Avsnitt 572 - Nästa spännande sektor att titta på

35:37Nu verkar det ha blivit postponed. Alltså man har skjutit i mötet på framtiden. Men det var varför jag gick lång förra veckan. För ingen pratade om att Xi och Trump skulle mötas 31 mars till 2 april. Trump skulle alltså på stadsbesök till Kina. Det är första gången som USA är där sedan 2017 tror jag. Jag såg bara framför mig en brohug när de kommer ut och Trump står och äter dimsum eller står på kinesiska muren och säger Great Wall, I have a better one. but it's a lot of charm and I don't know I don't know if I'm going to be short before the market starts to be in it And now they're going to be on a month Yeah, exactly, and it's not like a positive but I think even that they can be a brick in the game China and Asia are the ones that are open to the most they import 20 % of their oil from there and they need the oil China has 25 % of work all of the work all of the work If not the 20 % of the oil coming, what will it be?

36:41They will not to use it as they do. Their production will go down. I know that all of us think that Kina and the part of it is safe. If you have 30-35 % of the work of working with young men, then all of us are afraid of demonstrations and all that. Or even more than anything. So it's not an easy match for us. heller. It's not like that. In West have we on all these leds that are not a chance to see 150 drag out. Look at the statistics from China. Uppenbarligen has not been in China. They have no idea of what drag they should do. So, Hormos Sundet is something that all the world is interested in that it will be open.

37:26And then I have a little bit of a look at how it will open. It's like that Ju längre du håller på, folk börjar kolla på socker, gödsel. Det sprider sig till fler sektorer. Så där kan man ju kolla om man söker vinnare runt om. Hur många jämför med Houthi-rebellerna som har lyckats strula till i Röda havet. Skillnaden där är väl att det inte fanns den här militärkapaciteten i området. Sen i helgen så bombade ju Kargön, den 95 % av iranska olja, går via den ön till Tankers. I think they're going to put in Marines and save the island. The USS Tripoli-skepp with 2500 Marines is on the way. From Asien to Mellanöstern.

38:12And then it's like that the one who controls the island controls the iransk regime, regardless of which regime that sits there. Because it's the pengakran. So it's a pretty good trumf to have on hand. It looks like you're a war reporter here, which is playing a schack. I think I should zoom out a little and not just look at now a drone to in Oman it's not as important as the big old pencels No We'll see, it's like focus has been a little here from we'll see what's happening next week Next week it's a quarter-losing on Friday we'll hint at March-losing is always very big many contracts, many products Allt möjligt.

38:57Så på måndag kan det vara en helt ny värld på börsen. Och då brukar jag alltid göra något dumt. Och så ligger flöden kvar från lösen. Och sen måndag eftermiddag, tisdag, brukar man se de rätta ansikten. Ja, men det är en vansklig tid. Slutet på mars. Du brukar vara i Thailand. Du brukar krascha här. Och vända. När jag kommer hem så brukar jag alltid börsen vända upp. Jag är ju så här kortsiktigt lång S &P nu. Mötet blev ju uppskjuten mellan Xi och Trump. Så jag är inte alls säker på att jag kommer att ha den positionen how long as possible. Absolutely not. So, but as you said before, you have a lot of cash and you can hold tongue right in your mouth.

39:39Ibland must you not be a and now it's very asymmetric. Yeah. We have a fill or kill. I will say that fillen has been a little American stuff. We talked about Klarna for the week. It was a very inside-go. I got to buy it right when it came. I had a little other stuff, so it was on the hook. Killen, it will be my handle today. I think I did 5 and 5. I got to come a little bit. Just this, handla 9.00. You can come in at 9.30. What do you do for anything? How are you doing? You can go to the top and you and I are doing some good affairs. Man behöver inte vara hjälten i 00 Det är väl amatörtimmen Amatörnens halvtimme Sen kommer du in till desk Nej men om infill Är väl

40:37Om man tittar på Oljemarknaden så är den Jag vet inte, jag kanske är helt knäpp Men jag tycker den är ganska sansad Om man tittar på oljeterminerna Så den priset är in that the oil price will be much less until the sommar and even longer out absolutely less it's a lot of skrik and gap but the market says something else that I note it and it is or so to underscate the market that's on to say two years exactly kill it is if the market actually has a problem then it can be very volatil very cool for us so I think it will be a very nice in my field my kill is that it's hard to see a risk of reward it's a lot of kortsiktig when you have to go back like for the week we had a day where the first time we went to go back up if you look at it's a very tough it's a understatement and it's the end I can say for the two weeks now under Iran it's a lot of things in the week you follow all you read This is my kill.

41:48You read everything, you follow everything. And at the end of the week, nothing has happened. Index is a lot of change. It's a half percent, but in the middle of the week, it's just a chaos. And then at the end of the episode, we have an interview with CIO on Hilbert, where we both talk about market, drive a hedge fund and crypto. Very spännable. Russell Thompson, he's he.

42:17And this week we have with us Russell Thompson from Hilbert Group who will talk about Hilbert 2.0. The company has made a lot of changes, interesting things and that we will talk about now. So I welcome you, Russell. Very welcome to the Fuller of Kill podcast. Very nice to be here. Thank you for having me. And for our listeners, we have had your CEO last year. He was joining us. Tell us a little bit about you. You have come into the company after that, I believe, or if it was during the merger. So what is your background and how did you

42:52Russell Thompson:come to join Hilbert Group? Well, I'll try and keep it relatively succinct because I think a lot of the, certainly the Hilbert shareholders or investors in our business are sort of familiar with my background by now, but I'll do a quick five minutes on it. So I've been a trader on a variety of trading floors since 1990. So I was actually on the trading floor when Soros took Sterling out of the ERM. So I'm an old grizzled global macro trader. I ran trading for HSBC, their prop trading in Hong Kong. And then I was with them during the Asian currency crisis, which was very interesting, 1997. And then I moved over and I ran Asian trading for the old AIG trading, which was the good AIG, not the one that broke the world up.

43:52Russell Thompson:And then in 2001, I founded a hedge fund called Cambridge with my partner, Peter Hendricks. And we ran that until 2000. We sold that in 2017 or 18. I can't remember which. It took about 18 months to actually get the deal done, as these sort of private asset management transactions generally do. And we went from zero to 3.5 billion in assets under management over that period. It was a quantitative global macro fund. And, you know, we survived a whole raft of, as you can imagine, through that period, you know, the global financial crisis. Pigs crisis. Yeah, exactly. A lot of Russia, a lot of things.

44:42Russell Thompson:So Peter got, unfortunately, sick with cancer, terminal cancer, back in about 2016. And then we made the decision to sell the fund. And so we sold it to Mesereau Financial, who are a big Chicago-based fund of funds, in either 17 or 18. And then I founded my own family office in Monaco. I've actually been in Monaco about 15 years. And that family office then founded or seeded Liberty Road Capital, which was an asset management business that was just focused on the digital assets world. I had three founders of that. So crypto. In crypto, yeah, yeah. And we did the traditional bit more high vol stuff, but the stuff that we were able to raise money in was much more low vol, balance sheet enhancement type of stuff.

45:40Russell Thompson:And then we did well on that. We grew assets in that. And then in 2024, I met Nicholas and Magnus, who are the two founders of Hilbert, along with Benali, who was ex-Goldman. And I tried to hire Benali into Liberty Road and didn't get her. And Nicholas and Magnus did. But I've always had a lot of time for Benali. I think she's an absolute rock star and very solid anchor in terms of leading the business forward. So we started sort of discussions in the summer of 2024. We got to some broad agreement on a deal at the end of that year. And then we actually implemented the deal in end of March of 2025.

46:23Russell Thompson:So we are less than a year into what I call Hilbert version two. All right. One question, like with your solid background in traditional finance with risk management and all that, what made you do the leap into the digital assets world and crypto? Was it just opportunity-based? Well, I bought my first Bitcoin in 2012. And this is quite well known too, but I'm one of these poor saps that have, you know, 300, 350 Bitcoin in a wallet with the key that's been lost. One of the very old, when you had to download the entire blockchain. Shane. So I've had interest in Bitcoin, especially since then, but I'm really not a Bitcoin maxi and I don't lie awake at night praying to the Bitcoin gods that the price goes up.

47:18Russell Thompson:I look at it as a high volatility asset that can fit into a global macro portfolio. In fact, We actually have a global macro product now live in Hilbert. But I'm very pragmatic about it in that I look at it with a realistic lens and say, look, will this go up? Will it go down? Where are we in the current world environment? But I thought it was quite interesting technology and it was something different. I'd sort of been there and done it on a global macro. and no one at the time, if you're going back to 2017, there were very few people that were doing asset management businesses in digital assets then.

48:03Russell Thompson:No, definitely. So it was sort of something that was a bit new, and I like the asset class. I like high volatility. Yeah, you trade them at heart. Most traders do. Yeah, we can testify to that. And why was Hilbert interesting for Liberty to merger? What did they come to? Because people sort of think that to build a rounded world-class asset management business out, you have to just raise money and then generate returns. And obviously, both of those two things are very important. But I'm not interested in getting$1 ,000 out of a retail guy. You know, I wanted to build an institutional business.

48:47Russell Thompson:And institutional businesses have to tick all of Maslow's hierarchy of needs, have to tick all the boxes. So you have to pass compliance checks, KYC, legal checks. You have to have the risk management in place. You have to have the backup facilities. It's an endless list of things that you need to do. And Hilbert had the vast majority of those things in place because of the requirements from the listing. and they built out the operations, they built out the UI. They had in-house legal already, very good back office. And by the time I was done with Cambridge over those 17 years, we had that to a very high degree.

49:32Russell Thompson:In fact, we pulled an SEC audit because one of our clients was a huge pension plan in the US. And the SEC report on us after that audit was we were one of the best firms that they'd actually reviewed. but that took years, years. Really, we started getting that right after we had a few shocks during the global financial crisis. So really, we're talking 2007, 2008, over the next 10 years. And it's a pretty thankless job to do that. And I didn't have the heart to go and do it again in another business. And when the opportunity sort of fell into our lap, that was already done from these guys. And plus it was a listed business, which was very interesting to me.

50:21Russell Thompson:So yeah, from our perspective, from myself and my co-founders, that was the sort of the hook that got us in. And what is the business model? You have funds. The pitch for Hilbert, for the listeners who's not familiar with Hilbert Group. What do you do? We have, you can invest via our products. If it's not going to be a significant amount of money, but it's going to be over$100 ,000, we have Cayman funds that you can invest into. And we owe all of the infrastructure around that. So an administrator, custodian, all that stuff. We actually custody via Copper Clear Loop. So we have no counterparty risk for our investors either, which is very important.

51:05Russell Thompson:Going back to 2017, we were one of the first people, Liberty Road, actually on board with copper, because that was a huge hurdle at the time, because people who had significant Bitcoin did not even, even if you could generate 50 % for them, they wouldn't give you the Bitcoin because of the counterparty risk, the hacking risk. So that problem got solved by copper. So that's all incorporated in our fund structures. A lot of our institutional investors are invested via SMAs. SMAs are? They're managed accounts. Managed accounts. Right. We don't generally take any investor for under 10 million into an SMA.

51:46Russell Thompson:It's quite a lot of work for us. It's also a lot of work for them. 10 million Swedish crowns. No, no, dollars. Dollars. And then we have an execution platform where we trade our funds and all of our SMA clients pari passu. So they get executed at the same rates. So the business, but to me, it doesn't really, that sort of is the back end stuff that I just have a pool of capital that I have to generate alpha on and then manage and run the risk over. And that pool of capital is one pool, depending, well, one pool of, In Basis Plus, there's another pool in our other products, and we have a multi-strategy.

52:26Russell Thompson:We have now our global macro. We've acquired Enigma, which I'm sure we'll talk about, which is another pool of capital. So, yeah, that's sort of – and then we have a significant strategic relationship with Zappo Bank. In fact, Libby Road had a relationship with Zappo Bank previous as well, and so we run their structured credit fund as well, which is a different fee structure. So all of our fee structures, our SMAs, our funds are what I call an alpha fee structure. So generally two and 20. Someone, if they're going to give us a lot, we'll negotiate a bit on that. And then it's a different fee structure on the structured credit fund.

53:07Russell Thompson:So they have different values to us as a business. And in terms of what the market cap and what the valuation of the business should be, obviously the multiples are different depending on whether it's an alpha product or it's, you know, nothing, not the lower fee structure things aren't beneficial because they're very good because they provide a baseline level of revenue for the business. So, yeah. To cover costs and stuff. Exactly. And what is your asset under management now? We're in our quiet period. I can't address. Historically. I can't address that to you. I can say they're rising. Yeah.

53:47Russell Thompson:We've got our results out end of the month. So Nicholas has been on to me this morning to not disclose the direct level of assets under management. We did a press release this morning, though, which addressed some of those issues. But they are climbing. Our bigger clients have been adding month on. We had one client that doubled their assets with us last month, so 1st of March. And our pipeline is extremely strong. So very, very happy and optimistic as to where we sit right now. And we're going to talk a little bit about the strategies. I think people are curious. Like the name of the company is Hilbert Group.

54:31There's a connection to mathematics. David Hilbert, the famous mathematician. What's the connection? How are you trading? Is it retouching on volatility? So it's volatility-based maybe?

54:43Russell Thompson:It is. And that was another synergy, really, because my co-founder, Tom Bowles in Liberty Road, he was an Oxford PhD in mathematical forecasting. And he is a huge proponent of AI. And we were utilizing AI and machine learning inside Liberty Road back in 2020. Now, obviously, the J-curve on AI has gone through the roof, but we're really heavily utilizing AI and quantitative techniques. and we were in Liberty Road and we brought a lot of those two things together in Hilbert. So we have trade signaling, which is AI based. It looks at inefficiencies in the market. And then around that, our trade signaling generates a portfolio and then that portfolio generates a level of risk that needs to be managed.

55:36Russell Thompson:We utilize something called extreme value theory, which is it looks at generalized Pareto distributions rather than normal distribution. I won't go into this too deeply, but if you do look on the Hilbert website, there's a paper that I wrote on how we utilize this. But we calculate from modeling the left-hand tail of the distribution a level of what we call EVAR, which is extreme value at risk, which is very different from value at risk in traditional financial models. And it's very well, and we do that minute by minute. So we can see if the portfolio starts decoupling a bit, it becomes very apparent to us quite quickly.

56:15Russell Thompson:And that has a direct impact on both our risk management and our forward risk management in terms of how much risk we're taking in any new trades we're doing and in terms of managing the portfolio as it sits at the moment. So it's quantitative-based, which was sort of a marriage between what Hilbert were doing and what we were doing. And we sort of married a lot of the things that they were doing and that we were doing into our products. The main product, probably best if I touch on that, is Basis Plus. And we offer Basis Plus both in BTC terms and in USD terms, USD stablecoin terms. Not that a US investor can't come in with USD.

56:57Russell Thompson:And we have four revenue streams in Basis Plus. So we trade the traditional basis trade, which I'm sure you and most of your listeners will be familiar with. The basis trade in crypto is utilizing the perps, which obviously BitMEX invented. And so we'll get along the spot, sell the perps and pick up the interest rate differential, which is calculated every eight hours. We did very well with that part of our revenue stream back in October, November, December, January, February, March 25, after President Trump got elected and we had that bull run. the basis tends to the premium increases you know FOMO and retail guys are buying and so the basis gets higher and so then we were we were sort of running around low teens on the basis trade for that period so that was that was great recently when the crypto winter that we've had the opposite tends to happen and the basis contracts and it can go negative and you in And in those instances, we would look at the negative basis trade.

58:08Russell Thompson:The problem with the negative basis trade is it's not the same participants in it. And so it doesn't hang around for very long. So it's hard to sort of run it. You've got to time it very well. It's a lot trickier to extract the alpha. The second thing we do is that we arbitrage the yield curve. So we have a yield curve in this perps and futures, and we can calculate a synthetic yield curve. And so it's opportunistic in its nature. But that's a second revenue stream. you can get situations where front futures in Bitcoin will trade two or 300 points under spot. So it's just free money that we can take the other side of that and we'll hedge back in the spot and we'll lock in the premium.

58:48Russell Thompson:So that's the second revenue stream. Volatility. You're right. We trade volatility, volatility, implied volatility in Bitcoin, excluding Ethereum, but in Bitcoin is the highest in the world. but you've got to know what you're doing. I wouldn't recommend it to a retail investor to play around in shorting volatility but there is alpha to be extracted with those levels of high implied volatility. So we're looking at taking advantage of spikes on the volatility yield on the surface and hedging them through troughs on the surface. So we're doing that. And then the fourth revenue stream is we utilize yield-bearing stablecoins, primarily USDE, some USDC, USYC, Biddle, as collateral.

59:39Russell Thompson:And the venues that we trade on will pay us a running yield on the actual collateral that we're posting. So those four revenue streams together make up basis plus. Again, it's a little bit of a misunderstood product because people assume it is completely accretative in nature. It is not. We clearly have vaguer risk on the volatility side of what we do because we are generally shorting vol. But we don't short anything beyond one month. So on those October the 10th days, etc., and vol goes through the roof or Iran, a lot of people on the basis trade, but also on the vol trade, got badly hurt in those market environments because they have to manage relatively long-term vega.

1:00:30Russell Thompson:And that's tough. And you can get negative gamma real quick there. So we're able to take that vega hit that we get bleeds back into the book through the high theta that we get and we just let the options run off and we manage the risk by staying delta flat. So the overall basis product is a Delta neutral, but it has the ability, it has got some market direction just from the movements in the Delta from the puts and the calls as they move. The other three products are Delta zero, but there is some risk in the product. So we do have some months where we've taken some losses where we've had to risk manage a very large move, October 10th being one of them.

1:01:15Russell Thompson:But we took a couple of percent, you know, people were taking like huge losses in that month and we were able to manage that down. So it's neutral product, but not zero in terms of the delta. And can you say anything about your performance, historical of the funds? Our performance is great. You know, we did, again, I'm talking growth. So if you look at our website or our fact sheets, they'll be quoting net, but that doesn't interest me. I look at the alpha. Yeah. So we did around basis, the two basis products were about 33 or 34 % last year and about 25 % in Bitcoin, which is very good in terms of people that are looking for yield on passive Bitcoin.

1:02:03Russell Thompson:Although we're seeing a lot of interest on the US dollar stable coin side, you know, when you're getting 4 % 10 year treasuries, you know, it's, and you're holding dollars, you know, and we've got clients. Clarity just around the corner, the Clarity Act. So I think that the US stable coins are going to be the new euro dollar market, and they're going to get to that type of size over the next five years. So that's a product that I think we will see some really significant growth in. And then this year, we're up. We're looking to make 1.5 % a month. So we were hot in 2025. We beat that. We're a little cold.

1:02:42Russell Thompson:We're up about two-ish at the moment, 1 % on January and February. But to be honest, we have a lot of AI-based risk metrics that we look at. And also on the volatility side of things, a real big size parameter decider for us is whether we're getting paid for the risk that we're taking. And that means that the relationship between realized vol and implied vol is very important. And I get asked a lot, you know, well, does this product fall apart if vol goes down? Not at all. If realized vol goes down and implied vol's had a good premium, then it's fine. But we've had situations in the last two months where realized vol has been through implied vol, You know, by 10 points and generally implied is 20 points over.

1:03:39Russell Thompson:So we're quite comfortable at the moment with all of the geopolitical risks going on in the world to run a little bit cold right now. And so 1 % a month for January and February, more than happy with that. And I think a lot of people out there would be very happy with those numbers. So and then we have our multi-strap product that is directional. and in the first two months of this year, that's up 32%. Oh, wow. So again, we have a long, short momentum indicator powered by AI again, and that firmly, as Bitcoin broke through 90 ,000, we shorted it and stayed short. We took most of that trade-off around 65 ,000.

1:04:25Russell Thompson:So, you know, obviously, and that goes back to my point that it is frustrating, this perception that people go, if Bitcoin goes down, then Hilbert's stock should go down with it because they must be doing badly. And the fact that Bitcoin is lower means that Hilbert is in some ways in trouble. I'm more than happy generating alpha in a market that's falling as well as one that's going up. And that's how it should be. Is it that the market maybe puts you in the treasury bucket? with other treasury companies. They shouldn't. They absolutely shouldn't. But I think that there's something to be said in that.

1:05:06Russell Thompson:I've said it many times to many people that that is not the way. But, you know. That's why we're here. Bigger companies like Strategy have got the same misunderstanding that happened with them. And, you know, the only thing that myself and Nicholas and Benali and the rest of the team can do is articulate what we're doing and how we're doing it. And hopefully people will start to realize that we're an asset management business and not a debt. And how is the competition when you seek new inflow of capital? Is there a lot of asset management in the crypto space? I think we're competing because of the nature that we're listed.

1:05:46Russell Thompson:I think we're competing right at the sharp end with the big boys, like someone like Galaxy. You know, we're competing with people that are able to go and take a big ticket from an institution. And there are a lot of, in fact, like Enigma is a really good example of this. Their tech is, when we looked at them, it was absolutely world class. They're a relatively small firm with a relatively low AUM with great returns. This is a company you bought, just for the listeners. You recently bought this algo platform, Enigma Nordic. Yes. But it's a different skill set to get from there to becoming able to take institutional money.

1:06:29Russell Thompson:And so, again, sort of the trade-off when we talked to Enigma was they were bringing great world-class tech with them. They're good guys. They know their stuff. But they didn't have that requisite knowledge to go and build that out. And we had the platform there. So, again, it was a nice marriage between Hilbert and Enigma where we gave them something that they wanted. and they gave us something that we wanted. And we're now running a Hilbert Prop Money in Enigma Live, and it will at some point go out there as an offering to investors, and it will probably, a low vol version will go into our multi-strat as well because it's completely uncorrelated to anything else that we run, which is great.

1:07:11Russell Thompson:We ended up, we just get better sharp ratios with risk going down and returns going up with an uncorrelated strategy that we can bleed in. And now with the war in Iran and the crypto space, do you have any view on the crypto? I do. I do. I think I haven't got a crystal ball on Iran, obviously. No one knows what's going to happen there. So I'm going to assume that unless we're all dead in some nuclear holocaust, that Iran is going to get resolved maybe sooner, maybe later. And I'm actually, over my career, have been probably, for people that know me or have talked to me on markets over the last 35 years, I would say the majority of the time I'm more of a bear than a bull.

1:08:00Russell Thompson:But I'm moving quite firmly into the bull camp now. So if we assume, and let's just say we look at crypto. One thing that a lot of people talk about with crypto is, okay, well, what is crypto? What drives crypto up? And one of the lead indicators that people quote all the time is liquidity. Now, that is true, but it's also not true. So there is liquidity and there is liquidity. There's different forms of it. What historically has driven crypto up has been liquidity that flows into the financial system. And if you actually look at the numbers, that peaked in October 2025, and it's come off quite hard since.

1:08:50Russell Thompson:But you've seen other indicators of liquidity, like a lot of people talk about M3. Now, honestly, if you're going to tell me that bank balances in global banks around the world are a good lead indicator of Bitcoin going up, then I think you need to go have a good hard look at yourself. It's what happens to the money when it moves out where it goes. And if you look at what's happening to global liquidity flows at the moment, they are going into the real economy. And I think the absolute most clear indicator of that is this massive divergence that we've had between gold and Bitcoin. I've seen it on some of our family office clients.

1:09:30Russell Thompson:They have diversified out of Bitcoin and into commodities. And that really is a reflection of liquidity that's flowing out of the financial markets and into the real world, into the real markets. And gold is firmly based in the real asset markets. And so when liquidity flows into that, then gold goes up. And obviously, money's coming out of somewhere. And to some extent, it's come out of Bitcoin. So you've had this real divergence between Bitcoin and gold, which I think is nearly over. I own gold and I have owned gold for quite a while. I've trimmed quite a bit off. I will buy it if it falls again.

1:10:09Russell Thompson:If Iran gets resolved and gold falls by 10%, 15%, I will definitely buy it again. But I think that this huge divergence that we've had between the two, it's due to these liquidity flows. And it's sort of the narrative from where Bitcoin is sort of concerned isn't helped by this moniker that it's digital gold. Bitcoin is not digital gold. It is a high volatility risk on asset. At some point, when it's got some maturity, when long after I've retired, there will be some features of Bitcoin where obviously it's one of the hardest assets in the world, if not the hardest asset in the world. 21 million Bitcoins, probably a lot less than that, are actually ever going to be out there people are able to trade.

1:11:00Russell Thompson:And so if you're looking to protect yourself against monetary debasement, it will have huge value and it will have value on a medium term. But this sort of divergence, right now, if you're saying, well, look, this Middle Eastern conflict is going to escalate, you don't want to be buying Bitcoin. It's a periphery asset. And if a US pension fund that's holding Bitcoin ETFs sees this happening, one of the first assets they'll sell will be Bitcoin. So that's just the nature of the beast, you know? So it's a risk on asset. But I think that there are a lot of things that are happening in the background that tell me that I think the bottom is in, short of things getting much worse in the Middle East.

1:11:47Russell Thompson:If that gets resolved, then I think that we will, you know, if you put a gun to my head, will Bitcoin be above or below 70 ,000? I will be considerably higher. And that's not me being a Bitcoin maxi at all. If I thought that it was going to 40 ,000, I would say, I don't care. If I could make money in that move, then I would. But my rational global macro head on is if I was going to put it into the portfolio, I think it will outperform for the rest of this year. And part of that is also to do with what's going to happen, I think, in the next six months with the November midterms. Trump is going to goose the markets.

1:12:29Russell Thompson:I think that Walsh is very misunderstood. You know, he is... Kevin Walsh didn't accept Fed Reserve. Yes, yeah. He has said many times, and he's very well documented, that we're in a disinflationary world. He will cut rates. If you look at Fed Fund futures right now, they have got either 50%, I think 30 % and 20%, of either no rate cuts for the rest of this year or 25 basis points. I think you're on drugs if you think that. I think that we're going to get probably two or three rate cuts this year. Walsh will be happy delivering them. I cannot see President Trump appointing someone to lead the Fed who is going to be a rate cut hawk.

1:13:18Russell Thompson:Now, he's a balance sheet hawk. That's a different thing. And they've just ended the Fed in November QT. I don't think that he is going to support QE. He's not going to sit there and start expanding the Fed's balance sheet to help President Trump out to get into the midterms, but he doesn't need to. Because if you look at someone like Scott Besson, the guy is like in our world, he's very well known. He's a consummate trader. He knows how the various levers in the global macro world work. He has said many times that the supplementary leverage ratio, he's going to reform that. That is, and that'll happen this summer, that is basically the amount of tier one capital that US banks have to hold against assets.

1:14:09Russell Thompson:And he's talking about removing treasuries from that. That is at least seven. He said so himself. It's 70 basis points, probably lower on US 10 years. And they're also talking about drawing down on the GDA, which is the government's account at the Treasury. And so, again, going back to my sort of thing about different types of liquidity, you could have the Fed on one side giving the world interest rate liquidity, cutting interest rates, and you could have the US Treasury on the other side doing things like reforming the SLR, drawing down on the GDA, stuff like this where that will provide liquidity which will go much more directly into the real world, the real economy.

1:14:50Russell Thompson:and that's what President Trump wants because he wants unemployment to improve and he doesn't want to lose his majority in November midterms. I don't think anyone can argue whether you love him or hate him. He's a very pragmatic guy and he's going to do what he thinks is going to be best for him to get what he wants. Whether it works or not is a whole different conversation. But that whole thing, if you take how it all fits together, is, I think, very bullish for assets for the rest of this year. Once we get this geopolitical risk out of the way, hopefully that can happen relatively soon. And if we look at the future for Hilbert, what can you say about like milestones the coming six to 12 months?

1:15:37And also the regulatory environment, like inflows from Zappobank. Like Hilbert have communicated heavy inflows?

1:15:45Russell Thompson:Yeah, we're getting inflows into the structure credit. We're pushing hard on the alpha stuff on the 2 and 20. We announced this morning our pipeline is at over 300 million. To give you an idea of the impact, and that is not including some of our big institutional sovereign wealth fund investors that are with us now. I was trying to get it. This is new pipeline, and our existing investors, I'm fully confident that they're going to be continuing to add. But if you look, I do know what I'm talking about here because obviously I know what the multiples were when I sold my old hedge fund, Cambridge.

1:16:28Russell Thompson:I know what the performance fee multiples are and what the management fee multiples are. And if you assume a relatively conservative, eight and a half percent multiple on management fees and two and a half on performance fees, then for$100 million in terms of AUM that we raise, that adds about conservatively 40 % to the market cap of the business. So if we land our pipeline that we're looking at over the next few months, then that's going to have a really significant impact on the stock price. And that's irrespective of, and I'm not talking about getting rewarded because that first 50 will put us over the line in terms of profitability, which of course the market's going to really like.

1:17:13Russell Thompson:Like positive cash flow and stuff. Yes. Yeah. And that bleeds into the business in so many other ways. Yeah. Because it sounds like when you're talking that like institutional acceptance is here, but like the discussion in Sweden or the Nordics is like we're still behind on the institutional acceptance. Yeah. Yeah, well, the institutional acceptance really is much more out of the US. You know, there is this central bank digital currency stuff that the ECB, nobody wants that. You know, they've already lost that war. That doesn't come in until 2029. The Bank of England are doing the same thing. No one is going to own that.

1:17:53Russell Thompson:You know, so the whole mindset in Europe is behind on digital assets. and the regulatory whole path is a bit clouded. It's not sort of my area of expertise, but it's getting much clearer in the US. That's why we want to pursue a NASDAQ listing to get the research and get access to the US investor base and the US capital markets. And back to your sort of original question, if you're an institution, if you're a solving wealth fund and you want to go and put$100 million to work, unless you're going to go and pick 50 managers and put two in, which that's just not going to happen. The universe of people where they could put$50 million with a couple of managers, it's quite small.

1:18:41Yeah.

1:18:42Russell Thompson:And, and, and if they're anywhere, they're in the U S yeah. Okay. Or they're in Stockholm. Maybe not. Yeah. It's a small, small parallels. And how long is the waiting time? If you get like the inflow, How many reports do the investor need to see before they see the AUM go up and it's in your revenue stream? Yeah, for the stock market, if you communicate the inflow when we see the revenue. The pipeline, that's sort of how long is a piece of string. So how it typically works will be someone will come to us and they'll say, okay, look, there'll be a process that will start. But that process is going to involve, if it's an institution, it will involve significant KYC.

1:19:27Russell Thompson:If someone is looking at us and talking to us, they're not part of our pipeline. So then there comes a period where they go, okay, look, you passed. We're happy with all you're doing. Or there might be one of our investors in London said, we want you to do a couple of things, which we did. That's what they wanted. So to bolster what they consider to be the operational resilience of the firm. And then quite often, you'll know that there is a ticket out there. Let's just say it's 50 million. And they will go, okay, well, we're going to put in a few million. And we're going to make sure that all the rails work.

1:20:04Russell Thompson:And we're going to make sure that the performance that you are generating, what we actually see lives up to what we're expecting to see from your historical returns. You know, now that's a much bigger that you can call it off. Yes. And then, and then the money starts coming in that, that by the way, is not an insignificant risk to institutions because let's be frank, there's a lot of shady characters in the crypto world and people can just lie about their returns. That's, that's why it, when you're dealing with someone like Hilbert, we can't do that. So there's some, there's some real, um, comfort that institutions can take from that.

1:20:43Russell Thompson:So that process starts and that can take, and we're sort of in that process at the moment with our current big institutions. They're, as I say, they're upping their allocations because everything is going well. The 305 is institutions that have said, okay, we're willing to invest and we're just, now we're going to onboard. If you want to onboard with a custodian, And it can take two months. But you might be talking to an institution that's already got a relationship. So the timeline can be when someone goes, okay, you've passed and we want to allocate. Then it will go to investment committee. So an analyst or a team that handle this will put together a report and it will go to investment committee and they'll say, okay, we're willing to do X.

1:21:31Russell Thompson:And we'll do it in this way. Or we want to change something and it goes back and it goes to the next one. So to answer your question, I know I've been long-winded there. From the moment that somebody reaches out to us, a due diligence can take six months. During that process, we will get an idea that they want to invest with us. And then from the moment they want to do that, it can be very quick or it can take another six months. Or it could take six months to be fully invested, which is where we are with our guys now. and when they put the money in then you can take your fees and then you can see in the revenue statement but the performance fees can be quarterly they can be semi-annually they can be annually it can vary and the investor to a certain extent will call the shots on that we're not going to turn down the big ticket because we want quarterly and they're going to say it needs to be six monthly or annually and about the ownership you're an owner of Hilbert Yeah, we've seen some insider buying from you.

1:22:34Russell Thompson:Yep, yep. I think, look, I'm a big boy. I could take criticism. I think I got a bit of criticism, particularly from the Swedish retail market, because I announced back in, I think, in October, something like that, that I was going to buy a 25 million stocky. I ended up buying about$1.5 million over that period. But I think a lot of the retail guys were watching the insider trading things and going, well, where's this? Where's he buying? He's not buying. The stock's going down. Where's Russell? Why isn't he buying? The reason I wasn't buying was we were in a blackout period because we were acquiring Enigma.

1:23:17Russell Thompson:So I obviously, I'm privy to insider information. I can't go and buy the stock during that period. So I think a lot of retail investors got a bit frustrated with me. That's fine. You know, it is what it is. But that was the reason that, yeah, we were in a blackout period with Enigma. And Enigma took a little bit of time to actually get that deal over the line. So it sort of came quite quickly after that where we actually went into the blackout period. So, you know, but yeah, I have been buying and I'm comfortable with where we are. But I'm looking at this from a three, four, five-year horizon.

1:23:52Russell Thompson:And this stuff does not happen overnight. And I would say to investors to, you know, if you're looking for, you know, a 10x return over the next few months and go and buy it into an AI company, you know, this is an asset management business. I'm very confident we will make a success of it, but it takes time. You've got to do it in the right way. So that sounds like a good plan. Like 17th year was Cambridge, your last fund, right? Sorry? 17 years it took for Cambridge. It did. It did. But it's funny how it works because the asset management world, the business models, it's a really interesting one.

1:24:34Yeah.

1:24:35Russell Thompson:Because as we were talking beforehand, it can change very quickly. There's a tipping point, which I don't think Hilbert's very far away from, to be perfectly honest. And with Cambridge, we went from a$70 million ticket, we got up to well over a billion dollars, but it took two years of, just a little bit of like 5 million ticket here and 10. We didn't make much progress from that 70. And then suddenly it happened. And your people watch you and they get comfortable with you. And then they see one person goes in and said, well, they've gone in. And so that momentum can happen quite fast. So in terms of that side of things, one thing that we have to be very aware of from our side is that we need to be able to handle the capacity.

1:25:22Russell Thompson:you know, that we can actually not degrade our alpha by having significant flows coming in, which we've done a lot of work on. I'm comfortable on that side of things. And then sort of the final point really is that when you get that tipping point, the actual multiples that can apply to the valuation of the business are fantastic. You know, it can flatline for a long period of time. And then that tipping point comes and the assets start coming in and that has, that has very, very significant value to them, to the value of the business, whether it's a private business like, like Cambridge was for me or whether it's a public business like, um, you know, like Hilbert.

1:26:01Very interesting. We should follow up in like some months or a year.

1:26:05Russell Thompson:Yes. I'm, I'm, I was here in, I believe November. So I'll try and come over again in, in, um, in two or three months. We will be happy to have you, uh, to follow up, not at least for your crypto. I want to try and experience some nice weather when I come here. That's the problem. So summer probably is going to be better for me. Perfect. June it is. So, yeah, and it will be very exciting to follow you and follow the Bitcoin price, of course. You called the bottom right here in the PhiloKill podcast today. I'm called the bottom at 69. I think we've seen the bottom, you know, 60. Caveat, though, that we don't have, it doesn't get worse.

1:26:47Russell Thompson:Exactly. Thank you for coming to Fill or Kill Thank you so much for having me It's been a pleasure Thank you.

1:27:22I'm on my research. I don't buy Twist's but I want to have it. It's going to be a story. I need to find out how much you have in it and in it. But come back all we talked about here in Fill & Kill. We're going to be free.

1:27:52We want to be free to do what we want to do. And we want to get loaded. And we want to have a good time. And that's what we're going to do. But wait, baby, let's go. We're going to have a good time. We're going to have a party.