How Clearlake Capital’s José E. Feliciano is finding value across private markets
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Welcome to golden sex exchanges. You might notice that today's episode is coming to you on monday rather than our regular tuesday. That's because after the U.

S. Election, we're going to give you a special episode looking at the market reaction to whatever the news may be today. You'll hear a great interview with liano cofounder and managing partner of investment firm clearly capital, conducted by my common sex colleague, Michael mayer. We hope you enjoy .

welcome back to golbin sex exchanges, great investors and Michael grandma, global head and chief investment officer of the external investing group within golbin sex asset management.

Today, i'm very excited to be sitting out hose for ciano, managing partner of cleric capable group, a coffee clear lake in two thousand and six and has helped grow IT into one of the world's largest private equity firms with eighty billion dollars in assets under management today, how has huz been able to drive such incredible growth? And what does the future look like for clearly capital and for the private equity industry in general? We didn't talk to say about his career, his investment philosophy in his unique outlook on the investment opportunities today and very pleased to welcome z for siano.

Z, welcome or should I say welcome back to golbin sex since you started your career? Let's get right into IT is a very interesting time in markets and in the world right now. And we're currently having this debate of what direction is the economy going. Clear lake must be very excited about the ford opportunity, said you talk about how you like to invest across economic cycles, across the couple structure, how you seen the world right now.

First of all, you. Thank you. Thank you for having me back. Very exciting to be back at common sex.

This is definitely one of those times in the world where the outlook appears to be extremely uncertain, even to investors, even two private equity. Ms, like us, when you look at the Crystal ball, you see many contradicting factors out there. You certainly see at the very micro geopolitical, you see lots of issues.

You know, we have a war in the in europe. We have a significant conflict in the middle. We have significant tension in asia. Here in the, uh, we have an election. So these are all very significant factors that they accomplish the economy, one where or the other, as you mentioned, for us in the most important thing is not necessary predicting where the economy is gonna, but it's understanding where the opportunities might be across a broad rate of industries or our focus industries and then trying to understand you kind of what is the best way to invest in those industries.

But personally, I think that we are most likely finally see in decreasing interest rates despite party and not even backdrop and turns to demichelis, but we're going to see Price, generally speaking, a resumption of growth, not gonna, the same type of growth that we sell pre latest down. And we're pretty gone to see a lot more volatility in both the stock market and certainly in other significant macro factors. At the of the day, though, our job is not to predict that macro. I think our job is to find great companies and great national teams that can partner with them, and we planned to do that.

So a lot of your brother out there complaining, saying, gosh, the market aren't really open, is hard to get a lot done. If you just look at the industry data, transaction flows are still quite light overall, but you have a very different tool kit at clear lake that you can access things through different parts of the capital structure. So how do you think the opportunity said, as you see here today, looks different.

is a great question. I'll give you an example. Go back to two thousand. Twenty went at the beginning of the pandemic and essentially almost overnight in the course of two or three weeks, right?

The capital markets essentially shut down with extreme volatility in the capital markets overall and obviously, a real effect in the real economy. Those are moments in time where the traditional private equity firms are not able to access the market. There's not much to do when the capital markets shut down during that summer.

And you kind of beginning of the fall, you're clearly investing party three or four billion dollars in that time period. Obviously, that was a very interesting time because, you know we saw a significant repricing of risk, meaning that uh, in the secondary markets, primarily dead Prices were much cheaper. Know everything went down very significantly, and that's one of the whole Marks are clearly, as you are, looting to the ability to invest across economic and credit cycles with different entry points as we call them.

And I think going back into this moment in time, I think we see similar opportunities. We do see a reopening of the capital market, obviously interested I going to be higher for longer proudly. But we do think that there's going to be very selective opportunities in the by outside, there's gona be really interesting opportunities. And what we call special situations thinks that car balls turn around, and we do see idiosyncratic distress or special situations where they are really interesting opportunities to buy companies or accessing those companies through that or restructure.

Has a investors been hurting for more liquidity in private equity partners? We call this D. P. I. So this is cash coming back to investors who have invested in private equity firms.

If I look at how much money in the last few years you've return L, P, S, it's a lot. And you've continue to be quite creative and getting money back to L P S. Talk about you're thinking in your strategy there.

A great question. In over the past two, three years, we have returned upwards of fifteen billion dollar capital international pes. We have always believed that our job at the core is very simple.

We take our investors money, a lot of our own money as well. We invested. And the quicker we can get a back to our investors with the higher multiple tech to IT, meaning multiply that capital, the Better IT is.

And I think what a significant thing says, part of our ethos that were always looking for that exit opportunity, we're looking for two or three things when we basically invest in the company, were looking to make the company bigger, Better. We certainly have a lot of pride in that over time. We have done that consistently.

And a lot of that has to do with our Operations framework, which we call O P S Operations people's ratee. And we can talk more about that. But at the core, every single quarter were thinking of our portfolio and thinking about what are the companies that are mature enough, where the value creation has already occur and where there might be interesting exit opportunities.

And we have access those from time to time. We have been creative about how to do that. We have done everything from selling companies, obviously, to strategic to other sponsors, public or IPO and public opportunities. And we have certainly use continue funds and other interesting vehicles again to make sure that our investors have access to that capital and have the benefit of that value creation that we think we can create.

right? So you invest mostly in tech, in industrials. So let's talk about the flavor of opportunities in both those spaces. Tech was certainly over funded over a part time. There are a thousand privy and acorns.

That means a company that was founded in private markets to evaluation more than a billion dollars of a thousand of those. If you look at the typical IPO pipeline or annual IPO that are done, that's probably a fifteen years supply. So that's not gonna en.

In other words, you also have many tech riots were down over the last few years, a very high valuations. So there's a real lack of liquidity. There's a lot of companies that are upside down, then you have a AI that is ripping through the investing world and will get into this for industrial as as as well. But talk about how you think this opportunity sets .

up for clear lake. First, we're still in the middle of the ball game in terms of the impact of technology in our economy and the opportunity to invest in that transition right now. We think the technology as an important role in our economy and society and hopefully, positive role in terms of creating all kinds of efficiencies. What has changes? I think some of the statistics that you mention, there's a very significant amount of very interesting companies in the many of private that are looking for either born capital or other types of exit opportunities of evaluating gic alternatives.

Some of those are going before close in the near future, and we think that's a very interesting opportunity for clear lake because, you know, from the very beginning of the firm, we have invested in those companies and technology and we have, we think, want the brothers tour kids in the industry in terms of how to invest in technology, meaning that we understand how to invest in the company. Perhaps that is growing very fast and a where the playbook might be that growth and may be supplement in that growth with strategic M A. But we also understand how to take companies through transitions of companies, for example, or selling licenses on prem software that I done, transition into software as a service.

We have plenty of experience taking companies to that transition, creating a lot of value of doing that. We are plenty of experience helping companies transition from what used to be a much higher growth kind of model to a somewhat slower growth model. And we have certainly a lot of experience, you know, taking them those companies that now maybe are experience in the slower growth and revamping Operations and helping them find the places where the company can grow again and reignite a resume that more rapid growth.

And that is that we think the essence of valley creation. So for us, technology will continue to be pretty a larger sector, and we will continue to look for opportunities primarily and software primarily and subsectors that we understand very well. We think I ripe for that type of transformation.

For example, health care I T is probably the largest sector within software and one that we think wales continue to provide very interesting opportunity. So we think that the investing opportunity and tech is here is real. And certainly, if we had a more significant downturn, if we had a more significant slowdown where there were more those companies that require not only capital but expertise, turn those companies around her to help them get back to a healthier profile. We had that expertise as well. So we are actually quite bullish about the opportunity set in the next in eight, twenty four a months, particularly .

technologies. M A, I is there's going to two category. There is going to be companies that take advances of IT in disrupt.

Of course, there's going to be the disrupted, and I think that's onna happen in sectors like technology as well. Industrial and other sectors, probably very few sectors will be untouched. Maybe deeply regulated businesses will have more remote around them, but A I is coming everywhere. So how to use the ops playbook to make sure within your technology companies. That you're disrupt or not a disrupt?

E, absolutely. First of all, let me try to modify what we call O P S. O S, our version of an Operation framework that we use to make our companies to be very simple, bigger and Better.

So the idea is that will focus on certain aspects of of those companies, either the Operations, the people, the strategy, sometimes more sometimes multiple aspects of the business. And we trying to really identify what really matters at the beginning of the investment, trying to make that Better. And we have found that through a lot of focus and blocking tackle and hopefully strong execution, we have been successful in doing that.

And that typically translate tes into what you're looking for in an investment, a more rapid or faster revenue growth and hopefully Better margins. And most, most importantly, and the most difficult to measure is a more valuable company is more significant, more interesting within its ecosystem. So hopefully, when you go to sell, not only do you get a Better multiple, but you probably have a broader set of potential buyers because it's such an interesting asset.

And that's kind of what we try to do in most of our companies and most of our businesses within that context, the advent of A I is fascinating. Obviously, the concept of machine learning has been around for a really long time, yes, but technology does reach certain inflection points, and IT does seem like we have reached that inflection point with A I where now is more scalable and certainly is ripe for applications in companies of significant scale, which is obviously highly applicable to our companies and more broadly, to private equity. I think there are many ways where A I could be applied and could make a very significant impact on our business.

IT starts at home, right? We're using A I at clearing for all kinds of complex and simple. thanks. You know, we're looking to A I to help us source.

We're looking at A I to help us same thesis information and present that actually in a faster uh and in Better formats to our investors and to ourselves. But I think most important and what you're getting at is the impact of eye and the broader economy and hands portfolio anties. And we think that there are two aspects of IT for our companies.

So we A I can bring significant efficiencies across many companies and industries. The typical example will be no customer services can not be increasingly more more automated than driven by A I power. And that kind of a simple application that applies to our tech companies, our industrial companies, even consumer driven companies who benefit and be impacted by that.

But I actually think that there's even a more interesting opportunity that like when we talk about I am machine learning, we can never forget what powers that machine, right? The machine has to learn from data sets. And one of the really interesting things that do, we have been been focusing on this, both are tech companies.

Our industrial companies, after times, generate massive data sets. And those data are very specialized and their preparatory, and those are extremely valuable and will become more more valuable as we think of interesting applications within A I. And you have this preparatory data set, they're gonna be the linchpin for the machine to be able to provide those sufficiently.

Es, you the best examples is probably within health care I T, where there's significant applications where big data s are generated in signal data. That data is extremely important for that machine to learn them, potentially make them or or potentially translate to Better outcomes, Better predictor of outcomes, Better forecasting. And hopefully in the case of health care, you know, Better treatment and Better outcomes of patients. So we think that A I ultimately will be a force for good. And we're certainly thinking about many creative ways of incorporating that into our investing framework.

I think a lot of people talk about a in the context of tech, and obviously, there's already many examples within your portfolio that demonstrate how effectively you are using A I.

When you think about diligences ing industrial assets, one of the advantages think clearly has is the fact that its multiseminal and as deep expertise in both of these spaces, when you're looking at industrial assets today, how wit change your due diligence process? And do you think it's just table stakes that everyone's looking at and as the same way and thinking about, okay, here's how this business could be transformed using A I? Or are you seeing situations where you have a unique angle because of your skill sets, your industry expertise in your ability to go in with ops and make fundamental change to companies up?

We have reached at inflection point that I was referencing before, but I think every board, a very significant company in the U. S. And globally, to have a board meeting dedicated to ai and how A I can potentially transform your business.

And what are the threads obviously implied by A I competitively, but also from my business model perspectives? S so I think we have reached that moment. I would encourage everybody to do that in their portfolios or you you own the company or your board member of a company, I think is the time to do that is now or maybe yesterday.

IT is really interesting. You when you think more bly about you on how technology can applied in the industrial investing, every company right now, the technology company, the way you know you look at any uh, industry company and their manufacturing processes there, you know often times very significantly uh, automated and certainly heavily reliant on technology. So I think every companies of the technology company nowadays, we, for example, investing in one of the largest providers in the self starched industry of building product systems in building none necessarily the place that you would think about the very technology focus.

But what we quickly determine is that not only the company have a great product, a break, a mortal product that know they had sold and and had garden a very significant market share in that market, but that industry knowledge could translate to selling other products right into the same channel. And and we innovative. We actually, as part that platform, made several other acquisitions.

All of them were most of them actually on the technology side, where we focus on the entry systems. And when you think about the self storage industry, inherently, you have a consumer relationship where somebody actually gets a self start unit and then you need a lock, you know, and those locks tend to be the old fashion log, my key or a code. We invested in electronic entry systems that you could very simply use with your APP and your phone.

That's a from a business model perspective, if you think about IT, we took what was old fashion manufacturing company and started to introduce a business model that now implied a sale that not only was a one time sale, but implied now a ongoing relationship with the customer, creating a lot of data. Now the owner that storage facility understand, you know, who's using the facility went who's opening those doors and went as a consumer, you understand if you lock as open or not, you can actually provide a temporary code. But again, most now, now you're paying basically not only the one time of front, but you have a recurring revenue associated with the maintenance of dead kind of system.

You have recurrent revenue associated with other aspects of the refurbishment. And then for the ultimate customer, which is the self store facility owner, you have a massive increase in R. I know because actually we were able to demonstrate that using these electronic locks, you could charge more rent and you have a happier customer and people stop with you longer. Massive transformation from a revenue model and business moral perspective in the company that you know if you look at that first blush was essentially just manufacturing, you know kind of a building product going to a specialized edge, an industry or subsector.

Yeah, I love to talk about examples like this when i'm talking to general audience, and I get this question, you know, isn't private equity just levered public equity and a golbin sex? We really like partners with managers that have that combination of industry expertise in Operating experts and is such a great example because here's a situation where you go and you have a totally different view on what can be done with an asset.

And you put yourself in this situation where you're playing chess when I want else is playing checkers. That's absolutely right. And so we see you do that again and again.

And it's the mpower private equity right there. I remember when you're raising your first institutional fund and you and your cofounder, big dog a boli, had a very strong view on what you wanted to do. And right back in those very first meetings, you had a perspective that you wanted to have a lot of flexibility in investment IT.

You wanted to be able to invest across cycles and across the capital structure in that went right back to the very beginning of clear lake. And we remember in those first discussions with you thinking here, these relatively Young guys, they have such a clear perspective, but you are unyielding in your conviction that was the right way to go about IT. So talk about your formative experiences in what bright you at the founding of clear lake going back at seventeen years ago, now your widely veterans. Now you're very good at IT. But at the time you're setting up a new private equity firm with a clear point of views to how you are going to preach the markets differently.

yes, we were starting with a firms, but even beyond that, I think we were entrepreneurs. I always tell people are thinking about sitting their own firm, that great entrepreneurs have an idea that they believe is transformational. They believe that they understand how to do something that other people are doing, but they think they can do IT differently.

And we certainly had that idea. We ve felt that there was a Better way to invest. This idea of combining sector experts with the ability to invest across economic and credit cycles, and that combine with making these companies bigger, Better Operational.

And that combination, if you think about IT, almost twenty years ago, did not exist. That was not prevailed, at least in private equity. So we did had that belief. And as an entrepreneur, then there were things that we were willing to sacrifice that were negotiable.

So, for example, the economics of that fun, in the early days, when we were unknown, an unknown firm, and he was a difficult time, we started fun racing essentially in the middle. The great financial crisis, we sacrifice with sacrifice ownership of the firm, with sacrifice economics. But what we were unyielding, to your point, was in what we believe was actually at the core of the investment strategy.

We had never compromise when we think is important, which is the core strategy that we use to invest, that core investment approach because we always felt that was a Better way of generating great returns and now performing. And as a result of that, even though we were Young and IT was our formative years, we resisted any type of pressure, any type of influence, any type of I. As about changing that investing strategy or limiting that investing strategy does.

And the so we actually at at a time when we d needed the capital and we were looking around for a capital in a very difficult market, we actually refused investors that were trying to limit us because we felt I was gonna mpr the very core what we were trying to do, and we were resolute. So I think as an entrepreneur and certainly as a private equity investor or investor in general, you have to understand what are those non negotiable, right? what? What is the core that investing strategy makes you special? What is that secret sauce? And I think you have to be uncompromising that, and we certainly happen.

And so what are the formative experiences before that? Because there was a conviction where you are willing to make real trade s real, an important economic trade, to get what you wanted to have, the investment style that you thought was gonna differentiated. You've obviously had timing and sex.

You worked at a tech company during the day com period. You are at another private equity firm. So when we look at you and bad in the formative experiences, because you showed up with a lot of conviction, what were the experiences they gave their conviction?

I think by the time we started the firm u, even though we were Young, I started to my career, golden sex in nineteen ninety four. So we had over a decade of experience in the financial markets already. And we certainly from different vantage points, so different types of investors navigate actually significant this location.

And in the past thirty plus years, we have had a few significant this locations. Obviously, we had the pandemic. We had a great financial recession, but before that, obviously we had the dark comm era and the duck com crash.

My party form, which has more of focus on special situations, navigated that a certain way, but that came from more traditional private equity model at that time. They is that environment differently. And from that eminent a few key ideas.

One, the world was changing. They're gonna be certain industries that we're gonna be more significant drivers of growth within the general economy. Technology, for example, being proudly the most obvious and significant example, we wanted to be industry focus or sector focus are suppose to just generous.

We felt that sector focus, investors, ultimately, we gna have an edge, and we're going to understand how to create value those industries differently. And we're going to be able to understand the opportunities within that industry faster. And that's particularly important in times of crisis where you have to make decisions much more quickly and you can also bring the right resource as much more quickly.

You understand the ecosystem, you have a relationship with the right management teams and the right people and in the right consultants that so we just felt that being embedded in that sector ecosystem was going to make us Better investors and more effective long term. That was number one. Number two was this idea that the great investors out there, you know, people like buffett, one of things that has distinguished in a great investors that they actually have, they don't have narrow, very prescribed ways of investment.

They actually have very broad Mandates, and they have the ability to think about hydro best in the best place at the right time. And that evolve into this idea that we wanted to have the flexibility in one fun, which again, almost twenty years ago, was actually somewhat unique to, in the same fund, be able to do a traditional buyout, more complicated deals like turn around car wounds, structure equity, all the way to potentially distress or investing in the secondary market. And then as we were growing up and seeing how companies and investors behave in the aftermath of the dark com crash and the opportunity said there, we also felt that being a financial investor, only being a financial engineer, was not enough.

Yeah, IT was great to buy a company at a good Price, maybe at some levers to your point, and create returns that way. But you need the to be a Better investor than most. And to do that, you needed to basically create valley.

You needed to make these companies bigger and Better. And over time, with the past seven years, that is what has commented to this idea of O P. S.

But I think those formative years were a crucial right. Seeing from different vantage points how different firms navigated would turn out to be very volatile times in terms of investing. That was actually a great opportunity to generate new ideas about is there Better way to best? Is there Better model.

And ultimately, though, we realized that we still have to confirm in certain ways to what private equity was, right, you know? So we didn't want to completely reinvent how to structural private equity fund. So are fun. Our fees, the way we think about and talk to investors, that's very conventional, very traditional. But how we invest, as IT turns out, was very different, particularly again seventeen years ago when we started .

to the firm who said, you mention warm buffet. Warm buffet had charlie monger, and they were partners for decades in was part of their success. You also have a very successful partnership.

You cofounded cloudy capital with bigger a bali. One of things that we've always like to back clara lake, is the ethos of the firm, the values that you guys have. Your both immigrants here from porter ico, he's from iran.

You bring very complimentary skills sets. And like you've talked about a lot, you really have some very hard skills and capabilities that are differentiated a lot of times. It's the intangibles that make the difference. Talk about the partnership you have and how you think that makes you different.

No, by now, you know, I partner with that seventeen plus years ago and has been an incredible partnership, an incredible run. I think, like any team, part of that emanates from understanding our strength. And we certainly have different stamps and weaknesses, understanding there are commonalities. You know, I think you mention one of them, right? We came with lots of commonalities terms of our families, even though, no, we came from very different places in the world, families that were not wealthy monetarily.

But we're wealthy in other ways, you know, in the terms of education and love and nurturing of, as the turns out of, and also A A high degree of focus on education, the power of education, a catalyst for a Better world, and for us, some for others. And I think that still translates, and it's an important part, certainly, of my life. At the same time, we also were able to harness our differences, and we have different personalities and different perspectives and different ways of looking at a problem.

You know, i'm an engineer by training and to be more analytical framework driven. But I may think about things sometimes a different way, but that combination, appreciating of those commonalities of differences and over time, learning then how to agree and disagree, that's one of the most important things about a great partnership. And I think we put that all together in the context of also having a very common vision about the firm and the culture of the farm.

I wanted things that in this industry we don't talk enough about, I think, is how culture can affect how you invest on how different from behave and and I think that's actually fundamental. And and from the very beginning, we wanted to create a culture that was based on teamwork, on humility, on that consent improvement, on always thinking about our investors, much like golden access to fourteen principles. And the other you think about your clients coming first, actually from time to time, you know use some golden sex I P, and bring up the fourteen principles to my team and mentioned that are used that as an example, right? You feel very simple or clear principles can build a great firm, and that's what we're trying .

to do ultimately. Yeah, one of the things that I think is consistent about you talk about your format is conventional, but i'm guessing that neither you and you in the six great thought, you going to be private equity tips right from very different backgrounds.

And so I found that you've always been able to chAllenge conventional wisdom and not constrain yourself in a way that many people, Frankly, do constrain themselves because they grew up in an industry and they're expected to act a certain way. And that's paid off investors because I think you've made money because you have so much flexibility, personality wise. Where do you think that comes from?

I think for me um so my dad was an engineer and I grew up building lego sets and thinking about how things are working. So I was fascinated by how things built and how things work, and and ultimately I was good at math and science and other type of things. And that translated into indications of mechanical and airspace engineer, even though I that are going to go on sax.

So I joke around that. I I went from differential equations and calculus and in as a banker, you basically ads of tracks. Sometimes you're multiple.

It's mostly is is to a great math.

But I think what I did for me though, it's cemented that idea that went your person of the problem of an idea with a company, with a process, with a product you wanted ask why? Why do people do in this way? Is there are a Better way of doing IT.

But often times you actually find out that there is a Better way of doing IT. And nobody wanted to chAllenge, and nobody thought about IT or IT was so in Green, and the people in that industry, that group to do at a certain way, that nobody wanted to chAllenge that conventional wisdom. So I love convention, the wisdom, because as as the naming of lies, IT has some wisdom and bet IT in IT.

But I also think that you should always try to look outside the box and see if there's a Better way of doing that. And we do that all the time. I clear like, right, know that kind of part of our ideas, know when we make a great investment, yeah, we look back and try to decider why became a great investment.

But often times when we make a bad investment, we make a mistake. You know we that we try to really understand why we did IT that way. But ultimately, but the view or the objective of analyzing and understanding who we are, what we are do, doing how we're doing that and how we can get Better at IT and chAllenging our own conventional .

wisdom as a result. Maybe one of the best examples of this is your recent purchase of Chelsea football club, where I think the whole world was scratching their head saying clearly, like is coming in in buying one of the most storied european football clubs. And we've talked about this and you said, look like it's not that much different than the software company. So talk about your perspective on that I said and why you thought I was interesting.

So first, and for most, I think what you think about sports, you thinking about much more than just a business right kind of sports connote and the notes, emotion and passion. And certainly, we're very familiar with that. I became a soccer foobar fan really nineteen ninety, eighty.

So over twenty five years ago, very passionate about IT. So I think, number one, you have to understand the ethos of the sport. You have to understand that this, for many people, is much more than just a game, is much more than just a business.

At the same time, you know, when you translate ate to make that club sustainable, you have to look at the business aspects of IT. And as you then correctly point out, sports over the past twenty thirty years has as a business, be completely transformed in terms of a business model. Know where the focus used to be much more on you, maybe the the stadium itself and the attendance and selling hot ducks and beers if you are here in the us.

To how do you basically take that franchise, that club, and what happens on the field, around the pitch, and how can you basically bring that to the most people possible, to the fans, to supporters, to the people that are the core of that club. And in today's world, a lot of that is technology writing. Obviously, you see the advent of not only the traditional media networks, but in today's world, a lot of people are consuming or looking, or seeing or or watching their favor club through all kinds of different channels, right? You're parly doing in your phone and you maybe watching smoke clips or your favorite player on tiktok or things like that.

So we identify that Young ports, again, much more than just a business, is a passion, is a movement. And they were incredible opportunities that came from understanding how to basically provide that to the broader number of people. And that means that then when you look at the on the most teams, the most major leagues, the world, most of the revenue has transformed and into multi year contraction. Revenue that comes from media companies are come from multi year sponsorship deals or things like that. And the core, we have learned a lot, you know, over the past two years as investors and controlling investors in Chelsea and understanding to put first the club and the team and that eats and our fans and supporters at the same time handle in that context, build a sustainable business that can continue to provide that same enjoyment, that same passion, that same feeling to our fans and supporters.

amazing. I wanted pivot for a moment to the personal side because you are very active, your very civic minded, you're very filthy pic. And maybe you could just spend a moment talking about some of your work on the philanthropy side with your wife, quana Jones, and you found the supercharged initiative, so tells about your passions outside of the office, in off the field.

So particularly my mom is really instilling me this idea of giving back even when we didn't have a whole lot. You know, we were always SHE was always writing checks the union and trying to be chargeable and trying to really make an impact on, on others that maybe we're not as fortunately, I think that has always been part of my DNA will and certainly not a day goes by that I don't think about and how fortunate personally and as a family we have been.

And I think there's a responsibilty that comes to that and the responsibility lie to try to basically leave something behind that a little bit than how you found IT and try to give back and try to maybe even if you're really successful, provide others where you know with the same path for at least the same idea, the same tools about how to get there. So I think we identified a few principles that we think are important in terms of that success. And those principles revolve around very simple things, you know education, entrepreneurship and equity.

And we try to basically give back or really best is the term that i'd love to use more because even though we may not get a financial return, we may get a social impact return, we may get A A psychic income return out of helping others. And we have tried to basically direct our efforts that way. And I think that's as important uh, as anything else that I do uh nowadays.

So for us, that has translate ted into significant investment or contributions, donations to educational stick tions, our album matter for university, stanford, other we know much smaller local communities during the pandemic writing for example, the issue, the digital divide was specially start looking at our face that we invested with donated significant amounts to a non profits. I were trying to deal with that. And by providing high speed wifi and internet access now, uh, computers, things like that.

And it's not only enough for profits, you can make a lot of impact on the profit world, you know, is well known in the industry. There's all kinds of statistics, but roughly one or two percent of the capital out there goes to either women or or funds managed by women or under represented minorities. So we have invested over now upwards of two hundred million dollars and funds managed by women and other represented minorities.

But that's charity. I am investing in people that I think are to generate Better than average, actually top quite out, hopefully top this out returns. And I think for me is just is almost to use hetch fund paranis an arbitrator, right? Basically underused talent I mostly care about, you know, am I investing in the best town t there? And that went happens to be female or happens to be black or Brown.

That's okay. Actually, that's great. And if rather people .

are Better than OK.

if other people have investigated that time to even Better, because, you know, we can invest more and we can create or generate or get even Better returns. But ultimately, I will love those people to be able to scale their firms, to be able to be discovered by others. And ultimately, my hope is that will be a lot more clearly capitals, more with the equities, more firms like that, that are utilizing a hundred percent of the human capital of this incredible country.

OK. We like to end this podcast with a lighting round where we run you through A A few quick questions. Let's go. What is your greatest strength as an investor?

I can think about and understand my mistakes, but not warn them. And the next day I can make a decision then without basically dwelling on those mistakes and and getting wrapped up in the emotion of, you know, having failed, picking myself out out. Their failure, I think, is my greatest strength.

What's the best piece of advice you've ever received?

Early on, I was told to follow my own instincts, follow my own path, understand your dreams and weaknesses and fellow that, and I have done that ever since, and I think that has served me well.

How about your biggest mentor?

So I have had a few people I admire and I have followed. But ultimately, I think my mom and that have been my greatest mentors. They instill in me both that intellectual curiosity that we talked about before and that sense of giving back and making the world hopefully is Better place.

Which investor due admire most.

right? They have to go with the conventional warm. But we we talked about this interview, but I have always admired what he did. You know, he created basically a business model that really exits and created space for himself, where, you know, he can invest across economic and credit cycles in multiple industries. And obvious, ly has become one of the best asbestos that we have ever seen.

And where do you spend your time outside the office?

You know, to me, the philanthropist p is very important, you know, giving back. And then once a while I can get out in the golf course. great.

And finally, what do you most excited about in the world right now?

So I do think that technology of this is important in my day job in terms of investing, but I think technology can be used for good. And where at that point, where technology has democratized so many things across the world, access to knowledge writing has been democratized. And I actually super excited about that because as we talked about before, I think education, knowledge is the catalyst for people around the world to improve themselves and improve those around them. So I mean, really excited about that.

Who say, you've always struck me as a guy who has IT figured out you're a great partner to us hear a common sex. You've developed this platform, which we think is highly differentiated. You give so much back to your communities and yet you're still A A humble guy that seems like he's enjoying the ride. So it's really great for us to share some of that with our listeners today.

Thank you, mike. Super excited to be here again back a golden sex. And we wouldn't be here without investors like you that believed in us when that we were unproven. We were Young.

And so like a little Spark, in every single day, we wake up thinking, how can we reward? How can we get back? How can we basically prove your right? And we still trying to do that.

Thank you for listening to this episode of golbin sex exchanges, great investors, which was recorded on september seven, two thousand twenty four. I am Michael brand wire.

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