Generating Alpha Podcast
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.
00:35:33 · Amir Fischer
[00:35:33] S0: And I think it's incredible, the point of taking early bets on those people, because a lot of firms that are already built up bureaucratic, institutionalized couldn't take those early bets on those people and ride with that look, which I think is a really big differentiator. And on the topic of these very big institutionalized firms, most wealth managers, especially in the below the ultra high net worth individual class, talk more than they listen. But you've made a point of listening more than you talk. How does that philosophy influence how you hire? Because you want a certain type of person who listens more than they talk.
00:36:04 · Michael Anders, Amir Fischer
[00:36:04] S1: Yeah. So first of all, the interviewing process at Iconiq is pretty extensive. And if the candidate makes it through the initial screening process, then there's a lot of time invested in the recruiting process. And it is very much about that. Our values are humility, diversity, thinking about uncommon care, and of course, listening. And so as we interview, and there's obviously multiple, multiple interviews that happen for any one candidate, There's a lot of collaboration around that interview process, but we are very much trying to hone in on that. Obviously, Iconiq's gotten to be a large firm. We have close to 600 employees. We have offices in Palo Alto, San Francisco, New York, London, Singapore. And depending upon the roles, there's a greater need for listening than others. But to your point, it is important for us to ascertain how curious is someone, someone, how interested in learning are they, and are they a great listener. And that is pretty easy to come by in the interview process, especially as thorough as the process is for us. [00:37:27] S0: And you made the point that this collective wisdom helps you shape your view on the world. So what perspective on the world and its future have you gained from your clients that shaped how you think today in this environment?
00:37:39 · Michael Anders
[00:37:39] S1: Yeah. Well, I think it's come in lots of different forms. And over the last few, I would say, investment cycles, obviously having a number of CEOs in 2,007, 2008, 2009 was very instrumental in us understanding where the consumer was, where consumer spending was going, and in real where estate and how interest rates were being affected. So that was a moment in time. I think a lot of investment team themes around private credit, and we were very early on in that, post the financial recession, which was a theme that we played because you were getting paid so much to lend to these middle market businesses. I think even through COVID, there was a lot of opportunity for us to create investment opportunities in middle market, private credit, structured credit that served us really well during that period of time. I think this moment in time is a particularly challenging time. And I actually would be the first to say anybody who speaks with certainty and conviction, I would run away from. We have not seen a period of transition like this happen this fast, I think, ever since the Industrial Revolution, which was over the course of one hundred and fifty years. And so the combination of the shifts in geopolitics right now, the current change right now in tone around our country and our allies, coupled with what AI is going to do, both positive and challenges, are things we're paying very close attention to. And we feel quite lucky that on the one hand, we have a number of CEOs of traditional businesses who we're in touch with all the time, understanding how they're embracing AI, how they're thinking about hiring, how they're thinking about job retooling. And on the other hand, we have a number of tech founders in and around AI itself and the making of these companies. And so the ability to sit in a room and understand how healthcare may be affected by AI, how the automotive industry is going to be affected by AI, as well as ties to world leaders who are helping us think through what tariffs mean, what does job relocation mean. So, is as complicated of an environment as possible. And I think we've done a really good job over the years of building a very, very senior investment team internally, but certainly aided by direct ties to some of the folks shaping both policy and outcomes of business.