about places as populous with as much economic activity as those destinations that I just listed, but there's probably others. Sure. It's just a function of time and precedent, really, and not so much viability. It just takes people to get in there and figure it out and make plays. I don't think it's impossible at all. We worked on the first search fund into Mainland China late last year, it just launched now in January. And there has been one search fund effort in India so far. And there's a couple new ones looking to launch this year. The students are currently just wrapping up business school, but keen to go for it. Probably be later, maybe this summer that they launch in India. So there are just very, very early moves. And then from there, it's just about execution and the creation of precedent and the building of a local investor base and service lenders, service providers. It's some of that ecosystem building that we talked about. But to your point of, call it economic capacity for ETA to flourish, that's just, there's no question that that's there. And so it's really more a question of just the model being exported and finding its feet in these places. And then we think it scales. And that's for us, super exciting. Because it's like, if you work on the first couple, and you figure out some of those learning curves and hiccups and sort of indigestion of figuring out how to make it work there, in theory, you know, numbers like one, two, three might be super, super hard. But then hopefully, you know, four to 15 is really exciting. And that's not true just in like, more frontier markets or emerging markets as classically defined like India and China. I mean, even a place like Germany, that's got like the middle stand, it's one of the most robust SME sectors in the world, you know, pound for pound, like the composition of Germany's GDP is disproportionately SME driven. It's an incredible SME market. I think we're like on 15 or maybe 16, 17, search funds like forever in Germany, right, which is the US in what, the mid 90s, maybe? Yeah, right. It's so fascinating, Rob. And I can't help but I violently agree with this notion that like, sort of the learnings build upon themselves. And, you know, I think success draws, you know, more awareness and more activity and there's pattern recognition associated with going into a new geography. And it does look different when the 10th search fund is being organized as opposed to the first or second or third. And I just, you know, appreciate all that you and your partners are doing to start to figure that learning and that flywheel out because I think it just has such a positive global impact for this model and beyond. So this conversation, at least for me, but I think I'm speaking on behalf of all of our listeners has been inspiring and full of insights. So we thank you for sharing. Well, cool. Well, thank you for having me. It's always a pleasure to talk about it. Well, Rob, next time we'll be sure to ask about all of the amazing things that are happening in fund one and all of the trends that you're seeing. I'm sure there will be new and exciting trends as you get into your next fund. But for now, I just want to offer up my heartfelt thank you and appreciation on behalf of the Polsky Center for Entrepreneurship and all of our listeners globally, which there are many. This has been extremely insightful. So thank you so much for sharing your time. Well, thanks for having me. Total pleasure.