Generating Alpha Podcast
00:24:59 · Amir Fischer, Michael Anders
[00:24:59] S0: And I want to talk a little bit about what Iconiq is now. But before we get there, what do you think is necessary for me and my listeners to understand about the building of Iconiq all the way from when you started it to today to kind of just get a sense of what it is, what the core principles are, what the tenants are? Yeah. [00:25:14] S1: So I think the core tenants of Iconiq are listen more than you talk, even though I'm doing a lot of talking right now, build genuine, lasting relationships, not with some transaction in mind, but because you genuinely care about the human and you want to help them in any way you can. Create goodwill, not for the sake of it, but because you genuinely want people to live a happier, healthier life, and you want to create this goodwill, and always be learning. I think generally speaking, a lot of industries, certainly wealth management can be a mile wide but an inch deep. And one of the things that was a tenant for us was go deep and go wide. If you're not learning, you should quit. And being an inch deep is you become a commodity and you become transactional. And so those are the sort of the tenants of building Iconiq, and it wasn't something we wrote down, It just was who we were. And I think in the end of this long party, I think it will go down that while Divesh and I have many strengths and weaknesses and differences, I think those core tenets are foundational in our DNA. That was sort of an unwritten thing. It just was. And I think that's very core to who Iconiq is.
00:25:14 · Michael Anders, Amir Fischer
[00:25:14] S1: So I think the core tenants of Iconiq are listen more than you talk, even though I'm doing a lot of talking right now, build genuine, lasting relationships, not with some transaction in mind, but because you genuinely care about the human and you want to help them in any way you can. Create goodwill, not for the sake of it, but because you genuinely want people to live a happier, healthier life, and you want to create this goodwill, and always be learning. I think generally speaking, a lot of industries, certainly wealth management can be a mile wide but an inch deep. And one of the things that was a tenant for us was go deep and go wide. If you're not learning, you should quit. And being an inch deep is you become a commodity and you become transactional. And so those are the sort of the tenants of building Iconiq, and it wasn't something we wrote down, It just was who we were. And I think in the end of this long party, I think it will go down that while Divesh and I have many strengths and weaknesses and differences, I think those core tenets are foundational in our DNA. That was sort of an unwritten thing. It just was. And I think that's very core to who Iconiq is. [00:27:02] S0: And Iconiq now manages over $100,000,000,000 yet remains relatively unknown under the radar outside of the world of finance. And I love the analogy you describe it as, as a caddy to a golfer. Can you kind of just expand on that and tell my listeners a little bit about that?
00:27:17 · Michael Anders
[00:27:17] S1: Yeah. I mean, I think taking one step back and going back to one of our early tenants, we understood from the very beginning, and we were really kids, We didn't know anything. And it wasn't about what schools we went to and what grades we got. Life is also about real experiences, running businesses, being exposed to volatility and facing adversity. And in our lives, we had some of that, but not nearly as much as folks that are ten, twenty, thirty years older than us and running things. So, for us in the beginning, it was less about how much wealth someone had or didn't have. It was really about who they were and what they ran and what could we learn from them by listening to them. And if we could curate a group of clients, founders and CEOs, star athletes, star entertainers, and we could spend our time listening to this diverse group of thought leaders, the collective wisdom of these clients who sat around the proverbial living room table would really help us form a view of the world. And because we were managing everybody's wealth, their incentive was to share the whole truth and nothing but the truth with us. But it was the aggregate of all this wisdom versus any one individual that helped us really think about where the world was and where it was going. And similarly, each of these folks, because they were well known and ran something, their brands collectively opened up a lot of interesting, unique investment doors for us. So there was always a focus on creating and curating an exceptional network of clients who we worked for. And because the job is really intimate and we end up having some incredibly exciting but also hard conversations over the course of these relationships, there's a level of trust that's built up that's incredibly intimate and vulnerable. But we understood from the beginning that no matter how close these relationships became, there was a client and we served the client. And these clients were mostly incredibly well known. And so if they were the professional golfers, if they were the Tiger Woods, we wanted to always remind ourselves we were the caddy and we should be anonymous. We should be below the radar. And that would allow us to operate on their behalf more effectively.
00:30:17 · Amir Fischer
[00:30:17] S0: And how do you actually curate this group and this collective intelligence, especially at this very, very early stages? Or when you guys started, a lot of these people who were your clients weren't necessarily who they are today. So how did you kinda curate those? How did you go about finding your clients and picking your clients and just building this incredible network that would eventually become something what Iconiq is today?
00:30:38 · Michael Anders
[00:30:38] S1: Yeah. So I have to be clear, there has been an enormous amount of luck in the building of Iconiq. We've worked hard, we've worked honestly, We've tried to work diligently and create goodwill, and we genuinely care. So we can take some credit for a few things, but the amount of luck over the course of the twenty year arc is undeniable. And so, those early clients helped really shape the vision, and they also helped us execute upon the vision because not only were they themselves, as luck would have it, CEOs who became even more well known, they knew lots of other CEOs. And then I think there was also an opportunity for us at the very beginning to really bet on founders who were not well known at the time, who didn't actually have any money at the time. But when you got introduced to them and someone really smart and reputable and in the know suggested we meet this founder or that founder because of what they were building, even if we didn't see the vision of what this particular founder or that founder was building, we did feel their ambition. We felt their drive. And so, also from almost the very beginning at Iconiq, we did place some bets. And our bets were not investments of capital, they were investments of time. And so for some of these founders, some of whom are some of our most famous clients, there were years and years of pro bono work. And it wasn't because we knew these companies would be huge, it was because they had vision and drive and we liked them. And there was a genuine sense of purpose to want to help them. And the things that they really were not steeped in knowledge with, trust, estate, tax planning, we actually knew a lot about. And those were the things that maybe they didn't even want to talk about, but they really needed to talk about. Because if these companies worked out, there would be a lot of optimization around their equity ownership that would be meaningful. And so the combination of having a few older established CEOs that were family relationships or relationships we were lucky enough to make and who helped shape this vision, coupled with betting on a few folks, that is ultimately what made Iconiq's first chapter. And then we did take that luck and run with it.
00:33:40 · Michael Anders
And we spent a lot of time and still do today looking at the world and understanding from our own client base the direction of where the world is going, and trying to think of it as a jigsaw puzzle. Which are the industries where we may not have adequate representation and thus access to, and what are some of the industries that are growing? I mean, when we started the business, there wasn't anything really as known as crypto. There wasn't something known as AI. And so we do believe that we have to continue to evolve and stay hungry, and we have to continue to stay relevant. And the Iconiq founders are not relevant, but the client base is. And so how can we keep this client base as relevant tomorrow as it might be today and certainly was ten years ago? And so we are very, very deliberate about which clients we bring on because we want them to be accretive to this network, to this ecosystem. It helps us think about the world. Remember that collective wisdom helps us get access to very unique opportunities, collective access. And then we feel like now we've really built, while the world doesn't know who we are, the investment world does, and they see our capital as highly value add and strategic. And so there are opportunities for us to invest that are unique to us because of whose capital we have, and that leads us really to a structuring advantage.