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Host Stacy Havener brings you the storytelling tips, sales strategies, behavioral secrets, and inspirational stories that help YOU turn your words into dollars. Learn from sales and marketing experts. Meet finance and investment leaders, founders and fund managers who have made it, and the ones on the rise. Because there are people behind the portfolios. Their stories matter. So does yours.
Presented by:
Ultimus Fund Solutions // www.ultimusfundsolutions.com
GemCap // www.geminicapital.ie
@stacyhavener // www.billiondollarbackstory.com
[00:00:00] Stacy Havener: Ever feel like raising money is kind of the most difficult, worst part of building an asset management business? You aren't alone. It is difficult work. It is not for the faint of heart. It's fast paced, high stakes, and against the odds and success is often found in skill sets and stories that you might not expect.
[00:00:23] My next guest is one of the most successful, energetic and thoughtful capital raisers that I have ever met, and his enthusiasm for the specialist in this business is inspiring to say the least. Seb Stewart is a partner and head of US institutional business development for Pacific Asset Management and almost $20 billion asset management firm that is challenging the status quo with creativity and innovation.
[00:00:50] Seb is also the chairman of imi, a think tank for independent specialist firms that recently published a fantastic paper on the [00:01:00] landscape for boutiques. Today's conversation is Fire and it comes to you live in partnership with NASDAQ Studios in New York City. Thank you to SEB and NASDAQ for making this special conversation even more magical.
[00:01:18] Let's dive in. Meet my friend Seb. Hey, my name is Stacey Haner. I'm obsessed with startups, stories, and sales. Storytelling has fueled my success as a female founder in the Toughest Boys Club, wall Street. I've raised over 8 billion that has led to 30 billion in follow on assets for investment boutiques, you could say against the odds.
[00:01:43] Yeah, understatement. I share stories of the people behind the portfolios while teaching you how to use story to shape outcomes. It's real talk here. Money, authenticity, growth, setbacks, sales and marketing are [00:02:00] all topics we discuss. Think of this as the capital raising class you wish you had in college mixed with happy hour.
[00:02:08] Pull up a seat, grab your notebook, and get ready to be inspired and challenged while you learn. This is the Billion dollar Backstory podcast.
[00:02:21] Wouldn't it be cool if you could diversify your investor base and add some non-US investors? Europe could be fun, or Latin America, maybe Antarctica. Hey, icebergs aren't really my jam, but you never know. You've only got one problem. How the heck do you do that? Fair question. Maybe this is a who not how thing.
[00:02:44] Meet my friends at Gem Cap. Not only do they handle all the back office stuff, the how. They'll also solve the who in your distribution conundrum. They have an incredible network of distribution partners who can help you sell the [00:03:00] thing. Once you've built the thing and Gem Cap won't just help you launch globally, they'll tell you where to go and maybe more importantly, where not to go.
[00:03:10] Saving you time, money, and annoying headaches. Want to find out if your investment firm is ready to go global? Visit billion dollar backstory.com/gem Cat, G-E-M-C-A-P. We've created a quick quiz that'll help you figure out if you're ready to expand beyond the US and side note. It's pretty fun too. Get your firm in front of the right investors in the right places with Gem Cap.
[00:03:39] Take the quiz and get more info@billiondollarbackstory.com slash gem. Cap ge. M-M-C-A-P.
[00:03:53] Thank you so much for making this magic happen here in NASDAQ Studios in New York City. What an incredible [00:04:00] honor.
[00:04:01] Seb Stewart: It is. My pleasure. You. Yeah,
[00:04:03] Stacy Havener: it's amazing. It's amazing.
[00:04:04] Seb Stewart: Couldn't be better.
[00:04:05] Stacy Havener: So this podcast is different because it's about the people more than the performance, right? Right. The qualitative more than the quantitative.
[00:04:14] So I'd love to start with you and your backstory. I guess it's possible that growing up you always wanted to be doing, you know, business development and be a partner in an asset management firm. But something tells me there might be more.
[00:04:28] Seb Stewart: Yeah. There
[00:04:29] Stacy Havener: might be something else.
[00:04:30] Seb Stewart: Yeah.
[00:04:30] Stacy Havener: Tell me, what did you wanna be when you grew up?
[00:04:32] Seb Stewart: Yeah, there's sort of two elements to this. Okay. And I'm afraid to disappoint, but I've wanted to get into asset management from a very early stage. But I'll, I'll how old? I must have been 12 or 13.
[00:04:42] Stacy Havener: Okay. Tell me, started, how did that that even happen? When
[00:04:45] Seb Stewart: started, and I remember it very vividly, I was, I was at home and I was watching a film with my older brother.
[00:04:50] Stacy Havener: Okay.
[00:04:51] Seb Stewart: And we were watching the film, rogue Trader, and of all the films we were watching, and I remember very vividly, we, it was quite late. We probably should have been in bed [00:05:00] by that stage, Uhhuh. And I was totally enamored by this film. And I think the things that struck me the most about it were that it was a whole kind of vocabulary and a whole culture that was totally foreign to me and incredibly exciting and intellectually stimulating and fast.
[00:05:21] And the other thing that really struck me about it was that there was a huge amount at stake. I mean, you know, everybody knows the story of what happened with Barings and at Road Trader. And the fact that there were such severe consequences of, of the behavior of, of the people within the film, and particularly Nick Leeson, it seemed like super kind of important.
[00:05:39] And so from that moment, pretty much mm-hmm. I was kind of hooked on the, on the idea of, of working in, in finance. And I started doing work experience quite a lot of it from an early stage as well. So I did my first bit of work experience when I was 15 here in New York actually. And I worked for SocGen on the International equity sales desk.
[00:05:59] [00:06:00] And it was three days. And because I was working on the, on the European equity sales desk, I had to get up at like three o'clock in the morning to be in the office early in order to, to be there for, for European market openings. And I remember the guy who I sat with who was this incredible guy who wore braces and was a real kind of caricature of the financial industry.
[00:06:17] And from that moment as well, you know, I was just totally hooked on the people and stuff. And I remember there was another. Really important kind of moment where he called one of his friends on the last day of the work experience and I was 15, so I was young, called one of his friends and said, who worked on the New York Stock Exchange?
[00:06:31] So just down the road, well quite far down the road from him. And he said, listen, can we, can we come and visit? And you know, I've got somebody who's working with me and I think that he'd, he'd get really excited about what's going on there. And this was when the whole market was still very much open cry.
[00:06:44] And yeah, it was extremely exciting. So we jumped in a cab and we went down to the New York Stock Exchange and I remember the doors opening and it was just like, wow, that probably sealed the deal for you. This, that sealed the deal. Yeah. And so from that point forward did a lot more work experience, not only within banks, but then ultimately within fund management [00:07:00] businesses.
[00:07:00] And then I realized that I wanted really to work in a smaller place that was more people orientated, less transactional. And so that really kind of, I naturally gravitated towards the boutique sector. And then, you know, initially, like a lot of people I think who think about fund management, I wanted to become an analyst and I wanted to become a, ultimately a portfolio manager.
[00:07:18] That seemed like the kind of mecca Yeah. Of the investment industry. And I eventually got picked up by a business that was an emerging market equity specialist. And I remember interviewing for them and we got on extremely well. And ultimately they said, listen, we'd like to, we'd like to hire you and we know that you want be an analyst, but we don't need a, an analyst at this point in time.
[00:07:38] We need a fundraiser. Yeah. Someone to help us on that, on that front. Sure. And you know, the, the CEO at the time said, listen, I think you are going to be a better fundraiser than you are an analyst. And he said, listen, join the company. Do this. Yeah. And in two years time, if you still wanna become an analyst.
[00:07:54] You can transfer within the company. And I never looked back. So I became totally [00:08:00] obsessed with business development, with the people side of, of fund management. And, and I, I did study my cfa yes, because I wanted to use that as a, as a way of working out if I genuinely did wanna become an analyst. And ultimately, you know, having concluded that, felt that I would be at a competitive advantage, having a more technical background.
[00:08:19] And, you know, I studied maths at university as, as well as business. And I thought I'd be at a competitive advantage having a technical background within a sales orientated role, rather than having interpersonal skills within an investment role. So I think that that has, you know, over time been proven to be the right decision.
[00:08:34] So, very happy with how things have panned out.
[00:08:36] Stacy Havener: I cannot believe that from age 12 This is what you wanted to do. Yeah, it's. Yeah. And that the movies was the Spark.
[00:08:43] Seb Stewart: I know, I know. I love that. And Nick Gleason of all people.
[00:08:46] Stacy Havener: Yeah.
[00:08:47] Seb Stewart: Yeah.
[00:08:47] Stacy Havener: So why did you decide then that fun, like, so you took the CFA, which I do agree, and maybe we can talk a little bit about how that helps you, because it really does help you understand the people that you're liaising with.
[00:08:59] Yes. [00:09:00] Both the fund managers and the allocators.
[00:09:02] Seb Stewart: Yeah.
[00:09:02] Stacy Havener: But what was it about fundraising? Because this is not an easy job as someone who sat in the seat for a long time, especially for boutiques. Raising capital is not an easy job.
[00:09:13] Seb Stewart: Mm-hmm.
[00:09:14] Stacy Havener: What did you love about it? You said, oh, I, once I got into it, I was like, this is it.
[00:09:19] Seb Stewart: Yeah, I think that there are a few different, a few different elements to it, which I think are incredibly interesting and, and exciting. The first thing is, is that you are really ultimately selling people. You are, you are, you are selling characters, and these characters are not simple people. You know, people who make successful investors are, are unique, you know, they are, they operate on a, at a very, very high level.
[00:09:42] You know, by and large they can be very sensitive in ways that you don't really expect. They can be very obsessive, they can be complicated, they can be difficult to work with. And that whole challenge of interacting with someone really understanding who they are, what they represent, and [00:10:00] ultimately being an extension of them, I thought was not only fascinating, but also very challenging.
[00:10:04] And, and in that way I thought it would be very, very rewarding. So, and I think that people misunderstand that, that you're not really selling products, you're selling people and you know, the funds or investment strategies are one of the few things where you can not. Offer any guarantee of what the future utility of that thing was gonna be.
[00:10:21] So it's all about selling hope and selling people and selling characters and selling behaviors and, and I think people, people don't understand that as clearly as they should. So that was the first thing that I found interesting. The other thing as well is that I love meeting people and I like building relationships and I like the art of rhetoric and persuasion and using words in order to build emotion.
[00:10:42] You know, all of these things are things that really, uh, kind of speak to me and, and that stimulate me. And that is what you have to do in droves if you are working in our position is build relationships, nurture those relationships. Understand how people think, understand what will persuade them and [00:11:00] use your intellect and use your language in order to help persuade.
[00:11:03] And so all of that stuff I found completely fascinating. And then the other thing as well, and particularly within the institutional fundraising space is that, you know, this stuff is complicated and you know, you are dealing with very, uh, sophisticated people that you know, the strategy buyers and you are dealing with, you know, complicated investment strategies and the requirements from an analytical, you know, perspective can be very demanding.
[00:11:25] And so not only are you dealing with people and the relationships and the rhetoric that comes with it, you're also having to think very deeply about the. The technicalities related to, to investment strategies, and that was just this incredible marriage for me. Yeah. That kind of spoke to, to everything that, that interested me, you know, about life in general.
[00:11:41] So it was, it was a amazing fit for me.
[00:11:44] Stacy Havener: There's so much to unpack there. One thing you said that I, it gets underestimated, very rarely talked about, because trust is something we talk about a lot.
[00:11:55] Seb Stewart: Yeah.
[00:11:55] Stacy Havener: In that, right? Okay. We need the buyer to trust us. They've gotta trust the people who are [00:12:00] running the money.
[00:12:00] Trust, trust, trust. Very rarely do you hear people talking about the trust or the interaction between the fund manager and the fundraiser.
[00:12:09] Seb Stewart: Yeah, for sure.
[00:12:10] Stacy Havener: And that is so spot on. Mm-hmm. The ability for somebody to have that personality of a fund manager that you described, so well feel comfortable
[00:12:23] Seb Stewart: mm-hmm.
[00:12:23] Stacy Havener: To share with you and trust you to make them look like the rockstar they are. Yeah. To tell their story when they're not in the room, to translate for them if they are, you know, on a tangent and need you to bring them back to all the things that really make a meeting magical. Mm-hmm. That dynamic between fundraiser and fund manager is, to me the most underestimated thing that's happening there.
[00:12:51] When so much we're talking about, oh, the trust between us and the allocator. Mm-hmm. It actually has to start before that with fund [00:13:00] manager and sales team.
[00:13:01] Seb Stewart: Totally. Yeah. Yeah. The other thing as well, which I think is, is interesting about it, is that the relationship between a fundraiser and the portfolio manager in the most part is the first window that an allocator has into the culture of the business.
[00:13:15] Yeah. And, you know, the culture of a business is paramount with when an allocator is making a decision and, you know, wanting to partner with a business that, that has great alignment of interest where people get on, where people feel that they can push each other and that they're competitive in a creative way.
[00:13:30] Right. And, you know, you or the fundraiser's relationship with the portfolio manager needs to represent that. Mm-hmm. So it, you are making the first impression Yeah. In terms of what the culture looks like within a business. So you're absolutely right. I think that the relationship is, is far more critical than people make out.
[00:13:46] Yeah.
[00:13:46] Stacy Havener: And I do think in a weird way. Going back to the movie reference and something that you said about your role now, the idea of storytelling, which of course is something I believe so passionately in [00:14:00] that is also part of it. The ability, not just to understand the numbers, but to wrap those numbers in a narrative.
[00:14:06] Seb Stewart: Yeah.
[00:14:07] Stacy Havener: Of sure. What's happening in the market and all of that jazz, but also of the people. Mm-hmm. Because to your point, that's what the buyer is actually investing in.
[00:14:15] Seb Stewart: Mm-hmm.
[00:14:16] Stacy Havener: And so how do you make anyone care?
[00:14:19] Seb Stewart: Yeah.
[00:14:20] Stacy Havener: And I think this industry does a really bad job of understanding that it's still a people business.
[00:14:26] Mm-hmm. The fact that there's, you know, dollar signs and decimal points and lots of commas and, and money moving around. That's fine, but it's still a people business. Every business is.
[00:14:37] Seb Stewart: Mm-hmm.
[00:14:38] Stacy Havener: So if you didn't have this sort of art creative qualitative side to you, and we haven't even touched on the sort of the behavioral science bit mm-hmm.
[00:14:48] You'd be like every other salesperson.
[00:14:51] Seb Stewart: Yeah.
[00:14:51] Stacy Havener: And you're not.
[00:14:52] Seb Stewart: Yeah. Because you
[00:14:53] Stacy Havener: understand that it's more than just. Okay. Numbers. Check, check, check. Yep. Chart up, up into the [00:15:00] right. Done deal.
[00:15:00] Seb Stewart: Yeah. Yeah. I, I totally agree. Yeah.
[00:15:03] Stacy Havener: Yeah. So let's talk about the human behavior piece. 'cause you talked about the art of persuasion.
[00:15:08] Mm-hmm. In my opinion, as a salesperson, that is the universal language mm-hmm. Of a talented salesperson. If you were to know anything, it would be how people make decisions. Mm-hmm. How people make buying decisions. And you mentioned that. We have not talked about this. I mean, are we talking like, you know, literally like behavioral finance, why people choose the Yes.
[00:15:35] Seb Stewart: Yeah. I think, tell
[00:15:36] Stacy Havener: me more about that.
[00:15:37] Seb Stewart: Yeah. I think that there are many ways to, you know, in the most simple form, there are many ways to, to present information to people. Yeah. And the key is understanding what makes people tick and, and how people think. And tapping into that. And, you know, I always tell the, the more genius salespeople on our team about this, this whole sort of, you know, apocryphal story about, you know, selling somebody a pen.
[00:15:58] Yeah. And the whole idea behind that [00:16:00] is that, is that in order to sell the pen, you shouldn't do the talking first. You need to get your, I agree, your customer to do the talking first. And you need to understand what it is that they need and they're looking for. Because then that enables you to solve their problem.
[00:16:12] And, and that's the key is that as soon as you offer something that solves their problem, you've been able to sell whatever you are you're offering. And so, yeah, I think understanding what makes people tick, understanding what is gonna resonate Yeah. With them understanding what's not gonna resonate. With them and understanding how to orientate something in order to yes, to, to speak to them is extremely important.
[00:16:32] I mean, the other thing as well, which I think is, is critical and people overlook this, is that, you know, people wanna be part of a, of a journey and people wanna build relationships with people as well as being an investor in their strategy. And I think that, you know, what's critical is building an excitement around an idea and, and a team, and a business and a relationship that somebody wants to feed off.
[00:16:55] And that you've gotta bring, as a salesperson, you've gotta bring a lot of energy to Yeah. The [00:17:00] relationship and to the idea and to the concept. And you've gotta bring fun to the relationship because, you know, whilst people may invest in, in funds just for the sake of investing in the fund, by and large people wanna have the whole package.
[00:17:11] Yeah. In terms of the relationship. And if they're dealing with people who excite them, who motivate them, who inspire them, who are fun, yeah. You're gonna be much more successful in, in what you're doing. So I think the, one of the big things that again, people overlook is, is your role as a salesperson in bringing a high degree of energy to the relationship and to a a situation,
[00:17:30] Stacy Havener: especially for boutiques, that journey piece.
[00:17:32] 'cause there's two journeys happening in my opinion. You have the journey that the allocator is on. Yeah. We go back to our pen example. Do they really need you to talk about how this pen is a 0.5 millimeter
[00:17:45] Seb Stewart: Yeah.
[00:17:45] Stacy Havener: With really nice ink. And you're selling like the fact that they wanna write the Great American novel with
[00:17:51] Seb Stewart: Yeah, exactly.
[00:17:52] Right. You got it. Okay.
[00:17:52] Stacy Havener: So there's that journey that they're on and understanding that being so critical. But there's another bit that I love that you highlighted, which is. [00:18:00] Especially for a boutique.
[00:18:01] Seb Stewart: Mm-hmm.
[00:18:02] Stacy Havener: This is business risk. Mm-hmm. This is the opposite of you don't get fired for hiring IBM.
[00:18:08] Seb Stewart: Yeah.
[00:18:08] Stacy Havener: Right. So if we put ourselves in their shoes and we think about that journey
[00:18:13] Seb Stewart: mm-hmm.
[00:18:13] Stacy Havener: And the invitation we are giving them to be a part of this, they are taking. Career risk many times to go against the crowd with a boutique. Yeah. And it would be so much easier to hire BlackRock or JP or whomever. Mm-hmm.
[00:18:31] Because again, IBM not gonna get fired.
[00:18:34] Seb Stewart: Yeah.
[00:18:35] Stacy Havener: So when we invite them into that story about a boutique, to your point, it has to have meaning.
[00:18:40] Seb Stewart: Yeah.
[00:18:40] Stacy Havener: There has to be a why. You have to enjoy the people that you're on the journey with. And feel like you're part of something.
[00:18:46] Seb Stewart: Yeah.
[00:18:47] Stacy Havener: This is not just selling a fund.
[00:18:49] Seb Stewart: Yeah. It's
[00:18:49] Stacy Havener: not just selling the pen.
[00:18:51] Seb Stewart: Totally.
[00:18:51] Stacy Havener: Yeah.
[00:18:52] Seb Stewart: Totally. Totally. The other thing as well is that the, you know, one of the special things about boutiques is by their nature, you are only ever gonna work with a limited [00:19:00] number of, of clients. I mean, what, what is characteristic of a boutique is that you are, you generally have capacity constrained products and, and by and large, you only offer a limited selection of products.
[00:19:10] You know, if not a single product. And so you are only gonna work with a limited number of clients, which means that you can build, in the most part, stronger relationships with your clients. And you're not separating out a very big client list amongst, you know, a lot of different salespeople. So you can really build very, very strong long standing relationships with your clients.
[00:19:28] And, and ultimately, you know, going back to what we were talking about earlier, this is we're selling concepts where there is absolutely no guarantee of what the utility is gonna be in the future. And so the richer the relationship, the more trust there can be the, the deeper understanding of how people are gonna behave.
[00:19:45] And I don't mean, you know, just with the salesperson, I mean also with the portfolio manager. Yes. And so it really offers a greater sense of sort of security in that. In that relationship that enables those relationships. I, I think to, to last much longer. So it's all super [00:20:00] important, this stuff.
[00:20:00] Stacy Havener: It is. And the, this is probably a great segue into one of your other roles.
[00:20:05] Yes. As chair at Emmy and the research you've done on boutiques. The interesting thing, going back to that people dynamic, 'cause I'm gonna just keep hammering that. Is access.
[00:20:17] Seb Stewart: Yes. Big time.
[00:20:19] Stacy Havener: So, you know, the things that boutiques feel might be disadvantages. And this is, I think generally true for all of us.
[00:20:27] The things that we feel are disadvantages, the things that we maybe don't wanna highlight or we sort of hope, those are often our advantages in disguise.
[00:20:36] Seb Stewart: Mm-hmm.
[00:20:37] Stacy Havener: So for a boutique to say, well we don't have the resources of BlackRock and we don't have, you know, the macro team and all the, all the things in the army of salespeople and the budget and all that stuff, that's fine.
[00:20:48] Mm-hmm. But what you do have is somebody can talk to the decision makers. Yeah. The fund managers, the CEO of the company, and that's not gonna happen at a big
[00:20:59] Seb Stewart: mm-hmm. [00:21:00]
[00:21:00] Stacy Havener: And so instead of trying so hard to be something that we're not, if we actually just said, that's fine and there's a place for bigs and there's a place for those types of strategies in generalists, and that's.
[00:21:11] There's also a place for specialists because we bring something different, not better. Something different. And you have access and you have special, you know, you have a specialization, you have capacity constraint, you have alignment, you have all of these things.
[00:21:23] Seb Stewart: Mm-hmm.
[00:21:24] Stacy Havener: So just leaning into who we are, why we do what we do, and what we stand for.
[00:21:30] Not in a way of its better or worse in a way of Its different.
[00:21:33] Seb Stewart: Yeah. Yeah. I think And
[00:21:34] Stacy Havener: complimentary.
[00:21:35] Seb Stewart: Exactly. Yeah. And actually, anecdotally, I was having a conversation with a very large US public pension plan that was a client of mine at the time. And they said that, well, they're large enough to essentially be a universal owner.
[00:21:49] So they, you know, essentially have exposure to the, to the entire market. Yeah. I mean, this is the sort of 150, $200 billion plan. And they had been clients of ours for, for many years. [00:22:00] And I was speaking to the. Ahead of equities at this plan. And you know, he said, listen, we don't actually generate alpha in any meaningful sense through our manager selection.
[00:22:13] The way that we generate alpha is through our asset allocation. Mm-hmm. If we are overweight
[00:22:17] Stacy Havener: still big
[00:22:17] Seb Stewart: Yeah. Certain, you know, emerging market equities or we're overweight US equities, or we're overweight credit or whatever it may be, that's really what's gonna move the dial. Sure. From an alpha generation perspective, and what enables us to become better at our job in allocating assets is the insights that we get from the portfolio managers.
[00:22:36] So, you know, actually we are hiring a portfolio manager by and large, you know, there were gonna be periods that they outperform, they're gonna be periods that they underperform, but they serve a particular function within our portfolio and actually we don't want them to shoot the lights out because that, that suggests that it's unpredictable.
[00:22:50] Yeah. Where we get the, the most value is in working with managers where. They're accessible. Exactly. To your point. Yes. And that they're able to share insights on what's going on in their market segment. Yes. [00:23:00] Because that enables us to be better at what we do from an asset allocation perspective. And that's really what, what is gonna move the dark.
[00:23:05] And you know what's a really important indicator, I think of a, of a successful relationship is a portfolio manager who has the confidence and the integrity to say, listen, now is the time that you should be taking money off the table. Yeah. Within my asset class. Yes. Because actually valuations are particularly high or things have, you know, for whatever reason, things have have got kind of stretched or excessive.
[00:23:27] You should actually be taking money off the table. And very few people have the courage to do that because everybody just thinks of their, so
[00:23:32] Stacy Havener: every fund manager is dying inside right now.
[00:23:34] Seb Stewart: Exactly. But that's, it's a critical thing because that builds a huge amount of trust with the asset allocators where they think, my goodness, this person is, is giving me information that I can actually use in order to generate.
[00:23:45] Outperformance in other areas of the portfolio. This is somebody who I need to stay. Yes. You know, I, I need to keep in my, in my portfolio.
[00:23:50] Stacy Havener: So Well said. And it goes back to that idea of just being authentic and real. Like that question of in what market environment does your [00:24:00] strategy do well? Yes, exactly.
[00:24:01] Right. And the fund manager feels compelled for whatever reason to say all of them.
[00:24:05] Seb Stewart: Yeah.
[00:24:05] Stacy Havener: When's a good time? Is there ever a bad time? No. And those are all the stereotypes and the cliches, but there's a reason because that's what people say. Yeah. And it's a mistake.
[00:24:15] Seb Stewart: Yeah.
[00:24:16] Stacy Havener: Yeah. So let's talk about Emmy.
[00:24:18] Seb Stewart: Yeah.
[00:24:19] Stacy Havener: I'm gonna let you set the stage for what Emmy is, what you stand for. It's an incredible organization for boutiques and specialists. And then I specifically wanna talk about the research
[00:24:30] Seb Stewart: Yes. That
[00:24:31] Stacy Havener: you just come
[00:24:31] Seb Stewart: out with. Yeah. Well, Stacy, thank you. And you are a great friend of the Imy. Yeah. So you're great to give us a platform to be able to talk a little bit more about it.
[00:24:37] So the, the imy, which stands for the Independent Investment Management Initiative, was founded in 2010. So we're in our 16th year now, I think, actually. And we are essentially a think tank for specialist asset management businesses all around the world. We've got the largest footprint in the uk, but we represent managers all around the world.
[00:24:57] And in fact, we've recently taken on our newest member that is based in [00:25:00] Australia, to give you an idea of.
[00:25:01] Stacy Havener: Okay. Yes. Of our
[00:25:01] Seb Stewart: reach across, across the world. So we, we are a think tank that represents specialist asset management businesses. We, we are just shy of 60 members. Mm-hmm. It's very much a member led organization.
[00:25:12] And really we have three core pillars as an organization. So three things that we're trying to achieve. The first is to help shape a industry, and particularly a regulatory environment that is supportive of entrepreneurialism. Mm-hmm. And specialist firms, because we are firm believers that an industry that is rooted in entrepreneurialism and innovation will lead to a more, well, more choice and better value for underlying investors.
[00:25:40] So we want to create an atmosphere which really nurtures innovation and, and entrepreneurship. The second thing we, we want to do is to create an ecosystem where we can share institutional knowledge in order to ensure that all of our members. Can be the very best at what they do within their particular fields, whether that is in operations or compliance [00:26:00] or IT or ai or investing.
[00:26:02] Or distribution. Mm-hmm. And, you know, we're very much of the belief that in a very large organization, like a, a BlackRock, you know, you've got tens of thousands Yeah. Of, of members, of staff. And there's typically quite high turnover of staff. So the institutional knowledge that comes in and outta those businesses and is, and is retained within those businesses is, is vast.
[00:26:20] And you know, as a collection of smaller independents, where typically these firms have, you know, on average 50 members of staff and turnover tends to be very low. Institutional knowledge actually isn't as great as, well, nearly as great as in these bigger firms. But you know, across our 60 odd members, we represent half a trillion dollars of assets, almost 3000 members of staff.
[00:26:41] And together we are able to, to have the same sort of institutional knowledge as a much larger asset management business. And leveraging that and sharing that institutional knowledge enables all of us to become better at what we do. And then the third pillar is to provide commercial opportunities to our members and to really [00:27:00] ensure that the strengths of boutiques are well known across.
[00:27:03] The market. So we, you know, we, we wrote this recent piece of research that is, was entitled The Case of Boutiques. We do host marketing events for our members. We, you know, have a, a quarterly webinar series with an investment consultants who our members can learn about, you know, how investment consultants are thinking about the markets, you know, what, how they're thinking about boutiques, what enables them to be more targeted in, in our members, to be more targeted in terms of how they build relationships with, with consultants, all those sorts of things.
[00:27:30] Yeah. So it's, it's really trying to, to drive ultimately, you know, revenue growth for our underlying members. So it's been, you know, it's a great organization. As I said, it's been around for 16 years and we're doing amazing work. Very proud. It is
[00:27:39] Stacy Havener: a great organization. And so you said worldwide? Yes. And I'm like, here we are in New York City.
[00:27:45] Yeah. Can we get some, we, we do have.
[00:27:48] Seb Stewart: We do have some American members. Okay. Alright. Yeah, we do, we do. So we, we've got I think, three or four US headquartered members and most of them have some representation in, in the, the uk. In the uk. So, but there's a lot more [00:28:00] we can do.
[00:28:00] Stacy Havener: Think So essentially with your help, we can
[00:28:02] Seb Stewart: build, we can build the empire here.
[00:28:03] And,
[00:28:03] Stacy Havener: well, I love the vibe of it because to your point, it's not just that these specialists don't have the scale of a BlackRock, let's say. It's also that the information is different.
[00:28:15] Seb Stewart: Totally.
[00:28:15] Stacy Havener: There are nuances that are game changing, that if, if you took all the institutional knowledge BlackRock had and gave it to boutiques, it's still, it wouldn't work.
[00:28:24] Yeah. Because it's a totally different business. Everything.
[00:28:28] Seb Stewart: Yeah.
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[00:30:10] They can. I confirmed this this morning.
[00:30:12] Seb Stewart: Yeah, they can.
[00:30:13] Stacy Havener: So what were the takeaways for you? Like what are the things that boutiques need to know from this research? Well, what were you trying to uncover
[00:30:19] Seb Stewart: basically? Yeah. Yeah. So the first thing to note, just to sort of set this in a little bit Yeah. Is that to our knowledge, and we did do quite a lot of digging on this, this is the most comprehensive piece of qualitative academic research that's ever been conducted on the boutique sector.
[00:30:33] Okay. Anywhere in the world. So we, we, we very much feel as though we're sort of trailblazers in, in this regard. And it was an very much an academic paper that we developed in partnership with, uh, an academic who specializes in the asset management sector. Professor Andrew Claire at Bayes Business School.
[00:30:48] So this was a really, really important piece of, of academic research. It wasn't just us sort of trying to bang the drum for, for boutiques. And you know, what we really wanted to do is build on some existing research that had been conducted by Andrew Claire [00:31:00] where he identified what he called a, a boutique premium when it came to the boutique sector, where on average smaller asset management businesses are able to outperform their larger peers.
[00:31:13] And it was a very kind of quantitative analysis on, on data I think that he got through Morningstar or one of the other data providers. And one of the big questions that we were asking ourselves as Vimy is that's great. And you know, that's amazing for us in terms of the advocacy of, of smaller asset management businesses, but what is it about the DNA of smaller businesses that actually enables them to, to generate better performance?
[00:31:34] Mm-hmm. And if we're able to provide a bit of a blueprint Yeah. As to what good looks like, then not only will that help our. The existing businesses, it'll also help new businesses that are looking to, to set up. And furthermore, it will also help the asset allocators in educating them about smaller asset management businesses.
[00:31:51] And, you know, it comes at a very important time where active management has, has had its hardest decade probably ever, you know, where, [00:32:00] where markets have been driven by very, very small selection of companies in the most part. And it's been very difficult to outperform global indices. And so, you know, active management and the specialist sector really is the purest representation of active management has had a terrible time.
[00:32:14] And you know, you have a lot of pension funds and larger institutional investors. In fact investors of all shapes and sizes that are kind of throwing in the towel when it comes to active management and, and specialists or boutiques. And so we found that this was a crucial time to really. Demonstrate why people need to be paying attention to specialist asset managers and, and why they are actually able to outperform it.
[00:32:36] We, you know, Andrew demonstrated that they are able to outperform. So that was the sort of the backdrop. And what we did was we leveraged our membership as well as communicating to a lot of. Other members or a lot of other specialist firms that aren't yet members of BME. And we developed a questionnaire in order to ask asset managers, you know, what it is about their business model that they felt gave them a competitive advantage on the one [00:33:00] hand, and then on the other hand what it was about the industry or about their business model that actually was holding them back.
[00:33:06] Okay. And what that would enable us to do is to identify certain things that we may be able to address or alleviate in order to make those businesses even more successful. So we built a questionnaire quite short, but punchy and effective in order to be able to ident or get to the heart of some of these issues.
[00:33:20] And we sent it out to about 250 different boutiques, mostly in, in Europe. And we received responses from almost half of them, which is a pretty great response response rate. So we received response from about 90 different members, and it was incredibly revealing in terms of, you know, what? It is about these businesses that the leaders felt gave them a competitive edge.
[00:33:40] And, you know, whilst the conclusions may not be revelationary, what's important is that we actually have the data to support what people think is, is the strength of, of boutiques. And one of the key, or some of the key things that came out about what makes Specialist asset managers successful are first and foremost their independence.
[00:33:59] [00:34:00] And, you know, for us at the, at the imi, you know, we strongly believe that to be a specialist asset manager or, or a boutique, you do need a high degree of, of independence, ideally full independence. So not being a publicly listed mm-hmm. Company. And you know, what that enables you to do is to not have to prioritize the shareholders of the business that really have a different agenda in the most part to your investors.
[00:34:23] And your investors have a, you know, often a multi-decade investment horizon where your shareholders often don't. And so you are able to deprioritize. Shareholders, because in the most part you don't have any shareholders and you're able to focus on what matters the most, which is delivering great long-term returns for your, for your investors.
[00:34:39] So independence was a, a critical part of what enables boutiques to focus on what matters the most. The other thing that that came out, which was, you know, very highly considered to be a kind of key driver, was agility. And that if you have a smaller business with less bureaucracy, you can be more nimble in adapting to the changing needs of your clients and, and the changing landscape of [00:35:00] the industry overall.
[00:35:01] And, you know, the, the whole world and particular industry has never been changing. Has never changed at a faster pace than it as it is right now. And not having to deal with bureaucracy in adapting to challenges is a superpower. And you know, specialist firms that have a very limited number of strategies and have far fewer people and have much simpler governance structures are able to be much more nimble and adaptable to changing dynamics.
[00:35:28] And that was also considered to be a, a great strength. The other thing as well was being able to just focus on a single thing and not getting distracted by other things. And you know, if you are just focused on a particular asset class, you can become absolute experts in that particular field. And, and you know, that was very much considered and we've got the data to prove it to be one of the key kind of selling points.
[00:35:47] And then the final thing, which very much came out was one of alignment of interest in that, you know, a lot of specialist businesses are structured as partnerships where the staff have real skin in the game. You know, in the most [00:36:00] part they have all of their personal wealth tied up in the business either.
[00:36:03] In the funds that they're managing or through the equity that they own within the business. And it really leads to very different behaviors where you are thinking about your business and performance as an owner, not just as an employee that's trying to work towards your bonus at the end of the year.
[00:36:17] Yeah. So it really, really ties the key people into the business and ensures that they're thinking long term and ensures that they have the right sort of all the, the, the same investment horizon as them as their clients. Now, on the challenges side, which was also, you know, equally insightful, the biggest thing that came out of it.
[00:36:34] Is that specialist firms find it difficult to surprise the price, distribute their products, and you know, it's a very challenging thing to it. Right. It's, and there are so many examples of businesses that have generated incredible performance. Yeah. But they don't know how to distribute their products and, and beyond distributing also how to market their products.
[00:36:52] Yeah. And the two are very interrelated, but are, but are quite different. And, you know, funds and strategies don't sell themselves. And, [00:37:00] you know, the, the other angle of this is that you can actually. Raise significant assets for strategies that on paper may not, or historically may not have generated the, you know, returns that have been that impressive, but over time go on to do extremely well.
[00:37:13] And it's people who are able to understand the strength of a particular investment strategy, communicated at the right time, and raise assets ahead of time that are particularly successful at that. So, and you know, that speaks very much to what we do from an asset raising perspective is that, and also the firm that I work for Pacific in, that, you know, we are specialists at not only managing money and, and offering differentiated investment strategies, but also we understand the market, we understand the needs of clients, we understand how to market strategies, we understand what information is needed.
[00:37:43] We understand the platforms that strategies may, may need to be on. We understand what strategies are suited to what market segments and aren't, which is another important thing. You know, you need to know what to pursue, but also what not to pursue. Yes. So distribution was, was probably the biggest thing that came out of it.
[00:37:58] And in [00:38:00] terms of challenges. And the other thing as well, which I thought was particularly interesting is that specialist firms, you know, often are challenged in terms of succession
[00:38:08] Stacy Havener: planning. I was, that's what I, I was very interested in that.
[00:38:11] Seb Stewart: Yeah. So, and that's, you know, it's a, it's something that I've studied a lot when I did my MBAI focused a lot on leadership in, in boutique asset management and thought a lot about succession and mm-hmm.
[00:38:21] Leadership and the importance of great leadership in, in driving results in, in a business. And, and I mean, that's a whole different world that we, we can definitely go into. But you know, what is undeniable is that great leadership helps to lead to sustainable results and also, you know, positive outcomes within the business for all sorts of different reasons.
[00:38:40] And, you know, when you're starting up a, a specialist asset management business. You often, well, in the most part, and I speak to a lot of founders, you are approaching it with roast tinted glasses that you think that, you know, you and your founders are always gonna get on and it's all gonna be great and you're never gonna come across any issues.
[00:38:55] And it doesn't really matter how your partnership agreement is structured because it's all gonna be hunky dory forever. And [00:39:00] that, you know, often is, is the case, but only up to a point. And you get to a stage 20 years later when you've got all your clients and there is a lot more accountability to what you are doing when the cracks start to form and people think about retiring and people have, you know, made a lot of money and they're probably thinking about, you know, doing something else or winding down.
[00:39:19] And you, you start to have real, real issues late on in the game when you haven't actually prepared for these Yes. For these challenges. And so, and that can be the downfall of, of many businesses. I mean, you see it all over the, all over the place. And so the, the key kind of takeaway for that from that is that you really need to start thinking about succession.
[00:39:39] Ideally from the onset. Yeah. But if not from the onset, you need to be starting to think about it years in advance before it, it becomes a reality. Yes. So that you can prepare for these things. And again, you know, the thing that people often overlook is that, you know, getting the right succession plan in in place is hard enough.
[00:39:54] But if you get it wrong, there's also a lead time as well. So, you know, if you're thinking about, you know, hiring [00:40:00] someone to succeed as a portfolio manager or, or, or a CEO or something like that, you know, you need to give them, uh, three years to see if it's gonna work. But if it doesn't work, you're then back to zero.
[00:40:09] You've then gotta have another three years in order to see whether it's gonna work. So people underestimate the lead time
[00:40:14] Stacy Havener: Yes.
[00:40:15] Seb Stewart: That it takes with this stuff. So anyway, that was another fascinating thing.
[00:40:18] Stacy Havener: Yeah. So thank you for sharing all of that. And again, people can download it on the IMI website. Yeah.
[00:40:23] Which is imi IIM i.org.
[00:40:26] Seb Stewart: That's right. Yes.
[00:40:27] Stacy Havener: Okay.
[00:40:27] Seb Stewart: Yeah.
[00:40:27] Stacy Havener: I wanna talk a little bit about Pacific. Yes. 'cause at the beginning of your story, you shared that you went directly to a boutique.
[00:40:34] Seb Stewart: Yeah.
[00:40:35] Stacy Havener: And now you're sitting here. Still, you know, Pacific has an interesting vibe to it because it's larger and has some scale and some distribution as you described, but also is sort of a collection of boutiques in a way.
[00:40:49] Seb Stewart: That's right. Yeah. So
[00:40:50] Stacy Havener: can you kind of take that thread from your backstory and pull it forward from the boutique that you started with and where you're sitting now?
[00:40:59] Seb Stewart: Yeah, [00:41:00] yeah. I mean, it's funny you say that about Pacific. When I joined Pacific 18 months ago, yeah, we had a little over $5 billion under management, and so I was coming from a business that at Peak had $10 billion in them.
[00:41:12] Undermanaged. Oh, how interesting. So, a way I was actually, yeah,
[00:41:14] Stacy Havener: going down
[00:41:14] Seb Stewart: downsizing in terms of the business. Yeah. But we are now at $17.5 billion, so we've over tripled in size in the last 18 months alone. So there's been, you know, incredible growth across, across our business for, for great reason. I mean, we're doing something very different and you know, we've got great people and, and great strategies and we're very technology enabled.
[00:41:35] And so we very much see ourselves as a, as a disruptor within the asset management industry. Yes. So we've grown for, for great reason. But the thing that really, well I, starting with my previous. You know, business, we had enormous success. You know, that business grew from about one and a half billion dollars under management when I joined to about $10 billion at peak.
[00:41:53] And, you know, I learned a huge amount about what it is that enables businesses to, to succeed. And, you know, one of the [00:42:00] key lessons was about how to market products effectively and how to build great long-term relationships with investors. So there was a huge amount of learning that went on during that period.
[00:42:09] And then the business did, did struggle. And, you know, eventually the business wound down a little after I, I left. But, you know, I made a, a point of staying with that business through the whole cycle. You know, I could have left at the top a lot of people mm-hmm. Did. But actually I, I felt that in the early stages of my career, going through not only the success, but also ultimately the, the decline of a business Yeah.
[00:42:29] Would be a critical learning point. And I learned a huge amount about what can go wrong with businesses. In terms of whether it's succession or, you know, hiring policies, the quality of people in terms of focus, you know, all sorts of partnership structures, all sorts of different sort of issues. And, you know, that proved to be completely invaluable for me.
[00:42:49] And, and what I, it enabled me to do in thinking about the next step and, and broadening my horizons, not only in terms of a new business but also in terms of product range, was identifying a [00:43:00] business that was very forward thinking. Mm-hmm. About a lot of the challenges that my previous business had faced.
[00:43:08] Mm-hmm. So that the business would have a, a great chance of being able to succeed over the long, over the long term. So it was really about trying to find a business that was aligned with me in terms of understanding what mattered and what didn't matter. And, and I really found that in. Pacific and I met the, the CEO of Pacific, you know, amazing guy called, called Matt Lamb.
[00:43:26] And we had lunch together and we hit it off instantly. And, you know, he was talking about the business and about their plans and about what mattered to him and about the culture of the business and everything resonated. And I was like, you know, pretty much from the word go, I, I, I thought to myself, I, I've gotta work in this, in this business and I think I can do, I can do great things within it.
[00:43:45] And so, you know, and my initial instincts about Pacific and, and what it did well and the, the focus it put on distribution at the same time as offering very differentiated products as well as, you know, working with the best of the best fund managers has all [00:44:00] proven to be right over a long period of, or a longer period of time now having worked within the business.
[00:44:04] So it's been an amazing fit. It's an incredible business that does a lot. Right. In my opinion. And also, I think importantly, and not least because of the governance structure, that it has a number of, of non-executive directors and independents. Sitting on the board, it is a very introspective business and never rests on its laurels.
[00:44:22] Always wants to do better. Um, always thinks that there are areas that they could improve on. And, and the, the lack of complacency within the business, I think is, is something that was extremely kind of present and powerful for me. And so it's been a, it's been an amazing journey so far.
[00:44:39] Stacy Havener: Love that you shared.
[00:44:40] Thank you for sharing that with us. And I'm hoping to meet Matt on my next fund insurance. Yes. You'll get on like a house on farm. Yes. Yes. I've heard he's fantastic. So it's interesting, if we take now the, the research from Emmy and what you just described about Pacific, and you think about if I put myself in the shoes of a boutique fund [00:45:00] manager or team and I'm sitting there struggling with distribution, Pacific's very good at that and I'm struggling with succession.
[00:45:07] Mm-hmm. And this is an interesting one where I think about Pacific and some very, very small group of people who are doing sort of staking. Seeding private equity type of deals with asset managers who are good at them. Yeah. I think there's a very small, small group of, of firms that can do that Well, and if I, I'm sitting there like, gosh, Pacific is sitting in such an interesting spot right now.
[00:45:33] Did you always take stakes in managers from the get or did you have, so like talk about, 'cause there's like a dynamic that, I don't know if it's a new dynamic, new meaning more recent.
[00:45:43] Seb Stewart: Yeah.
[00:45:44] Stacy Havener: Or was that always the vision to take equity stakes in managers? Like, talk about that piece because I think it's a part of the market.
[00:45:51] Like I said, there's not enough players and it's a way for these boutiques to solve some of the problems that you mentioned
[00:45:57] Seb Stewart: mm-hmm.
[00:45:57] Stacy Havener: In the, and that you found in the research.
[00:45:59] Seb Stewart: Yeah. [00:46:00] I mean, the first thing to note is that we, we are an asset manager. We're not a.
[00:46:03] Stacy Havener: Oh, you don't take stakes. Oh, because, well, we
[00:46:05] Seb Stewart: do.
[00:46:06] I I'll come onto the, onto the, yeah.
[00:46:07] Stacy Havener: Tell me. Onto the minutia. Tell this. It's so interesting.
[00:46:09] Seb Stewart: It is. It is. It is. And it's, it's a very dynamic model. Okay. But we are an asset manager. Okay. First and foremost, we, we are not a private equity
[00:46:17] Stacy Havener: No. In investor. I did not to suggest,
[00:46:19] Seb Stewart: and the business was really founded around, initially around offering multi-asset mm-hmm.
[00:46:26] Portfolios or solutions, which we offer as an outsource investment proposition to financial advisors around the world. Okay. And the two ways in which we, we really compete in that space is by. Offering, you know, products that generate great performance on the, mm-hmm. On the one hand, but also we've built this incredible technology infrastructure.
[00:46:43] So we have an investor portal where investors within our multi-asset funds are able to log into the portal and they can do incredible fund analysis and they can do reporting for their clients and they can do wealth planning and. Loads of amazing mm-hmm. Things and, and you know, thinking to our earlier discussion about, you know, [00:47:00] being innovative, this is a really innovative way in which we were able to Yeah.
[00:47:03] Attract clients and do something different. So the business was originated around that. Okay. That sort of business model and, you know, our multi-asset portfolios invest a lot passively and they also invest actively where they feel that they can generate or they can find managers that can generate significant amounts of effort within that particular field.
[00:47:21] And so, you know, it was then a. Natural extension to start thinking, right. If we work with some of these active managers that are doing an incredible job Yeah. Why don't we actually house them within Pacific? Yes. Okay. And then we're able to offer those capabilities to the wholesale and to the institutional market.
[00:47:37] Yeah. So we started building out what we consider to be our single manager strategies where Got it. They are focused on very particular asset classes that, you know, in the most part, they've got 10 to 40 years experience working within their particular asset class. Mm-hmm. Even within their particular strategy.
[00:47:51] And but also have very long term track records of delivering substantial amounts of outperformance. So we started to build that business and the most important thing for us [00:48:00] as a business is to offer the best possible performance and strategies to our end clients. Yeah. And not necessarily to be dogmatic about what that looks like in terms of the, the relationship that we have with the underlying managers.
[00:48:13] So we have several fund management teams that are employed directly by Pacific.
[00:48:18] Stacy Havener: Okay.
[00:48:18] Seb Stewart: Who work within the firm. A number of
[00:48:20] Stacy Havener: those who owned,
[00:48:21] Seb Stewart: wholly owned, fully owned their employees of the Okay, got it. Of the business.
[00:48:23] Stacy Havener: Got it. Now,
[00:48:24] Seb Stewart: some of them have worked previously at either larger organizations and wanted to set up their own essential, you know, essentially a team.
[00:48:31] Other people, you know, have had their own independent business and, and have joined us because they want to be able to focus exclusively on investing and, and leverage Pacific's ecosystem for distribution and operations and compliance. And then there are some instances where we use subadvisors.
[00:48:47] Stacy Havener: Okay. So then you're it where
[00:48:48] Seb Stewart: there are existing businesses that it wouldn't be practical for us to acquire the business or for them to sit within Pacific, but we still want to be able to leverage their investment expertise.
[00:48:59] And so we [00:49:00] work with one manager, K Bar Capital, that is headquartered in Australia, that operates within the investment grade credit world. And they do something, you know, incredibly innovative within that in terms of, you know, very high frequency trading and, and identifying pricing and efficiencies in credit, for example.
[00:49:14] And then we also work with an emerging market value specialists called North of South Capital, who've been investing in emerging markets for 40 years. They've got one of the longest and best track records within this space. And they are also a subadvisor. It just so happens that we also. Own an equity stake in that business.
[00:49:31] And so that relationship is not only a sub advisory relationship, but we're more integrated in the sense of, of owning equity. So I think the key thing is that we are focused on offering the best possible strategies to our clients and we'll get creative as to how we can structure those deals in order to offer that.
[00:49:48] Yes, I think that the overriding thing is that the relationships we have with all of the fun teams, whether they sit outside of Pacific or within them, it there needs to be an equity-like relationship. Yeah. In terms of us being [00:50:00] partners. It not just being a transactional Yes. Relationship. So, you know, we, we believe in equity and we believe in, in, you know, true integration and partnership.
[00:50:10] It's not just about, you know, the, the sort of business relationship economics.
[00:50:13] Stacy Havener: Totally. And I love, and thank you for clarifying and explaining because it is different, which I know is sort of this move forward kind of, you know Yes. Yeah. Vibe that you have had. Yes, yes. And challenging the status quo. Yes.
[00:50:27] And the, even just the way you're building the asset management business. Sub-advisors, wholly owned teams, that you're either presumably starting from scratch. Yeah. Or taking in-house some where you're, you have an equity stake. More of that. Yeah. We need more of that because what it does, going back to that research, is that not only are you solving problems for the allocators, providing specialists, great.
[00:50:52] You know, long-term performance, differentiated process and philosophy, et cetera. Mm-hmm. You're solving the problem for them. You're [00:51:00] also solving a problem for the boutiques.
[00:51:02] Seb Stewart: Yes. Absolutely. One of the key things that we are trying to address that is an issue for a lot of smaller businesses is this issue that as a business grows mm-hmm.
[00:51:14] And becomes more complicated. The founders of the business, often, whom are the portfolio managers, get distracted by stuff that that isn't within their core. Area of competency and what that results in is performance, suffering. And, you know, very few businesses are able to, are, are founded by or able to develop specialist business builders who can focus on the managerial side of, of operating the business and can lead the portfolio managers to do what they do.
[00:51:42] A lot of, more often than not, specialist firms, when they set up or boutiques when they set up, they're founded by portfolio managers. Yeah. And inevitably, as partners of the business, they get dragged into stuff that, that, that actually they don't really want to be getting involved with it. Whether that's personnel issues or thinking about, you know, remuneration or new markets to go into [00:52:00] product development
[00:52:00] Stacy Havener: regulation or, or regulation, product development.
[00:52:02] They just wanna focus on, on, on
[00:52:04] Seb Stewart: managing money. And so, you know, what we offer is an environment where. The investors can focus on what they do best. Mm-hmm. Which is managing portfolios and also not only what they do best, but what they wanna do.
[00:52:16] Stacy Havener: Yeah. Their passion, their passion, their craft
[00:52:18] Seb Stewart: is focusing on managing money, which is totally in the best interest of our clients, and they can leave the wider Pacific business to focus on the stuff that is equally important, but is completely different in terms of the competency that's required, whether that's distribution or operations, or compliance or technology.
[00:52:34] So it's about taking the distractions away and enabling people to focus on the stuff that they want to do and that they're best at. Yeah. And we think that that leads to the best results and I think the growth of the business and the, the investment returns are the best testament that that's working.
[00:52:49] Stacy Havener: I'm such a huge fan of everything you just said of Pacific, of you, and we're here at Nasdaq, in part because going back to distribution, you've recently launched [00:53:00] some ETFs.
[00:53:01] Seb Stewart: Yes. One ETF, but I'll one EF your first one,
[00:53:04] Stacy Havener: your first foray.
[00:53:05] Seb Stewart: Yes.
[00:53:06] Stacy Havener: How's it going?
[00:53:07] Seb Stewart: It's going amazingly. It's been a real adventure
[00:53:09] Stacy Havener: coming up on a year.
[00:53:10] Seb Stewart: Coming up on a year. Yeah. It'll be January, January 22nd. Yeah. Of this year we launched, so January 22nd, 2026 will be the one year anniversary. Anniversary. Yeah. And it's been an amazing journey. Huge learning curve. Yeah.
[00:53:22] Stacy Havener: So it's probably a second podcast. We'll have to have you come on and talk about Yeah.
[00:53:26] Happily. The ins and outs of, of launching an ETF 'cause it's an active ETF,
[00:53:30] Seb Stewart: it's an active ETF and it's an emerging market, active ETF. Yes. And we are one of the very few genuinely active, and by that I mean, you know, highly concentrated emerging market, active ETFs in the, in the market. And I think we're coming up to being the largest in size as well.
[00:53:44] So we're just approaching $75 million in a UM that's in nine or 10 months. That's amazing. So it's, it's, it's, it's been met with amazing demand and we're one of the few. Funds in the emerging market, funds in the market that are genuinely active. And furthermore, I think we're, we are one of, if not the [00:54:00] only value orientated emerging market ETF in the market.
[00:54:03] So we're doing, again, we're trying to do something innovation. Yes. Which is genuinely differentiated. Yes. That is supported by an amazing team that's been doing this for a long time. This is north of South Capital and in a product wrapper that is innovative, that is actually genuinely solving the needs of clients, that is supported by the, you know, the Nasdaq that is a very technologically enabled, forward thinking organization.
[00:54:24] So, you know, we've, we felt that there was a lot of cultural alignment there. I love it. So it's been, it's been amazing. We've loved it. It's, it's been met with great success. We hope that there's a lot more success to come, but time will tell. But it's been really fun.
[00:54:35] Stacy Havener: And hopefully you'll be back in the studio not too
[00:54:38] Seb Stewart: long now.
[00:54:39] Yes. Ring the bell now ring the bell right here. Um,
[00:54:40] Stacy Havener: I wanna end with a couple questions just designed to let us
[00:54:44] Seb Stewart: please
[00:54:45] Stacy Havener: know you a little more. You've been great. I mean, again, the. You're anything but a rogue trader. But I love that that's how your journey in finance started. So I'm gonna go from movies, which you already shared with us.
[00:54:57] Okay. I wanna go to books.
[00:54:59] Seb Stewart: Yes. [00:55:00]
[00:55:00] Stacy Havener: What book inspires you?
[00:55:01] Seb Stewart: The book that I think I've read recently that, that left an indelible mark is a book called Tuesdays with Maori.
[00:55:11] Stacy Havener: That's a have, have you read it? That's, that's a classic. Yes. That's going back.
[00:55:15] Seb Stewart: Yes. So, so, wow. Have you, okay. Yeah. Tell for those, for those who don't know it, it's a, it's a book about a sociology professor called Maori Schwartz, I think.
[00:55:24] And he has a student called Mitch. Can't remember his surname. But anyway, Mitch. Yeah. And you know, to cut a long story short, Maury was an inspirational professor to this guy Mitch, back in the day. And they lose touch. And then Mitch, uh, turns on the TV one day and sees his professor, who is dying of a, of a degenerative disease, a LSI think, and reconnects with him and, and wants to spend time with him in his closing.
[00:55:48] Months to learn what it is about life that has really resonated with, with Morian what he's learned from, from life. And they have this rebuild, this incredible relationship together where every Tuesday he goes up to spend [00:56:00] time with him and learns about what is important, you know, in life from a sociologist who's thought very deeply about, about life.
[00:56:06] And the, the overarching message is that nothing matters in the world. Nothing material matters in the in, in the world or in life. The thing that really, really matters is the relationships that, that you build with, with people. And I think it's a very simple, powerful message that, that I, you know, believe deeply and, and so yeah, that really inspired me.
[00:56:25] Stacy Havener: Mitch Album. A LEO. Exactly. Thank you. Yeah. You're right. Yes. Great book. Okay. From books to places we go.
[00:56:32] Seb Stewart: Yes.
[00:56:33] Stacy Havener: What place inspires you?
[00:56:35] Seb Stewart: I think I love music. Ah, I'm passionate about, about music and the place that inspires me most of all in the world is Glastonbury, the music festival. Music and Arts festival in, in the UK that's held every or most years in June.
[00:56:50] And it's very big. It's about 200,000 people. I mean, it's, people will probably know, know a lot about it, but it for me is the most creative, [00:57:00] energetic, positive place on earth. Wow. And you know, you've got 200,000 people who come there in order to do one thing and one thing only, which is enjoy themselves without, you know, any regard for pretension or anything like that.
[00:57:12] Yeah. It's just pure creativity, enjoyment, a love for one another. And I, I think that there's, you know, the world could do. With a lot more of of that. Yes. And so that's a place that, that I hold dear to my heart. And I
[00:57:24] Stacy Havener: Was that where Louis Capaldi? That is? That is, yeah. That story.
[00:57:29] Seb Stewart: I know, I know you're right.
[00:57:30] Stacy Havener: Brought me to tears because I happen to be in London when that festival was happening this year. And he came back and Yes. Yes. You're so if you don't know, we're not gonna tell you. You have to Google that whole situation. Yeah. And make sure you have Kleenex near you because Yeah. That is. Incredibly powerful story.
[00:57:46] Seb Stewart: Yeah. It's, it's an epic environment and ecosystem and microcosm of, of, of a, of a very positive society. So that, that's the, that's the happy place.
[00:57:53] Stacy Havener: Oh, I love that. Okay. Well, the next question is music related. I don't know how you're going to decide on this. Let's pretend that [00:58:00] you're coming back to Nasdaq.
[00:58:01] You're gonna come out into the studio to ring the bell.
[00:58:04] Seb Stewart: Yeah.
[00:58:04] Stacy Havener: You get to pick the walkout. Anthem
[00:58:06] Seb Stewart: Walkout. Okay. Walkout Anthem.
[00:58:08] Stacy Havener: So this is like your hype song. What are they gonna play as you?
[00:58:12] Seb Stewart: Yeah, I, I've always thought that the song Eminence Front by the Who, if you know that song is one of the great walkout songs, and it's filled with energy and power and motivation, and it's just an epic, epic piece of music.
[00:58:28] So that would be my walkout.
[00:58:29] Stacy Havener: So people having asked this question in over a hundred podcast episodes, I have found that people either pick their song based on lyrics.
[00:58:37] Seb Stewart: Yeah.
[00:58:38] Stacy Havener: Or like the beat and the music. Is this one or the other or
[00:58:42] Seb Stewart: is it a lyric combination lyrics? No, I think it's just, it's just, it's the beat.
[00:58:45] It's just build up and power and energy.
[00:58:46] Stacy Havener: Yes. As a good walkout, Anthony. Exactly. A walkout song,
[00:58:49] Seb Stewart: that's what you need.
[00:58:50] Stacy Havener: That's right. Okay. What profession, other than your own, would you like to attempt?
[00:58:55] Seb Stewart: Yeah. Okay. Attempt or to, or to do
[00:58:58] Stacy Havener: well, yeah. Do
[00:58:59] Seb Stewart: I [00:59:00] would, I think, take enjoyment out of being a teacher.
[00:59:03] Stacy Havener: You'd be a great
[00:59:03] Seb Stewart: teacher.
[00:59:03] Yeah. My, my dad was so much energy a teacher, and I studied mass education as part of my university degree. And I think that, you know, I take a lot of pleasure in seeing other people succeed and sharing and reflecting on things that I've learned and imparting that to other people, and I think it would be an incredibly rewarding profession.
[00:59:23] It's not paid enough, unfortunately. I know. And that, that needs to be addressed. But I think that in terms of doing something which is intellectually stimulating and rewarding and leaves a legacy, that's a, that's a, that's a good one. And I would love to do that in another world.
[00:59:37] Stacy Havener: You would be, you'd make math fun.
[00:59:38] Seb Stewart: Thank you. Yes.
[00:59:39] Stacy Havener: You really would. Maybe I should've done that. Okay. No, you're, we're happy to have you here. We're not letting you go yet. Okay. What profession would you not like to do?
[00:59:47] Seb Stewart: Not like to do? Do you know what I think this is, this is relevant for, for our industry and our discussion? I would not wanna be a portfolio manager.
[00:59:55] Stacy Havener: This is full circle. Yes. You wanted to be a portfolio. I know, I know. Tell me.
[00:59:59] Seb Stewart: I would not wanna be a portfolio [01:00:00] manager. I think it is. I have the most, you know, the utmost respect for portfolio managers. I think, you know, they are incredible people for taking on what they take on and the accountability. It is a fiercely difficult job, and not only difficult from a technical perspective in terms of actually being good at what you do in a, in just an incredibly competitive environment.
[01:00:22] And it becoming, you know, even more difficult to outperform as, as the years go go by. But the, the burden of managing. Money for pensioners and savers and institutions around the world is enormous and, and more than, than people a lot of people really understand. And I wouldn't like to carry that with me.
[01:00:44] Yeah. During life. And it's very tough. And, and I, as a result, I have even more respect for portfolio managers. Yeah. But it's, it's something that I, I don't think I could do. So that's a job I, whilst I love, I love, you know, to, to work with and I, I have the utmost respect for, it's not something that I'd wanna do [01:01:00] personally.
[01:01:00] Stacy Havener: That's such a great answer and thank you. It's so true. And another thing that people don't really think about what a fund manager signs up for when they take that
[01:01:11] Seb Stewart: seat. It's another level.
[01:01:12] Stacy Havener: Yeah. It is another level of accountability. Yeah. Okay. Last but not least, and this is no time soon 'cause we're not letting you go.
[01:01:18] What do you want people to say after you've retired or left the industry? What do you want people to say?
[01:01:23] Seb Stewart: Yeah. I think that I, I want people to say that I brought an energy and a positivity to the industry and to the teams that I work in, and the companies that I work in that encourage them to work harder, to do more and to have fun in what they, they do.
[01:01:40] And I think that there's, I exude energy, you know, I'm a high energy person and you know, I studied physics at university as well, and I very much believe in the, in the concept of sort of, of forces. And, and if you want outcomes, you need to have some, some, you know, you need energy in order to get those outcomes.
[01:01:56] Mm-hmm. And so, you know, I want people to feel as though I was able to [01:02:00] harness my energy and encouraging them to be better at what they do and to do more positive stuff and to enjoy the journey whilst they're going along. So that's, that's the legacy that I would want to leave.
[01:02:09] Stacy Havener: People are already saying that about usap.
[01:02:11] Literally, when I said that we were doing this podcast, I said, the nice thing for me as the host is you have. So much positive energy.
[01:02:20] Seb Stewart: That's, we don't to say Stacey. I don't actually, Stacey need to give
[01:02:22] Stacy Havener: you all of mine.
[01:02:23] Seb Stewart: That's, that's great. So it is a
[01:02:25] Stacy Havener: pleasure to talk with you for all of those reasons.
[01:02:30] Thank you so much for making this magic happen here, Stacey. It's my pleasure. What a awesome experience. I mean, what an incredible experience. Thank you for being here.
[01:02:37] Seb Stewart: My absolute pleasure.
[01:02:38] Stacy Havener: This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
[01:02:44] The information is not an offer, solicitation, or recommendation of any of the funds, services, or products, or to adopt any investment strategy. Investment values may fluctuate and past performance is not a guide to future performance. All opinions expressed by guests on the show are [01:03:00] solely their own opinion and do not necessarily reflect those at their firm.
[01:03:04] Manager's appearance on the show does not constitute an endorsement by Stacey Haner or Haven or Capital Partners.