Space, Robotics, and the Next Investment Boom

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1:29Carol Massar:Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. You know, we talk a lot about the public markets and we focus on that a lot. We've talked a lot about fixed income today coming off of the Fed decision. I feel like our next guest definitely paying attention to those markets, but looking at both in the private world and then also thinking about maybe how to take them public. Yeah, we got a lot to talk about with Joe Magazine. He's a partner at Fortuna Investments. He's on set here at Future Proof. He's also Miami Beach City Commissioner.

2:06Welcome, welcome. Trading the East Coast beaches for the West Coast beaches. What do you think? Well, thank you for having me out here. This is such an incredible event. What Matt and his team, Josh Brown, have put together here at Future Proof is you have to really be here on the ground. to appreciate the scope, the camaraderie, the fun, and how much work actually gets done out here. You might look at it from afar and say, oh, man, this is a conference on the beach. This isn't serious. People are in shorts and polos. There's a lot of serious people here, a lot of serious firms. The who's who of Wall Street is out here, and they've done a great job curating, and we're really excited to have brought this special event to Miami Beach.

2:46Oh, go ahead. I was just going to say, Joe, you work at this really interesting intersection of sort of like public companies, private companies. You're this private equity venture capital hybrid. Explain what you do at Fortuna and sort of where it fits in the ecosystem. Yeah, we're a great America first venture capital firm. And we do have that hybrid of a private equity field because we don't traditionally just do a lot of passive investing. We have had rounds in issuances like SpaceX and Rocket Lab and things like that. But our more bread and butter model is to find great founders, great companies, some of the technology that is really on the frontier of American exceptionalism, and look to take an active role.

3:27More of a partnership, but we won't just give a dollar and go away. We will look to provide that strategic advisory, the infrastructure, whether it be CFO, accounting, relationships, networking, and it's access to the public markets, right? If you look at just some of these IPOs that have happened over the course of the, well, SpaceX and when we see Anthropic, I truly believe at some point in time it will become a societal issue where these are creating unprecedented amounts of wealth in such a concentrated amount of hands. If you look, what, just 15, 20 years ago when Amazon won public, a$400 million market cap, right?

4:08And now these companies are - $400 million. $400 million, right? Yeah, yeah, yeah. And I said it, and I almost second-guessed myself, but yeah. But think about the wealth that that has created for doctors, for teachers, for lawyers, for the everyday person. That that is just not available when these companies are staying private until they get into a$1.5,$2 trillion market cap. So we truly believe in a model where if you take these companies public at an earlier stage, that's not an exit into the public markets. That's providing the course. There's no incentive to do that. But why do you want to be bothered by the regulatory challenges of being a public company?

4:47Quarterly calls. You're annoyed by people like us calling you and saying, hey, come on our show. Do I have more gray hair than you, Tim? The incentives just aren't there for that. And that's why these companies stay private for longer. And even right now, you're looking at things like Anthropic. And you're wondering, well, do they really have this incentive to go public now with all this scrutiny and the S1s that they'll have to file and things like that? But I'm the biggest believer in our capital markets. I got my background. I started my career in 2005 at Merrill Lynch on the Structured Credit Trading Desk.

5:18And if you look at how things have changed, I think that is one of the primary drivers of what has changed is how our capital markets function. And we are huge believers at Fortuna in American exceptionalism. And when I think about what competitive advantages America has versus the rest of the world, make no mistake, the world is better when America leads.

5:41Carol Massar:Well, I want to jump in for a second because some of your plays, when I look at the sectors that you are focusing on, nuclear, critical metals, defense technology in space, robotics, data centers, automated industrial manufacturing, in many ways that plays to this administration and the things that they've been very supportive. and you're taking a lot of companies public. Some would argue they need a little bit more time to be private. Is it fair to say that you're taking advantage of kind of the current environment and administration to take these guys public because it's an administration that's very supportive of these industries?

6:17Carol Massar:And that could change come midterms or who's ever in the White House next. Absolutely, but the industries that you just mentioned, while you could have made an argument before that there was some partisan nature to that, There are such critical elements for where America is heading right now that this is going to last across administrations, right? Whether it be your iPhone or an aerospace or in defense technology, what is missing? Critical minerals, critical metals. That doesn't matter who is president. Right now, we're relying on China for that, right? I would say, and we've done a lot on critical metals and minerals.

6:57One of the reasons we rely on China is because it's a pretty bad business. The margins are really tough. It's tough to refine this stuff. The environmental impact is really tough. So we haven't wanted that in the United States. Is there a way to do that that makes economic sense without government intervention? Yeah, and when you say government intervention, I think where the government can really play a part is in helping facilitate. We could talk about whether it's right if government takes some of these equity pieces or things like that. That's another conversation to have. But what government can really do is help with things facilitating that process, the permitting issues, making it easier to come to market.

7:35Right now, if you look in the copper mine, right, if you look in the copper space, what it takes to pull a pound of copper out of the ground now versus what it took 20 years ago, this is a race about who will decide the future of the world. The U.S. versus China. And the government doesn't have to be there as an equity partner in it, but they have to sit there and help facilitate a more accommodative environment.

7:57Carol Massar:Still with us is Joe Magazine. He's partnered for Tuna Investments, also a Miami Beach City Commissioner, and he brought Future Proof to Miami. How big is the Miami Future Proof? So we started at about 3 ,000 attendees, and I think this year we're going to have it in March. We're actually going to look to surpass what we have here in Huntington Beach. So we're going to aim for about 5 ,500 to 6 ,000. How is it different than this one? Huntington Beach is amazing. It truly is. This is my first time out here actually seeing it on the ground. In Miami, we have a lot more infrastructure around. So some of the satellite events are not right here in the booth, but actually outside in our city.

8:33And that's one of the reasons why we brought it, because it really looked to move with the direction of our city that we're moving in, all the wealth, the businesses, the finance that is relocating to Miami, and what follows that. So it's not on the beach? It is. It's on the beach, but some of the nighttime events and things like that, then it'll shift to our world-class restaurants and iconic hotels that I'm sure you're all familiar with. So let's talk about this idea of Wall Street South. I mean, we've been talking about this for five years at this point. It was really big post-pandemic. There were concerns that there was a talent exodus out of New York and a wealth exodus out of New York.

9:06It's kind of played out. It kind of hasn't played out. My understanding is that some of the major financial firms have a really tough time finding talent in Florida right now. It's all in New York. So it's not a zero-sum game. And I don't think we will look to ever surpass New York City. I grew up there. I spent 15 years on Wall Street there. We are not looking to overtake New York City, but we're looking to be different than what we were. We want to bring that same sense of optimism and opportunity where if you're a 20-year-old grad out of college, You can go to Miami and work at a venture capital firm and take an aerospace company public or work on the next technology that's changing the world.

9:46Will we ever have J.P. Morgan or Goldman Sachs headquartered in Miami Beach? No, likely not. But can we be better what we were than 10 years ago, 5 years ago, 2 years ago? Yes, absolutely. We're creating that infrastructure, that ecosystem. It's no longer just the wealthy people that are moving there, but it's the employees that they're bringing, the opportunities and the jobs that they're creating that is really exciting. So the build-out continues. The build-out continues. I'll never say, oh, we're going to be the next New York City. I don't think that's what we strive to be. Like so many other things, we do it in our own Miami way.

10:18And that is at a smaller scale, but it's relative to what we were before. Before, you either moved to Miami when you made massive amounts of wealth, or you moved there, or you lived there, and you stayed in that same kind of almost gas system, if you will, as where you've begun. What we're looking to do is provide that upwards mobility of opportunity to truly create a better economy that works for everyone.

10:42Carol Massar:What is the trickle down? Because we have done stories and reporting out that how Florida, Miami are more expensive than New York City in terms of insurance, homeownership, so on and so forth. I mean, as a result of this, are you squeezing out a lot of the people? You talk about upward mobility, but are you squeezing out some of those people who would love to kind of move up the chain? So we've had such tremendous success, but that actually comes with some challenges, right? Whether it be infrastructure, education, we're working on bringing great public and private schools to Miami. But I would much rather be in a position where we are looking to determine how we smartly grow and deal with some of those issues than how to manage our decline.

11:25You're really seeing a dichotomy of visions across the country. those locales that are penalizing success, that aren't facilitating entrepreneurism. Right here in Miami Beach, we actually just cut our tax rates two years in a row. We have our lowest millage rate in the last 10 years, budget surpluses. We're funding education, the things that matter. Of course, that comes with challenges like resiliency, infrastructure. But we're in a really unique position where now if you live in Miami or Miami Beach, hospitality isn't the only job that you can have. You can go and work for one of these big wire houses or wealth management firms or the family offices and hedge funds and technology companies.

12:04We knew we were going to get some influx from New York City. But what we really didn't expect was the tax exodus that we were seeing when Seattle, when California are proposing some of these wealth taxes. Sometimes government's best role is just getting out of the way, right? It's helping facilitate. and when you see some of these high-tax states that are penalizing some of the success, we welcome it and we rely on that trickle down. I'm a great example of that. My business partner, he was a founder in Canada, Los Angeles. Our office is a Class A++ office space. It used to be Burger King, and now there's AI companies in there, venture capital, hedge funds.

12:44That is a Miami Beach that didn't exist five years ago. And you can still get a burger somewhere. Of course. I mean, we don't lose what's in our DNA. And probably more so than burger, you can get a great pork in the Cuban cuisine as well.

12:58Carol Massar:He's always hungry. 30 seconds, Joe, left. We've been asking everybody, biggest risk when you look at the market outlook, just quickly. I think it's certainly if there's going to be this AI backlash, whether it be from a local perspective on this backlash against data centers. But that is really where it is. AI is driving so much, the tech investment, so much of our economy, if there's any type of hiccups in that. I don't mean a weekend hiccup like we just saw right here, but something that is going to call into question the fundamental shift towards that. But I think there's too much on the line, not just for our economy, for America, for the future of this world, to really have that be a hiatus.

13:38I think we're really going to have some exciting times ahead.

13:41Carol Massar:All right. Well, listen, thanks for stopping by. I really appreciate it. We'll see you in Miami. Is that a promise? Well, we'll try. You've got to talk to the bosses. Tim, I have that cafecito waiting for you, my friend. Hey, listen, if the bosses say it's cool, I'll be there. Excellent. Well, thank you for having me. Thank you. Joe Magazine is partnered for Tuna Investments, also a Miami Beach City Commissioner, as we said, brought future proof to Miami.

14:05Bloomberg Businessweek Daily is brought to you by HPE, bringing you the self-driving network, a network that's self-optimizing, self-healing, and self-protecting, and only continues to get smarter. Learn more at hpe.com slash networking.

14:19Carol Massar:Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com by selecting Work Mode, available on Plus and Pro plans.

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