Kyle McDonald: Excellent. And I guess if we begin to think about it, this space has rapidly been evolving, and it continues to do so, particularly now. David, it’d be interesting for you to think about how and why this space is evolving the way it is at the moment. 

David Ryan: Well, I think the evolution over the last couple of years has been interesting. It’s been a bit of a hiatus in private markets, and I think it’s very simple. A couple of factors came down dramatically after a period of overinvestment through COVID-19, and then, as a result, the private market allocations as a percentage of portfolio weights increased substantially. So it was a very difficult period up until Q4 last year. That has changed very quickly. Obviously, public markets have come back. There’s still a bit of an overhang from overinvestment. So, I don’t think private assets have really rallied nearly as much. But perhaps with the IPO market opening again, that will change quickly. But, I think another interesting consideration is DPI from private equity funds. 

It’s a pretty constant two or three-year fundraising cycle for the bigger platforms, and I think DPI ground to a halt is very challenging. And so that presents itself as a very difficult fundraising environment, even with the big tentpole private equity managers who are kind of looking to budget vast fundraising budgets on an annual basis. I spoke to the chairman of a $200 billion asset manager, a private markets asset manager, yesterday. Based out of Europe, they’ve got a budget to raise $20 billion annually. They fell well short of that last year for the first time in a number of years. So, I think that will be enduring at the fund level and at the growth of tech names in certain areas. I think the markets will come back quite quickly. 

Kyle McDonald: Interesting. Great. And Brett, I suppose we should think about what this might mean for family offices and how they should be thinking about shifting their approaches. 

Brett Mock: Yeah, I mean, I agree with what Pete said: This is an asset class that’s perfect for a family office. In fact, we see the participation rates from family offices only increasing. They’re long-term holders. That’s typically what a company wants. The last two years have been difficult. I’m not going to lie. The market froze up. And because companies are private, they can basically restrict the transfer of shares or outright block the transfer of shares. We saw that a lot last year where they just didn’t like the price because they didn’t want to affect their valuation, and that’s their right as a private company. That, to me, is an inefficient market, frankly. But if you look at the broader. I’ll just throw some numbers at you. I mean, the average time that a company’s IPOS has doubled in 10 years. 

Peter Clancy: So it used to be seven. Now, it’s 14 years before that company IPOS. Most of the alpha was realised by that IPO event. And so for the J Curve crowd and those that want to have outsize returns in alpha, you know, it’s the mid to later stage privates, and that’s forced frankly the asset management community, the public side, to cross over because they’re just not weren’t getting the gains anymore. This is probably, we estimate by 2030, a $9 trillion asset class. It’s about three today. There are still about a thousand private companies that are unicorn companies, use issuers, and use equity in grants as part of the compensation for employees. We estimate there’s about a trillion dollars worth of that. We’ve worked with over 650 companies over the last 10 years and done over $50 billion work with 200,000 individual employees in C suites. 

It’s not a small asset class—it’s about the size of the United States municipal bond market. The problem is that it’s still emerging. I could go on and on, but I’ll stop. 

Kyle McDonald: Excellent. 

Peter Clancy: Just jump in there and actually kind of link back to the question you asked before about the space evolving rapidly. I think another key driver is just the access and options available for family offices. So, there are platforms like Case iCapital that are making investing in alternatives significantly easier and more accessible. So they’re bringing down the barrier of entry, especially for smaller and more emerging family offices. And then also, I think a lot of, from my time at Blackrock, asset managers are super focused on family offices. They’re a great partner. So, some of these larger asset managers are making many more solutions available. With that, the profile of the family office is expanding. I mean the number of family offices globally. 

I don’t know the exact numbers, but I know they are exploding. I mean, there’s a huge driver there. It’s just, I mean, there’s candidly more wealth at the top. But yeah, the barrier of entry is just lower for families to actually assemble a family office. It now makes, I mean, you can do it with less aum now based on some of the technology that’s available. 

Kyle McDonald: Yeah. And I guess sort of to your point around the sort of shape and form of family offices changing and evolving quite quickly, whether it’s a traditional family office or a next-gen family office, and how they’re thinking about future-proofing their approach to private markets and ultimately the tools they need to bolster that data and market intelligence. How do you think the family office should be thinking about that, Pete? 

Peter Clancy: Yeah, another big question. Yeah. So, I mean, I don’t meet any family offices that are projecting their commitments to go down over time. They’re all seeing a significant growth rate across new managers. Existing managers and groups should be focused on building an operational infrastructure that can really scale with their commitments. It’s critical. Otherwise, it’s going to become a significant burden on these firms and family offices. I mean, with more volume and documents of documents and data, speed, accuracy, and transparency will be absolutely critical for these groups. I think that up until today, investors in private markets and vendors alike have been focused on creating efficiencies around managing data required for accounting performance and tax workflows. So this includes creating efficiencies around valuation statements, transaction notices, and K1s. 

But now, with the influx of exposure to private funds, there is the need to understand underlying exposure, understanding actually what you own. If you’re 60% allocated to the private markets, for most groups, you’re just seeing the fund company, or you’re seeing the fund. You’re not actually looking at the underlying investments. So, for example, having rapid transparency into underlying holdings will tell investment teams that they might have significant exposure to stripe across multiple managers. We’re actually just releasing a product right now that actually does this and seeing significant traction among allocators, including, of course, family offices. 

Kyle McDonald: Interesting. So you’re saying Excel spreadsheets and PDFs are no longer fit for purpose? 

Peter Clancy: I don’t think so. 

Brett Mock: I can add to that. I think Pete and I are aligned on that. I think transparency only makes markets better. Right. This is not a transparent marketplace, and it obviously doesn’t have regulations. We have built an entire operating system that basically can take analogue to digital. So, there is the transfer of documents, the movement of money, the tax reporting, and the settlement of a transaction. We also believe in, again, price transparency to frankly allow both buyers and sellers to have better visibility into the fair value or the price. It’s a fragmented market. We settle transactions for many private companies with exclusive settlement transactions. And we can see that there’s a lot of price disparity even in the same time period. And it’s because people don’t have an accurate view of what the price is. 

We purchase 15,000 COIs from the state of Delaware and scrub that from analogue to digital so that people can now look at the price per share and the last round valuation. I know there’s Pitchbook out there and other products, but we also find that you need a source of truth. So we are using regulatory filings, our own 10 years of historical data, and then when the company allows it trade history, we are triangulating that price product and that data product, which we are actually going to release this quarter to the institutional community. 

Kyle McDonald: Fantastic. Well, yeah, I guess we’ll dive a little bit deeper into the sort of solutions available on the market and obviously how they are and should be evolving. But thinking a little bit about, you know, taking it back to a family office perspective. Where are we starting to see some strategic risks potentially emerging for family offices? And maybe this is a question for you, David: As these risks begin to evolve, what does that mean for family offices? 

David Ryan: Just on mute? Well, I think liquidity in this space is clearly the number one risk. And you might get 8% public equities, 12 to 12 plus per cent in private equity venture liquidity is the number one, two and three-factor, I think, for many people. And I think we’re in the decarbonisation space as well. And I think climate risk is becoming a bigger consideration within one’s investment portfolio. I think this is also becoming pronounced because of climate change; we’re sort of tracking it as it relates to the UN pathway. So that’s for sure. The other thing within the family office space is the huge sort of transition, inheritance transition in the family office space. And so the younger generation, the generational wealth transfer leaves the younger generation much more focused on climate change. 

So I think that’s a good thing for assets that can deliver those objectives. However, it also has implications for liquidity. Are some of the bigger private market platforms delivering on the generational shift in climate-related objectives? The jury’s out on that one. And with those objectives in mind, there will be more liquid assets that are more volatile in the target range for many of the younger generations. So I think that’s a consideration. 

Kyle McDonald: Yeah, perfect. And I think, you know, very much leading back to, I think it was, Pete, you were speaking a little bit about this idea of transparency, you know, actually beginning to think about the data sets and the availability of solutions in the market providing the right level of transparency for family offices so that they are be able to prepare for, you know, future regulatory risks or requirements around ESG or climate commitments within their portfolios. So I guess a question for you, Pete, is thinking about what role technology solutions can and should play in beginning to kind of prepare family offices for some of these struggles that they’re facing. 

Peter Clancy: Yeah, absolutely. I mean, and you’re right, I mean, the lack of visibility across a portfolio for a family office is a significant challenge, a significant burden. And it’s not just, I mean, it’s from actually collecting the data that’s required for that to visualising that. And often, multiple applications need to talk to each other. So, yeah, that’s a significant burden, especially again, as allocations to the private markets increase. So, yeah, I mean, in terms of the role that technology can play in plugging those gaps, I mean, technology can allow family offices to stay lean while really increasing their operational efficiency and relieving some of that burden of managing documents, collecting documents from portals, extracting data from those documents, getting into downstream systems. 

So, technology, and in that context, Canoe can really help with that and allow investment teams to manage investments and the portfolio and deploy capital as effectively as possible. So, I mean, solutions, such as automation solutions, can just make the collection and visualisation of data a lot faster. So investment teams can make faster and better decisions. And then what I think David was talking about is there’s a liquidity challenge right now in the market. We’re seeing cash positions get a little bit lower. Managing capital calls is just becoming more of a burden and more of a challenge for family offices as their cash balances are lower, and they have more commitments that are coming in on a regular basis. So, having that rapid transparency currency in upcoming capital calls is really critical. 

Kyle McDonald: And maybe I’ll sort of point the question at you as well, Brett, around this idea of thinking a little bit about what role can and should technology be playing to kind of do some of the heavy lifting that family office traditionally had done. But now they need to sprint a little bit faster and be a little bit smarter as the market begins to change. Sorry, yeah, over to you. 

Brett Mock: Yeah. I mean, the good news is that it is changing, and it’s going to continue to increase. So, let’s start with the barrier entry. As you have a private company friend at Elon, there’s a handful of people invited to a transaction, and it’s a closed transaction. So the idea that like we, you know, our DNA and npm NASA acrobatic market is really to service the issuer because we, our goal is to hand them off some data, our parent company NASDAQ or a former parent company, so they can do an IPO so one of the things that we’ve done is rapidly expanded our network of global investors, including family offices so that they can be eligible to participate in private companies. 

We ran a number of programs last year, and we’re currently active with top AI companies, such as an emerging asset class. So, it provides access to more opportunities that are typically run by either a company or a bank. And the family office network, many of them didn’t get exposure to that, number one. Number two is information; it’s portfolio tools. One of the things that our clients have asked us for is that we need to mark our portfolio for the market. How do we get an accurate price to report? And if you look at the mutual fund filings, they have to have a pricing committee. So we are going to give the institutional, including the family office community, a NASA private market price. So you can have a third party that can do that. 

We have portfolio tools that you could put a portfolio or a watch list in, and you can look for the price of that portfolio or names you care about and also have potential liquidity in those names. Just to sidetrack: One of the biggest risks is that even the VC community is facing this where you had a tenure up into the right marketplace, and in the last two years, there have not been very many exits. I consciously get asked about VCs, including how we exit a position because they need to return LP capital because that vintage fund is at the end of its life. 

Some funds are doing continuation funds, and some are doing 40-act, but the idea is that you don’t want to buy an asset and then not have a strategy for the exit at some point. And I think that’s another structural problem in this market because companies can basically block that.

Kyle McDonald: Right? So I guess if we’re thinking very much again back to David’s point around liquidity, what type of solutions should family offices begin to think about to support understanding how to navigate this challenge they’re facing? David, over to you. 

David Ryan: Off mute again. So, well, look, you know, a decade ago, maybe five years ago, private markets were sort of quite the domain of the institutional investor and family offices. You know, this is a very broad-reaching statement that is somewhat newer, more fund-driven, has fewer single assets, and has very little exposure to single names. And I think that’s evolved markedly. But on the other side, for liquidity, the big platforms in secondary investment, whether it’s Adyen or Lexington or Harborvest, Et Cetera, I think we all know the names. They’ve been much more proactive in the family office space, providing liquidity across a broader range of assets. Ten years ago, it was a KKR fund or a CVC fund, and anything off the reservation was probably a bit more challenging. I spoke to one of those big platforms a few weeks ago about a VC portfolio in Bangladesh. 

So, I think they’re sort of going out the risk and liquidity curve. However, that also provides support for the family office community, which is doing more in alternates at the fund level, asset class level, and single name level. So, I think the market’s sort of coming up to meet that challenge. 

Kyle McDonald: Fantastic. And I guess maybe Pete, over to you. So, think a little bit about what kind of solutions a family office should begin to think about and why. 

Peter Clancy: I mean, obviously, I’m going to say managing post-investment documents is not an easy one. So yeah, I mean, I think I always talk about, when I talk to groups, I always, when we talk about creating automation with an organisation, I always talk about and discuss. It’s important to think about automating what you can and what you should automate. Not everything should be automated at the end of the day. So I think what we do is automate the really mundane stuff, the easy stuff of collecting documents from portals, managing passwords, and two-factor authentication. 

No one wants to do that job, so we’re automating that component of the process. We’re also automating the extraction of data points from documents using machine learning. 

We have a lot of technology when it comes to validating data points that we’re extracting, but that’s where a user would potentially get involved. So, we don’t want to automate that part of the workflow entirely. So. And then automating the delivery of data. So I think yeah, especially with post-investment document management; I mean, we’re seeing groups that even have 100 commitments having one time or having a full-time employee just managing post-investment docs, that’s significant. That’s a lot of overhead. That’s also a job that really no one wants to do, to be candid. I think there’s also performance and exposure reporting. I think that’s an easy one. Going back, I’ve already mentioned this a couple of times. 

Being able to look across your entire portfolio to understand exposure and performance is absolutely critical for groups right now, both for the investment team and the ops team. 

Kyle McDonald: Right. And I guess maybe a similar question for you, Brett. So if I think of a typical family office today, you know, obviously that automation process of trying to ensure that they’re streamlined and fit for purpose for tomorrow and the sort of tailwinds that are facing them, but what type of solutions can they use to augment their current capabilities? Anything that comes to mind. 

Brett Mock: Yeah, I mean, not everything should be automated. I agree with that statement. I mean, you know, smart people should need to still make decisions as fiduciaries. But the pain points and the friction that exists in this asset class almost make it, for many, just a barrier again, another barrier to entry. It’s too much work, too manual, too much takes too long. You know, if I look at it, I’m just going to cherry-pick a couple of examples because this is a common theme. A lot of the management community doesn’t love secondary investing because of the time that they have to spend to uncover the opportunity, run past an IC committee, do the diligence, and then that opportunity might not be there, and then the company itself might block the transaction. 

You’re talking about 1, 2, 3 months of a process and sitting on cash is not an efficient way to make investments. So when we start settling transactions, which again sounds boring, but it’s literally the movement of documents and money, which is what exchanges kind of do, actually the settlement period drops from like 90 days to like, you know, five to 10. And that actually really matters because that means you have certainty of a transaction and the movement of, and change of ownership and movement of funds. So that’s one example, you know, more access to information, which we’ve already talked about. It’s just being able to accurately price the asset and have access to information, or if there’s no information provided in the transaction, being able to do your own research and diligence to find it. 

And I think that’s another struggle that a lot of investors have in family offices, especially because if you’re not in a data room with a company, how do you know what that company is actually worth and what the cap table looks like, what their financials look like, et cetera. Unfortunately, this market is a private market, and companies do not have to share information. So we also think that the future will be sort of bifurcated, meaning that there’ll be more regularity amongst company liquidity once a year, twice a year, and more of a, hopefully, more of an open auction where there’s access points for family offices and other investors or just a continuing market, a continuous market. The more liquid names trade more regularly, which allows for more regular participation with more opinions. 

Kyle McDonald: So great. Maybe stepping back a little bit from solutions or thinking about what’s in the market. And this is more of a question for you, David. So, if I’m thinking of a family office today that’s operating quite a lot within the private market space, what are some of the common pitfalls that are increasing risk or exposure ultimately to things that I might not have intended to have exposure to? What are the things that you’re sort of seeing or hearing in the space? 

David Ryan: I think some of the things I mentioned about liquidity are probably one, but it’s improving. As I also said, you know, we’re involved in secondary market trading, and Brett’s the expert in this market, but platforms like NPM and others are certainly improving visibility on market levels and providing liquidity. And so I think all that’s headed in the right direction. I think there is a developing trend for companies to provide less information in some sectors, which is really quite remarkable in a secondary 1 AI situation at the moment. The company is not providing any financial information. There seems to be no shortage of investors coming to invest in that situation, which surprises me. 

But, there are some more attractive headline names in certain sectors, such as more interest in family offices but less information. Even though liquidity is starting to improve, I think many entering this market find it really unusual and very difficult to get their heads around. So that’s something I would highlight, and I think that’s something that people are surprised about, but I can’t really add much more than that other than what’s been discussed already. 

Kyle McDonald: Great, fair enough. Well, again, I think if we begin to think a little bit about, I’m a family office today, and I’m thinking about, you know, what might the best practices be for selecting, comparing and ultimately managing solutions. So, Pete, I might sort of start with you here. If I’m thinking of being a family office and I’m thinking about discovering which solutions are available in the market, how do I ultimately begin to compare those solutions? 

Peter Clancy: Yeah, I mean, first off, organisations or databases like simple, it’s a fantastic resource, but I think the other big thing is just to ask your peers if you’re a family office, you obviously know other groups that look like you ask them what they use. And then I also think groups should really leverage vendor relationships. If you think about IT vendors, there are not all, but a lot of vendors have a great view across the entire ecosystem and know which solutions out there are good ones. They’re quality solutions and maybe the ones to avoid. I also think integrations between systems are extremely important right now and will continue to be so. For example, talking to a vendor that you work with and understanding how they might integrate with another system that you’re considering is very critical. 

Kyle McDonald: Fantastic. I guess, Brett, if I think of thinking a little bit about how I know I can trust a solution as I’m beginning to warm up to the concept of using it, maybe it’s the first time I’m beginning to think about adopting a solution like yours. How do you know you can trust it? What kind of thing should make you feel at ease, and what might be a red flag? 

Brett Mock: Well, maybe I’ll start with the fact that even though this is a less regulated market, we’re still heavily regulated. You know, I mean, we have to file with SEC on almost everything, including FINRA exams and all that stuff. So, we operate as a registered marketplace under SEC and Finra. We also have kind of requirements when we work with companies. I would like to probably see some more. I hate to say this because I feel like everyone’s too regulated, but I would like to see some more transparency overall. 

Because if you look at some of the failures like FTX and Theranos and even WeWork, I think that these hot names and then if, you know, there’s not some sort of regular disclosure and regular access to information, you have a risk that, you know, these companies can, you know, like those examples can be a real problem. And so I think it started there. Again, I’m just to be clear: I’m not asking for more regulation, but I am saying I think there do need to be some standards so that it’s fair for investors to appropriately look at opportunities. And again, for us, you know, we are, I mean, my board of directors are the biggest banks in the world and one of the largest exchanges. So, I think for us, trust is literally the most important thing, period. 

That’s us; that’s what our brand means: a trusted market. And we look at the landscape and see a lot of less than, you know, worthy or less trusted marketplaces, or frankly, just bulletin boards. And I think that as this asset class needs to mature, it does need to transition into a more trusted market and trusted parties, and again, it just needs to grow. And I think it’s a global product. So I think that’s also not just specific to the United States. One of the things that probably excites me the most is the opportunity to help create emerging markets in other economies and other countries to allow for that sort of VC-backed company to emerge. So, I do think that the future is bright, and I want to get to it later. 

But I think it’s really important for trust in a marketplace with standards and transparency. 

Kyle McDonald: Great. And maybe a follow-up question for you as well, just around this question of moving beyond trust. Thinking about family offices. The world’s a volatile place, and ultimately, we know family offices should always be prioritising their cybersecurity. What type of things should they be looking at in terms of understanding whether the data they’re ultimately accessing or sharing is secure and that they’re there in a good place? 

Brett Mock: Yeah. Well, I sit in California, so obviously, we have our own state data policies, but I agree that cybersecurity, cyber security, and data are super important. A lot of private issuers basically view the data as theirs, and that’s fair because it’s their company. But once you transact in markets or with other counterparties, if you look at exchanges or different marketplaces, that price and that information does need to somehow create transparency. You know, for us, just speaking specifically, I feel like we’re very fortunate because our entire infrastructure back end sits at Nasdaq, which is one of the global exchanges. So, for us in a cybersecurity and trusted market, as we talked about, we sit within NASDAQ’s ecosystem. 

But I think, yeah, I think that especially when you’re talking about, you know, legal documents, you know, name disclosure, I mean, you know, when you work in capital markets, you always protect the identity of counterparties. And I think one of the things that surprised me about this marketplace was that it’s more like a transfer of a title or a house. You’ve got a, you know, trilateral exchange of information. You’ve got a seller, a buyer and the company, which means everybody knows who everybody is. So again, we’ve done some things in our market to separate signature pages and just sort of try to create more confidentiality. If this market can move to even an escrow model or other things in the future, you might even get to a place where you can be totally anonymous. 

But, the company still in the day has to know who is transferring ownership. SPVs are a product I think that a lot of global investors use as well because then you don’t have that same friction point of a company getting involved, and you’re basically just bundling into a vehicle. The transparency of SUVs is something we’re actually working on. We think that the price transparency of SUVs needs to improve because, frankly, there are a lot of hidden costs, and we are going to help change that in the very near future to create more SPV products or help make. Create more SPV products, which might be attractive for family offices because you can basically buy into an SPV. So that’s another thing I think that’s important there. 

Kyle McDonald: Right. So I guess maybe a similar question over to you, Pete is thinking a little bit about, you know, ultimately why having visibility and traceability of your sort of documentation is so important for families, particularly in a sort of global context. Particularly family offices these days, you know, might have multiple family office locations, West Coast Singapore, etc. So why is it so important to ensure that there’s a kind of security with how that data is managed? 

Peter Clancy: Yeah, no, I mean, it’s incredibly important for a variety of reasons. I mean, I think nowadays it’s the risk of breaches. The risk of hackers is really significant for a lot of people. And I mean, as groups continue to work with more and more vendors, there’s just going to be more risk. So, having a real policy and a true diligence process in how you evaluate vendors is going to be important. Going to be critical. 

Kyle McDonald: Great, perfect. That’s something we’ll be picking up in our next webinar. So I’ll sort of leave the pin there for people to tune into next time. But perhaps I should think a little bit about it. This is a question for you, David, and I’ll pass it on to you, Pete, as well afterwards. But thinking a little bit about the sort of cost-benefit of beginning to actually adopt private market solutions. So why should family offices begin to think about optimising their approach to family so to private market solutions? 

David Ryan: Well, public equity is 8, and private markets are 12 on a risk-adjusted basis. If you do it properly, there’s a lot of returns to be had or alpha, as Brett said, going a bit early. So, the return opportunity is there, and it’s been proven. And so I think the reason to do so, but for all the reasons, whether it’s data transparency, liquidity, ability to analyse situations, get information, all of the things we discussed today is more challenging. So you’ve got to build a focused team to be able to execute successfully for you. That would be how I think about it. 

Kyle McDonald: I guess this is a question similar to yours, Pete. If I’m thinking about building out a team internally or trying to optimise the cost of bringing this team to life, how should I approach adopting solutions? 

Peter Clancy: Yeah. I mean, every family office is obviously different. There are a lot of shapes and sizes out there. I mean, I think it’s tough to think about ROI when evaluating a single vendor or single solution, and it can be tough to draw direct conclusions. But I mean, lots of vendors have ROI studies out there, so family offices can leverage those. For example, we typically see a 90% reduction in the time spent processing post-investment documents. But I always like to point out in my conversations that it’s not strictly about cost savings. It’s really about creating a more robust process, accessing more data, and eliminating. I think that’s a big one, especially as family offices really do have lean teams. One person lives in a three-person group, which is significant. So I think there’s also this eliminating human error risk. 

Suppose you leverage technology to process documents and data. You might employ smart people, but humans are humans. They’re going to make mistakes. Technology doesn’t make mistakes. So yeah, hopefully, that’s perfect. 

Kyle McDonald: And I think. So, say I’m a family office, and I’m thinking about pulling the trigger and, you know, committing to a particular solution. And again, this is more a question for you, Pete, and maybe for you, Brett, as well, but, you know, what does onboarding typically look like? Obviously, it can vary from product to product and solution to solution, but I’m just trying to manage a bit of a family office’s expectations. Is this going to be a super disruptive process to my workflow and my team? Do they have to change the way they operate? 

Peter Clancy: Yeah, I mean, every onboarding is different. So, I think you have to evaluate the actual solution and what you’re solving for to truly grasp what you’re going to be undertaking. I think it’s also really, I mean, you can always. And this is coming from, I mean, I’m a salesperson saying that’s, don’t just listen to me, talk to your peers, right? Talk to another family office that has onboarded the solution and ask them how it went. What types of resources do you actually have to allocate to the process? How long did it take? Did you actually reach your goals? 

Again, I think because there are so many different types of family offices out there, you should lean on your peers and talk to groups that look like you about their specific onboarding experience. 

Kyle McDonald: And sometimes I guess it’s just about asking the question, what does this process look like? What can I expect? 

Peter Clancy: And vendors and Canoe, like. Well, I mean, we’re going to give a very descriptive, we’re going to give you the information on what is required, what you need to be successful, the time commitment. But again, it’s always helpful to talk to your peers as well, in addition to the references that we or another vendor might give. 

Kyle McDonald: Great. Well, we’ve got a good question in the chat from Karen Rusko, which I’d love to just perhaps bounce around the group a bit. So, short of regulation for more transparency in private markets, what can a family office do to get private companies and all funds to provide the data and information that they need? Perhaps one for you. I’ll start with you, Brett, and then I’ll sort of ping it over to you, David. 

Brett Mock: Yeah, I mean, that’s a great question. That’s really honestly one of the best questions you could ask, right? If you’re a fiduciary and an investor, you would want to think you could have access to management information to make that investment. I mean, that seems pretty obvious. But again, private companies don’t have to share. That’s their right as being a private unlisted company. So the answer is that you need to be able to participate more in company programs where the company does provide information through a data room or access to management, which we actually, as I was saying earlier, think is one of the ways this market’s really going to evolve. It’s just a more regular cycle of company liquidity programs. And the companies have some pressure. 

Just so you know, it’s not just like, hey, it’s my information, and I’ll give it to you, and I want. Employee retention is a big deal, right? I mean, if you’re especially a tech company, you need to keep your key employees, and if they can walk across the street to a publicly listed company like Amazon or Google, you have to be able to give them options and give them liquidity for their compensation and their equity. There is pressure on companies to provide solutions for their employees so that they can actually have those liquidity options. Typically, the companies want to have the right investors in their cap table, which includes family offices, because, again, they’re long-term investors. So there’s an incentive for them to share information and do that we run. 

I think we ran 8,000 employees for WeWork. I mean, it’s like we can scale this market very easily through company solutions, and it can be an early to mid or late-stage company; we talk about tenders and buybacks. In the earlier stage, you can talk about more price discovery sort of mid-stage. And like we did for Coinbase into a direct listing, we ran a dual side of the market so that you can have companies at arm’s length from picking the price. I think there’s a bit of conflict, too, when a company dictates a floor or the price that even their employees can sell at it. It really should be, frankly, something that employees can actually influence the price so they can put floors. 

But anyway, my answer is that the company has to be incentivised, which is really, frankly, the best answer I can give you. And they should because, again, of the employee retention problem. 

Kyle McDonald: And it might be sort of over to you, David, similar to the question, but I guess if we’re beginning to think a little bit more about the space that you are increasingly operating within, which is the climate attack and sort of ultimately in natural capital space, you know, are you seeing there an appetite for private companies to begin to share increased type of data? How do you get that type of data from companies if you want to get these disclosures? 

David Ryan: Unfortunately, Kyle, it depends a little bit on the sector at the moment. As I said before, the hot companies provide very little information. And some of those are clearly in the AI space, which is a sector that Daniel is telling us is white hot right now. Climate’s interesting. I like that sector because there’s a more collegial attitude. We’re all in it together. We’re going to save the planet. And so I find companies in that sector are much more open. And let’s face it, in the last couple of years, there’s been a lot of money that’s gone into climate tech, VC, and that was one area that really held up in the sell-off through 2022 and 23. This continued. I think it slowed down a bit last year, but in 2022, it was quite robust. 

Look, I think it’s really a function of how hot the sector is. But you know, I see that changing. 

Kyle McDonald: Yeah, yeah, I mean, I guess. It entirely depends on, you know, the incentive very much. Sort of back to Brett’s point. So I guess thinking a little bit more about the future and, you know, where private markets are going, we obviously have 10 minutes, obviously some more questions open to the floor if there’s some of the audience who’d like to ask us some questions. But otherwise, if we begin to think a little bit about, you know, private markets and, ultimately, the implications of AI. So, AI is already beginning to change some of the solutions we’re seeing in the space. Brett, it might be interesting to hear how you think AI might actually begin to disrupt the intelligence space within these markets. What are you sort of seeing? What are you anticipating? What is exciting you over to you? 

Brett Mock: Well, to David’s point, I mean, I think AI just as an asset class or as a sector or industry group is white hot. I mean, I think $15 billion was raised last year amongst just a handful of AI companies. You know, we’re active with AI companies ourselves as far as a solution for investors and family offices. I mean, yeah, I think back to Pete’s point, you can’t have. Tech doesn’t make mistakes; humans do. But you still have to be a fiduciary, right? You still have to make decisions. 

So using AI as a tool to scrub documents, to find critical information, I mean, who’s, who has dug through the EDGAR filing system of the SEC or who’s dug through, you know, COIs and, you know, from Documents Incorporated from the State of Delaware, you know, or, you know, just who has many logins to many different data providers and having to manage all that and like, how do you aggregate that data? We’re going to release our API product this year so that people can consume data how they want to, not force them to do it through, you know, another front end, although we have that too. So, I think AI absolutely is going to help, especially if smaller teams scale themselves because they’ll be able to use that product and look for the information they need. 

Kyle McDonald: Right, yeah, go ahead. 

Peter Clancy: I can just add on to that. So, yeah, I think. Sorry, I just had a coughing fit. Bad timing. So, yeah, I mean, I think when done correctly, I think ML or AI will allow products and companies to really scale significantly and become real, real players. I think we’ll probably see existing technologies or solutions out there rapidly bring more products to market. That’s really driven by machine learning. But I also think there’ll be a lot of new companies built on ML or AI technology that are going to emerge. You can obviously do a lot more. You can be a very lean team and bring products to market. If you’re, if you’re correctly leveraging ML.

But I also want to say that I think AI and ML are thrown around a lot. 

I think every, a lot of companies now just say like, oh yeah, we’re using it. Yeah, it’s a thing. It’s part of our product. I don’t think that’s very true. I think it’s, I think individuals can leverage chat GPT and start using it, but for a company to actually wrap it into a product and make it consumable by their clients or by their customers, I think that’s tough. I also just would ask the right questions. I would really uncover how groups are really actually leveraging AI or technology to, in our case, extract data or collect documents. 

Kyle McDonald: Right, perfect. David, it might be interesting to get your point of view on this, as I know you’re quite close to the sector as well. 

David Ryan: Well, yeah, I think Peter’s right. I think it’s a bit like dot com in the 90s, right? All of a sudden, every company was dot com something, and now everyone’s utilised the AI. I think it was a survey. It may be dated now. Three months is a long time in this market, but I think there was some survey. I saw that 92% of companies surveyed were planning to be, you know, plan or develop AI enablement between the normal business activities, but only 6% had actually done so. Now, maybe that number is sort of 85 and 15, but there’s still a big gap. Now, are the AI companies going to benefit the most, or are the regular companies optimising their operations for AI and, therefore, increasing their productivity and profitability? 

And I kind of think that’s where a lot of the value is going to be driven. Now we’re clearly, you know, in a bubble? I don’t, you know, as we saw, you know, I guess ChatGPT is a year and a bit old, but what, almost a year and a half old now? You know, I think we’ve seen bubbles can carry on for a lot longer. It’s certainly pretty frothy, but I think that the valuation or the fever pitch is going to develop, but we’ll move to more regular companies. They’re at the front of AI utilisation and implementation rather than the AI companies themselves. 

Kyle McDonald: Right, yeah, I mean, I see that very much on a day-to-day basis as well. So we build quite a few AI products, and really what we’re seeing is, you know, companies are very much in the early stages of beginning to understand what the implications and where the potential use cases are they getting the proof points they need to be able to scale out these solutions? The question is still there is the impact being delivered. I think we’re still going to see a couple more years of us needing to investigate how far AI can actually go to serve ultimately users’ needs and market value. 

So I think we’ll still see a couple more years of needing to prove market value, but beginning to think a little bit, I suppose, beyond AI, which is obviously the frothy topic, which I think will increasingly be so for a while thinking a little bit more. And David, I might sort of point this back at you. You know, we’re sort of increasingly seeing this demand for ESG mandates changing and shifting. We’re beginning to see a little bit more geopolitical tension. You know, I can mention multiple scenarios where this is playing out. Increased volatility. Ultimately, what does that mean for private markets, and why does that mean that they’re potentially more important than ever? 

David Ryan: Great question. Well, I think there are a few themes. We had the ESG bubble that’s well and truly gone, and we had the war in Ukraine that allowed some of the fossil fuel companies to take sustainability off the front page of their annual reports for a period. I think that will come back. It’s interesting that oil prices went up, and the oil stocks also went up, but there wasn’t that much of a dramatic RE rating multiple-wise. So they got a pretty good trade where they could buy huge amounts of their own stock back for a kind of a, you know, 18 to 20% return on capital. That was pretty much the best thing they could do. But I think they probably got a bit of a free pass with the war in Ukraine. 

I think, you know, that’ll probably come to an end soon. But in private markets, as mentioned earlier, there has been a big growth in climate tech vc. But a lot of these companies are still very early. You know, I don’t see any climate tech VC companies probably making a grade for an IPO in the next year or two. It is not a negative thing; it’s just that they’ve, they’re earlier in their path. Hopefully, you know, family officers are engaged. This general generational wealth transfer I mentioned. But also the bigger, the Magnificent Seven, are also very actively investing in the space and certainly, in some of the climate solutions, they’re really investing uneconomically. So, for example, you know the Frontier Group of companies, including one of your competitors, Carl and McKinsey, they’re very actively investing in direct air capture. Dare I say the name? 

Yeah, you know, Microsoft, Stripe, and so on. You know, they’re investing in direct air capture where the price for carbon removal is sort of, who knows, $800 a ton. There’s a 500 million-year-old technology called a tree, and you can invest in that to remove carbon for $5 a ton, which is good for the technology companies, but it shows that there is a commitment, you know, across a range of investors, including corporates, to advance, help advance and scale technologies in that space. Perhaps the oil companies or the fossil fuel companies will catch up again. 

Kyle McDonald: Excellent. Well, unfortunately, we are out of time, so it has been a fantastic conversation. If you would like to connect with any of the individuals you see on screen, we’ve obviously got Pete from Canoe Intelligence, Brett from NASDAQ Private Markets, and David from Zeal and Partners. You can find them all on LinkedIn. Otherwise, you can join the Simple community, which allows you access to more conversations, insights, and fantastic media to join with like-minded individuals like the ones you’ve seen today. This webinar highlights an intelligence report that will be released next week. So keep an eye out for that on the private markets report; otherwise, I’ll catch you soon on LinkedIn. Thank you so much, gentlemen. It’s been an absolute pleasure, as always.