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“The tsunami in Asia was the first of 3 tsunamis I faced in my professional life.”
232 Plays1 year ago
20 YEARS IN PERSPECTIVE:
“People don’t remember books; they remember sentences. More specifically, they remember stories.”
Four different places in the last 20 years. I married for the second time and hopefully the last time, I also fell in love with running, so I became an avid marathoner, hopefully I'll complete the 6 majors.
Corporate culture matters quite a lot, so all those OB classes were actually quite helpful.
On Credit Suisse - one of the key takeaways is how a centennial brand or franchise could vanish in a matter of months.
ON TOPIC: Finance, alternative investments, seeding managers
We're always looking for PHD: Poor, Hungry and Desperate to make money people.
Lack of humility is actually like a cancer, it eats you over time.
Humility, to know what you know and what you don't know, humility to keep learning and know that you know you still need to continue to develop yourself.
Even more important than being a good investor is to be a good psychologist.
The top 20 companies in the S&P500 index, they're worth more than the total of all private equity, venture capital, infrastructure investments in the world.
Today about one quarter of the whole stock trading that takes place every single day is performed by machines, by computers and algorithms and so forth.
Out of every 10 new managers that I meet, it's probably 1 or 2 to have some likelihood of becoming successful down the road.
it's very important to identify how the person behaves when things are going sour.
We all know that the first 2 to 3 years is the key period for knowing whether the business will take off or not, and the mortality rate across alternative asset managers in the first three years is probably 60% - 70%.
ON TOPIC: Capital markets and the future direction of investments
The improbable is different from the impossible.
The cost of capital measured by interest rates became very low during the last fifteen years.
When capital is easily accessible people make a lot of stupid mistakes
We're basically migrating to a different regime - we're going to a period where interest rates will remain high for a certain period of time because of high inflation.
We need to be much more cautious about how we allocate capital; we need to think a lot about allocating more capital to real assets because these are the assets that protect us from high inflation.
One of the things that I think people underestimate is inflation. Inflation can get very sticky over time, it doesn't revert to the mean.
One of the consequences of that is that the income distribution gets more unequal over time, because inflation is basically a tax that primarily affects the less wealthy people. And with more income inequality social unrest becomes more likely right.
One of the ways to preserve purchasing power over time is investing in real assets. And one of the real assets that I think still has a lot of good value embedded in it is public equities.
ON GIVING BACK
All my donations go for institutions that are related to education. Talent is somewhat overrated, what we really need to care about is providing the opportunity for people and I think education is probably the best way to provide opportunity for people to develop themselves and grow.
If you look at all cases of emerging markets that evolved over time and grew, that was because of education.
Outlive (Peter Attia), Credit Suisse, Psychology of money (Morgan Housel), Berkshire Hathaway, Warren Buffet, Lifespan (David Sinclair), Alternative investments, Venture capital, hedge funds, private equity, Elizabeth Holmes, Bernard Madoff, FTX, Sam Bankman-Fried, Crypto, INSEAD, INSEADAlumni
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Transcript
Introduction to the O3D Podcast Edition
00:00:00
Speaker
This is Republic of Insead, the 20 years later O3D podcast edition. I am Milena Ivanova and will be your host in this limited series.
Reflecting on 20 Years of INSEAD Alumni Stories
00:00:11
Speaker
So, here we are, 20 years later, hopefully all the wiser, naturally smarter and as charming as ever. There were 432 of us in the O3D vintage.
00:00:25
Speaker
And certainly there are 432 unique and very interesting personal and professional stories to tell. While I cannot physically cover all, I have tried to make a selection of stories that will keep you interested and curious and will hopefully convince you to join us on campus for reunion. Welcome to the Republic of Insead Podcast Edition and enjoy the show.
Guest Introduction and Career Reflection
00:00:50
Speaker
Here we are.
00:00:51
Speaker
My guest today is calling in from Brazil. For more than 26 years, he's been dealing in asset allocation and especially alternative investments. For those who missed finance one or two, he'll give us the summary.
00:01:08
Speaker
I'll start with, instead of an introduction, which I usually do, I'll start with a quote from his LinkedIn profile and let him take it from there, whichever way he wants. So people don't remember books. They remember sentences. More specifically, they remember stories. So I'll leave him or I'll open with this quote. He can tell us more about the quote and then tell us his story of the last 20 years.
00:01:37
Speaker
in a nutshell, and then we take it from there. Hi there. Well, actually, unfortunately, this is not my cult. I took from one of my favorite daughters. He's called Morgan Hausl, and he writes a lot about financing investments in general, but his book is probably one of my favorites. I'll tell you about it later. There you go. So we started with the book. So tell us, where has your life taken you in the last 20 years?
00:02:07
Speaker
Well, different places. So I, you know, after finishing inside, I decided to stay in Singapore because I love the place. And then I actually joined another alumnus to set up a investment consulting firm, which is called the GFIA. And then I stay over three years. But during that time in Singapore, I actually survived the Asia tsunami in 2000, 2004. I was spending Christmas in
00:02:36
Speaker
in Thailand. And like many, many other alumni, I managed to survive, otherwise I wouldn't be here. But that was one part of the story after Ensead. Then I
00:02:51
Speaker
I moved back to Brazil and then moved to London to establish the office of a hedge fund manager in that city. And subsequently I moved to New York City where I lived in the last eight years before moving back to Brazil. So four different places in the last 20 years.
00:03:13
Speaker
In the meantime, I married for the second time and hopefully the last time, had a beautiful girl, Julia, and also fell in love with running. So I became an avid marathoner. Hopefully I'll complete the six majors in the next two years, but that's basically the way I really stress. All right.
Facing Professional Challenges and the Role of Corporate Culture
00:03:38
Speaker
And so tell on the
00:03:40
Speaker
So you've moved around and it's interesting you mentioned Thailand and the tsunami. I have another guest who's going to talk about it and how it has profoundly changed his life. And in fact, his business now is the result of what more or less happened after he stayed in Thailand, after the tsunami. But that's a different story. Tell me what has been the most challenging
00:04:07
Speaker
thing in these last 20 years for you, personal or professional? Yeah, actually I was, the tsunami in Asia was basically the first of three tsunamis I faced in my, especially my professional life. So in my professional life, I actually faced two other, say, tsunamis. One was when I was a partner of Brazilian investment bank called the BTG Pact Hall.
00:04:35
Speaker
the majority shareholder got arrested fairly in 2015. And basically, we faced the challenge to survive at that time. But one of the things that I learned from that lesson, from that event, is that corporate culture matters quite a lot. So, you know, all those OB classes were actually quite helpful at that time.
00:05:03
Speaker
And this was one of the nicest, I think, corporate turnaround stories in the local market. BTG, after that, became the biggest investment back in Latin America. And the second corporate tsunami is the one that I'm actually living through right now, Credit Suisse. I'm currently working on the Credit Suisse.
00:05:27
Speaker
I think one of the key takeaways is how a centennial brand of franchise could vanish in a matter of months. It's really a pity. It's all about accountability or lack of and risk management as well.
00:05:49
Speaker
Even though it's a pretty solid brand, it got hit and it simply disappeared in a matter of months. Yeah, well, the specifics of banking is...
00:06:04
Speaker
You keep it quiet at the moment. There's too much noise and confidence is lost. It becomes very scary very quickly, right? Yeah, it's all about trust, right? If you think about what happened in some of those small banks in the US, Silicon Valley Bank and so forth, and especially nowadays that you can move money around with the touch in a smartphone,
00:06:30
Speaker
it gets very tricky. Risk management became even more important for financial institutions.
Stress Management Through Marathon Running
00:06:40
Speaker
In terms of stress, you've had a bunch of stress and you say you deal with it through marathons. Any other tips you have for
00:06:49
Speaker
Well, it's an obvious one, right? I think physical activity is critical. I just read this book, which just became a bestseller, Outlived by Peter Atchia. It's a great book. It talks about how you can live longer with quality. It's a doctor that focuses a lot on longevity. And physical activity is by far the most important thing, because you take care of your body, you take care of your
00:07:17
Speaker
mental health as well. Gotta stay close to your friends, gotta stay close to your family. Human beings are social animals, right? So we need to, we need each other. And you need to belong to, you need to perceive or feel that you belong to a group of people, be it your family, be it your group of friends. So
00:07:40
Speaker
That's my tip. But my tip is actually to read that book because it's a fantastic book. It talks a lot about, especially when we become closer to our 50s. It makes you think. I'll swap one with you. I'll recommend Lifespan. Oh, yeah. That's a good one as well. Very good one. Right. So finance and asset management
00:08:10
Speaker
Managing other people's money is a tricky thing, right? Either you can or you cannot. I was in finance, but I can never touch other people's money. So I stayed on the other side for the time I was there. But what is the most difficult aspect of being successful in what you do, which is asset allocation?
00:08:30
Speaker
Well, I think in finance, one of the features or one of the qualities that it's very hard to stick to is actually humility. And humility is like, or lack of humility is actually like a cancer, right? It eats you over time. So humility to know what you know and what you don't know, right?
00:08:57
Speaker
humility to keep learning and know that you still need to continue to develop yourself. So that's very hard. And most of the cases of, for example, private equity managers or hedge fund managers that reach a peak, but after that they get into decadence is usually because of lack of humility, right? Because someone, you've got to know when to stop.
00:09:27
Speaker
Right. That's basically it. Yeah. But it's easy to say, but very hard to practice. The ego is a big factor. Remember, I don't remember which course it was in, but the experiment with the monkey, was it in finance? Yeah. So how do you answer this? I mean, obviously asset management is a huge industry.
The Psychology of Finance and Investment Decisions
00:09:52
Speaker
We cannot all put our money
00:09:54
Speaker
speaking professionally, it's in the trillions in SPX or whatever. But how do you respond to the argument of demand for doing as good a job as your random? No, that's a good point. I guess one of the things we don't study much at business school is exactly the psychological behavioral aspect of finance, right? And that experiment is actually taught in one of those courses. So
00:10:24
Speaker
Even more important than being a good investor is to be a good psychologist, I think. You need to understand what other investors are thinking. And that explains a lot of some of the movements in asset prices overall. So most of the time I spend my spare time reading books or trying to learn more about psychology.
00:10:52
Speaker
Because at the end of the day, it's all about people. And we need to know how people react to certain facts. That's one of the things in finance that is really underestimated, but it's quite important.
00:11:08
Speaker
So, can you walk us through the basics of the industry you're in, where it's coming from and where it's headed, how much is technology affecting AI, all that? Oh yeah, AI became a buzzword, right? Yeah. So, alternative investments is a lazy word, basically to describe any investment that is not traditional.
00:11:32
Speaker
So traditional investments being, you know, bonds, stocks and things like that. So alternative investments compresses from ranges from hedge funds, private equity, venture capital.
00:11:44
Speaker
real estate, infrastructure, all sorts of different investments. And the size of that group of investments grew quite a bit. It's estimated that it ranges between $17-18 trillion today. To give you a sense, if you take the G7 countries, putting aside the US is the same of the GDP of, let's say, the largest six economies in the world. But still,
00:12:12
Speaker
It's relatively small compared to, say, traditional investments. So because of AI, for instance, there's a whole foray about AI these days, right? So the top 20 companies in the S&P 500 index, they're worth more than the total of all private equity venture capital infrastructure investments in the world, right? And technology, obviously, is a double-edged sword.
00:12:39
Speaker
It helps a lot in terms of providing access for any investor to invest in any sort of investment. So anyone today can invest in with Warren Buffett or can invest in a private equity fund or infrastructure projects all over the place. But at same time, I think he creates some distortion. So to give you a sense today, about one quarter
00:13:07
Speaker
of the whole stock trading that takes place every single day is performed by machines by computers and algorithms and so forth so it's like in any sector technology can be very effective improves productivity and so forth but it also has a negative side of it.
00:13:29
Speaker
And, you know, alternative investments is why people get so excited about alternatives. I think the number one reason is returns, right? It's a different way to make more returns out of your money, out of your capital. That actually started quite, like the growth became more rapid after the 80s when some of the US endowments started to invest in private equity, especially Yale University Endowment.
00:13:59
Speaker
And today, many different Ohio Network individuals, corporations and pension funds invest in alternatives. How big is the portfolio or the assets that you are on top?
Supporting New Investment Talent
00:14:12
Speaker
Okay, at Credit Suisse, we manage a book of around $8 billion that's primarily invested in Brazilian managers, Latin American managers, but we do have about a third of that exposure exposed to global managers, primarily in the US, a little bit of Asia as well. We also spoke in the preliminary conversation about seeding new managers.
00:14:38
Speaker
Oh, yeah. Can you walk us step by step? Because presumably, I mean, I've spoken to a number of classmates who have raised funding. But what are your insight tips? I mean, give us the process how it looks from the inside and what advice you may have for people thinking at some point of trying to do this to raise a fund.
00:15:03
Speaker
City Manager is one of the most exciting things in my job. Actually, that's one of the reasons why I'm so passionate about my job. It's basically supporting talents and rough talents. So we used to joke that we're always looking for PhDs, poor, hungry, and desperate to make money, people. But jokes aside, it's not only about finding
00:15:29
Speaker
good investors, whatever the investment niche is. But it's always helpful to find talented investors who also have soft skills, people skills. So these are people that have the entrepreneurial spirit that know how to lead teams of people. And that combination is very rare. So I'll say that
00:15:57
Speaker
Out of every 10 new managers that I meet, it's probably one or two that have some likelihood of becoming successful down the road. But it's a very exciting job because you meet a lot of smart people.
00:16:16
Speaker
in different market practices. So ranging from people that are starting up a venture capital fund to a hedge fund manager, a new hedge fund manager. But the only way to really spot and identify the ones that have more likelihood of, or are more likely to succeed is basically to spending time with that person, right? Because it's like, you know,
00:16:42
Speaker
my wife won't like this comment, but it's like dating people because you spend time with, you have to grab a beer with the guy and then start to understand better his reaction function to different situations. At the end of the day, it's very important to
00:17:00
Speaker
identify how the person behaves when things are going sour. And like in any industry, the first two years of any startup manager are the tougher ones. So if you identify someone that has really the skills to not only survive but thrive during those bad times, it's probably the most important quality we're looking for.
00:17:29
Speaker
And in terms of size, typically, what do you start with?
00:17:33
Speaker
Yeah, that's a good question because that depends on the strategy and the location. So business costs obviously vary quite a bit between, let's say, development markets like the US or a merger market like Brazil. So generally speaking, I would say if a manager in the hedge fund space or in the private space starts with, say, less than $100 million, it gets tougher.
00:18:00
Speaker
And it's not a matter of sitting managers, not just a matter of providing financial capital, but I think it's much more about providing intellectual capital. So we we tend to spend a lot of time providing strategic advice to the city managers, because that's probably the type of knowledge that some of those managers like the most. But I would say
00:18:30
Speaker
You know, between 100 and 250 million dollars is probably the minimum critical mass any manager has to have to get started. And you do it together with other...
00:18:44
Speaker
Yeah, we can potentially co-invest. That's always helpful. But the key criterion to co-invest is, again, not about money, but about, let's say, fit in terms of providing strategic support for that particular manager. So maybe some other financial sponsor that has more skills or more distribution capabilities
00:19:09
Speaker
things like that that we don't have, and then we can combine forces to provide the support for that manager. But usually we do it ourselves, alongside some of our clients. Typically, how long would you be holding? Or do you be investing? That depends as well on the strategy. If it's a more liquid strategy like a hedge fund, it usually is a deal that has a duration of, say, four or five years.
00:19:38
Speaker
If it's a liquid strategy like private equity, real estate usually takes longer. So we're talking about maybe eight to 10 years, which is usually the duration of the first fund of that manager. But regardless of the strategy, we all know that the first two to three years is the key period for knowing whether the business will take off or not. And then the mortality rate,
00:20:07
Speaker
across alternative Amazon managers in the first three years is probably what, 60%, 70% these days. So it's pretty high. It's like startups, right? Oh, yeah. Yeah, very much. Right. So how do you think about ESG and responsible investing and
00:20:30
Speaker
the environment and all these that have become hot topics now, but it is that we've been talking about or the school has been talking and putting a priority on it for quite
ESG in Investing and Economic Challenges
00:20:40
Speaker
a while. But yeah, how do you incorporate this into your thinking? I think ESG is just one manifestation of
00:20:50
Speaker
doing good. And I think all different businesses can do good. So again, it's one of the ways you can do good whenever you invest in investing in financial capital. But I wouldn't say it's not a
00:21:09
Speaker
I'm being very cynical here, but I'm not a big believer that ESG per se creates a different investment category. I think it's just you need to incorporate that in your investment process. Whenever we're city managers, obviously we
00:21:31
Speaker
pay a lot of attention in terms of sustainability and some other ESG type of features, but it's not, it became more like a label, right? Yeah. Sometimes it's a little bit overrated, I guess. Yeah. In terms of being a marketing tool as opposed to having substance, right? Absolutely. Yeah. And the statistics that we have so far
00:21:55
Speaker
prove that there's no much differentiation in terms of investment performance between what is ESG labeled versus the rest.
00:22:06
Speaker
You have any running commentary on the state of affairs of the market at this point in time? Let's say this year, 23 hours. Oh, yeah. No, definitely. I guess all of us, we live it through a period of zero interest rates everywhere or low interest rates globally.
00:22:26
Speaker
That created a lot of anomalies and distortions. Basically, the cost of capital measured by interest rates became very low during the last 15 years. When capital is easily accessible, people make a lot of stupid mistakes. We're seeing some of that.
00:22:50
Speaker
One of the most recent examples is probably crypto. But whenever you look at, you can find a lot of different bubbles or mini bubbles that people created with easy access to capital. And one of the things we need to pay a lot of attention going forward is that we're basically migrating to a different regime. We're going to a period where
00:23:19
Speaker
It was really remain high for such a period of time because of high inflation. I joke with my American friends that, you know, most of them are less than 65 years old, so they never saw high inflation like people like us, I guess. And markets, we have the privilege of the joy of having lived with inflation forever and ever. Yeah, probably one of the few things that the Brazilians can brag about. So it's a different regime and therefore in terms of
00:23:49
Speaker
investments, it changes quite a bit the market environment. We need to be much more cautious about how we allocate capital. We need to think a lot about allocating more capital to real assets, because these are the assets that protect us from high inflation. So think about even equities, which is a real asset, real estate, infrastructure assets, and things like that.
00:24:17
Speaker
And I'm afraid that the press correction, we witnessed a big press correction last year in 2022, but I don't think that's really over. There might be another legs of correction. Most of the markets today are not pricing in the recession, particularly in the US. I think the only market that is really expressing some concern about recession is the commodity markets. Otherwise,
00:24:44
Speaker
everything looks pretty too peaceful from my point of view. All right. And what would be a Black Swan event that we'd rather not think about? Well, we just got out of one Black Swan, which was the pandemic. And by definition, we never know what the next Black Swan is. One of the things that I learned from a former
00:25:12
Speaker
Central Banker is that the improbable is different from the impossible. So there are lots of different things and obviously geopolitics gets into the agenda now, right? But there are many things that we don't estimate as likely that might happen.
00:25:31
Speaker
One of the things that I think people underestimate is exactly what we talked about, inflation. So inflation can get very sticky over time. It doesn't revert to the mean by any chance. And if inflation gets too high, continues to be high in development markets like the US and Europe,
00:25:54
Speaker
One of the consequences of that is that the income distribution gets more unequal over time because inflation is basically a tax that primarily affects the less wealthy people. And with more income inequality, social unrest becomes more likely.
00:26:16
Speaker
Right. And we're seeing a lot of polarization in the political debate these days. I think it will probably get worse, unfortunately. And one of the reasons is actually inflation. And US elections look scary, at least to me. Oh, yeah. So last question on investments, and it's for the benefit of everyone listening. What did you recommend to people 20 years after INSEAD in terms of what should they do with their money now?
00:26:46
Speaker
We're obviously not retiring. But most of us have kids, right? So we need to save on behalf of the next generation. I guess one of the ways to preserve purchasing power over time is, again, investing in real assets. And one of the real assets that I think still has a lot of good value embedded in it is public equities.
00:27:17
Speaker
Public equities is still one of the largest asset classes in the world. If you invest in a diversified portfolio of public equities, if you have to pick just one, I would go for Berkshire Hathaway because it is by definition a diversified portfolio of public equities and private equity as well. You don't need to do much analysis, just go for Berkshire Hathaway and then you're done.
00:27:45
Speaker
There you go. Buy one share because they're in the tens of thousands or whatever. I don't know. Yeah, it's more than a hundred thousand, I think. Yeah, it's hundreds even, excuse me, because they never split. They don't do the funny accounting stuff of usual equities. Good, excellent.
Philanthropy and Personal Insights
00:28:02
Speaker
So with that, we switch to my favorite topic, which is giving back and giving back to Yousiad. And you are among
00:28:14
Speaker
our both generous classmates and you've been making gifts with that for quite a while. You are a silversal amander and you've been doing it very quietly.
00:28:24
Speaker
So thank you very much for your generosity. But I wanted to ask, and here it's actually interesting because you said the first business you had after INSEAD was with another INSEAD person. And I always look for these connections and I love all the ways that INSEAD alumni and not necessarily from the same class end up working together, doing business together, etc, etc. But can you tell us the story of how you think about giving A and
00:28:53
Speaker
giving to INSEAD-B and why you're given, what motivates you? Yeah, no, I think I, you know, INSEAD-B now my matter is one of the institutions I donate to, but all my donations go for institutions that are related to education. I think, you know, talent is somewhat overrated.
00:29:18
Speaker
So what we really need to care about is providing the opportunity for people. And I think education is probably the best segue for people to provide opportunity for people to develop themselves and grow. And I would say it's also not only about money. It's about donating your attention, your time, your energy.
00:29:48
Speaker
I'm very happy to be a donor. And also when this school decided to set up the San Francisco campus, I also contributed a little bit, a tiny contribution. But again, I think education is the only way that some people can really develop in themselves. If you look at all cases of
00:30:16
Speaker
emerging markets that you know evolved over time and grew that was because of education. One of the arguments because you know I've been doing this for 20 years with our class and one of the arguments particularly for people
00:30:33
Speaker
from emerging markets is, yes, but I have, you know, in India, we are still building toilets. So I'm donating for this. So how do you counter because you are from an emerging market, you're from Brazil, I'm Bulgarian, plenty of meat still all over Europe. But how do you counter these arguments?
00:30:55
Speaker
There's a luxury good, right? It's business education. We all end up making money afterwards. So why should you put money into this course in particular? I guess the answer is for certain types of basic needs.
00:31:12
Speaker
It's more about money. So if you think about, say, you just mentioned sanitation or healthcare, these are things that it has to do a lot of financial capital and most of the financial capital is provided by governments.
00:31:30
Speaker
But in case of education, it's not only about the money. So some of the institutions that I try to help down here are institutions that provide strategic support to improve the quality of education in public schools, for instance.
00:31:50
Speaker
So they're not providing necessarily capital, but they're providing human capital. So training programs for teachers and things like that. And that became very effective in Brazil. So I would say there are certain parts of basic needs that need to be provided by governments, but there are others that the private sector or even nonprofits can step in and help quite a bit.
00:32:19
Speaker
Great. Thanks. Thanks for that now. And thank you again for the generosity. Let's go to the last bit, which is the quick round of questions. Let me grab my cheat sheet. Ah, you did a cheat sheet. Oh, so pretty. Another instead of learning. Yeah, right. We were allowed to cheat sheet. It's good. Right. So you're ready? Yep. Proud of the treatment. Well, really a family. Successful you is.
00:32:50
Speaker
Having the optionality to decide what to do and how to do it. Or in other words, the right to say no to certain things. Happiness is? Enjoying the journey. The journey of life. Biggest regret? No specific regret, but I think I had a feeling in my life and every single time I had a regret it was because I didn't listen enough to other people.
00:33:19
Speaker
Interesting. What keeps you awake at night? Well, the legacy that I'll leave to my daughter, like which kind of principles, which kind of values, that's the most important thing, I guess. Do you sleep well? Sorry? Do you sleep well? Oh yeah. That's very important as well, right? For longevity.
00:33:40
Speaker
So retirement, ever, never? Well, we never retired, you know, for good, right? We're always in motion, we're always doing something. Like, you know, professionally, I might retire someday, but we never stop to do things. If you had to pick one book, everyone should read. You've already mentioned two, but
00:34:03
Speaker
You can give us a third one or repeat them. Now, I'll stick to that. Actually, it's this one. Psychology of money. Morgan Hausl. You don't need to be a fan of investments. He talks about different things. It's a great book. Perfect. Psychology of money. Most admired public person for you.
00:34:23
Speaker
Oh, well, I love sports, right? And one public person that I really admire is Roger Federer. Not only he's the gold in tennis, but I think he's a gentleman of the court. I had the chance to, I was lucky enough to see his firewall last year. He's a great guy. Most despised public person, if you have to.
00:34:45
Speaker
Probably not the most despised, but the most recent despised person, that guy who founded FTX. What's your explanation there? Any explanation? It's simply fraud, right? It's like, it's very, many, many similarities to other people like Elizabeth Holmes and Bernard Madoff. Yeah.
00:35:13
Speaker
common traces. But what really annoys me about that guy is the fact that he pretended to be a philanthropic person who didn't care much about money and there's all hype about crypto. So I think he combined different things that I really hate.
00:35:37
Speaker
How would you explain the role of the investors in the fund, like risk management and all that? How could professionals, and this is going back to psychology, which is what you've been saying, how can you miss it for so long? And it was three years, the gig caught up with him fast enough, but still a lot of money in there. Same with Elizabeth Holmes, which is... And same with Bernard Madoff as well. So it's always a combination of too much greed,
00:36:07
Speaker
and, you know, too cheap capital. So, you know, capital is widely available and people lose the respect for money when money is too cheap, right? And that's one of the most repeated mistakes in the world of investments all over the place. Like people have very short memories.
00:36:32
Speaker
So this type of event and fraud happens consistently over the last 30 years. We just mentioned three of them, but there are dozens of those cases over time, right? But it seems to compress the timeline of how soon they get uncovered. And maybe that's a side effect of technology advancements, I don't know, but Bernie Madoff took decades, right?
00:36:57
Speaker
That's true. Yeah, that has to do with technology. If technology was more available at that time, you know, made of, wouldn't have grown that much. You're right. There you go. And my last question for you, are you coming to Reunion? Yes, I am. I'm taking my family over there. So I'm very excited to be back to the campus.
00:37:19
Speaker
Perfect. So looking forward, it's October 6th in Fontainebleau and Gala dinner at the Chateau on October 7th. So everyone get your dance shoes ready. Bring the kids, not the dogs. Thank you so much for your time, Elio. In fact, now I can say this was a conversation with Elio Shinohara, who is an MD, Head of Fund Solution and Business Development at Craigslist, Brazil. And that's it for today. And we'll see you live in Fontaine.
00:37:49
Speaker
Thank you. You were listening to the Republic of Insead 20 years later or 3D podcast edition. It is my hope to remind everyone what an interesting and dare I say colorful bunch of people we are and how much we can contribute to each other, be it through ideas, knowledge or mere inspiration. The podcast is inspired by the original Republic of Insead yearbook produced on paper 20 years ago by Oliver Bradley and team.
00:38:19
Speaker
Thank you Ollie and team for this contribution to our class's memory and for letting me continue in the tradition, title and inspiration included. Creator and author of the Republic of Incia 20 Years Later O3D podcast edition, Am I, Milena Ivanova. Original music by Peter Dondakoff with help from their films productions. Stay tuned for more and remember to book your tickets for the 20 year reunion in Fontainebleau October 6th, 8th, 2023. Thank you for listening.