[REPLAY] Ian Charles & Doc O’Connor – Investing in Sports Teams at Arctos Sports Partners (Capital Allocators, EP.225)

32:55And so you really only have to do that underwrite quarterly. At the local level, you're underwriting the ownership group, the management team, the local assets, the local contracts, sponsorship, ticketing, local media rights, all of the related assets that are part of the platform. But that's just a normal investment underwriting. It's a ton of diligence time with ownership and management, third -party consultants. It's a lot of math. It's a lot of contract review. But there's nothing that complicated about it once you have access to the information and the people and the decision makers to do your work.

33:35You just got to do the work. Getting access to those deals and that information is really, really difficult. It's one of the moats around this strategy. This is not an easy sector to get approved to invest in. I would just add to that, aside from all of the performance aspects that Ian just talked about, the protected and defensible moats, the long -term recurring visible, predictable revenue streams, the scarcity of the assets, because in the big five leagues, there's only 150 of them or so. So underlying all of that, and I apologize in advance for getting on my soapbox, but underlying all of it is the fact that sports matter in our culture, in our world.

34:28As content, it's the most important and valuable content across all of media. Sports is simply great storytelling, great narratives, hundreds of unique stories that go out 365 days a year. Winners, losers, triumphs, tragedies, all of it. And like any great content has superstars and celebrities and great brands. And probably most importantly, they have incredibly passionate customers. They're called fans, fanatics. You're talking about people that have this passionate and engaged connection that exists through generations and have massive LTV. My father was a New York Giants fan. I am a New York Giants fan.

35:17My son, even though he grew up in Los Angeles, California, is a New York Giants fan. Being a sports fan is part of identity. On top of all of these performance characteristics, you have an asset class that has an unusual connection to human beings. I'm curious, when you think about this as an investment, there are a couple of things that you had said about the risk return profile that feel different from private equity. One of those is the lack of ability to lever. How do you think about the absence of financial leverage in terms of the risk -reward characteristics of what you're trying to do?

35:59Let me explain why or some of the reasons why that leverage constraint exists, and then I can talk about how we view it as an investor. So, Doc talked about why direct investments from institutional investors was prohibited in each of the leagues because historically, institutional investors either deemed sports to be no longer strategic or they got into trouble and had to sell the sports assets. And forced selling is one of the ways you impair long -term returns. If you go through a phase of forced selling, you get bad prints and it suppresses price appreciation until you can get inertia back in a positive direction.

36:48Leverage can have the same outcome, and it has historically. There have been periods of selling in pro sports that were driven by highly levered owners or highly levered structures. And so the leagues proactively put up leverage restrictions, both on the assets directly and as collateral. So an owner is not allowed to use their team as a piece of collateral on a loan. And the leagues regulate maximum leverage at the franchise level to the point at which across the big four North American leagues, the average loan to value is about 13, 14 percent. Which is nothing when you look at the private equity landscape generally.

37:43I came from a world where 40 % of everything was levered healthcare, 40 % was some kind of levered tech, and the other 20 % was highly levered industrial exposure. And all of those betas were highly correlated and levered. This sector doesn't have leverage. It has a correlation to traditional asset classes in the U .S. of between negative 0 .2 and positive 0 .3. And over the last 20 years has generated compounded returns of 12 to 14 % per year, which is about a 500 basis point premia to the S &P 500. So you've been getting higher compounded returns with significantly less leverage with negative or low correlation.

38:38This is a risk reducer and a return enhancer for most institutional investor portfolios. And our thesis is we can identify the best assets, the best management teams that have incredible visions for growth. We can build a portfolio of exposure across leagues, across metro markets, across ownership groups, diversify away that idiosyncratic risk, and generate an enhanced return profile for our investors. Doc, you had mentioned that there are only, say, in the big five in North America, 150 or so franchises. So there's a limited supply of these available. You also alluded to the leagues having an onerous approval process.

39:25So it gives you a sense maybe there's also a limited pool of buyers. Can you give a sense of what that process is like and perhaps why it isn't easier for more people to become, say, a minority owner? The leagues have become very, very diligent about researching and diligencing the background of every single owner in the league, right down to minority stakes holders. They do so out of need for protection, for reputation protection. So the risk for the leagues is very high for bad owners coming in. And so they've placed the bar very, very high to gain entry into this very exclusive club. I'd love to dive in a bit on your investment process because it's such a unique asset and space, particularly in the minority ownership.

40:21How do you go about finding the opportunities? It's probably not hard to be able to define, hey, there's 150 teams, but that feels quite different from figuring out where you can purchase stakes. I want to go back to the three kinds of deals that we do. There's liquidity to the limited partners or minority shareholders. There's also liquidity, partial liquidity to the control owners. That's category one. Category two is acquisition financing. And category three is growth capital or operating capital. Across all three of those transaction types, we've originated in the last 22 months, almost $25 billion worth of deal flow.

41:04There's a tremendous amount of deal flow in this space. If you go category by category, in the 180 platforms, we have built out as one part of a very large data platform that we've built. We have a database of over 1 ,200 limited partners in these pro sports platforms. And I always draw an analogy to the early days of the private equity secondaries market. There used to be a book called the Alternative Investors Directory. And that was the golden Glengarry leads for the secondaries market. If you had that book, you knew who to call. And so for that part of our strategy, it's like we've gone in a time machine back into 1998 to 2001, and we've got the only copy of that directory.

42:02We have this proactive origination campaign to put our team, our firm, and the insights that it has to offer, the resources that it has to offer in front of the control owners and the executives of these platforms. That whole process, that business unit, was modeled in many ways after the data science business that Barry Griffiths and I built at Landmark. It's called Arctos Insights. And Arctos Insights' job is to provide content, tools, ideas, and resources to owners and executives of these pro sports teams on a very regular basis. That allows us to have a regular dialogue with all of these decision makers.

42:51It allows us to tell them what we're doing for other owners across the leagues. It allows us to identify opportunities of untapped growth in their market or in their platform and position ourselves to be the partner of choice when there's an opportunity to partner. We're going to take a quick break in the action to tell you about SRS Aquium. Want to make sure your M &A processes aren't stuck in the past? partner with a company that's been defining the future of dealmaking for nearly two decades instead. When it comes to M &A innovation, SRS Aquium has reshaped the way that deals get done, streamlining processes for maximum efficiency and minimum headaches.

43:40Professional shareholder representation, online M &A payments, digital stockholder solicitation, SRS Aquium pioneered each and continues to set the bar for game -changing innovation. So leave the days of disjointed deal management behind and define your future with SRS Aquium, the smartest way to run a deal. Learn more at srsaquium .com. That's S -R -S -A -C -Q -U -I -O -M .com. And now, back to the show. So when you go into sourcing all of these, let's say hard to find assets in some sense, or who the owners are, how do you then go through the due diligence process to confirm that there are these stakes that you'd like to get a hold of?

44:32So the diligence process for us starts once we've identified a potential partner or a potential counterparty. And we've had some reasonable discussion around their expectations around terms. Remember, there's three layers to each of these assets. There's the league, there's the club, and then there's the platform assets that the club owns. We've done all the work at the league level. And depending on the league, 40 to 80 % of the economics for each team are generated at the league level. So even if it's a club we've never seen before from a diligence perspective, we probably have a very strong view on 40 to 80 % of the value that that club has at the league level.

45:20At the local level, our process looks just like any direct investment underwrite. Line by line, every piece of revenue, every cost, decades worth of underwriting, we think about everything probabilistically, not static case. So we have wide variations in outcomes for each of those variables, especially the longer the horizon. So our due diligence process, there are parts of it that look a lot like a normal private equity underwrite, but then there are parts of it that look very statistical in their output. I would add that our diligence extends also to diligencing the owner and the ownership group.

46:04It extends to the management and the operating group of the platform or franchise. And it extends to the likelihood of a control transaction in the next, say, five to 20 years. The other thing that we have, we have a huge roster of senior advisors. I think today we have 17 senior advisors and each of them specializes in decade plus of deep operational experience and leadership around the areas that impact revenue and value creation. whether it's sponsorship, ticketing, media rights, real estate, legalized gambling, diversity and inclusion. We have this full roster of resources that are available not only to our team during the due diligence process, but also to our owner partners on an ongoing basis as resources and advisors as they think about growth.

47:13So it all adds up, Ted, to Arctos being any kind of partner that an owner would want. We can be a partner that's purely passive, that gets our quarterly financial statements, and that's that. Or we can be a partner that is truly value -add, depending on the control owner's needs or desires. Once you're in the ownership group, I'm kind of curious, on the field, on the court, on the ice, these teams are competing against each other. And if you're a minority owner in multiple franchises, say in major league baseball, how does that nature of, call it competition, cooperation, coopetition work, and where can you try to add value and where does it cross competitive lines?

48:02So it's really simple. Anything that touches players, drafts, free agency, farm system, anything that has to do with players, coaches, we can't be involved. We can't have any information. We can't have any dialogue. We actually are prohibited from receiving any information on those topics in each of our agreements with the clubs. We've also built a proprietary compliance system. It's very much like a MNPI compliance system to detect and quarantine any sensitive competitive information about players that we might accidentally be exposed to. Where we can have some value add is on the business side.

48:52Revenue generation, value creation, platform building. So M &A, deal flow, technology, those are huge areas of value add for us. partners shared services sponsorship analytics know your customer all of these areas that touch the venue touch the ticketing the revenue side we can be involved if the owner wants our help and so what we do with each of our owners when our partnership is formalized is we put together our value -added operating plan and in each of the four verticals where we believe we have value to We work through with the owner what they want to tap into, which of our senior advisors they want access to, and how we can help them achieve their vision faster or make their vision bigger.

49:45But remember, Ted, in addition to being intense competitors on the field, on the court, on the ice, whatever it is, more importantly, they're all partners. So if Arctos or any entity for that matter can bring value to the league, it's a value to all 30 or 32 teams. How much does winning on the field of play matter to the economics of these businesses? Clearly the league sharing, it doesn't matter at all. But how about on the local side on the platform? It's very specific to league and geography. It's really hard to quantify what winning really means. In European football, it's much more of a direct corollary to winning and revenue because so much of the revenue is tied to on -field performance.

50:38In the U .S., it really depends on the league. It's less important in the NFL and the NBA given the high percentage of national revenues that each of those leagues generates. So market matters less. In baseball, in hockey, in Major League Soccer, winning is probably more important. But even in those circumstances, winning and losing is less important, I believe, than the customer experience. If you create a great experience of going out to the ballpark or going to the rink, you will make for a memorable experience and winning becomes less and less important. But markets matter. Actually, what you own matters as well.

51:29if you own your arena, if you own your venue, if you own a bunch of the ancillary assets, winning and losing becomes less important. You'd have to look no further than my own experience with the New York Knicks. During my tenure there, we were terrible. I think one year we had a 17 win season. We were awful. I believe, if I'm not mistaken, that the Knicks are the worst performing NBA franchise in the 2000s. So 21 years of some of the worst performance in all of the NBA. Yet night after night after night, the garden was at capacity or certainly near capacity. And we sat atop the revenue food chain for the entire time until the Golden State Warriors came along and beat us in many revenue categories with their new arena.

52:24But that speaks to the market for sure. And for the fact that the Garden sits in Midtown Manhattan atop the largest transit hub in North America, but it also speaks to the LTV of the Knicks fan and for the value of the NBA experience in Midtown New York. So you mentioned earlier that the last time the leagues allowed institutions in. There were a bunch of incidents of forced selling. And while not optimal, private equity fund structures generally have an end of life. Maybe that's evolving now, but many of them do. How have you thought about your own exit strategy down the road? So our exit at the fund level and the deal level, and frankly, in the due diligence process and the data science platform that we're building, we do consider all of that stuff to sort of be part of our secret sauce intellectual properties we don't talk a lot about our own structuring and architecture what we do talk about is the limitations of traditional private equity architecture and what that means for investing in these leagues so some of the leagues require that a fund have at least 10 years left in its term to be considered for approval So if you're in a traditional 10 plus 2 architecture, unless you're trying to do a deal in one of these leagues during your fundraising period, you don't qualify.

53:56Some of the leagues require that you have at least 500 or 700 million of capital dedicated to their league. Well, again, that's pretty hard for a traditional fund architecture to comply with. You're not allowed to use leverage. package you're not allowed to use the assets as collateral in a back levering package you're not allowed to have formal governance control so if you're a control buyer if you're a control LBO fund well the the L doesn't work and the B doesn't work and if you've got like your four pillars of plower or your flywheel of excellence or whatever bullshit's on slide three or your fund deck it doesn't work here.

54:41You have to be prepared to be a passive partner over a long horizon with no leverage. And that's hard for traditional fund architectures to get comfortable with. Then you have all sorts of other constraints around portfolio contamination by owning prohibited assets, conflicts with leadership within your firm who might own stakes in teams. It creates this labyrinth of restrictions that make it really hard for a traditional private equity firm to get approval to move forward, both from the leagues and from their own investors based on how they've marketed the fund. So the other side of the absence of leverage you alluded to earlier was this sort of private equity with growth opportunity.

55:34And I'd love to hear you alluded to eight to 12 different areas of growth for these assets going forward. The first that comes to mind is sports betting. It's been the most publicized, the most talked about. And sports betting is a huge tailwind for all of sports, particularly in North America, given sports betting has been allowed in globally elsewhere for quite some time now. Sports betting enhances the whole sports value chain. It increases fan engagement, which increases and translates into higher media values and higher LTV. It increases sponsorship. In fact, sports betting has become an entirely new category that didn't exist five years ago.

56:21It increases tech integration with sports. So as an example, the data business, which has created all sorts of investment and equity opportunities for leagues and teams. So sports betting is a big growth opportunity in Tailwind. Media growth. Media growth is going to continue for sure. As I said before, it's the most valuable content in all of media. That trend will continue and sports will be on the leading edge of this transformation from our legacy media ecosystem to what comes next, which is likely a much more direct -to -consumer and streaming landscape. And that road will be a little bit bumpy here and there, but ultimately, because it will lead to a direct -to -consumer type of offering without middlemen, the value to leagues and teams will only grow.

57:23There's international expansion, which all leagues are definitely focused on. They're all expanding their footprints internationally. The NBA is probably leading the way for most U .S. leagues in that regard. Growth exists, what we've alluded to before, with respect to platformization. This horizontal consolidation as well as vertical integration across other sports, media properties, real estate, live entertainment, hospitality. You're seeing a lot more of that and transforming the landscape. And then I think overall, this trend that's happening in our world and all forms of content, this trend towards direct consumer and really owning the fan will only benefit leagues and teams more greatly in the future.

58:14Only things I would add to that on the growth side, you've got next generation venues. You have new venues to be built and you have a ton of technology upgrade coming to a venue near you. Frictionless checkout, self -checkout, robotics, parking. Then you've got all of the real estate around the venue. it's a massive 20 to 50 billion dollar opportunity over the next five to 10 years the digital assets and crypto all the nft craze that's being driven by the intellectual property that's coming out of these leagues it's a tremendous portfolio of growth options that all require capital, perspective, a plan, an execution.

59:09What do you see as the biggest risks to the strategy? There's a couple of risks in this ecosystem that are very unique. I don't worry about the same risks that impact every asset class, but this asset class does have some unique risks. One is the long -term league -level media contracts. Those are a big part of the revenue stream for each of these leagues. for us a big part of that risk has been taken out of the system for the next seven to 12 years because major league baseball the national hockey league and the nfl and a couple of the european soccer leagues have all repriced their national and international rights deals in the last 18 months major league soccer and the nba will be doing that soon so i think that risk has actually come down since we started the firm.

1:00:02I mean, look, the obvious risk that we weren't smart enough or creative enough to think about when we started the firm was a global pandemic. No one, no league, no team, no vendor, no insurer had ever envisioned a scenario where you might actually play games without fans. And in fact, that's exactly what happened And after the first six months of the COVID -19 pandemic abated and the leagues had confidence that they could put their players on the ice, on the court, on the field in a safe environment and provide content to their partners and their fans and the consumers, that was a risk that we never really envisioned.

1:00:46So I think big, unique risks are venue safety, long -term meteorites, and then the collective bargaining agreements with the players. Those are the three big unknowns that are unique to this strategy. All I would add to that is that in the last 100 years, these leagues and teams have survived many global pandemics, global depressions, world wars, nuclear war, a whole host of environmental and physical catastrophes. And yet they persist and they're durable and they go on. In a relatively short period of time, you've raised a large institutional fund. You've been implementing on the strategy. You raised a SPAC.

1:01:34I'm really curious, what do the next couple of years hold for Arctos? I think when we take a step back, we're the first mover in this market. And this is one of very few markets where scale and information compound to create even bigger advantages. And so we're building this intellectual property advantage in this vertical. We intend to continue to scale and grow the business of partnering with owners of premier sports assets. What we might be able to do is broaden out the definition of partner for those owners. We could use this intellectual property, partner with our institutional investors and provide solutions around real estate that are anchored by sports assets into the credit market around sports assets and live entertainment.

1:02:35Those are obvious areas where our IP, deal flow, and brand could provide excess return for institutional investors over and above the expected risk -adjusted return. Great. Well, Doc, Ian, I can't let you guys go without asking a couple of closing questions. So let's have at it. What is your favorite hobby or activity outside of work and family? Doc, why don't you start out? I guess I'd call myself an outdoorsman. I fly fish. I fly fish all over the world. I'm a snowboarder. I like to be in the outdoors. It's my favorite hobby. Ian? Love to exercise every day. That's my thing. If I get to spend time with my family, outside of family and work, I got to get to the gym.

1:03:24All right. Well, that might dovetail into the next one. Ian, what's your most important daily habit? That's what it is. I got to get my 5 a .m. exercise in. It's where I get my mind right. It's where I do some of my best thinking and reflecting. Doc? So we have four rescue dogs at home. Each was rescued from a kill shelter. My wife is very involved in the animal welfare movement. And my daily habit is walking my dogs. It reminds me to be present. It reminds me how fragile and precious life is given we saved each of them from a certain death at the hands of the shelters. And it keeps me grounded.

1:04:08It gets my mind right. Doc, what's your biggest personal pet peeve? Ian's going to love this one. Oh, yeah. My pet peeve is practical jokers. And my partner here happens to be a really, really talented and creative practical joker. If I can, I'm going to digress for one second and tell a story. It was my birthday. It's in March. During the pandemic, we spent time, most of the time in Jackson Hole, Wyoming. And I went out fishing for the day. I took the day off and my wife calls me and says she just had her vaccine and she was saying she was having a bad reaction to the vaccine. I had to get back home.

1:04:51I come back home and just as I'm walking in the door, I see this group of people at the end of my driveway, about 10, 12, 14 of them. They're all dressed up in fishing gear and they're walking down my driveway. and I immediately realized this is some practical joke that my partner's pulling on me, given I told him at one point that I don't like people poaching my fishing. So they came and said, hey, we hear there's good fishing around here. They sang happy birthday. They did sing happy birthday. It's nice of them. So it's practical jokers. Ian, how about you? I hate bullies. Full stop. professional bullies, kid bullies, community bullies.

1:05:39I was bullied when I was a kid, like a lot of people were. It pisses me off. And whenever I see it, it really bugs me. I'll take practical jokers all day. I just can't stand bullies. All right. How about on the investment side? What's your biggest investment pet peeve? I'll start. Since I'm a relative newcomer to the private equity world, it's the sheer volume of jargon and acronyms. And it's as if I was dropped into downtown Tokyo and I don't speak Japanese and I can't read any of the signs. I assume it's a moat that gets put up by most private equity people to keep others out, but it's this inside language that it's taking me a long time to learn.

1:06:24Yeah. Mine's actually probably pretty similar. My biggest pet peeve in investing is a lack of awareness by the practitioners, professors that kind of study the asset class and try to really tease out alpha versus beta. And if you look at the research, I think it's something like 90 % of the managers in alternatives don't create any excess return, net of fee and carry. But they talk like they're shaping these industries and molding these businesses and driving these outcomes when really they're along for the ride. And so my biggest pet peeve is GPs that don't understand the difference between alpha and beta.

1:07:15That drives me nuts. Doc, which two people have had the biggest impact on your professional life? That's a difficult question to answer. I'd say the first that comes to mind is Lorne Michaels. He was my client for more than 20 years, and he's an extraordinary human being more than anything else. But he taught me, I think, two things. Number one is the power of relationships. His entire life and career has been driven by the strength of his relationships. I've never seen anybody better at that than Lorne. And the second thing is I think he integrates his life and work in a truly seamless fashion.

1:07:59I'm not a believer in this work -life balance idea. Work is life. Life is work. It's all one. And he's probably the best practitioner of that that I've ever seen. The second was Michael Ovitz, who was my first boss and the founder of CAA. I learned a lot of things not to do with Michael. It was probably just as much as important as what I did learn from him, but he really showed me what hard work looks like. I didn't know it before I arrived in the mailroom at CAA, and I saw up close what drive and ambition and hard work looks like. And I think he taught me another thing, which was he knew no limits in his life.

1:08:44He believed that how you spend your time is who you are, and he chose to spend his time in a very directed and mission -focused way. He never saw the limitations of being an agent. It was only possibility. Ian? My first one is my wife, Jamie. I've known Jamie since I was 17 years old. Actually, I've known her since I was 13 years old. We grew up in the same small town in Alaska. but she supported me for so long but in two very important points of my professional career she was the one that kicked me in the ass and said you got to go for it the first was Colin McGrady and I wrote the business plan for Cogent my wife was a special ed teacher and she wasn't making any money I was about to leave my job we had student loans to pay we couldn't make rent.

1:09:42And she said, you got to try this. You've got to do this. And that changed our lives forever. And three years ago, she bought me for Christmas, a little crystal bear. Because she knew that I'd been like sitting on this idea of the name Arctos for a long time. and she just said i think it's time i think it's time for you and that was before any of this had ever really come together so jamie's number one number two is howard marks howard marks is the first gp i ever met at that fund of funds and this is in like the dot -com vc heyday and here's this guy talking about debt and restructuring i was like man this guy doesn't get it like he's totally missing the opportunity here.

1:10:34Sure enough, tech market melts down and I'm going through some old flip books on my desk. I was like, oh man, this guy was right. And like so many of your listeners, I've just consumed his memos and his books and the way that he so clearly articulates the power of cycles and margin of safety and value. But Howard has made time for me personally at several really important inflection points in my career. Even when we were starting Arctos, he was one of a small group of people I reached out to and said, look, here's what I see. Here's the opportunity as we're thinking through it. What am I missing?

1:11:14And for someone who's had so much success, such an incredible person in this industry to make time for people that are just trying to give it a go and share his perspective and just a couple kernels of encouragement. I don't think he appreciates how powerful those little nudges and those little windows of time that he's given so many people, the impact that it had on their careers. And for me, it was incredible. All right, Ian, what's the biggest mistake you've made and what did you learn from it? Partnering with me.

1:11:49the biggest mistake not being a very good listener and not really realizing when i'm not present for the people that i care about i didn't even know what the heck that meant and then people i cared about helped me realize that i was tuning them out i wasn't showing them how much they meant to me in just the way that I carried myself. And so learning how to be a better listener has been a challenging part of my walk for 10 plus years now, but I hope I'm getting better because it can be costly if you screw it up. That was a big mistake I've made that I have made for big chunks of my career. Doc?

1:12:33Well, what comes to my mind is not necessarily the biggest mistake, but it was the most important mistake. I was just made an agent off of Michael Ovitz's desk and I was thrown into the literary department and it was my first deal. And I had absolutely no idea what I was doing, none at all. But I thought that I needed to have all the answers. And so I just plowed ahead and I made every mistake imaginable, all in the course of literally like a day. And I guess the learnings from it was that I need to slow down. I have to move deliberately in everything that I do, and that I don't have to have all of the answers all of the time.

1:13:18It was an important learning. I remember it vividly to this day. Ian, what teaching from your parents has most stayed with you? My father was a mechanic. He was a laborer. Busted hands, busted back. And best I could tell, he hated his job. He loved the people he worked with, but he just, it was a grind. He would always tell me, anything's possible. If you put your mind to it, anything is possible. and the contrasting nature of that statement and how hard he had to work always stuck with me and my mom my mom taught me to believe in myself or she tried to it didn't really stick for a long time but they were both really good about just constantly saying if you put your mind to it anything's possible.

1:14:17Don't give up. And I'm grateful for that. Doc? I think that most of the things that stick with it come from my father. My father was a World War II veteran. His oldest brother was killed in the war. He was in the infantry in Italy. And he often said right until the day he died that he was living on borrowed time since the war. So I think I learned a couple of things from my dad. Number one was the fragility of life. But secondly, my father, who went on to have real success in the advertising business, ended up being the CEO and chairman of his advertising agency, a global agency. He treated everybody with respect, no matter who they were.

1:15:06And if he ever saw us in any way disrespecting any other human being, no matter their walk in life, he had hell to pay. He hated that. And he instilled it in all of us and in our family. All right, guys, one more. What life lesson have you learned that you wish you knew a lot earlier in life? It goes to some of the previous stuff that I've said. It's about being present in the moment and enjoying everything, The ups and the downs, the wins and losses, and probably most importantly, the struggles. Earlier in my life, I was always so anxious to move on to the next thing and the next thing and the next thing and not to appreciate what was happening in the moment.

1:15:54There's lots of summits and every one of them is a false summit. work is a continuum and you have to enjoy the day -to -day of it in all of its entirety. I think I've, as a result of that, Arctos, for a lot of reasons, has been my best professional experience by far for that understanding. Ian? To have courage. Change is hard. Being an entrepreneur is hard. Being an investor, it's hard to do something that nobody else is doing. It's lonely. I wish I'd learned earlier to trust my gut and have courage. Doc, Ian, thanks so much for sharing the story and taking the time. This is great. Thank you. Thanks, Ted.

1:16:39Much appreciated. Thanks for listening to this episode. I hope you found a nugget or two to take away and apply in your investing and your life. If you'd like what you heard, please tell a friend and maybe even write a review on iTunes. You'll help others discover the show, and I thank you for it. Have a good one and see you next time.