Tom Keck, '97, partner at StepStone Group - Distinguished Speaker Series

My pleasure, thanks for having me.

Sure. So the Navy paid for me to go to undergrad. And so I owed them a certain amount of time after I graduated from college. Because I had a job on graduation, I was an English literature major, because that seemed kind of interesting. And then when the Cold War ended, and the Navy decided to downsize, it turned out that the Navy wasn't gonna be a long-term career for me. So, they offered me money to get out. And I thought, well, there might be some interesting things to do on the outside. I actually thought I wanted to be a lawyer. So I was all set to apply to law schools, I actually did apply to a couple of law schools. But as I was doing my due diligence on graduate school, talking to people that I knew that were in law school, or who were lawyers, and then I had some friends that had been to business school, the lawyers all said, gee, law school was three years, it should have been one. I'm a lawyer now nothing I really learned in law school do I use on a regular basis, and I'm kind of thinking about getting into business. All my friends that had been to business school, said it was like the greatest two years of my life, I still am in touch with all these people that I met and it was just super fantastic and I love what I do, blah, blah, blah. So, a little light came on and I said, maybe I should apply to business school also. And the more I thought about it, the more business school seemed like the logical place to go. I also thought a lot about kind of my package of skills that I was coming out of the military with, and it was pretty light on quantitative analysis. So I was drawn to Booth in particular, because of the reputation for economics and the quantitative background that it would give me. I felt like coming out of the Navy, I did have some understanding of some of the more softer skills, leadership, management, and that sort of thing. And a lot of that, that I'd learned in the Navy, I have been able to carry forward through my career. But I think a lot of what I learned at Booth helped me to understand what I knew, from my experience having been in the Navy. So it was kind of, it refined, I guess, that experience a little bit and made it a little more accessible, as I've kind of gone through a number of different stages since I graduated.

Absolutely. So, first of all, it was really fun flying off of aircraft carriers. It was fun during the day, I should say (laughs) a terrific experience, got to see a lot in the world and really got to meet a lot of people from different walks of life. I had grown up in Champaign, Illinois, a couple hours south of Chicago, small town, hadn't really been exposed to a lot of different cultures and a lot of different ideas. So that diversity of people that I met in the Navy, I think is something, that appreciation of that diversity is something that I've been able to carry forward as well.

So it's different, my colleagues, a lot of them have gone into the airlines, some of them went to law school, some of them went to business school, and have gone into business. I actually see a lot of people coming out of the military these days, so here in San Diego, where I live, it's a big military town, the Navy has a big presence here, as does the Marine Corps. And I get calls on a fairly regular basis from people that are making the transition from military to civilian life. And I always try to take those calls, and I mean, pre-COVID, I would go and have a coffee with them, hopefully, I'll be able to do that again here before too long. But it's really interesting to see the talent that is coming out of the military. And one of the things that I'm gonna do when I have a spare moment is try to figure out how to do a better job of capturing that stream of talent that's coming out of the military and getting it focused into the right place. I think that's a huge opportunity.

You know, it's interesting, when the pandemic originally hit, we had been working on going public for a number of years. It's not something that you just wake up and decide to do one day, it is something that you need to plan out and develop a whole range of capabilities to get there. And so we had originally planned to do it in April of 2020. And then, when the pandemic hit, we thought, well, that's it for 2020, we'll try again next year. Having been a lifelong Cubs fan, maybe next year has been in my vernacular for pretty much my whole life, except for 2016, I'm happy to say. So, in any case, we thought for sure that it would not happen in 2020. And then over the course of the summer, as the capital markets recovered, and IPO started to happen again, we realized that, there was gonna be an opportunity to turn it back on. And knowing what I know now, I wouldn't have done it any differently. It actually turned out really well in that the roadshow is completely virtual. So what traditionally is a very grueling process, it's still a lot of meetings in a short period of time, but at least the travel was much more manageable. So, it actually worked out incredibly well. Not unlike other aspects of COVID, moving things into the virtual world, there's actually been a lot of pickup in some ways in productivity.

So definitely, there is a strong preference towards relationships that we had already established. So while we have brought on some new accounts, to a large extent, they're accounts that we had already been working on previously. Now, in our business it's a relatively long sales cycle, so, it would normally take a year or two, to develop a relationship for it to become a fully fledged, I mean, we have different kinds of customers, we have institutional customers who maybe have a separately managed account or an advisory relationship. We have other customers who are invested in our commingled funds, more traditional LP relationships. Those we have had, we've been able to raise relatively large funds and brought on new investors there, relatively, I shouldn't say easily, but I will say, both through our experience, and in talking to general partners that we work with, fundraising, the experiencing for fundraising has been very similar to what we experienced in our IPO, in that, the elimination of travel, and the concentration, and the focus in the virtual environment, has actually enhanced the ability to raise money from existing relationships. I do think that building the new relationships, the kind of trust-based relationships that are critical to our business, is gonna be a slower go until we can start to see people in-person again.

I mean, I don't know. I think, certainly my partners can't wait to get on a plane and go somewhere, and others of us are pretty happy, working from the home office, and being able to take all that time that was spent on airplanes previously, and channel it into, productive work or working out or reading a book. So, I think the, for the people who've been working in an environment already, and they kind of have already established relationships, they kind of know how to do the things that they need to do on a regular basis, the virtual kind of working from home is totally fine, and you can actually increase productivity. We certainly have seen an increase in productivity, whether it's putting capital to work, or being able to raise new money. But for the newer professionals, people that are just starting their career, I think it's gonna be a bit more difficult. And I think one of the challenges that we as leaders of these organizations face is, how are we going to sustain that apprenticeship model that we've kind of built our whole culture around, when you don't have those interactions where you're sitting on the same side of a table in a room with a potential client, an existing client, a GP. And there's just a little bit more that you get out of the body language, how the questions are asked and answered when you're able to observe in that kind of environment relative to here, where you kinda got the talking heads, and it's a little bit more like watching CNN.

I think that's really true. And I mean, you see that in other aspects of the pandemic, where the people that are sort of at the bottom of the food chain or, you know, the lower levels of economic opportunity, could be countries, they have been disproportionately impacted by all of this. And so I think, going forward, whether it's, making sure that we are developing our employees at StepStone, or we're allocating capital to opportunities, I think we need to figure out how we're going to address that situation.

You know, I think, I really don't enjoy talking on the telephone. And so I've always, throughout my career, tried to avoid doing that. And of course, you can not spend time, so I've gotten a lot more comfortable with this type of a format, where it's not exactly on the telephone, but it's not an in-person meeting either. So it's taken me out of my comfort zone. And I've tried to figure out ways to maintain and develop those kind of personal relationships, primarily with people inside of StepStone. And, those were relationships that develop more organically, as you would see people, you'd be in the London office, or you'd be in the New York office, or you'd be in the Sydney office, and you would spend time with people, you don't really get as much of an opportunity to do that. So, I think if I were left to my own devices, I probably would not be as outgoing as I think I have tried to be this year, kind of knowing that I'm not gonna have those more informal interactions.

So when we started StepStone in 2007, it was, my dog, a couple of partners we're in our spare room, in my house, and we didn't have any clients. My wife was the receptionist. And so we had a vision for kind of the business model that we wanted, we had a vision for the culture that we wanted. But really, when you start a business, you can't see more than two or three years ahead. So I think we had put together a business plan and we thought, maybe someday we'll have 60 employees, and then we really will have killed it, if we ever get there. We have almost 600 employees today. So on the one hand, you asked the question, how different is it than what you envisioned? It's completely, you know, order of magnitude different than what we ever dreamed of. On the other hand it's very similar, to what we kinda originally had envisioned. So the kind of core tenets that we built the business on, we wanted to be very research-focused, we wanted to be focused on customization of portfolios, to meet the needs of institutions. We wanted a collegial and open culture, but similar to the culture at Booth, we wanted people to feel free to speak out, you can raise issues that you see with something, it needs to have some evidence behind it, you need to be able to back it up. But we wanted to have that spirit of inquiry, that obligation to dissent, as we sat around the table and thought about investments to make. And that culture is alive and well today, even though we've done a number of acquisitions over the years, our growth, particularly in the last five or six years, has been more outside the United States than in the United States. So more than half of our revenue comes from non US clients. Which is exciting, I mean, we did want to build a global firm. But again, I don't think we thought that we would have that level of success.

So, it starts with the culture of the firm. And so the culture is not only the leaders and kind of the attitude that they project, but it's also in the people that you bring up, how you educate and develop those people, which people you promote. And so you need to have that culture of openness and collegiality, so that people recognize that, when they help somebody else be successful, that that's gonna come back to them eventually. So kind of a karmic culture. So that's the first step is really making sure that that, that everybody who is, rises to a leadership position in the firm, embraces that attitude and that culture. I think the second thing is that the culture needs to be open, so there's, again, there's sort of the core tenets that you have of what you wanna build, but you then need to be open to incorporating other elements or cultural elements, could be process elements, systems, ways of doing things, when you find better ways to do things. So I think there's sort of the core tenets, but then there's this openness to, you know, we brought in, we acquired a Swiss company, that was a very Swiss business. And, we didn't have any Swiss people in the company, but as we kind of integrated them into our processes and into our culture, they enriched the rest of the firm with this sort of precision approach to how they did things and kind of made the rest of what we do better. And then we were able to kind of contribute a little bit back to their culture. And so I think it's a lot of communication, a lot of openness and a very definite sense of what the culture should be.

So when we're bringing somebody in, at kind of the entry level, we're looking for fundamentally analytic horsepower. So, can they do the analysis and kind of meet the needs that we need there. But we're also looking for this kind of spirit of intellectual curiosity. So it's not just being able to do the math, it's asking the questions, and really being curious about why things are the way they are. There's a little bit of an ability to cope with ambiguity, a lot of what we do, I call it the 50 state problem. So if I showed you a list of 49 names, you would be able to look at each individual name and say, yes, that's a state, yes, that's a state. But if I said, here's 49 names, tell me which one is missing, that's a harder problem to solve. And a lot of the work that we do, we're given a ton of information, but what we're really trying to figure out is what's missing? And so you really need this ability to ask the questions that figure out what's missing. And to kind of cope with the ambiguity of, I got all this information coming in, how am I gonna process that? And then there's this kind of openness to being wrong, a lot of what we do, we're trying things and we're not always gonna be right. So as long as we can be right more often than we're wrong, and as long as we're not making the same mistakes all the time, then we're getting better. But we don't wanna be in a situation where we're always right, because then we're never gonna grow, we're never gonna expand. So, like, I think some of those are kind of the things that we're looking for. And then the other thing that's really important is, you have a resume, there's a bunch of things that you've been involved in previously, you really need to be able to explain what you learned, why you did the things that you did, you know, why the progression makes sense. If you've been involved in something, and you can't really explain, why things happened the way they did, or think about it critically, then that probably doesn't say very much for your ability to, as we go forward, when we do make a mistake, we don't wanna just, write it off, we wanna think about, like, what led to that? And what can we do differently next time to avoid that mistake and do something better?

I would say this is changing. You know, historically, we always looked for like a very specific, two or three years of banking or consulting experience, and, you kind of fit into this cookie cutter. Because as a small firm, you really don't have the ability to spend a lot of time training people, you need people that kind of have some fundamental skills, and you bring them in and you sort of make it work. That was an efficient way to bring on people quickly, it was not a very good way to build a very diverse group of people within the firm. And what we learned was, as we acquired other firms in our industry, well, they weren't very diverse either. So eight or 10 years ago, we kind of looked around the room, and we said, well, geez, everybody kinda came from this cookie cutter, and this is probably not a very sustainable model for a business that's supposed to be able to think about things from lots of different perspectives. So we spent a lot of time over the last 10 years trying to think about, how can we broaden the funnel of people that we bring in, we've always focused on our deal funnel, and how can we get the broadest possible deal funnel. So if we're gonna do it in the deal side, we need to think about it on the people side also. And so we do want to be able to bring in people from a broader range of backgrounds that have that broader range of perspectives, but understand how we can set them up to be successful, because they still do need some of these fundamental skills. But a lot of the, Excel building model when you're doing these kinda things, those we should be able to teach relatively easily. Some of the softer skills, the ability to deal with ambiguity, the, being a self-starter, being able to interact with clients, those skills are harder to teach, and so if we can focus more on finding people that have those capabilities, let's fill in the gaps with the easy stuff to teach, and then we'll wind up with not only a more diverse workforce, but a workforce that actually is more endowed with the harder to teach skills.

So, also about 10 years ago, we started to get questions from clients about something called ESG. And we could spell ESG, but we weren't really sure exactly, what they meant? Environmental, social and governance. And so my initial thought was, well, yeah, those are all things that we care deeply, like, we spend a lot of time thinking about all three of those things on every deal that we do. But it really, it turns out that it's actually a lot more than just, having a consultant look at the plant to see if there's any hazardous materials in the soils or finding out if there had been, labor disputes in the past. And so as we learned more about kind of the evolving, thinking around ESG, we kind of developed our own approach to it, which is to think about ESG as a framework for analyzing risks and opportunities in any business. Some people when they use the term ESG, they're talking about a tiny little niche of the investment world. We think it applies to everything, and you can equally talk about ESG if you're evaluating a coal fired power plant, as if you're looking at a wind farm. There's different opportunities available in both of those situations, but it's a framework that you can use to think about that. And so, the ESG applies to everything, and then responsible investing incorporates not only ESG practices, but then also what we call impact investing. And impact investing is really, you're not just trying to not have a negative impact, you're actually trying to provide some sort of a positive impact on something. And this is, again, where it kind of gets not very well defined, what does impact really mean? And it's actually, I've spent some time at the (muffled speaking) Center trying to get the latest and greatest thinking on, what does impact investing really mean? And there's lots of different views around the industry about, what impact investing is and is not. So, we're still thinking hard, about how do you have real impact, so you can make an investment that you intend to have positive results? How are you gonna measure those results? And how are you gonna report on that? And so that's an evolving branch in the investment world that we're spending a lot of time on. And I think is absolutely critical if you're going to avoid situations where an, impact investing double bottom line investing has a terrible reputation in a lot of people's minds, because 20 years ago, Economically Targeted Investment was a big trend. And it was essentially a way for people that had trouble raising money in any other way to find some money that had been set aside for that and to raise money that way. I think ESG and responsible investing and impact investing is fundamentally different because of this concept of measurement. And the revolution information that is available, I think is really driving all of that. Raghu Rajan wrote a terrific book called "The Third Pillar". And he talks a lot about the information and communication in technology revolution, and some of the ill effects in how it has driven a lot of income inequality, and some bad things in the world. But I think equally, it is also going to power the ability for investors, governments, to price externalities that historically have been very difficult to price and measure. And so as an investor, I wanna get out in front of that trend, because if you can anticipate where those externalities are gonna get priced in and invest on the right side of that, then you should be able to make better returns.

I mean, I don't think there's gonna be a point, it's already developed much further than where it was five years ago. I would say the US is way behind Europe and Australia, even parts of Latin America are more developed in this, in thinking about things using an ESG lens. They don't have the history that investors in the US have with Economically Targeted Investment and the really poor returns that happened there. You know even clean energy, there was a long time where investing in clean energy was a pretty tough row to hoe. And, Tesla almost went bankrupt until the government saved it. Now it's worth whatever, trillion dollars or something, so these things change a little bit at a time until all of a sudden, they change a lot. And so I think that, between the impact-weighted accounts initiative, that Chicago is a part of, SASB, the UN has been very active in trying to develop from the Sustainable Development Goals and the UN PRI. So, part of the problem is a little bit that there's too many standards out there trying to be developed, those need to kind of coalesce into something that investors all kind of buy into. And I think, as a firm, StepStone needs to be working hard to help that come about, because I do think that's the future of investing. And so the earlier we can be a part of that the better.

No.

Yeah, so greenwashing is definitely a big problem. And that's what this whole concept of measurement and transparency and disclosure is aimed exactly at that issue. And, there's a little bit of job security for StepStone, because greenwashing is out there, and it's not always easy to detect. I think, to the extent that we can be good at avoiding situations that effectively are greenwashing, then that's gonna be value added to our clients. So it's absolutely a risk, it's something that, we spend a lot of time thinking about.

So when I was at Booth, I had never taken an accounting class, I had never taken a finance class. And I think those were two of my favorite subjects, I always had figured that accounting was gonna be the dullest thing ever, and I was endlessly fascinated by it. So coming out of Booth, I wanted to either be a CFO, or be in private equity. But I also, recognizing that I had spent seven years in the Navy and didn't really have any marketable experience. My experience at Booth was so good, I thought, well, maybe I'll go do something that's sort of an extension of business school, so I can continue on this super steep learning curve. So that's how I got interested in McKinsey, which is sort of an extension of business school. There's a pretty aggressive training program, not so much on finance and accounting necessarily, but really focused on analytical approaches, problem solving, communications, interactions with different types of clients. And so that was really a great environment for me to kind of, I was already on this steep curve to kind of keep that growth path. The downside for being at McKinsey was working with private equity clients and doing work on M&A situations. There's typically, a very limited role for a consultant in the overall transaction that's happening, or you're deeply involved in the post merger integration, but it's after the whole transaction had already taken place. So I wanted to get closer to the coalface of where the transaction was happening and kinda be more broadly involved. And so it was 1999, when I got a call from a headhunter, who said, would you like to do corporate development for an internet startup? So that seemed like a good opportunity to get closer to the transactions and kind of make my way towards this thing called private equity. Now, they teach you at Booth not to try to time the market. And I can say from personal experience that that is good advice. So I joined my internet startup in February of 2000. I think we filed the S-one, maybe two weeks after I joined and six months later, we filed a 363, which for those of you who don't know is a bankruptcy auction. So we really kind of went from, on a rocket ship ride to selling off the assets to make payroll in a pretty short span of time. That was not a very fun experience. But, the relationships that I made there later came into play. One of the guys that I worked with there ended up being one of my partners that I started StepStone with. So even the really terrible experiences that you have, can be fairly formative in what you learn about yourself, what you learn about the other people that you go through those experiences with. Part of the reason why I was comfortable starting StepStone was because I had kinda been through the wringer before with this person, and I knew, there's a saying in the Navy, that you don't want a wingman who doesn't know what it's like to get punched in the face. Because the first time things get a little hairy, they're gonna run away. We've both been punched in the face multiple times, so we kinda knew that, that that was not gonna be a problem.

Yeah, I mean, I don't know if there's a connection to COVID, necessarily. But I do think that this is a big issue, not just for women founders, but I think minorities as well. When you think about the stock of human capital that, whether it's the United States or the world has, there's a certain amount of the human capital that's being very well utilized, and then there's a lot of human capital, that's completely underdeveloped. And I think, if you look at productivity over the last, I don't know, 20 or 30 years, the growth has slowed pretty dramatically. We got a big boost from the internet, but since then, it hasn't been very inspiring. I think if we're able to do a better job of developing and leveraging all the human capital that we have, rather than just focusing on a small subset, then that productivity curve is going to improve. So that sounds like a very easy thing to do, but, all the things that have led to us under utilizing minorities and women historically, are processes that are slow to turn around. So, it would be great if it was just COVID, and once we get that behind us, we'll be kind of, back to normal, but I think it's a longer term issue that is, making sure that investors have the right attitudes, but also providing the support and the experiences and the sponsorship and the development of the individuals as they develop their careers. So that, starting a business, it takes a lot of courage, maybe stupidity, but, it takes a tremendous amount of self-confidence. I certainly never thought that I had the self-confidence. We had already been running a business that looked exactly like the one we ended up starting, we were trying to turn it around, and for a number of reasons that we don't really need to get into it, the turnaround didn't work. But we had learned enough about the business model to know that it was gonna work great, and that the market was headed in that direction. So when we were kinda freed of the legacy issues of that business, we were able to start something from scratch that was perfectly suited for where the market was headed. So to me it didn't seem like starting a business, it was like we've already been doing this. So there's a certain amount of confidence of maybe hubris in starting a business and you need to kind of coach people to kind of get into that mindset and have the necessary set of skills to not just see an opportunity, but to do the 12 or 15 turns along the way that you have to in order to actually put together something that takes advantage of that opportunity.

You know, we get a tremendous amount of information, we spend a lot of time with the GPs that we invest with, we have all their backgrounds, like we do background checks, like there's a tremendous amount of data and information that you get. The tricky part is figuring out what correlates with successful investment performance. And, yeah, we're starting to get a sense of that. But there's not, it's funny, a good friend of mine was a biology PhD, the Navy had paid him to get his PhD in biology. And they said, well, we want you to come out here to San Diego, and evaluate the Navy SEALs. And we want you to find out, like, what's the difference between the people that make it through the training and the people that don't make it through? And so, he's got his like, measurement tools out, and he does all this work on all these people to figure out like, what's the difference between the people that make it and the people that don't make it, and he's got sheets and sheets of all kinds of data and information, and there's no one indicator that points to it, at least there's not a physical biological indicator. So, so again, that's kind of job security for us, like there is information out there about who's gonna be successful, who's not gonna be successful. It's not infallible, but you get a pretty good indication. And, we spend probably 40% of the effort that we do on any investment on evaluating just that piece of it.

That's a great, I mean, so we ended up raising money from a billionaire, and we only needed about $3 million. So it was kind of, he was able to, it wasn't a make or break investment for him. And the guy who was running his family office, was my partner's best friend. So we kind of had an inside track on being able to explain what our business plan was gonna be. Now, it doesn't mean that he took it easy on us, in fact, he's still on our board. He's been a terrific partner through the whole thing, kind of knowing when to kind of tighten the screws on us, and when to kind of loosen them up, and let us run with it. So, it was, I think we had enough of a background in what we were doing, and we had a pretty specific vision for what we were trying to build to get him comfortable. But, yeah, I don't, we didn't have people throwing money at us.

You know, putting my McKinsey hat on and sort of look at the investment management industry margins have been coming down pretty dramatically, since I graduated from Booth really. And so the industry dynamics, you've got, a few behemoths who are able to take advantage of economies of scale through passive strategies, index investing, the mantra of Gene Fama has been unbelievably successful because it works, at least in the public markets. So, yeah, money management is pretty tough now, there's a whole section of it, that I don't really understand very well, which is the hedge fund industry, where people have done fantastically well. But I think margins have been competed there as well. In the private markets, margins have held up better, although there's definitely margin pressure, both for firms like StepStone, as well as for GPs. It's a more complicated pricing model, so it's harder to observe that pressure, but it's certainly there. But I do think, and I'm always worried that I was gonna get my Booth degree rescinded, because, in such inefficient markets, kind of a place, and my whole business is built on inefficiency and taking advantage of inefficient markets. So don't tell anybody. So there's plenty of inefficiency in the private markets to take advantage of, and that's really where kind of our ability to sustain margins is hiding, is in that ability to arbitrage those inefficiencies. But those are, they're moving, the inefficiencies that we see today, are not the same ones we were exploiting 15 years ago. So, unfortunately, for this poor person who's really trying to get some practical advice, I'm seated here waving my hands for the last 10 minutes, I don't really have any great answers for, I don't think you should go into money management, because you think it's a great industry, you should go into it, because you have to go into it, because you're passionate about it, because it excites you. So, whether it's money management, line management, banking, consulting, whatever, you should do what you are truly passionate about, because that's what you're gonna be good at. And the person who is super passionate, is gonna be the behemoth that is the low cost producer and is still gonna have a pretty good life. So, that would be my advice.

So, there's a lot of excitement these days, and I mean, are portfolio companies that are focused on, vertical market software, enterprise software, SaaS businesses, Marc Andreessen said, I don't know, 10 or 15 years ago, that software is eating the world. And it is, every industry, there are software solutions that are dramatically changing how the business works. And we spend tremendous amount of our time at StepStone developing our own software. And so that's gotten a tremendous amount of excitement. We talked about Tesla earlier, Tesla is not a car company, it's a software company. There's no reason why you would ever value it the way you do if you thought it was just making cars. But the whole autonomous driving thing is really what's driving the valuation. So this power of information it's really driven valuations very dramatically. So that's sort of exciting today. Now, if you'd gotten into that business 10 or 15 years ago, you'd be pretty happy. The key question is, what can you get in today, that's gonna be where SaaS and information technology is today. I mean, I think there's tremendous opportunities in industries where the information technology hasn't yet taken hold. So it's really more in a lot of old line industries. I've been thinking a lot about agriculture lately. You know, changing sunlight into protein is kind of one of the older industries on the planet. The technology, actually I think I saw this on a Chicago webinar, so I should not, this isn't my own insight. But the technology used to turn sunlight into protein hasn't changed in like, I don't know, 10,000 years or something ridiculous. So, finding, and so I don't know, is it biology? Is it physics? But something about, how are we going to feed 10 billion people, which we're gonna have to do sometime in the next couple of decades, without crushing the environment, using up all the potable water that the planet has to offer. That's a pretty big challenge. And so I think if you get involved in a business that is kind of headed towards solving a big problem like that, then that's gonna be a growth area.

This is actually something that we're very intimately interested in. So we have recently launched a product that is exactly trying to solve this problem. And the entry barriers, you can think about in sort of three different categories. There's sort of regulatory barriers, and we're not gonna be able to do anything to solve that. There's liquidity barriers, so individuals have a shorter liquidity horizon than a typical institution, we actually have a lot of tools that we can use to solve that. So we can use our data, and techniques that I learned at Booth to figure out how we can inter mediate lots of small investors, and lots of private investments to create liquidity for those that need it, while husbanding liquidity for those that don't need it. So that's a pretty exciting product that I've been working pretty hard on for the last few years, and I think is going to, kind of reduce that liquidity barrier, not eliminate it, but it's gonna create quarterly liquidity, which is a lot better than what, is typically available. And then the third barrier is, it has really been cost. So the ability to access good investments at a reasonable cost. And that's part of this product we're working on it, and so I think that's going to get better over the next five or 10 years as well.

So SPACs is a, I mean, boy, that's a big trend, there's something like 400 SPACS in registration or awaiting registration. And they all wanna buy a company of somewhere between one and $10 billion. So I feel pretty good about it, given that our portfolio consists almost entirely of businesses that could fit into that space. So, as somebody who's gonna be selling things to SPACs, it doesn't bother me too much. I don't think that, what's interesting, I read an article somebody said that, the terms on SPACs have gotten better for investors and that's why SPACs are having this renaissance. But they're still incredibly egregious, and that's why all these GPs are raising them, because the economics are amazing if you're a sponsor of a SPAC. So yes, there's a little bit of concern about, geez, a GP raises a SPAC. But they've got all these private funds, the GPs know which side their bread is buttered. The private funds that they manage are much larger, and much, I wouldn't say more lucrative on a percentage basis, but on a dollars earned basis, that's really where the action is. So the SPACs are, I think, interesting for them, you know, one of the trends that we've seen lately is, particularly for these SaaS businesses that can just keep growing for a very long period of time, and a GP whose owned one for five years, they don't wanna sell it. But they need to get liquidity for their LPs, so they're coming up with these different ways to say, how can I continue to own this business, but kind of roll it into a new ownership group. And so SPAC is one way that you could potentially do that. And so, I don't think it's completely evil, but I'm not a big SPAC investor.

Well, thank you, my success, I owe it to a lot. And Booth is certainly one of the big contributors. So I appreciate all that it's done for me.