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Speaker 1: Welcome to Fear and Greed Q and A, where we

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Speaker 1: ask and answer questions about business, investing, economics, politics and more.

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Speaker 1: I'm Michael Thompson. We talk about a few alternative assets

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Speaker 1: on this podcast. I'd say this one sits well outside

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Speaker 1: traditional markets. One of the more unusual areas getting attention

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Speaker 1: right now is maritime recovery, essentially salvaging valuable cargo from shipwrecks,

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Speaker 1: which is kind of shifting almost from the domain of

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Speaker 1: treasure hunters to something that's more structured and more investable.

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Speaker 1: Remember this is of course, general information only, and you

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Speaker 1: should seek advice tailored to your circumstances before making investment decisions.

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Speaker 1: Stefan von Imoff is co founder and CEO of alts

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Speaker 1: dot Co, an alternative investing community and funds to fund

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Speaker 1: Welcome back to Fear and Greed Q and A.

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Speaker 2: Good to be here, Michael, all right.

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Speaker 1: Maritime recovery, it sounds like something out of a movie.

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Speaker 1: Just set the scene for me. What are we talking

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Speaker 1: about here? How many recks are out there and what

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Speaker 1: are they holding? Oh? Are they be talking about gyms

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Speaker 1: and gold or is it scrap metal?

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Speaker 2: There's thousands and thousands of res that's for sure, but

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Speaker 2: not all of them have you know, a lot of treasure.

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Speaker 2: This this world kind of conjures up like images of like,

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Speaker 2: you know, treasure chests and stuff like that. For me, yeah,

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Speaker 2: not quite usually how it goes. But there are a

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Speaker 2: lot of precious metals on a lot of these shipwrecks.

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Speaker 2: That does include gold, That definitely includes silver and even

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Speaker 2: like copper and other you know artifacts. Right, So this

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Speaker 2: world definitely used to be kind of the domain of, uh,

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Speaker 2: you know, treasure hunting. It was a bit of a

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Speaker 2: lottery ticket. You didn't really know what you were going

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Speaker 2: to get, and you could score big. But nowadays we're

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Speaker 2: seeing something much more structured, much more refined and methodical,

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Speaker 2: and there's companies now that are going down locating these wrecks,

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Speaker 2: working with governments to figure out the split the share

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Speaker 2: of who gets what when they recover the precious metals

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Speaker 2: and then recovering them. So it's a very fascinating world.

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Speaker 1: All right. Well, let's talk then about the Holy Grail

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Speaker 1: of shipwrecks, which is probably the one that's really brought

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Speaker 1: this to the attention of a lot of people over

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Speaker 1: the last few years. At the San Jose which was

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Speaker 1: discovered off the coast of Colombia, and it holds an

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Speaker 1: incredible treasure, billions of dollars worth.

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Speaker 2: So this is definitely the holy Grail of shipwrecks in

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Speaker 2: the world. This is there's an estimated twenty billion with

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Speaker 2: a bee worth of gold and silver and other metals

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Speaker 2: and artifacts on that ship. And yes, it crashed off

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Speaker 2: the coast of what is now Colombia, but this is

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Speaker 2: a very old wreck, and so there's actually a bunch

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Speaker 2: of different nations and entities that are kind of fighting

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Speaker 2: for this. The Colombians are saying, well, look, it's our waters,

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Speaker 2: so it's ours. The Spanish are saying, well, it was

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Speaker 2: our ship, so it's ours. The company that retrieved the

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Speaker 2: wreck is fighting with the Colombian government over what the

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Speaker 2: split should be. And then there's you know, indigenous groups

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Speaker 2: from Bolivia and Peru that will, well, we mind all

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Speaker 2: this stuff, where's our take, right, And so the companies

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Speaker 2: are kind of like fighting it out in the Hague

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Speaker 2: as we speak. But it's kind of a lesson in

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Speaker 2: what not to do. So this expedition, while they were

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Speaker 2: successful in getting the wreck, they weren't successful in working

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Speaker 2: with the governments beforehand. And so that's the big lesson

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Speaker 2: everyone learned with this stuff is like, you've got to

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Speaker 2: work with the governments and get very clear contracts about

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Speaker 2: who gets what in the event of a recovery, and

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Speaker 2: you have to do that before you set sale or

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Speaker 2: you're asking for a lot of trouble.

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Speaker 1: Now on alts dot Co, you've recently taken a deeper

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Speaker 1: dive into the world of maritime recovery, and really there's

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Speaker 1: three stages to this, right, and the first stage is research,

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Speaker 1: which sounds like it could be very dull, but it

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Speaker 1: actually also has a bit of an Indiana Jones kind

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Speaker 1: of feel to it, because this is a lot of

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Speaker 1: historical kind of digging, isn't it.

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Speaker 2: Yeah, it's definitely the least sexy aspect of this industry,

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Speaker 2: if the most sexiest is going down into the ocean.

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Speaker 2: This is just basically pouring over old documents and libraries

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Speaker 2: around the world. I suppose for some people, you know,

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Speaker 2: they would love it. But like the client we're working

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Speaker 2: with as a full time historian that basically does exactly this,

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Speaker 2: which is, you know, just pour through old records, make

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Speaker 2: sure a fact is a fact before we call it

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Speaker 2: a fact, and figure out what's on what the manifests

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Speaker 2: truly represent in terms of what's on these ships before

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Speaker 2: you even select the target.

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Speaker 1: So the research is essentially looking through the records of

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Speaker 1: ships that have sunk at some point in history. And

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Speaker 1: we're not just talking kind of racing recks. We are

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Speaker 1: talking hundreds of years old figuring out what was on them.

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Speaker 1: How on Earth then do they figure out where they

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Speaker 1: might be and try and kind of narrow it down.

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Speaker 2: Yeah, so thankful the technology is kind of caught up

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Speaker 2: on that front. So, you know, ten twenty years ago,

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Speaker 2: it's a lot tougher to kind of triangulate exactly where

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Speaker 2: a lot of the stuff is. A lot of these

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Speaker 2: watch we know exactly where they are. Some of them

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Speaker 2: we don't. We're not quite sure. And so yeah, and

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Speaker 2: robotics have made it a lot easier to figure out

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Speaker 2: where these recks are before actually, you know, again spending

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Speaker 2: you know, millions of dollars to go retrieve the goods

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Speaker 2: on board.

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Speaker 1: Okay, And so as part of that research, is that

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Speaker 1: where the negotiation of the discussion comes in with governments

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Speaker 1: or does that happen kind of during the recovery phase,

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Speaker 1: which is the next of the three stages.

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Speaker 2: It definitely happens before you go before the recovery. This

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Speaker 2: is the most critical part. And this is a long process,

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Speaker 2: nine twelve, eighteen months working with governments directly to figure

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Speaker 2: out what the split looks like and how that works.

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Speaker 2: And you know, there's no hard and fast rule for

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Speaker 2: the stuff. Some governments may say fifty to fifty, others

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Speaker 2: may say seventy thirty. It just depends. One thing's for sure.

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Speaker 2: You absolutely need permission. And this is again what we

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Speaker 2: learned from the San Jose a decade ago. So those

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Speaker 2: days of just kind of Indiana joning your way through

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Speaker 2: this world are basically over. You've got you've got to

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Speaker 2: playball now. So again, so the client that we worked

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Speaker 2: with has a full time person doing exactly this, just

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Speaker 2: working with governments around the world exactly.

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Speaker 1: All right, Okay, so you've done the research, you've figured

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Speaker 1: out what's on the ship, you've got an idea of

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Speaker 1: where the ship actually is, and you've got permission to

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Speaker 1: get in the water. How does recovery take place?

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Speaker 2: So the first thing you're going to want to do

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Speaker 2: is send a Once you've identified where it is, you

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Speaker 2: want to send like a starter probe, so to speak,

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Speaker 2: to go down and make sure it's actually there and

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Speaker 2: make sure it looks good from a you know, before

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Speaker 2: you send the big robots down to do the recovery

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Speaker 2: and retrieval, you just want to make, you know, make

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Speaker 2: sure you're going after something that's actually what you think

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Speaker 2: it is. So there's kind of a lesser expensive phase

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Speaker 2: of the recovery phase. There's the you know again, making

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Speaker 2: sure effect is a fact before we call it a fact.

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Speaker 2: And then once we know we're good, then it's like okay,

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Speaker 2: we can send in the big machines.

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Speaker 1: Yeah, okay, and then the big machines go down and

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Speaker 1: you can kind of retrieve a lot of the good.

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Speaker 1: The returns the third state. So I got research, recovery,

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Speaker 1: then the returns. Where do the returns come from? Here? Then?

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Speaker 1: Is it essentially the sale of the precious metals? Where's

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Speaker 1: what's the market here for this?

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Speaker 2: Yeah, it's a sale of precious metals, which again five

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Speaker 2: six years ago was valuable, but you know, given the

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Speaker 2: recent run up in gold and silver and copper and

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Speaker 2: other metals, I mean, it's much more economical than it's

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Speaker 2: ever been before. So yeah, I mean you're basically just

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Speaker 2: you're selling them to the market. It's a it's a

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Speaker 2: distribution play. The question is not, you know, will there

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Speaker 2: be value in the metals that we know that for sure.

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Speaker 2: The problem is that this stuff can go wrong very easily.

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Speaker 2: Were talking about thousands of feet or meters even under

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Speaker 2: the sea, extremely high pressure. We know how dangerous it

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Speaker 2: can be. There's all sorts of stuff that can go wrong.

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Speaker 2: So the client we're working with is hoping for like

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Speaker 2: a sixty to seventy percent success rate. Truly, I'll be

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Speaker 2: sitting pretty even if we're at twenty five percent. I

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Speaker 2: would say they're looking to do four retrievals per year,

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Speaker 2: one per quarter starting in Q three. If even one

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Speaker 2: of those four is a success, I think they'll be

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Speaker 2: in great cheap because even on the low end, the

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Speaker 2: low hanging fruit, the RECs, we're looking at ten fifteen

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Speaker 2: to twenty million dollars worth of goods. Just that's the

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Speaker 2: you know, those are the easy ones to get right.

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Speaker 2: So if even one of those is success, I think

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Speaker 2: will all be celebrating with champagne. But there's no guarantee.

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Speaker 2: This is a risky world. There's a lot that can

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Speaker 2: go wrong. So this is definitely not a riskless investment.

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Speaker 1: Yeah, And that's probably kind of where we end up here,

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Speaker 1: is how does this go from being essentially treasure hunting

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Speaker 1: and something out of novels, something out of movies into

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Speaker 1: an investment opportunity. Is it through these companies that are

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Speaker 1: doing the research, going out there, finding it, doing the

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Speaker 1: negotiations with governments to ensure that there is actually some

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Speaker 1: stability to it and you're not going to end up

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Speaker 1: in a decades long legal battle.

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Speaker 2: Yes, but those companies are usually has itant to just

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Speaker 2: allow a bunch of unknown investors on the cap table.

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Speaker 2: And that's where we come in. We streamline everything, We

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Speaker 2: create a single vehicle, single line item, so we can

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Speaker 2: invest into this company and you can invest with us.

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Speaker 2: We basically make the process easier for everybody.

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Speaker 1: And whereabouts is what would to say, let's finish with

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Speaker 1: the risks, because this feels like something that is obviously

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Speaker 1: fraught with risks. The biggest risk is it the legal

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Speaker 1: side of things? Is it the fact that you're dealing

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Speaker 1: with something that can be thousands of meters below the

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Speaker 1: water and it's just physically very very difficult to get

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Speaker 1: it up, or is it the fact that you don't

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Speaker 1: even know necessarily what you're dealing with. That you are

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Speaker 1: dealing with historical shipwrecks, things that have been kind of

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Speaker 1: lost for potentially centuries, and there is an element of

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Speaker 1: mystery to it.

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Speaker 2: All of the above, I would say the biggest risk

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Speaker 2: here is that this is not a proven model, right

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Speaker 2: Like basically we're looking at a confluence and a conversion

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Speaker 2: of increased prices, which is making this more economic. Like

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Speaker 2: we talked about better AI, better robotics, better technology, which

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Speaker 2: is making this the stuff easier to get and more

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Speaker 2: of a roadmap for working with governments and doing the

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Speaker 2: research beforehand that said, this is still unproven, that we

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Speaker 2: are just early days for this stuff. I think you know,

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Speaker 2: ten years from now, once this new kind of approach

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Speaker 2: to maritime recovery is proven itself, there won't be any

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Speaker 2: the risk profile goes down. But right now it's still

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Speaker 2: the wild West, so to speak, so there's a lot

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Speaker 2: of things that can go wrong and that's where the

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Speaker 2: risk comes from.

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Speaker 1: It is a fascinating story to look at, and especially

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Speaker 1: when you've got the San Jose there with twenty billion

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Speaker 1: dollars worth of treasure and really, as you said, a

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Speaker 1: lesson in what not to do in terms of managing

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Speaker 1: that whole process to fine. Thank you for talking to

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Speaker 1: Fear and Great. Thank you that was defined von Imoff

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Speaker 1: from alts dot co. Remember this is general information only,

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Speaker 1: and you should seek advice tailor to your circumstances before

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Speaker 1: making investment decisions. I'm Michael Thompson and this is Fear

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Speaker 1: and Great Q and a