WEBVTT - The ETF that lets you own SpaceX 0:00:00.240 --> 0:00:04.720 Many people are not allowed to get into private equity 0:00:04.800 --> 0:00:06.320 in the US. You have to have a net worth 0:00:06.360 --> 0:00:08.479 of over one million dollars and you have to have 0:00:08.560 --> 0:00:10.879 an income above two hundred thousand. I think the potential 0:00:10.920 --> 0:00:14.760 for private equity is larger than crypto. You've got many 0:00:14.800 --> 0:00:18.959 private companies that are worth currently thirteen trillion dollars. There's 0:00:18.960 --> 0:00:21.880 no question Elon Musk people you know, either love him 0:00:22.000 --> 0:00:24.640 or hate him. Arguably, he's one of the greatest entrepreneurs 0:00:24.680 --> 0:00:33.240 we've ever had, certainly the richest on Paperjora. 0:00:30.160 --> 0:00:32.559 And welcome to Shared Lunch, brought to you by Cheesy's. 0:00:32.760 --> 0:00:36.239 I'm Helen Madison, and today on the program, we take 0:00:36.280 --> 0:00:39.680 a look at how retail investors might get the opportunity 0:00:39.840 --> 0:00:43.040 to invest in private equity. Normally you have to be 0:00:43.080 --> 0:00:46.319 a wholesale investor to do this, in other words, an 0:00:46.320 --> 0:00:50.760 institution or an individual who has access to millions of dollars. 0:00:51.280 --> 0:00:54.840 With fewer companies listing on share markets today, searching for 0:00:54.920 --> 0:00:58.200 other potential that's not publicly listed as a hot topic 0:00:59.000 --> 0:01:02.120 in a moment to the people behind the first private 0:01:02.160 --> 0:01:07.440 public crossover exchange traded fund, Dr Joel Schulman from er 0:01:07.560 --> 0:01:11.320 Shares Before we jump in, here's some important information. 0:01:12.120 --> 0:01:14.720 Investing involves the risk you might lose the money you 0:01:14.760 --> 0:01:18.039 start with. We recommend talking to a licensed financial advisor. 0:01:18.760 --> 0:01:22.600 We also recommend reading product disclosure documents before deciding to invest. 0:01:22.880 --> 0:01:23.920 Everything you're about. 0:01:23.680 --> 0:01:26.120 To see and here is current at the time of recording. 0:01:26.240 --> 0:01:29.160 Welcome, Joel, thanks for joining us from Boston tonight. 0:01:30.319 --> 0:01:33.279 Thank you, it's great to join you. Joel. 0:01:33.520 --> 0:01:37.720 You're all about democratizing access to private equity. I'm really 0:01:38.000 --> 0:01:40.400 curious to see why you're so passionate about that. 0:01:41.080 --> 0:01:44.240 Well, so, for the last twenty years, we've seen etl's 0:01:44.319 --> 0:01:48.680 increase from about one trillion to about thirteen trillion dollars. 0:01:48.720 --> 0:01:52.520 In corresponding with that growth in ETRS, we've seen a similar, 0:01:52.560 --> 0:01:56.920 almost identical increase in private equity, growing from one trillion 0:01:57.280 --> 0:02:01.280 to thirteen trillion. And now so we've seen this parallel 0:02:01.360 --> 0:02:06.800 path of two fairly large markets increase in size, considerably 0:02:06.800 --> 0:02:09.480 increase in size thirteen acts. But yet we haven't seen 0:02:09.520 --> 0:02:12.840 any sort of crossover, no linkage, and so we're excited 0:02:13.280 --> 0:02:18.760 to provide opportunity for retail investors to finally access to 0:02:18.840 --> 0:02:22.840 this private market that they've been precluded from investing in 0:02:22.919 --> 0:02:23.720 all these years. 0:02:25.320 --> 0:02:28.160 One thing we can't ignore though this week, Joel, is 0:02:28.480 --> 0:02:30.760 the sort of sea of red that Will Street has 0:02:30.840 --> 0:02:35.519 been experiencing. They're still pretty bruised even the second week. 0:02:35.600 --> 0:02:39.639 And now the tech stocks particularly, I know that's one 0:02:39.680 --> 0:02:43.040 that you favor quite a bit, have been hit. What's 0:02:43.120 --> 0:02:46.680 your perspective a on where things are going? 0:02:46.800 --> 0:02:47.919 But also is. 0:02:47.880 --> 0:02:52.239 This constant volatility sort of making a sort of statement 0:02:52.720 --> 0:02:56.680 whereby some companies may not really want to list anymore 0:02:56.720 --> 0:02:57.920 and remain private. 0:02:58.520 --> 0:03:01.320 Well so, independent of whatever has been going on in 0:03:01.320 --> 0:03:02.880 the last couple of weeks here in the US, and 0:03:02.880 --> 0:03:06.880 they've peaked about mid February, and since mid February, things 0:03:06.960 --> 0:03:10.799 have been on the decline. And that corresponds probably more 0:03:10.840 --> 0:03:14.200 so with policy issues and maybe valuation issues to some extent, 0:03:14.560 --> 0:03:17.200 a lot of things going on that you probably hear 0:03:17.240 --> 0:03:21.680 about New Zealand that is addressing sort of our internal 0:03:21.880 --> 0:03:24.520 situation with you know, potential concerns and. 0:03:24.440 --> 0:03:25.560 Backlash on tariffs. 0:03:25.919 --> 0:03:31.359 Independent of that, however, the reason why private equity has 0:03:31.400 --> 0:03:34.240 not been coming to market more frequently, there's been a 0:03:34.360 --> 0:03:38.520 hesitation among many of the issuers to go to the 0:03:38.560 --> 0:03:41.720 IPO market. Public markets for the last few years, and 0:03:41.760 --> 0:03:45.280 there's a variety of reasons for that, perhaps nuisance lawsuits 0:03:45.280 --> 0:03:48.440 and other things which have caused many companies to pause. 0:03:48.760 --> 0:03:52.040 So when we think about, you know, twenty five thirty 0:03:52.120 --> 0:03:55.720 years ago when Amazon went public at five hundred million 0:03:55.800 --> 0:03:59.200 dollars and in Nvidia went to market a five hundred 0:03:59.200 --> 0:04:01.440 and sixty million dollars. This is back in ninety eight 0:04:01.560 --> 0:04:06.160 ninety nine around that time period. We're not seeing that anymore. 0:04:06.160 --> 0:04:10.360 We're seeing companies stay private longer and come to market 0:04:10.760 --> 0:04:13.560 you know, ten billion, twenty billion, thirty billion, levels that 0:04:13.680 --> 0:04:15.800 twenty five years ago would have been unheard of. And 0:04:15.840 --> 0:04:18.599 so it's more of that, you know, compared to the 0:04:18.680 --> 0:04:20.800 you know, the recent tumult in the marketplace. 0:04:21.640 --> 0:04:24.760 Okay, so this volatility, you thinking too, that this is 0:04:24.800 --> 0:04:26.719 going to be the new normal. 0:04:26.960 --> 0:04:32.320 For example, Well, I think the current volatility is a temporary, 0:04:33.120 --> 0:04:36.840 a temporary happenstance in the US markets. In fact, if anything, 0:04:36.880 --> 0:04:39.480 I think this may be a buyer's opportunity to come in. 0:04:39.920 --> 0:04:42.719 And the reason why I say that we're the last 0:04:42.800 --> 0:04:45.760 tip we had was in twenty one twenty two, we 0:04:45.800 --> 0:04:49.640 actually had a recessionary environment. Recessionary conditions. We had interest 0:04:49.720 --> 0:04:53.080 rates going up, we had the economy slowing down. We 0:04:53.200 --> 0:04:57.080 a lot of problems stemming from the COVID nineteen. 0:04:57.160 --> 0:04:58.720 You know crisis. And the follow from that. 0:05:00.160 --> 0:05:05.200 Is now we're seeing a volatility associated with internal and 0:05:05.800 --> 0:05:10.120 concerns regarding your terrif issues. But the economy here in 0:05:10.160 --> 0:05:12.360 the US one of the strongest economies in the world. 0:05:12.839 --> 0:05:15.640 The economy is generally okay. I mean there's that, you know, 0:05:15.640 --> 0:05:18.159 the economy is you know, is chugging along at a 0:05:18.200 --> 0:05:21.279 two three percent you know, or so clip on GDP, 0:05:21.960 --> 0:05:24.000 and and so I don't see the same sort of 0:05:24.040 --> 0:05:26.719 issues we've had in the past when we've seen markets 0:05:26.720 --> 0:05:31.279 slow down. So I see this particular drop the last 0:05:31.560 --> 0:05:35.520 month more temporary than long term. I think actually in 0:05:35.560 --> 0:05:37.440 twenty twenty five, we're going to see the markets end 0:05:37.480 --> 0:05:41.480 in a very strong path, you know, particularly here in 0:05:41.520 --> 0:05:42.000 the US. 0:05:42.160 --> 0:05:44.440 I see the markets on a strong note. 0:05:46.360 --> 0:05:50.080 John, Just thinking about the popularity of private equity. I mean, 0:05:50.120 --> 0:05:53.200 we've seen the likes of governments and pension funds, a 0:05:53.320 --> 0:05:56.880 number of kind of traditional institutions if you like, want 0:05:56.960 --> 0:05:59.880 a piece of the pie. What's behind that? Are they 0:06:00.360 --> 0:06:02.800 feeling that it's least risky because I mean it is 0:06:02.920 --> 0:06:05.560 classed as an a liquid a seat. 0:06:05.640 --> 0:06:10.839 It is a liquid And unfortunately, retail investors are not 0:06:10.920 --> 0:06:12.520 allowed to get into this. You have to be an 0:06:12.520 --> 0:06:15.520 accredited investor, at least that's the case in the US 0:06:15.560 --> 0:06:16.680 and most markets. 0:06:16.760 --> 0:06:17.799 You have to have a net worth. 0:06:18.240 --> 0:06:20.000 Again, in the US, you have to have a net 0:06:20.040 --> 0:06:22.320 worth of over one million dollars and you have to 0:06:22.400 --> 0:06:24.960 have an income above two hundred thousand or two hundred 0:06:25.000 --> 0:06:29.320 thousand if you're a joint filer between you and your spouse. 0:06:29.640 --> 0:06:33.479 And so many people are not allowed to get. 0:06:33.279 --> 0:06:37.640 Into private equity and they have to watch these opportunities 0:06:38.000 --> 0:06:41.640 pass them by. So when they read about an anthropic 0:06:41.839 --> 0:06:44.840 or an open AI or a scale AI, or an 0:06:44.880 --> 0:06:48.000 and a ROLL or an r case space X, they're 0:06:48.000 --> 0:06:50.400 not allowed to invest in. And so it's only the 0:06:50.400 --> 0:06:55.320 accredited investors, the institutional investors, the big pension funds, endowments, 0:06:56.279 --> 0:07:00.279 and the rich individual investors, the ultra high networth high 0:07:00.279 --> 0:07:03.800 network that can invest in private equities and sharing these rewards. 0:07:04.120 --> 0:07:07.720 Joel, lets have a look at XOVR, which is the 0:07:07.720 --> 0:07:10.800 private public crossover exchange traded fund which I think you 0:07:10.880 --> 0:07:14.480 launched back in August last year, so not that long ago. 0:07:14.720 --> 0:07:18.360 And it's called the first of its kind, but is 0:07:18.400 --> 0:07:22.400 that because it is actually excess for retail investors? What's 0:07:22.440 --> 0:07:23.040 the difference? 0:07:23.920 --> 0:07:27.080 So it's the it was the first etr to allow 0:07:27.280 --> 0:07:32.440 private equity in the ETF wrapper, and so private equity 0:07:32.480 --> 0:07:34.920 has been around for a while in open m mutual 0:07:34.920 --> 0:07:37.320 funds or closed them mutual funds, or even something called 0:07:37.360 --> 0:07:39.840 an interval fund, but this is the first time it's 0:07:39.880 --> 0:07:43.280 been in an ETF wrapper. And there's some, you know, 0:07:43.360 --> 0:07:47.119 some nuances to that. The interval fund may not trade 0:07:47.160 --> 0:07:51.920 as often or allow it may trade, it may trade more, 0:07:52.160 --> 0:07:56.400 it may trade, but it may not allow liquidity very often. 0:07:56.440 --> 0:07:59.360 I should have said that a closed end fund may 0:07:59.400 --> 0:08:02.320 trade in a premium or a discount to NAV and 0:08:02.400 --> 0:08:05.640 so the net asset value. So if it trades the premium, 0:08:05.960 --> 0:08:08.080 that means that the true value of the assets are 0:08:08.080 --> 0:08:10.560 one level and the price that you pay to access 0:08:10.600 --> 0:08:13.480 them may be at a higher level. With an ETF, 0:08:13.560 --> 0:08:17.520 it's chairly price very close to net asset value, and 0:08:17.760 --> 0:08:21.720 it allows trading through the day, which enables people to 0:08:21.760 --> 0:08:24.680 have liquidity to go in and out, which for a 0:08:24.720 --> 0:08:29.640 private equity for an et for an ETF to have 0:08:29.720 --> 0:08:34.760 private equity as unusual, it's eighty five percent. In our index. 0:08:34.800 --> 0:08:38.360 We have an index called the Entrepreneur thirty Index. It 0:08:38.400 --> 0:08:41.560 has a track record that goes back for many years 0:08:42.120 --> 0:08:46.880 and it's a growth oriented index. And importantly, when we 0:08:47.080 --> 0:08:52.199 built the index, we built the index on a VC platform. 0:08:52.280 --> 0:08:54.840 So by way of background, I'm a professor at a 0:08:54.840 --> 0:08:57.640 school called Batson College, which some people in New Zealand 0:08:57.640 --> 0:09:00.559 may have heard of. It's the number one school notnchpreneurship 0:09:00.559 --> 0:09:03.400 and I've been a ten yearful professor there for many years. 0:09:03.640 --> 0:09:07.720 And I built this model to invest in publicly traded 0:09:07.760 --> 0:09:12.600 companies based on how venture capitalists investing private companies, and 0:09:12.679 --> 0:09:15.360 so we've been doing that for many years. So for 0:09:15.520 --> 0:09:19.360 us to now go into private equities, it's consistent with 0:09:19.400 --> 0:09:22.080 the way we've invested right along, where we look at 0:09:22.160 --> 0:09:26.040 companies as if they were a private or venture capital backfirms, 0:09:26.320 --> 0:09:29.560 and we look at those companies both in the public form. 0:09:29.840 --> 0:09:32.319 But now we're going back and getting them right before 0:09:32.400 --> 0:09:33.080 they go public. 0:09:33.960 --> 0:09:38.640 So Joe, that index is that what this ETF private 0:09:38.920 --> 0:09:41.600 public crossover actually tricks? Is that right? 0:09:42.480 --> 0:09:42.680 Right? 0:09:42.760 --> 0:09:45.839 So the index is called the entrepreneur thirty index. It 0:09:45.880 --> 0:09:49.439 actually has a ticker. The E is an Edward Ars 0:09:49.480 --> 0:09:54.880 and Robert three zero thirty. If people, investors, or anyone 0:09:55.360 --> 0:09:59.199 chooses to look at XOVR, they'll see that it's highly correlated, 0:09:59.280 --> 0:10:03.480 moves very closely with the ER thirty tier indexes. We've 0:10:03.559 --> 0:10:06.559 relaunched in August twenty ninth, twenty twenty four, So prior 0:10:06.559 --> 0:10:11.600 to August twenty ninth, the fund was investing differently. 0:10:11.880 --> 0:10:15.520 Okay, so the CTF tracks that entrepreneurial index. If you 0:10:15.640 --> 0:10:20.360 like an inseet basket of thirty entrepreneurial stocks, but you 0:10:20.480 --> 0:10:24.240 have the private equity aspect as there included, and that 0:10:24.559 --> 0:10:27.240 like I know, SpaceX is eleven percent I think of 0:10:27.320 --> 0:10:29.640 the holdings you have currently and any of these other 0:10:29.760 --> 0:10:30.840 things like open AI. 0:10:31.200 --> 0:10:34.200 So the index does not include private So the difference 0:10:34.280 --> 0:10:40.719 between the index and XOVR. XOVR has the index for 0:10:41.320 --> 0:10:44.680 the majority of the fund, but also now has ten 0:10:44.720 --> 0:10:49.440 to fifteen percent private equities. The largest holding SpaceX. So 0:10:49.520 --> 0:10:52.559 SpaceX is around ten or eleven percent of our total 0:10:53.280 --> 0:10:57.360 portfolio and it represents the majority of our private equity holdings. 0:10:57.360 --> 0:11:02.240 We have another stock, another private stock called Klarna, which 0:11:02.280 --> 0:11:05.800 is a buy and LP later stock. It's a Swedish company. 0:11:05.840 --> 0:11:08.839 They just announced that they're going to come up with 0:11:08.880 --> 0:11:12.960 their IPO and that we expect that news to be 0:11:13.080 --> 0:11:14.480 forthcoming in the next. 0:11:14.240 --> 0:11:14.920 Week or so. 0:11:14.920 --> 0:11:19.200 So the holding of say ten to fifteen percent private equity, 0:11:20.000 --> 0:11:23.360 is there a cap like would the regulator come down 0:11:23.400 --> 0:11:26.560 on you if you increased that? Because I've seen, you know, 0:11:26.640 --> 0:11:29.480 some of the other competitors are thinking about maybe up 0:11:29.520 --> 0:11:32.040 to thirty five percent private equity in an eating right, 0:11:33.040 --> 0:11:35.559 What sort of constrains you for keeping it there? And 0:11:36.080 --> 0:11:38.880 is there a good reason to keep it, say fifteen percent. 0:11:40.040 --> 0:11:44.480 So private equity is, as you point out, an illiquid asset. 0:11:44.880 --> 0:11:47.679 And even though space x is. 0:11:47.600 --> 0:11:50.000 A three hundred and fifty billion dollar market cap as 0:11:50.040 --> 0:11:54.679 of the last tender offer, it's still it's it's you know, 0:11:54.760 --> 0:11:59.120 it's widely held among high net worth and institutional investors. 0:11:59.480 --> 0:12:02.920 It doesn't trade is frequently obviously as a public equity security, 0:12:03.280 --> 0:12:06.800 So it's still considered illiquid. And even though it may 0:12:06.800 --> 0:12:10.720 be more liquid than other private equities, it's still in 0:12:10.760 --> 0:12:14.040 the general scheme of things illiquid and as a result, 0:12:14.640 --> 0:12:17.280 a regulatory body here in the US called the SEC 0:12:17.360 --> 0:12:22.720 the Securities Exchange Commission restricts having too much of an 0:12:22.760 --> 0:12:26.040 ETF or any it's they're called forty Act funds, which 0:12:26.080 --> 0:12:29.240 means they're regulated by the nineteen forties Acts, which includes 0:12:29.320 --> 0:12:33.079 mutual funds, open end closed end funds, and ETFs. Those 0:12:34.200 --> 0:12:38.000 instruments which go to the retail market could be limited 0:12:38.240 --> 0:12:40.440 need to be limited to fifteen percent. And I think 0:12:40.800 --> 0:12:43.760 it's a good rule because it protects the retail investor. 0:12:44.120 --> 0:12:46.880 And we're being very careful to stay underneath that fifteen 0:12:46.880 --> 0:12:47.760 percent threshold. 0:12:48.880 --> 0:12:50.520 So it's a sort of a guard viol in some 0:12:50.559 --> 0:12:54.480 ways the font PAS, so that particus the retail and 0:12:54.559 --> 0:12:59.800 vista Right, what about in terms of excess as the 0:13:00.120 --> 0:13:02.640 no minimum investment I think is what I read. And 0:13:02.720 --> 0:13:06.000 also I mean sort of the cost you talk about 0:13:06.040 --> 0:13:09.760 it being relatively low, I mean, actually how accessible is 0:13:09.800 --> 0:13:11.800 it for someone who doesn't have lots of money? 0:13:12.559 --> 0:13:17.160 So access for an ETF and our ETF has no minimum, 0:13:17.200 --> 0:13:21.800 so we have daily liquidity, you can come in. We 0:13:21.880 --> 0:13:24.040 have investors who come in for one hundred dollars or 0:13:24.520 --> 0:13:27.000 you know, you know, I'm sure we have probably some 0:13:27.080 --> 0:13:29.559 investors that come in for fifty dollars or one hundred 0:13:29.600 --> 0:13:33.520 or a thousand, So there's no limit, no minimum investment. 0:13:33.840 --> 0:13:36.800 Daily liquidity you can buy and sell the same day 0:13:37.400 --> 0:13:41.000 through trading hours in the US which are nine thirty 0:13:41.040 --> 0:13:45.120 to four. We try to market pretty close to net 0:13:45.160 --> 0:13:47.640 asset value which on a daily basis to get that 0:13:48.320 --> 0:13:52.199 and so we think it provides and we try to 0:13:52.280 --> 0:13:56.079 keep our fees relatively low for this type of instrument. 0:13:56.200 --> 0:14:01.640 Other instruments that have access to equity charge appreciably more 0:14:01.679 --> 0:14:05.400 than our management fee were well below one percent, and 0:14:05.480 --> 0:14:09.960 so we try to make it attractive to any investor 0:14:10.120 --> 0:14:12.800 could do. Someone could be a retail investor with fifty 0:14:12.880 --> 0:14:14.440 or one hundred dollars to put to work, and they 0:14:14.480 --> 0:14:15.839 could be somebody. 0:14:16.200 --> 0:14:16.319 You know. 0:14:16.360 --> 0:14:18.319 We had an investor today to come in for three million, 0:14:18.440 --> 0:14:21.360 so we have a wide range of investors who come 0:14:21.400 --> 0:14:22.000 into our fund. 0:14:22.840 --> 0:14:26.080 What are the risks though, because we've talked about a 0:14:26.120 --> 0:14:29.600 liquid assets being the private equity aspect, but as you've 0:14:29.600 --> 0:14:32.120 sort of said, it depends really on the likes of 0:14:32.160 --> 0:14:35.080 that private equity with SpaceX, it could be slightly different. 0:14:35.680 --> 0:14:38.680 I mean the risks are they as great as they 0:14:38.680 --> 0:14:42.280 would be for other investments, or how would a retail 0:14:42.280 --> 0:14:44.440 investor kind of assess that right. 0:14:44.520 --> 0:14:48.720 So, first and foremost the fundamental risk that the investor 0:14:48.760 --> 0:14:52.560 has in XOVR, it's just the market movement. And so 0:14:53.400 --> 0:14:56.920 we are growth oriented. We have we have exposure to 0:14:56.960 --> 0:15:04.480 attack and we primarily enforced actors, information technologies, healthcare, consumer 0:15:04.560 --> 0:15:09.200 discretionary and communication services. We have some fintech as well, 0:15:09.720 --> 0:15:13.840 and we have of course exposure you know, to space exploration. 0:15:14.440 --> 0:15:18.480 So we tend to be in high growth industries, high 0:15:18.480 --> 0:15:22.560 growth companies. And so first and foremost the risk that 0:15:22.720 --> 0:15:25.240 investor would have in our funds, which is the same 0:15:25.360 --> 0:15:27.680 that they would have for example, if they invest in 0:15:27.720 --> 0:15:32.640 the qqques or other growth oriented indices that invest heavily 0:15:32.640 --> 0:15:35.800 in tech and healthcare, is the market movement. So if 0:15:35.840 --> 0:15:41.160 interest rates rise tech in other securities which are considered 0:15:41.560 --> 0:15:44.880 long duration, long duration means you get more of your 0:15:45.000 --> 0:15:48.120 benefits in the future, those types of stocks are going 0:15:48.160 --> 0:15:50.680 to suffer when interest rates go up or when this 0:15:50.880 --> 0:15:56.080 market volatility or when markets contract. So you investors tend 0:15:56.160 --> 0:16:00.200 to see when when investors, when investors get nervous, they 0:16:00.200 --> 0:16:02.160 tend to move more to value, or they tend to 0:16:02.160 --> 0:16:04.120 move to cash, or they tend to move to bonds. 0:16:04.280 --> 0:16:08.320 When you come to private equities, you'll see it's probably 0:16:08.360 --> 0:16:12.160 even more exacerbated in the marketplace like that. So for example, 0:16:13.240 --> 0:16:16.000 one of the stocks, and even though the private markets 0:16:17.520 --> 0:16:20.040 have been you know, showing with SpaceX, you know, some 0:16:20.080 --> 0:16:23.480 of the secondary markets are showing SpaceX you know, doing 0:16:23.800 --> 0:16:26.480 well and so forth, which you know, we would expect that, 0:16:26.760 --> 0:16:28.840 you know, to do well based on a lot of 0:16:29.640 --> 0:16:34.680 idiosyncratic conditions. Some of the pure benchmarks in this market 0:16:34.960 --> 0:16:39.560 are moving. So sometimes you'll see privates not correspond with 0:16:39.640 --> 0:16:42.240 those movements because the other public markets are moving daily 0:16:42.640 --> 0:16:46.200 and privates may be seeing a stationary They tend to 0:16:46.240 --> 0:16:48.800 move in step function. They can move into step function 0:16:48.920 --> 0:16:51.720 both up and they can move into step function down. 0:16:52.320 --> 0:16:55.680 And as we saw in twenty one and twenty two, privates, 0:16:55.720 --> 0:16:58.920 you know, we're moving in a step function down. Now 0:16:59.120 --> 0:17:01.760 we're seeing you know, over the last couple of years 0:17:02.160 --> 0:17:06.280 markets were more positive, more growth oriented. We saw privates 0:17:06.640 --> 0:17:10.520 appreciating during twenty twenty three and twenty twenty four, early 0:17:10.600 --> 0:17:14.360 part of twenty twenty five, and we'll see soon. For example, 0:17:14.480 --> 0:17:17.719 probably our best litmus test is going to be one 0:17:17.760 --> 0:17:19.040 of our holdings, Klarna. 0:17:19.440 --> 0:17:20.520 We'll see how it comes out. 0:17:20.560 --> 0:17:25.560 We bought it an evaluation of market evaluation twelve billion. Well, 0:17:25.600 --> 0:17:28.879 it's going to come out to peer benchmarks like a firm. 0:17:29.080 --> 0:17:31.760 There's a company in Australia called after Pay that was 0:17:31.800 --> 0:17:36.760 bought by Block. You'll we'll see very soon how the 0:17:36.800 --> 0:17:40.520 market is valuing these and we expect our stock to 0:17:40.600 --> 0:17:44.920 move comparable to these valuations as well. So we'll we'll 0:17:44.920 --> 0:17:47.879 have a pretty good insight fairly soon, probably within the 0:17:47.880 --> 0:17:52.480 next few weeks, how how that particular private security is 0:17:52.520 --> 0:17:56.280 holding up or not when market information comes out. 0:17:56.200 --> 0:17:59.280 As the advantages to investing in an eighteenth flight this 0:17:59.720 --> 0:18:03.640 into of that private equity aspects, and would you get 0:18:03.800 --> 0:18:06.760 more transparency than if I would just went straight into 0:18:06.760 --> 0:18:09.159 private equity privately you know if you know what. 0:18:09.200 --> 0:18:12.920 I mean, Well, if you went into a private equity 0:18:13.000 --> 0:18:17.320 directly yourself, that means you're again ultra you're either a 0:18:17.400 --> 0:18:21.000 high net worth ultra high networth individual investor. You can 0:18:21.600 --> 0:18:25.000 spread your legal costs and infrastructure costs in buying these things, 0:18:25.240 --> 0:18:28.199 and plus you'll have a better idea of how to negotiate. 0:18:27.800 --> 0:18:28.960 If you're doing it frequently. 0:18:29.440 --> 0:18:32.440 So for many investors or let's say putting to work 0:18:32.840 --> 0:18:36.040 five hundred thousand dollars or less. Even if you're an 0:18:36.080 --> 0:18:40.040 individual investor, even if you're a high net worth investor, 0:18:40.359 --> 0:18:42.760 you may not want to go directly in. And for 0:18:42.840 --> 0:18:46.680 everyone else it's you're not allowed. You can't get into 0:18:46.720 --> 0:18:49.280 it because there are restrictions in getting in. And for 0:18:49.320 --> 0:18:52.199 even ultra high networth people, they may want the liquidity 0:18:52.520 --> 0:18:54.800 because they may want to go in. Even if they 0:18:54.800 --> 0:18:57.200 have the ability to go directly into a private equity, 0:18:57.800 --> 0:19:00.000 they may want the liquidity. Maybe they have a wedding 0:19:00.080 --> 0:19:01.760 in the family than want to spend money or buy 0:19:01.800 --> 0:19:04.160 a new house, or you'll do a buy a boat. 0:19:04.680 --> 0:19:08.240 So the liquidity becomes very important to people. And that's 0:19:08.280 --> 0:19:09.360 the advantage of an ETF. 0:19:09.600 --> 0:19:12.760 What do you think the potential for private equity is. 0:19:12.800 --> 0:19:15.560 I've seen you've quoted before saying it could be I 0:19:15.600 --> 0:19:18.600 think five to six times the size of crypto, and 0:19:19.240 --> 0:19:23.120 well bigger than as you've already explained to ETFs. Why 0:19:23.280 --> 0:19:25.800 do you think that and how soon are we talking? 0:19:26.680 --> 0:19:31.120 Well, Crypto is an interesting acid class. I don't recall 0:19:31.160 --> 0:19:34.080 saying it's five to six times a larger than crypto. 0:19:34.160 --> 0:19:36.800 I'm not saying I wouldn't say that I think the 0:19:36.840 --> 0:19:40.840 potential for private equity is larger than crypto in that 0:19:41.600 --> 0:19:45.720 you've got many private companies that are worth currently thirteen 0:19:45.720 --> 0:19:49.800 trillion dollars. Crypto is currently I think one to two 0:19:49.880 --> 0:19:53.080 trillion dollars. I don't know after the most recent your 0:19:53.080 --> 0:19:56.320 price point. So currently it's five to six times higher. 0:19:56.400 --> 0:20:00.000 Maybe I was quoted saying that that's currently it's higher. 0:20:00.280 --> 0:20:04.480 In terms of the trajectory, I think private equity is 0:20:04.520 --> 0:20:07.120 going to continue to attract more and more capital. We're 0:20:07.160 --> 0:20:09.679 seeing it, you know, through the early part of well 0:20:09.920 --> 0:20:12.800 we saw in twenty twenty four, is attracting a lot 0:20:12.880 --> 0:20:17.320 more of the capital going into companies than even public equity. 0:20:17.800 --> 0:20:21.560 And as I mentioned before, many companies are choosing to 0:20:21.560 --> 0:20:24.639 stay private longer for a variety of reasons. And so 0:20:24.800 --> 0:20:27.840 as a result, and this is a global phenomenon. The 0:20:27.880 --> 0:20:31.120 fact that we're seeing Karna, which is a Swedish company, 0:20:31.880 --> 0:20:35.479 coming to market here in the US, you'll suggest that 0:20:35.560 --> 0:20:39.440 this is an opportunity for global investors. So they're probably 0:20:39.520 --> 0:20:42.600 companies in New Zealand that may choose to go public 0:20:42.680 --> 0:20:45.320 someday and maybe you know, it's going to take them 0:20:45.359 --> 0:20:47.920 a while. Maybe some of your best own companies down there, 0:20:48.080 --> 0:20:51.560 you know, would like to tap the public markets. The 0:20:51.600 --> 0:20:54.880 best markets to go public tend to be in the US. 0:20:54.960 --> 0:20:56.720 They tend to be the NASTAC and the New York 0:20:56.720 --> 0:21:00.840 SoC Exchange. So for example, we've seen in Europe the 0:21:00.880 --> 0:21:05.399 London Stock Exchange pale in terms of volume compared to 0:21:05.480 --> 0:21:08.400 the US markets. Maybe one of these types of vehicles 0:21:08.480 --> 0:21:13.720 where larger, better known brands are seeing private equity as 0:21:13.720 --> 0:21:17.159 of mechanism to get there in anticipation of going public 0:21:17.240 --> 0:21:21.120 maybe six months a year, within two years down the road. 0:21:22.280 --> 0:21:24.520 It's rocket Lab one that you've looked at, or is 0:21:24.520 --> 0:21:26.560 it a conflict given you've got SpaceX. 0:21:27.359 --> 0:21:30.880 Rocket Lab is is a pure company. It's an entrepreneurial company. 0:21:31.119 --> 0:21:35.920 It's what we looked at. It's currently a small cap. 0:21:35.960 --> 0:21:39.480 We tend to in our XOVR ETF. One of the 0:21:39.480 --> 0:21:43.280 things I did mention these are entrepreneurial, publicly traded entrepreneurial companies, 0:21:43.480 --> 0:21:45.800 but they're large cap, which means that they tend to 0:21:45.800 --> 0:21:48.879 be ten billion dollars or larger in cap size. So 0:21:49.040 --> 0:21:53.880 rocket Lab is a company that we've looked at. It's 0:21:53.920 --> 0:21:56.720 a little small by our standards in terms of the 0:21:58.000 --> 0:22:02.680 in terms of the fund we have. Moreover, we already 0:22:02.720 --> 0:22:05.760 have a very large position in SpaceX. We see that 0:22:06.320 --> 0:22:09.440 we see SpaceX is the dominant player. And so one 0:22:09.480 --> 0:22:11.679 of the things I did not mention beforehand. When we 0:22:11.720 --> 0:22:13.680 go into private equity, one of the things we want 0:22:13.720 --> 0:22:16.160 to do is pick the leader. We want to pick 0:22:16.160 --> 0:22:19.320 the company with the biggest mote, and the case of SpaceX, 0:22:19.359 --> 0:22:22.240 one of the things I didn't mention before him. It's 0:22:22.320 --> 0:22:25.520 not only an entrepreneurial company that obviously is involved in 0:22:25.560 --> 0:22:30.320 space exploration, but as your group knows in New Zealand, 0:22:30.720 --> 0:22:35.800 it has Starlink, and Starlink is the crown jewel of SpaceX. 0:22:36.240 --> 0:22:39.040 And because they have seventy two hundred plus satellites in 0:22:39.080 --> 0:22:42.880 low Earth orbit around the world, and because they're now 0:22:42.920 --> 0:22:48.960 supplying telecommunications to geographically remote locations both the land, sea 0:22:49.000 --> 0:22:53.280 and air around the world, because it has geopolitical importance 0:22:53.600 --> 0:22:59.280 for military capabilities, this is emerging. SpaceX, which holds Starlink, 0:22:59.359 --> 0:23:02.840 is emerging. Are one of the most critical assets that the 0:23:02.920 --> 0:23:07.479 United States has from a military perspective, and we believe 0:23:07.720 --> 0:23:10.119 that this is one of those companies that's going to 0:23:10.160 --> 0:23:15.159 continue to rise in importance globally, but certainly within the US. 0:23:15.440 --> 0:23:18.159 And that's irrespective of the fact that Elon Musk is 0:23:18.160 --> 0:23:21.440