Pod Insights Masters in Business From Biotech to Asset Management with Sunaina Sinha About this episode Barry speaks with Sunaina Sinha, Global Head of Private Capital Advisory at Raymond James. Prior to joining Raymond James, Sunaina founded Cebile Capital, which was acquired by Raymond James in 2021. She was named one of the 50 Most Influential People in Private Equity for 2 years in a row by Dow Jones Private Equity News. She also earned a spot as one of the Twenty Trailblazing Women in Private Equity in 2023. Additionally, Sunaina serves as Chairman of the Board of Directors of SFC Energy AG and on the boards of the Stanford Institution for Economic Policy Research and the Stanford LEAD Council.
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Transcript 11,908 words · 6 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
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1:06 Barry Ritholtz? This is Masters in Business with Barry Ritholtz on Bloomberg Radio. This week on the podcast, yet another extra special guest. Is there any other kind? Sanayana Sinha is the Global Head of Private Capital Advisory Group for Raymond James. The Raymond James platform manages $1.6 trillion in total assets and advises on a whole lot more. Sanayana had stood up her own private capital group, Siebel Capital, which was acquired by Raymond James, and she's been there for the past three and a half years. She works as an advisor for a number of LPs and GPs and pretty much everybody in between.
1:49 Barry Ritholtz? If you're at all interested in the growth in private equity and private capital and how this sector of the investment world is changing and where it might go, I think you'll find this to be a fascinating conversation. Sanayana has a unique perch in the world of not only venture and angel investing, but most especially private equity and private capital. I found this conversation to be fascinating, and I think you will also. With no further ado, my conversation with Raymond James, Sanayana Sinha. Sanayana Sinha, welcome to Bloomberg.
2:26 Speaker 00 Thank you very much for having me.
2:27 Speaker 03 Having me buried.
2:27 Barry Ritholtz? Well, thank you so much for coming. So I was delving through your background and I had a first ask. BS in management science and a master's in engineering and in chemical engineering from Stanford, where you were a Mayfield fellow and then an MBA from Harvard. What was the original career plan?
2:47 Speaker 03 Well, the original career plan very much was to go into the biotech industry, which is what I did after I graduated from Stanford. Hence, the master's in chemical engineering, which was an unusual master's to get after doing undergraduate in industrial engineering, which was then relabeled as management sciences and engineering at Stanford. But it allowed me to go into the healthcare vertical, straight out of Stanford. I worked for two small and medium sized businesses owned by the same investor group and cut my teeth on those and then realized as a result of that experience, firstly, it was phenomenal experience. I was working directly with the CEO and president of both companies. But I realized that the biotech vertical was not my playing field for the long term.
3:31 Speaker 03 Hence, the MBA at Harvard to find another career path and that led me into asset management.
3:36 Barry Ritholtz? So the really interesting thing, I, for reasons between Stanford and the fact that you're here via San Francisco, I just assumed you were living out there, but you're not. You're London based. Tell me, how did you end up picking Stanford? How did you end up in California?
3:53 Speaker 03 You know, I grew up all over the world. They call people like me third culture kids. They're born in one place, so born in India, grew up in many other places and then land up in another place altogether.
4:04 Barry Ritholtz? Well, when you say many other places, what I often hear is, you know, India to London to Boston, New York, California. You seem to have traveled a little. Where else? Tell me where you grew up.
4:16 Speaker 03 So my dad was a diplomat for the World Bank. I grew up in Nigeria, in Lagos, in Harare, Zimbabwe, and then in Hanoi, Vietnam. I applied to universities from colleges in the US and also in the UK from Hanoi. There were no places to take the SAT in Vietnam back then. So we flew to Bangkok. My dad flew me to Bangkok to take my SAT ones and then we flew back a few weeks later to take the SAT twos and flew back again to do interviews. And I was blessed enough to get into a number of great US Ivy Leagues, but ended up choosing Stanford because even then, Barry, I knew I was an entrepreneur. At heart, I wanted to build businesses, scale businesses and help other people scale their businesses.
4:59 Speaker 03 And Stanford had that right magic between entrepreneurship and technology and the nexus of of starting to grow things, which is what I wanted to learn most.
5:08 Barry Ritholtz? We always pay attention to regions where there is a pool of capital, a world-class educational institution, and a private sector that can combine all three. There's no doubt Silicon Valley and Stanford is one of the leading places. So if that's what you wanted to do, you certainly picked well. How did you end up back in London as where you wanted to live?
5:34 Speaker 03 Yes, so I had the most incredible experience at Stanford, ended up working in the Bay Area straight after that. Still very close ties to Stanford, was still teaching a class there even after graduation and and working with a bunch of professors out there at the time. When it came to picking where I wanted to do my MBA, again, I had the choice between the Stanford of the East, as I call Harvard Business School, but also to go back to Stanford. And I knew that if I didn't leave then, I may never leave the Bay Area. It's such a special place and such a special bastion and ecosystem of entrepreneurship and and technology and growth and ideas. Made the decision to leave just to try something new at that point.
6:15 Speaker 03 Went to Harvard for my MBA and then had made the choice at that point to switch out of biotech. And interviewed with a whole bunch of firms and ended up getting into the hedge fund world, doing capital raising for two large hedge funds and one of them, Brevin Howard, was headquartered in London. So moved over to London back in 2009 and the rest is history. I've been a resident of London. My family would argue with you, Barry, and argue with anybody who asked them that I live on a plane because I manage a global business over seven offices, six of which happen to be in the US. So I'm stateside a lot and also traveled the rest of Europe, but home very much is London today.
6:51 Barry Ritholtz? So I want to rewind a little bit. I don't want to skip that middle experience. So you were at a couple of hedge funds. You were at Bridgewater, which is headquartered in Greenwich, Connecticut. And you were at Brevin Howard, which was, which is still headquartered in London. In either of those cases, you weren't working as an investor, right? You were a researcher analyst, capital raiser. How did those experiences at Bridgewater and Brevin Howard affect how you look at the world of investing? Clearly, two superstar funds that have put together a really impressive long-term track record.
7:29 Speaker 03 Absolutely. When it comes to any asset management business, Barry, two things are important. Make smart investment decisions and have investors to back you to do them, right? And so I knew I had to master in one of those, those streams. And the stream I picked was I do the capital raising to, that enables the asset management industry engine to turn. And both Bridgewater and Brevin Howard were incredible training grounds to teach you just how to do that. But secondly, how to cover investors systematically and how to think about the world in a holistic way? And what levers drive what others? Both were macro hedge funds, as you know, and understanding how macro markets work, how they interplay with each other is incredibly important. I use that day to day when I speak to my private equity clients today.
8:14 Speaker 03 I use it all the time when it comes to understanding how markets are going to affect different types of investors. How does the oil price impact my sovereign wealth fund investors? How does what's happening with rates impact endowments and pension plans? All of it is incredibly interlinked and it's that interlinkage that macro thinking really teaches you.
8:32 Barry Ritholtz? Really intriguing. So it's kind of interesting that you're in private equity. You spent time in the world of hedge funds, but you also made a number of venture investments. Going back to the early 2010s, tell us a little bit about how you sort of got involved in seed and angel investing, very early-stage venture investing.
8:56 Speaker 03 You know, we all have to decide what our gifts are to offer in the world. You know, one of the gifts I have to offer is how do you help businesses growth hack and get to the next level of scale? I did that with two businesses early on in the early 2010s, as you say. Bought a business called Barkor, it's a fitness boutique in the UK, doing something new for women by women. Grew that over a course of six or seven years, a very successful business and sold that to a private equity-backed strategic. Did that again with a business called Mindful Chef, a healthy recipe box business that grew like gangbusters, especially over the COVID years, and sold that to Nestle as well. I now, I'm chairperson of the board of a publicly listed company called SFC Energy.
9:40 Speaker 03 They do clean energy fuel cells. And being able to steer entrepreneurs and enable them to realize their vision and think tactically as well as strategically as to how to get there and help them do that, that's very much something that helps me come alive every single day.
9:53 Barry Ritholtz? So, so let's, let's expand on that because I, most people, I would imagine, think of angel investing very different than private equity investing. One is you're betting on a team, you're betting on a founder and some innovative new idea where there may not even be a market for that sort of thing yet, as opposed to taking existing company and management team and product and saying, here's how to level up, here's how to make this more productive, efficient and really reach your potential. What's the overlap or what skills you bring from one to the other?
10:27 Speaker 03 Well, I think the most important skill I bring is the fact that I've started my own business, grown it from scratch and sold it to Fortune 300. So I've, I've seen all legs of this journey.
10:40 Barry Ritholtz? So not just an investor, but an operator as well?
10:42 Speaker 03 Operator and a grower of her own business. So that's the first thing. The second thing is, you are absolutely right, Barry. The muscle it takes to grow from zero to 10 of revenue or zero to 10 of EBITDA is very different from the journey that takes, from 10 to 100 and 100 to a billion. These are different muscles and there's a different levers in the business, but also levers in mindset. I've done zero to 10 quite a few times. So in my angel investing businesses, it was very much that, hey, how do we get from zero to 10 of EBITDA? That takes a certain amount of nimbleness, hunger, agility, scrappiness. And I love that. Having done that myself, I know what that feels like. I can relate to the entrepreneurs. I can help them duck and weave through whatever's coming at them.
11:27 Barry Ritholtz? I'm sensing the word pivot coming.
11:30 Speaker 03 I'm not going to use it because you used it already. But you've got to be able to figure out what I call the incomings. If life is throwing a lot at you, the market throws a lot at you, and what are you going to ignore and deflect? And what are you going to say? Okay, that's the signal from this noise. That's where I double click. That takes a pattern recognition that I have. Now that said, over the last few years, and once I've sold my business to Raymond James, I'm doing that other second leg of the journey. How do you take something that's established, growing, proven, and really scale it? And that's the same thing I'm doing with the public board seat at SFC, helping that management team and that board take an existing business, a business is doing, you know, close to $150 million of revenue, you know, very profitable, growing
12:12 Speaker 03 organically 30% year on year. How do you take that and scale that to the next level? How do you make that a billion dollar business? So now I'm trying my hand at that second leg of the journey. But that first leg of zero to 10, that I've done a few times over, and I think I've got real value to add to entrepreneurs there.
12:28 Barry Ritholtz? So let me roll even further back. You launched Siebel Capital in 2011. What made you decide, I'm going to throw out a whole new company that's focused on, was it venture or private equity?
12:43 Speaker 03 At the beginning, it was focused both on private equity and hedge funds. But within a year and a half, I retired all our hedge fund business because I could see the capital inflows going into the private markets opportunity. That was the right call to make. As you think about the last decade, the inflows into private equity have been phenomenal, and we've been a great beneficiary of that, of that flow and that movement. But in the early days, what enabled me to start, or what gave me the conviction to start, was really the belief that build it and they will come. And if they don't come, at least you're enjoying the journey for yourself. I knew I loved capital raising. I knew I could do that effectively, and I could do that for a handful of clients. And my goal very much was Was let me give this a shot and if it doesn't work, I'll go out and get another job again.
13:28 Speaker 03 I was in my early thirties. I didn't have a mortgage. I didn't have kids. I had very few liabilities. It was a risk. It was a calculated one, and I'm very glad I took it because it worked out beautifully. But it's not for the faint of heart. That's for sure. Being an entrepreneur isn't anyway, but being an entrepreneur in an industry like financial services, where there's these old and very incumbent eight hundred pound gorillas are all around you is certainly not.
13:52 Barry Ritholtz? To say the very least, you went to Stanford, you were an adjunct professor, visiting guest professor.
13:58 Speaker 03 I was a guest lecturer with the Stanford School of Engineering, yes.
14:01 Barry Ritholtz? But you're also on the advisory board for the Stanford Institute of Economic Policy and Research. Tell us a little bit about what you do there and how that ties into your day job.
14:13 Speaker 03 As you know, I love macro and I love thinking about how policy and macro movements around markets around the world really impact what's happening in the ground reality for businesses that are run all over the world. The SEAPER, as it's called, the Stanford Institute for Economic Policy and Research, is an incredible congregation of leading economists, Nobel laureates, policy advisors from all walks of life across Stanford, around the world, who join the institute to look at the big problems facing the world today and think about how do you, how do you solve them? How do you come at them? It could be from looking at how social security reform or looking at homelessness in California or thinking about the age issue in Japan.
14:58 Speaker 03 They could look at any number of issues globally and parse it using the world's leading experts and actually research how to come out at the other side of it. Some of the most powerful research that I've encountered at SEAPER, being on that board, I'll give you one that really astounded me. One of the researchers there, Nick Bloom, has done some of the most definitive research on flexible working and how it impacts productivity, retention, and how it's very much here to stay or should be. Very much flies in the face of how some Wall Street banks think about the return to work. Fascinating empirical evidence there that he's collected. Another piece of research there that I'll quickly mention is work on labor force participation by women dipping in the summer months as kids come out to school.
15:43 Speaker 03 Interesting on how it
15:44 Barry Ritholtz? Very seasonal.
15:45 Speaker 03 Very seasonal. What do we do about that? That caused the US United States GDP growth in the summer months. Fascinating the interlinkages between women, our education policy, labor force productivity, and again, ultimately, the growth of the economy.
16:00 Speaker 00 At KKR, we've spent 50 years understanding what matters to our clients and companies. From pioneering private equity to investing across credit, real assets, insurance, and sports, KKR has built the experience to navigate complexity, the judgment to recognize opportunity, and the conviction to create lasting value. Because when people and institutions are counting on us, understanding what matters isn't just important, it's everything. KKR, understanding what matters. Visit kkr.com/whatmatters.
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17:08 Barry Ritholtz? So, early in the 2010s, you were doing some angel investing. Tell us what you were looking for, either in sectors or technologies. What attracted you to the angel space?
17:19 Speaker 03 What attracted me to that angel space was that I was building my business and had skills and learnings I wanted to share. But more importantly, when I looked for businesses and entrepreneurs to back, it came down to really two very important criteria. The first is people, people, people. I learned that during my Mayfield Fellows Program journey at Stanford, where that was drilled into us. It starts with the people, it ends with the people. And secondly, the companies and the products they were building had to do good and do well. Right, that they had to have a positive impact on the communities that they operated in. So if you think about the recipe food business, that was all about healthy eating.
18:01 Speaker 03 Uh, the fitness business was all about a, an exercise program that's efficiently designed for women's bodies. You think about the clean energy business that I, I am now chair of the board of. Uh, that is all about clean energy fuel cell alternatives to diesel generators and to polluting generator types. So that's kind of the thematic that I lean into the most.
18:21 Barry Ritholtz? Really interesting. So you, you very easily could have either set this up as a VC fund or affiliated yourself with a venture group. What are the advantages to being an individual making single decision investments into a startup?
18:36 Speaker 03 I think the biggest advantage is that you're, there's full alignment because you're not operating with OPM, other people's money. It is your money, it's your skin in the game. The alignment of interest is one thing that you learn in private equity and all private markets investing, that it's all about alignment of interest. You can't exit these things unless you grow value and you're in sync with the founders and with the management teams. Because they're private businesses. So you've got to figure out if you have that match and a, and alignment of both economic interest, but also vision and execution forte into the next three to five year journey. That's the minimum amount of time you'll be together for.
19:16 Speaker 03 So that's why I think doing it as an individual always gave me much more reward. And also, quite frankly, economic success than doing it as a, as a fund investor. The other thing I'd add is that I found very early on that professionally speaking, in terms of my day job, Barry, what was I really good at? I was really good at the capital markets function. I was really good at the capital raising liquidity organization started side of the business. And that's what Sebel Capital did. So I knew that was going to be my day to day jam. And on the board of some of these companies, I would be able to go and add the value of how to grow their businesses.
19:52 Barry Ritholtz? So let's talk a little bit about your day. Job you set up Siebel Capital in in London, right?
19:58 Speaker 03 In London.
19:58 Barry Ritholtz? That's where you founded.
19:59 Speaker 03 Correct.
19:59 Barry Ritholtz? So before we get into the advisory services you provide, I'm a big Anglophile. I love London. But there's such a difference between how they operate, the economy and and especially the financial sector. Let's talk a little bit about that. What's it like being is it even bi-coastal? You're NY, you know, you're nylon, pretty regularly.
20:23 Speaker 03 Nylon, that's my roots.
20:25 Barry Ritholtz? Right? How how different is the UK finance from the US and start the startup mentality? I it seems that failure is not a dirty word in the US. I don't get that same vibe from Europe. Tell us a little bit about the differences.
20:38 Speaker 03 You're absolutely right. Operating in the UK and in Europe at large and the US are fundamentally different. Having been at Stanford, worked in the Bay Area, then went to Harvard and and worked in the Boston ecosystem, came out of New York. London was a bit of a an adjustment, I will tell you that, because the startup ecosystem, especially in the early 2010s, was nowhere near what it was in San Francisco and and the Bay Area and Boston.
21:04 Barry Ritholtz? I mean, that's a well-established, mature, if you could say mature startup region.
21:10 Speaker 03 Correct.
21:10 Barry Ritholtz? But but it is, and the same with Boston and New York.
21:12 Speaker 03 Hundred percent. And so, starting Siebel Capital in London ended up being both a blessing and a curse. Why was it blessing? It was a blessing because there was not that many startups there, period. There was not that many new entrepreneurs starting financial services companies. And so it made us very unique and able to differentiate ourselves in the UK and European market very quickly. There were not that many new entrants. And we use that to our advantage and often still do. Although the market has definitely come a long way, there are still divergences on how on ease of doing business. But it became very clear to me, Barry, very quickly on, we would have to diversify our business to be US-focused. And so we opened our first office in New York a few years after we started, and we've
21:54 Speaker 03 been heavily focused on the US private equity clients and US institutional investors have done so from day one, knowing that actually the US market is much deeper and much larger than UK or Europe could ever be, but also that the speed of doing business varies quite dramatically.
22:10 Barry Ritholtz? So we've talked about the startup and angel world. Let's talk about the advisory work you do for private equity, both in London and the US. I keep coming back to there seems to be such a difference between how companies operate there and how companies operate here. Every now and then, a European company comes to the US and succeeds, but more often than not, they have a hard time adjusting. And I imagine the same is true vice versa. When a US company goes to the UK, at least outside of finance. Finance seems to have found a foothold in Europe from the US. Why the big cultural differences?
22:51 Barry Ritholtz? What is it about the psychology there and here that creates such a different business and investing environment?
22:58 Speaker 03 I think that it depends on what type of investing you do. At its heart, private equity is about buy low, sell high. It's a long-only strategy in the private markets. So you've got to buy a business and you've got to know that you have to add value and make it larger, better, stronger, and then sell it on. So a number of the clients we have are pure-play, regional-focused. So we have a German private equity client. We have a Benelux private equity client. We have a Nordics private equity client. We've got UK clients. And they are experts in understanding what needs to happen to grow their businesses and their companies that they're buying and selling in their target market. They know the customer base.
23:42 Speaker 03 They know how to impact the value drivers, i.e. on the talent acquisition side, on the add-on, bolt-on strategy side. They know how to do that in their regional markets incredibly well.
23:53 Barry Ritholtz? And I just want to interrupt and say, is it that different from Germany to the Netherlands to Sweden to the UK? Like completely, like in the United States, New York is in Florida, Florida's in Texas, Texas is in California. But you could hop from one place to another and it's not so different that you can't adjust to the regional... We more or less speak kind of the same language throughout the country. Maybe there are some dialects and differences, but you know, the general gestalt of California, New York, Texas, yeah, the politics may be different, but the business seems to be the same. That's not true in Europe, is it?
24:32 Speaker 03 It depends on the size of businesses you're buying, right? If you're buying businesses that are up to, say, ten or twenty million dollars or euros of EBITDA, then it really matters that you're a regional champion, right? That you understand how a German business can scale in that end of the market versus how a Nordic's business will scale. So they're having regional footholds and expertise really matters. But when you're doing larger businesses, and we have clients that are pan-regional, that are European, pan-European buyout players, or there are global buyout players that do global deals, US and Europe, but they do them for larger businesses. And larger businesses often tend to have global customers
25:15 Speaker 03 because by definition, you've got to make sure you've diversified your revenue out. So it depends on what scale of business you're doing. But even if we're the largest private equity funds out there, they will have local offices. If they know they need to operate in the Italian market, they'll have presence in Milan, or they'll have Italian experts in-house that know how to operate and buy businesses in Milan, or they'll have sector experts. Because a software business in Italy is going to be very similar to a software business in Texas. You know, the operating environment might change, but the characteristics of the business and how you drive value in that business will often be very similar. So you've got to make sure you're either a sector or a regional expert, and that often depends on the size of business you buy.
25:58 Barry Ritholtz? So you've lived in Africa, you've lived in India, you've lived in Vietnam, you've been to Thailand and all over Asia. Have you thought of expanding to some of these other continents? Or is it just US and Europe?
26:10 Speaker 03 We do cover Asian and Middle Eastern investors in my business prolifically and have done from almost the first day of inception. You cannot ignore the rest of the world. As you know, the sovereign wealth funds and the institutions in the Middle East are big movers in the market today. And that's today. I started covering Middle Eastern institutions when I first opened the doors of the business, now fourteen years ago. And fourteen years ago, people were like, I don't know if I need to go over there. It's a huge investment of time and airfare and so forth. Well, now- Everyone's saying, I wish I'd built those relationships long ago because relationships die hard in those markets. Asia and Middle East and those relationships I've had and my team has had for a long time.
26:52 Barry Ritholtz? Huh. So let's talk a little bit about valuation in the public markets. Hard to say fourth quarter 2024 US markets aren't at the very least fully priced, if not richly priced. When we look at the UK, when we look at Europe, much, much less expensive. We see a lot of companies trading at book value.
27:13 Speaker 03 Yeah.
27:14 Barry Ritholtz? Not the same growth level that we see in the US. Does that valuation difference in the public markets extend to private markets as well?
27:23 Speaker 03 So firstly, let's comment on the public market side. That is characterized very much that valuation gap is characterized by the depth of the markets. The US capital markets vibrant, incredibly dynamic, incredible fragmentation of investors. Deep, rich market where you can do business on the capital market size pretty seamlessly.
27:44 Barry Ritholtz? And I would add plus all these giant mega tech companies.
27:49 Speaker 03 Correct.
27:50 Barry Ritholtz? That certainly have rich valuations and skew, whether it's the Nasdaq 100 or the S and P 500.
27:56 Speaker 03 Yes.
27:56 Barry Ritholtz? You know, there's a handful of them overseas, Taiwan Semiconductor, ASM Lithography. You can name SAP, you can name like a handful, but most of the big ones are here, which certainly.
28:07 Speaker 03 Skew the valuation.
28:09 Barry Ritholtz? On the public side, what do you see on the private side?
28:11 Speaker 03 On the private side, we see a similar valuation gap that, and I'll just finish the public market side. The UK and the European capital markets just don't have the same depth, which is why you see the valuation mispricing.
28:21 Barry Ritholtz? So you think it's more than just the tech companies, it's the structure.
28:25 Speaker 03 It's structural. There's not that many participants. It's also legal and regulatory, right? In the UK, there was a move away from holding UK assets by the UK pension plans. That sucked the liquidity out of the UK markets, hence the valuation gap. So there's also regulatory angles that are at play there. On the private markets, though, you've, I've got to agree with you entirely. There is a valuation arbitrage even in the private markets.
28:51 Barry Ritholtz? Wow.
28:51 Speaker 03 That the European. Buyout specialists are able to buy companies at better value in Europe and scale them into global businesses and sell them at global valuations or US market valuations when it comes down to selling time. So some of the biggest, best private equity household names that you know, whether it's a Blackstone or an Apex or a Clayton, Duble and Rice, have headquarters both sides of the pond because there's so much value to be harvested by buying smartly in Europe and an advantage. Quite honestly, a valuation arbitrage that you can play all day long and many of them do so very successfully.
29:27 Barry Ritholtz? So you're advising a lot of players in the private equity market. Is it general partners, GPs, the funds that are essentially running? Are they LPs and investors or do you advise across the whole spectrum?
29:41 Speaker 03 We sit in between the GPs and their LPs. When it comes to, and we will raise everything from a small, for us would be a $250 million fund and our largest client raised $27 billion in their last fund. Okay, and everybody in between. In the last year alone, we raised north of $4 billion of new capital commitments for our clients and are very prolific at ensuring that private equity, general partners, raise the capital they need to go off and buy businesses and build the ecosystems around each of their businesses. So we sit right in between general partners and limited partners, got a team of over 60 people, seven offices, raising capital for our clients, but also intermediating in the liquidity side of the equation in private markets.
30:26 Speaker 03 As you know, in the public markets, the secondary issuance market is much larger than the primary issuance market. In private markets today, it's flipped. But that means-
30:35 Barry Ritholtz? Explain what you mean by that. Why is that, how is that flipped?
30:38 Speaker 03 Well, in private markets today, there is a $1.6 trillion new capital raising engine that hums along annually. That's how much capital is raised across private market funds in a 12-month rolling cycle.
30:54 Barry Ritholtz? And to just put a little flesh on that, go back to before you launched Sebrel. Private equity was a trillion dollars.
31:02 Speaker 03 Less.
31:03 Barry Ritholtz? Ten, twelve trillion and it's projected to go up to twenty something trillion.
31:08 Speaker 03 Absolutely.
31:09 Barry Ritholtz? So, so this has certainly been ramping up rapidly.
31:12 Speaker 03 Indeed.
31:12 Barry Ritholtz? And your timing was quite fortuitous, launching in twenty eleven.
31:15 Speaker 03 Yes, very lucky to have launched then, but you're absolutely right. But the secondaries market in private markets is only a hundred and forty, a hundred and fifty billion dollars in size. But growing rapidly, that market, when we first did our first secondaries transaction as a, as a firm in twenty twelve, was only twenty billion, a drop in the bucket. Today it's a hundred and fifty billion, still small compared to the size of the primary private equity market. But these investors want liquidity too, Barry. You could have held something eight years, nine years, ten years, you want out. Who do you go to? You've got to call a market maker like ourselves who can make and advise on that position in the secondary's private equity market to get you liquidity. Can I tell you one fun fact?
31:57 Barry Ritholtz? Sure.
31:58 Speaker 03 The average age of a private equity fund, sixteen point two years.
32:03 Barry Ritholtz? Wow, that's crazy.
32:05 Speaker 03 It says ten on the tin, it's ten with two one-year extensions, so up to twelve. But the average vehicle is around for, average is around for sixteen point two years. Hence, the need for the secondary's market to provide liquidity for investors who want out.
32:21 Barry Ritholtz? So, just for the lay listener, I want to do a little definitional work here. So, for, when we talk about a ten-year funds, you're putting money into a private equity fund, that over the course of that decade, they're making various investments. There's no guarantee in, in year eleven that all of those investments have found an exit.
32:41 Speaker 03 Right.
32:41 Barry Ritholtz? So there'll be a series of extensions and even after those extensions, all right, the fund is arguably inactive, but we're trying to find an exit for this. A secondary market is one way that, that can take place. It gets people who, who are in that liquid and hopefully at a discount for the buyers who come in and say, we'll, we'll take this at X price, we'll give them liquidity and then it's year one for us, not year twelve. So there Different timelines. Is that fair?
33:11 Speaker 03 You have explained it very, very beautifully. The only nuance I'd add to that is that that liquidity can be asked for by both the limited partner, so i.e. the investor in the fund itself, and we get asked by pension plans, endowments, foundations, family offices, saying, hey, we've held this portfolio now for eight years, nine years, it's getting long in the tooth, or actually, my predecessor made these investments, I'm the new CIO, can you sell this stuff for me? I don't like it anymore, or I've actually realized the gains I thought I would realize much sooner than I expected, can you sell this on for me? All reasons to seek liquidity on the limited partner side, and we do that all day, every day. Actually, I've done one hundred and sixty-three transactions in that space alone in the last decade.
33:56 Speaker 03 And we also organize a liquidity when the general partner asks us. Sometimes the general partner will say, actually, can you help organize liquidity for a company that needs to be sold out of the fund because the fund is reaching its end of life? The fund needs to sell some companies, but I, general partner, want to hold on to it longer. So pull it out of the fund and put it in its own fund, and that is called the continuation vehicle space, and that's something we do all day, every day as well.
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34:59 Barry Ritholtz? We've been experiencing something here in the U.S. that I find kind of fascinating, and given your perch, I'm really curious as to what you see in the U.K. and Europe or the rest of the world. Over the past decade, there has been, for lack of a better word, a democratization of private equity and private debt.
35:20 Barry Ritholtz? You used to need twenty or or ten million dollars to participate in this. I think you could get into a number of places for a quarter million, a hundred thousand dollars.
35:29 Speaker 03 Less, very less.
35:30 Barry Ritholtz? So so this has, you know, when when I look around at Blackstone and Carlyle and so many of the big P E firms in the U S, um, they have set up parallel funds where, you know, there's really practically no minimum. Is this trend something that's U S focused? Are you seeing this in the U K and Europe? Tell us a little bit about private equity for everybody.
35:55 Speaker 03 Absolutely. The entrance of private wealth into private markets, but private equity in in particular, has been the single biggest innovation and movement of capital from L P investors into private markets in the last five years. It's been happening. It started off over the last decade, but it's really over the last three to five years we've seen an acceleration. And here's the most important fact, that as ultra high net worth and high net worth individuals build out their portfolios, they're putting equities, they're putting bonds, and they're putting alternatives and alternatives being led by private markets.
36:34 Speaker 03 The average investor in private wealth is under allocated to private equity by three to five X, three to five hundred percent. That is a huge number. And so the growth of private wealth as an investor in private markets has absolutely exploded over the last two years and will continue to do so in the over the next decade or so. And it's a global phenomenon. Of course, the U S led the way. And certainly, the forty act regulation of allowing semi liquid evergreen products and individuals to invest on those was a huge game change when it came to private wealth's interest in alternatives. We're seeing the same thing in Europe. We're seeing the same thing in Asia,
37:17 Speaker 03 that individuals who have a certain net worth are saying, I want a bit of private equity in my portfolio. How do I go out to get it? And more and more sponsors are saying, well, I'm going to create solutions for you to access my funds and product and my alpha through accessible channels.
37:34 Barry Ritholtz? So in the U S, when this really began to get popular in the twenty teens. One of the big drivers was zero interest rates, the ZIRP policy, where when bonds are yielding, you know, 2%, 2.5%, that side of the portfolio really wasn't producing anything. And people started looking around, hey, where can I get better yield? Private debt, private equity stepped into that and really filled that gap, especially for institutional investors. So I look around the world and we had, you know, rates that were zero for a decade. How significant was that as a driver? And then what does it mean now that rates are, you know, appreciably higher than they were in the 2010s?
38:18 Speaker 03 There's no doubt that rates being low helped investors seek yield and seek alpha in different markets, including in private markets. But also it helped private equity do deals, right? Leverage buyouts requires leverage. And when rates were so low, the leverage was cheap and easily accessible. And they used it for that decade of boom that we had until rates started going up. Now that rates have gone up, but they are coming back down, we can always discuss what neutral looks like. What we have is now investors seeking, where do I invest that I can still find value in? Given how expensive the public markets are, right? You think about the forward PE of the public markets today. Where do I still get relative value where I can buy at sensible multiples
39:02 Speaker 03 and sell at higher ones, private markets? So it's a diversification strategy. And secondly, it's an incredibly important way for investors to say that, as I think about a balanced portfolio, I want to seek investments in folks who really know how to add value to businesses over a period of time. So they'll do that only in general partners who have a track record. And that track record is often anywhere between 15% to 22%, 23% net IRRs. And that track record really matters. So you have to be able to return money over the neutral rate. Otherwise, you're not going to be viable. Even the best private credit funds will return high single digits
39:45 Speaker 03 or low teens type of returns, which is very much a good diversifier. And in addition to private wealth portfolios.
39:52 Barry Ritholtz? And one of the things I noticed whenever I see a private debt or a private credit, it used to be LIBOR, now it's SOFR, it's not a fixed rate, it's a variable rate plus some markup beyond that. So kind of raises the question, low interest rates first send people exploring this aspect of private markets and private credit and debt. Do higher rates really have a negative impact or you're still getting whatever the SOFR rate is plus five, six, seven percent?
40:25 Speaker 03 Yes, for sure you're going to get a, if you're comparing to SOFR, you're definitely going to get a return normalization, which did happen when rates were in 22, 23. Less deals got done because at higher rates, private equity funds had a difficult time borrowing, you know, the debt markets were shut. So deal volumes came down. If you look at the M and A volumes at most of the major investment banks, including at Ray Majeans, volumes came down. Now they're on their way back up, but your point is a salient one. How does it impact returns? You have to be able to show, if you're doing private equity buyouts, you've got to be able to show that you can do 15 points over for SOFR, right?
41:01 Barry Ritholtz? 15, that's a big number.
41:03 Speaker 03 10 to 15 points. If you're a mid-market private equity house, you are returning 20% net IRRs. That's kind of what you have to show fund on fund and that's interesting. That's why you're added to a portfolio. If you're a private debt strategy, obviously not private debt will be more like low teens type of numbers, somewhere in the 10 to 13% net range. But even that is value add when you think about a debt strategy that, because even in public market debts, you're not able to find that type of yield. So as rates come down, as money gets pushed out of T-bills, gets pushed out of money market accounts and starts to seek yields again, private markets become interesting to a lot of players.
41:43 Barry Ritholtz? Huh, really, really interesting. You mentioned the transaction numbers slid down and then came back up again. Does that impact the secondaries you've done? You guys have done over 200 secondaries and fundraising transactions. That's a pretty big number for a relatively short period of time. How have you seen the volumes on secondaries affected by swinging interest rates?
42:06 Speaker 03 So there was a dip in the secondary markets transacting volumes in two thousand and twenty three in particular, as rates were high and investors didn't know what that what impact that had on valuation. If you remember, first half of two thousand and twenty three, the world froze because you had Fed raising interest rates and all other central banks, you had Ukraine, Russia, you had Silicon Valley Bank, and then you had Credit Suisse. So everybody was deer in headlights going, what on earth is going on? Volumes came down that year in secondary market as well as in M and A. Now those volumes have gone up. This year, two thousand and twenty four, will be another high watermark for the secondary market in terms of transacted volumes.
42:49 Speaker 03 And that's because as the private markets grow, the need for liquidity and a liquidity solution over the period of that ten to fifteen year hold becomes all the more pertinent for both limited partners and general partners. So now, regardless of what the rates are doing, you have investors saying, you know what, every year or every two years, I'm going to sell in the secondary market and move that cash into other more opportunistic situations or back into a program that will yield me a higher return because I've made what I needed to make out of this portfolio. That's become programmatic amongst many institutional investors.
43:22 Barry Ritholtz? So I I love the word opportunistic. When in the public markets, when we get those dislocations in people, you use the word freeze. In public markets, we use the word panic because they have the liquidity to engage in bad behavior. It definitely creates opportunities. When you see in the private markets, people pulling back and freezing, do you end up seeing the same sort of, hey, this is a substantial discount, I want to participate in this?
43:49 Speaker 03 You're absolutely right, Barry. It all comes down to the discount. And are there willing sellers sellers at the price? There's always a price. I'll give you one anecdote. One fund interest we sold traded at eight and a half cents on the dollar. Eight and a half.
44:02 Barry Ritholtz? Really?
44:02 Speaker 03 There was a seller who said, get me any price I want out. I don't want to hold this anymore. Okay, this was, I'm going back to two thousand and thirteen, two thousand and fourteen. But there was a buyer at eight at eight and a half percent of NAV of net asset value. Great. You have all the cushion in the world and you look like a genius when you do your markups the next quarter.
44:20 Barry Ritholtz? Even in the worst of the financial crisis, bad mortgages, pools of bad mortgages.
44:25 Speaker 03 Right.
44:26 Barry Ritholtz? They were selling for thirty five, forty cents, seemed like a huge deal. Ninety two and a half percent off, ninety one and a half percent off, that's unbelievable.
44:34 Speaker 03 That was in an Asian manager in twenty thirteen, but I would say the average discount these days, the best private equity fund managers do not trade at discounts. They trade at close to their net asset values. They close trade close to par, but the average discount when it comes to the average buyout fund is somewhere in the four to eight percent range for the average private equity buyout fund. If you hold venture, especially if it's got a lot of fintech in it these days.
44:59 Barry Ritholtz? Right.
44:59 Speaker 03 That's going at thirty to fifty percent discount because it's really hard to value that stuff. As you know, venture and growth is often valued at its last round's valuation.
45:08 Barry Ritholtz? Right.
45:08 Speaker 03 Well, if your last round was back in the boom years and all you've done is try to tread water and maybe raise some debt, you don't have a valid print. So we are seeing a lot more spread, a bid ask spread is very wide in the venture and growth world right now. When it comes to buyouts, especially mid-market, large cap buyout, at or close to par in the nineties.
45:27 Barry Ritholtz? Huh, really interesting. So you mentioned deal flow has ticked up. I'm assuming that'll continue into next year. What are some of the challenges and headwinds that are out there that could be something an investor in this space should be aware of?
45:43 Speaker 03 I think the one that's most salient that we track most closely, Barry, is the fact that because the math broke at the investor level in end twenty two, early twenty three, we're still playing catch up on that. What does that even mean? It means that the exit activity, the M and A volumes, the ability to sell companies and return cash to institutional investors really slowed down from summer twenty two onwards as we had inflation, as we had Ukraine, as we had some of the macro challenges.
46:10 Barry Ritholtz? Plus, plus a pretty public market at the same time.
46:13 Speaker 03 And a very ugly public market. So at that point, institutional investors stopped seeing very much cash back from their private equity portfolios. They were still having to pay into those capital calls that were being made. By their private equity clients because the contributions still kept coming in saying I want to do a new deal. I want to do an add on here. Some management fees and expenses you need to fund. But the cash back froze. Now we're starting to come out of that now. But that math is still nowhere near where it needs to be, i.e. The private equity industry needs to return a lot more cash back to its investors. The capital markets need to open because some of the largest private equity funds you have out there.
46:53 Speaker 03 Need to list some of those businesses and we haven't seen the IPO window open US or Europe in the in the last year. In a meaningful and sustainable way, we need all of that math to write in itself. Before institutional investors kind of come back to their normal levels of allocating to private equity. Where institutions have pulled back, private wealth has stepped in. We had that discussion. But the institutional investor has pulled back the average pension plan, the average endowment, the average foundation. The average insurance company, if they used to do a hundred dollars per fund investment last time around. This go around, there are seventy five to eighty percent of that only. So for them to come back to the hundred dollars, we need the private equity industry to sell companies and return cash back to them.
47:38 Speaker 03 It's getting better. Twenty twenty four is better M and A volumes that twenty twenty three was. But is it back to what it was in twenty one? No, sir. We're not back there yet.
47:47 Barry Ritholtz? You know, it kind of reminds me of what happened in the automobile market during the pandemic. When you're not making a lot of new cars, it means a few years later, there are not a lot of used cars for sale. Sounds like it's the same situation where you have a twenty twenty two slowdown. Twenty twenty five, where are the exits? Am I oversimplifying that?
48:06 Speaker 03 You are picked a really interesting and analogy and I like it. Because that is what is happening and now we're at the point where a lot of companies that were bought in the twenty twenty one era. Need to be sold and some of our clients have been prolific at returning that capital back. In fact, have done a great job in twenty twenty four of exiting those businesses and returning cash back to investors. Others not so much. Others need to pick up the speed on that. And as an industry, if you look at the entire tree of the industry, let me give you some numbers. The average returns that investors get cash back that they're used to expecting. Distributions as a percentage of the total value held in private equity is generally around twenty four percent. In twenty three, that number dipped to only eleven percent.
48:51 Speaker 03 So far in 24, we're back to about 14%, but we're not back to 24.
48:57 Barry Ritholtz? So when we're not talking about returns, we're talking about?
49:00 Speaker 03 Exit activity as a percentage of the net asset value.
49:04 Barry Ritholtz? So 14% exit as opposed to almost a quarter, big difference.
49:08 Speaker 03 Yes, historical average of 24%. The institutional investor does not like that math. They like to have their cash back, come back to normal levels because that's the cash back to then recycle into new investments.
49:19 Barry Ritholtz? Right, they see other opportunities. So I asked you the negative question, what are the challenges? Let me flip it. What are the tailwinds? What are some of the positive things you see coming forward for the private markets?
49:31 Speaker 03 I think that as you see the increase in regulation around public market listings, more and more companies around the world, US and Europe and beyond, want to remain private. Because they see the benefits of being under private equity ownership, the value add, their access to resources, the ability to have capital at hand to grow faster is a very valuable playbook. So I expect that the private equity industry will continue to grow at the very rapid expansion rate that they've enjoyed. The other point I'll say is that this is a really interesting return-driving environment for private equity. Valuations in the private markets remain very sensible. And there's a great arbitrage between US and Europe.
50:16 Speaker 03 The US-Europe divergence, as they're calling it these days, is real. So when it comes to saying, hey, I'm going to globalize my company's revenue chain, how do you do that? That's an interesting playbook, especially in the political environment we're in. And private equity is very well positioned to figure that out. The third thing we've already touched on, which is private wealth is a game changer for private markets, is a game changer in terms of the capital inflows that's coming in. And we're still at the early innings of that. It would change private equity for good. And I think it's very exciting to see that gather pace and to be at the forefront of that at Raymond James, which is one of the largest platforms, global private wealth platforms in the world.
50:59 Barry Ritholtz? So let's talk a little bit. About your time at Raymond James. First, you stand up your own firm, Sebel, and now you're at a Fortune 500 bank and advisory firm. That's gotta be a culture shock. Tell us a little bit about what that transition was like.
51:16 Speaker 03 On paper, it is a culture shock. But during diligence, Raymond James approached me with an offer to acquire the business. And we spent months getting to know each other to ensure that the culture fit would work. Because if that didn't work, the key asset you were buying, which is talent in financial services, was gonna walk. And so my boss now, who is the person who acquired Sebel, Jim Bun, and I spent a lot of time getting to know each other and ensuring that him and I could work together well and effectively. And that the cultural alignment and entrepreneurial DNA would stay intact when they acquired the firm. Now I've been part of Raymond James three and a half years. I can safely say that the honeymoon's over.
51:58 Speaker 03 But also say that the culture fit has been a real hit. Raymond James has a very affable, community-oriented, very low ego type of culture in general. And I've found the same thing in the capital markets business. And it's been actually one of my upside surprises of joining Raymond James on the cultural side. You wouldn't know it if you looked at the paper announcement that a Fortune 300 was buying a small boutique.
52:23 Barry Ritholtz? And you go from small boutique to a trillion dollar platform. How has that changed how you operate, not just globally, but the sort of companies you advise, the sort of funds that you're working with? What has been the upside for you being on this trillion-plus-dollar platform?
52:41 Speaker 03 There'd be two things I'd point to. The first is, almost overnight, the largest private equity funds in the world started hiring us. Same team, same people, same services. All that change was the logo of the boutique got replaced with the logo of a Fortune 300.
52:58 Barry Ritholtz? Plus Fortune 300 is a giant, you know, that there's thousands and thousands of banks and funds, only a couple of hundred companies attain that heft size and, you know, it's not just the boutique, it's everything around it. You can tap into a giant network of experts.
53:17 Speaker 03 And one of my clients said, listen, no one gets fired for hiring a Fortune 300. Now you are part of one. And it changed our game overnight. Overnight, we started signing 10, 20, 30 billion dollar funds, and that was incredibly exciting. Do what we love to do, but to do it for some of the biggest players in the markets is very exciting. The second one is that we were able to figure out and avail of and offer the synergy with our private wealth partners at Raymond James very quickly. And for that, I'll always be thankful to the leadership of the firm because they saw the opportunity and they made that happen. And that's been a huge value add to our clients.
53:54 Barry Ritholtz? I can, I can imagine. All right. So I only have you for a handful of minutes left. Before I get to my favorite questions that I ask all my guests, I have a couple of curveballs I have to throw at you, starting with, you're a certified sommelier from the Court of Master Sommeliers. Tell us a little bit about your enthusiasm for wine and what led you into that?
54:20 Speaker 03 So I started teaching a wine class at Stanford for one unit of credit in my junior year. I was part of living in the French house there where I was a member of the staff and I had to teach a class that had something to do with France. I said, France and wine, that makes sense.
54:36 Barry Ritholtz? Even though you were less than an hour from Napa Valley?
54:39 Speaker 03 And guess who my teachers were? I would get guest speakers and winemakers from Napa and Sonoma to come and my pitch to them was, hey, you get to teach, you get to talk to and teach wine to an impressionable young audience that can go on and become loyal customers. They loved it. They would come down and do a talk on wine and we'd do a small wine tasting.
55:00 Barry Ritholtz? Maybe bring some, a couple of bottles, right?
55:02 Speaker 03 They sure did. It was voted Stanford's most popular class. It would often shut down the Stanford systems during signup day. And even after I graduated from Stanford, I kept teaching that wine class for close to three years after graduation. When I went to Harvard for my MBA, Harvard College, one of the houses there, residential houses there, asked me to come teach a wine seminar for them, which I did, which was again a roaring success. And then I moved to London. And when I moved to London, I said, well, I'm not teaching anything here. I guess I'm gonna lose all this wine knowledge. Let me put it to the test. And I decided to take the Court of Master Sommeliers test. It was a three-day test.
55:45 Speaker 03 I don't think I've crammed that hard for anything in my life. It was, I had a blind tasting of ten wines. It had a service test, had theory papers. It was incredibly intense. But low and behold, I ended up passing. And here we are. It's a lifetime qualification. I still have it with pride and honor, although I don't use it as much anymore now being a mom of three.
56:06 Barry Ritholtz? So you're, I was gonna ask, you're London-based. It's a short train ride to France, to Germany, to Italy. There are some great wines in that area. How often do you get to go to local wineries and sample the wares?
56:21 Speaker 03 I love tasting wine. And so I have joined a wine club in London, which I love. I used to take part in blind wine tasting competitions, less so now. So any opportunity I can to enjoy and experiment and try new wines, I do so. You're absolutely right. Europe is a bastion of winemaking. And so if I go to board meetings in Germany, or if I head off for a weekend in Spain, it's all about diving deep into the local wine. I recently went for dinner with about ten, twelve friends to a lovely restaurant in, near Barcelona in Spain. And there was a wine tasting pairing there for all Spanish wines.
57:05 Speaker 03 And we did that together and learned more about Spanish wines than we ever thought we would know. That's the kind of thing that I do now as a passion and hobby.
57:12 Barry Ritholtz? Really, really interesting. All right, so I'll have you for a few more minutes. Let's jump to our favorite questions. Tell us what's keeping you entertained these days? What are you either watching or listening to? What are you streaming?
57:25 Speaker 03 Watching, I have to say, I I tend to watch in limited doses these days, given life and travel and children. But I love The Diplomat on Netflix, fascinating, again, geopolitics. I'm absolutely interested in the new spy thriller that Paramount has out called The Agency. I've watched a couple of episodes, it's trending well so far. I love listening to a number of podcasts. My go-to list will be Andrew Huberman, love his, he's a Stanford professor.
57:59 Barry Ritholtz? Right, the healthcare.
58:01 Speaker 03 Yes, he loves, he talks about health wellness protocols, super fascinating. I try to dive into his stuff as much as I possibly can. They're long, though, so sometimes it takes a few iterations. I'll often listen to the news via podcasts, whether it's Bloomberg, CNBC, that's often part of my regular rotor. And more than any of the others, I am a huge believer in preventative mental health. I meditate every day, go to an annual meditation course. So I'm often listening to talks around meditation, around mental health, how do you deepen your meditation practice? That's a huge part of my repository as well.
58:40 Barry Ritholtz? And while we're on streaming entertainment, if you like The Diplomat and The Agency, let me suggest The Lioness.
58:49 Speaker 03 Ooh.
58:50 Barry Ritholtz? On Paramount, about intelligent agencies and how they infiltrate terrorist groups, really fascinating.
58:56 Speaker 03 Very cool.
58:57 Barry Ritholtz? I just finished the first season and I'm looking, you need a break, because it's like, very tense and wow, we're about to start the second season. Tell us about your mentors, who helped shape your career?
59:09 Speaker 03 I am lucky enough to have been picked up by a wonderful professor at Stanford called Professor Tom Kosnick. Tom took me on at the tender age of nineteen or twenty, and took me under his wing, made me a research fellow. He's the one that enabled me to guest lecture at Stanford, I wrote case studies that are still used in the teaching curriculum there under him, and he's been a tremendous Mentor and supporter very early on and forever thankful to him for his coaching and mentorship over the years. Similarly is a wonderful professor at Stanford called Professor Tina Selig. She gave me one of the best pieces of advice I think any young career professional, but
59:54 Speaker 03 certainly a woman could have received. She said to me, you can have it all, just not at once. And that has stuck with me forever since and it's been true in many walks of life as I've had my children, as I've grown my businesses, as I do what I do on a daily basis. So those are the two that stand out, both at Stanford, both influential in the way they mentored me, but also what they imparted in me.
1:00:16 Barry Ritholtz? Really interesting. Let's talk about books. What are some of your favorites and what are you reading right now?
1:00:23 Speaker 03 I love the book The Big Leap by Gray Hendricks. Everyone should pick it up. It's a quick read. It talks about upper limits, how we set upper limits unconsciously in our lives. He starts off with this great research about how most lottery winners, after five years, most of them end up being broke.
1:00:45 Barry Ritholtz? Right.
1:00:46 Speaker 03 Or really unhappy.
1:00:47 Barry Ritholtz? Broke, divorced, suicide, it's terrible.
1:00:49 Speaker 03 It's terrible. Why? We've just been coming to all these riches. The mind has a reset point that brings you down into what you're used to feeling and the kind of mental space you're used to inhabiting. How do you break out of that and increase your upper limits so you can continue to scale in your life and in your career and your in your personal life and so on? Fascinating, quick read. Big Leap by Gray Hendricks. Highly recommended. I'm reading a book right now, I'm only about thirty pages into it called The Mind Matters. Back to my thematic about mental and understanding how the mind works and mental health. Mind Matters is by a professor who talks about how the mind can often visualize things into reality. So you hear this phrase called manifestation a lot.
1:01:33 Speaker 03 This is a neuroscientist studying what that means in terms of how the brain fires to try to make things into reality for us. Fascinating, thirty-five pages or so so far. So early innings, but it's going well.
1:01:46 Barry Ritholtz? Really interesting. And our final two questions. What sort of advice would you give to a recent college grad interested in a career in private markets or finance?
1:01:59 Speaker 03 My number one piece of advice to anybody entering finance is play the long game. Too many young people, I'm sure that you come across Barry, that I come across, are all about the short-term hits and the short-term wins. If it doesn't work out, they move on and they try to make it work somewhere else and they move on again. A rolling stone gathers no moss, especially in finance. It's a world that ends up being one, maybe two degrees of separation. It's a world in which relationships still really, really matter. And you have to cultivate them, thinking about a ten, twenty-year career in mind, not what can this person do for me today, or this week, or this month, or immediately.
1:02:40 Speaker 03 And that is, I think, one of the most profound pieces of advice I leaned into early in my career, looking at every human being as a long-term investment of time and energy, not looking for quick paybacks. Same with investing in private equity, but certainly true when it comes to people.
1:02:57 Barry Ritholtz? Really interesting. And our final question, what do you know about the world of private equity today you wish you knew twenty-plus years ago when you were first starting out?
1:03:08 Speaker 03 What I know now that I wish I knew back then is that the market will change and adapt even faster and more furiously than you ever thought possible. Did we ever see the trillions of dollars in the private equity primary market? No. Did I see the secondary's market growing to one hundred and fifty billion on its way to a trillion dollars itself? No. So the growth will far outpace your wildest dreams, both in your own industry, but also in the finance world around you. Think about twenty years ago, had you and I ever envisioned the Mag Seven and the trends we're seeing in technology and how markets would be at the levels they are today? Not even in our wildest dreams.
1:03:51 Speaker 03 So as I think about the next twenty years, I keep that in mind.
1:03:54 Barry Ritholtz? Really, really interesting. Thank you, Sinha, for being so generous with your time. We have been speaking with Sinha Sinha. She is the Global Head of the Private Capital Advisory Group for Raymond James. If you enjoy this conversation, well, be sure and check out any of the previous 540 we've done over the past 10 and a half years. You can find those at iTunes, Spotify, Bloomberg, YouTube, wherever you find your favorite podcasts. And be sure and check out my new podcast, At the Money, short 10-minute conversations with experts about topics affecting your money, earning it, spending it, and, most
1:04:34 Barry Ritholtz? importantly, investing it. At the Money in the Masters in Business feed or wherever you find your favorite podcasts. I would be remiss if I did not thank the crack team who helps us put these conversations together each week. John Wasserman is my audio engineer. Anna Luke is my producer. Sean Russo is my researcher. Sage Baumann is the head of podcasts here at Bloomberg. I'm Barry Ritholtz. You've been listening to Masters in Business on Bloomberg Radio.
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