The Real Estate Bubble and Targeting Innovation

30:05And so all of those design features are engineered out because you don't make enough money on the early leasing activity to justify the expense. It's why you see the same tenants in every new shopping center that is institutionally built, because it's the safe thing to do. It trades on a short-term income statement that assumes that these cash flows will be durable, and they're not. And the market has to penalize that before you see a change in programming. And so if we're on our way down in the commercial real estate cycle, it gets interesting for you once we start getting to more distress levels where things become opportunistic that you can put capital at work for people to repurpose stuff, create a new future.

30:58That sounds like innovation, bro. It does. Yeah. I mean, right now, prices haven't adjusted. You haven't had enough for selling yet. And so you're basically being required to make a call on rates because capital structures are inverted. I mean, you're borrowing at 7, 8, 9 % today. I'm not even sure that rates, even if they come down, if even at the end this all nets out the 25 % less occupancy in offices, I mean, that's a big hole. Oh, in the office sector, yes. I'm saying product where demand is much better understood. So to say residential, the pricing still makes absolutely no sense in the world today to be a buyer.

31:45No, that's right. Absolutely no sense. So, Mike, what gets you excited in what you're looking at? Because it's really difficult in your space. People ask me about VC and I'm like, I'm the world's worst because everything that looks amazing usually goes to zero and everything that looks terrible does really well. What are you looking at here? Because there's a lot going on. Yeah. And I think, unfortunately, like Matt said, sometimes innovation is in the form of rational pricing, meaning that you can't just keep raising your next round at a higher and higher price without any kind of thought about the turmoil value or what your business looks like once you finally sell it to the general public, which is the only real way to get liquid in this world.

32:32Even if you're doing M &A with a large company, you're ultimately selling to public shareholders. So I would say, first of all, everyone at the moment is still rethinking where things are. As you see companies peeking their head out, because we get well beyond the two-year fundraising cycle that most companies are in in a rational environment, I think you're seeing them, the good ones are popping their head up, getting ahead of things, coming out with rational numbers, looking for investors that are along for the ride, and frankly, taking advantage of the ones that want to go away. So the capital structure is still getting figured out.

33:10But to your point about what we're ultimately looking for, I mean, scalable businesses that can ride the wave, that are CapEx efficient, that utilize innovation, The ability to use your credit card anywhere and everywhere and facilitate transactions clearly has a place for the blockchain and innovation. But we'll back the clock 10, 20 years, we're much more of a cash society. So I think looking at those megatrends and finding companies that are taking advantage, smart management teams that know what they're doing and have a vision. And you're right, Roel, like the great ideas are never the ones that you and I come up with.

33:52I remember the banker that took, he said, I met this woman, Meg Whitman. I'm taking her company called eBay Public. What's eBay? Well, two people meet online and they sell something. And I was like, that's a stupid idea. Who's going to buy something from somebody they don't know? There's no trust. And I could go through all the reasons why that was never going to work, which obviously blockchain, the internet. And frankly, it's just a better way to buy and sell things. I didn't recognize it. And I think that is the reason why we try and find great GPs, because it is just a handful of people that can really manifest what's going to happen.

34:29So you tend to form it out to other managers as opposed to direct yourself? We do a mix. Well, we don't have the time or resources, given what Matt said, to really be doing it ourselves. We are a partnership model here. That doesn't mean we're going to blindly give money. And what I do and what a lot of institutions are doing now, we're doing co-investments alongside it, where we let them think about what's going on and construct a blind fund and have the good ideas, find the people that are innovating and get the money in the ground in a way that's going to create an acceptable return for the risks they're taking.

35:04and as those ideas bubble up, they tend to attract more investors. We try to position ourselves as an attractive investor for those situations to try and get the best opportunities. So, we're very much relying on our partner network and then we do take a view about certain things and decide to lean in and that's how we end up selecting certain investments based on our views. How are you dealing with AI? Because it's a gold rush of which everything is super expensive already. We kind of all know that we have to be involved. It's hard. Yeah. And we are involved. We're investors in a lot of the AI companies, whether it's software, Matt could talk about some of the infrastructure, but we are a big believer that this is not a flash in the pan.

35:53I do think it bodes well for blockchain and crypto. I think it creates a lot of innovation. and Matt can talk more about that. But the short answer is, if you're not thinking about AI, you're in trouble. And frankly, I work a lot in the enterprise software world where I think it's going to be very interesting where they're going to have to root out inefficiencies in their businesses. Most enterprise software companies are basically a database and a front end. So when you peel back the onion, no matter how innovative some piece of enterprise software is, it's about the use cases and what problems are solving in the real world.

36:31I believe that AI has a place in a lot of those worlds and it is a fundamentally different set of tools and technologies, whether it's running it yourself, using it as a service, how you implement it, what you're solving for. And frankly, I'll say this, this is the conversation. How much trust do we have in AI? When you allow AI to point out a problem and then solve it without any human intervention, that's a good thing. That is a scary thing too. And so I think there's caution. I think the reality is the lack of innovation in enterprise software is going to rear its ugly head now and you're going to see companies that are going to charge ahead and suddenly their offerings are going to be way differentiated than these enterprise software companies that are basically a database and a front end.

37:18So I think it has huge implications for a number of more traditional technology businesses. And then from there, it just keeps going into different areas, like the Berkshire Hathaway story about sanding cabinets and just using AI to train robots and those types of things to do physical labor. There's robots serving drinks in bars in Las Vegas. Well, you know, what a perfect place. you know if they know what kind of drink you like and they actually have an idea about how to innovate it you're like that's the best damn drink i've ever had because this robot has somehow figured out exactly what i want i mean so i'm what i'm also saying is you know the old world enterprise software is frankly dealing with it head-on and it's not going to be pretty for everybody and those that figure it out are going to really innovate and win but let's not forget about robots serving us cocktails that we love like there's lots of use cases that people have not even thought about.

38:15And to get to... I don't think I need a robot to tell me I love a frozen margarita mic, but it's an interesting point. I mean, Raul, we've looked at it a bunch of different ways. This is undeniably a mega trend, if not the most important trend that I think all professional investors need to study. I don't think I have a particularly... I don't have any reason to win this category. And so where I focused on it is our core competency of real estate and real assets. And so we've spent the better part of a year trying to understand, again, the system, like what is required to deliver these applications to maximize the potential of the technology.

38:59So it's clear that you're going to need a lot more power. You're going to need a lot more compute. And like just starting there from the perspective of real assets, it's pretty clear to us that it's going to be uneconomic for any application, mostly to not be on the cloud. I think it's also interesting from a venture perspective that the costs to play as a startup in AI, I believe, are underestimated by most institutions. And both the access to training data and the access to compute are going to be substantial for any startup trying to play in the space. And so it's hard for me to see where the winners will be with respect to startups that are competing with the established players in the space, the Amazons, the Microsofts, the Apples of the world.

39:55Just the scarcity of compute alone is hard enough. Yeah, and so that's where we focus. Like, all right, we have a core competency here. Let's try to understand how we can participate in this theme. And so I think people should really be paying attention to what's required with respect our and computing infrastructure, also networking infrastructure. And I think there's going to be a huge tailwind in the real estate business and infrastructure business into just call it data centers writ large. I think there's going to be a lot of money made and a lot of capital destroyed because it's not straightforward.

40:37And so that has our attention. That's probably the most direct way I'm focused on AI. And then from a startup perspective, you know, the digital asset venture funds that we've invested in, there's a number of different ways that you could envision blockchain and crypto being highly complementary to the the infrastructure and the architecture of these systems as AI becomes much more broadly adopted. And so it feels like it, it really confirms the base case that we had that web three is the future of how the internet works. And AI is kind of the reason why it has to happen. So with, I mean, if you can, if you can envision a world where, you know, the multiple billion people on earth that currently do not have internet have it through any number of different delivery mechanisms.

41:32Traveling's doing a pretty good job of that. I've got it in Little Cayman now. It's incredible. Yeah, and you can envision mesh networks. You see the cost coming down for mobile devices, and you say, hey, we have billions of people that are going to come online in the coming decades. They're going to be mobile first. They're going to be connected. Wow, what an interesting, you know, sorts of productivity that's going to come online. And it's going to be in a world where you have an increasingly connected global internet. And if you believe that blockchain can evolve into the financial rails for this internet, they're going to be connected both through value and through information.

42:13And so I think that as a starting point is an interesting trend. And then if you believe in an increasingly automated and intelligent internet, that's where this theme of tokenization, it's called real-world assets in the crypto world. It's really the idea that we standardize information. We have a common underlying technology that defines ownership. And we have to create these systems that allow automated market participants to be the most effective. Just think of it as bots for the financial system. But you're not being asked to pay a very high price for it based upon the market cap of crypto today.

42:56That's what captures my imagination. Yeah, I mean. And I have to add, too, I mean, we can't forget about AI as it impacts our investment world directly, our managers. So, you know, I'll take the two signals of the world. The folks that are very fast in and out of the market doing things, AI enabling that set of technologies for players in liquid, public, fast-moving markets, well, that's a phenomenon you can't ignore. I'll take the other side of that, private equity. Private equity is about information asymmetry. It's about fighting a needle in a haystack. It's about not missing a needle in a haystack.

43:33And frankly, I'll tell you, as a co-investor, the day that I don't see a goal seek for a 20 % IRR on a deal, 20.000065 when it's pasted into the cell is a good day because a lot of the innovation that AI brings to folks that have resources, have data, and have the ability to apply AI. And this is where right now we're early. One extreme you have groups that say, we're going to have an AI investment committee member. Like we're going to use AI to write memos. Like AI, we're going to harness AI to innovate our industry and give it a seat at the table. You have others that are completely ignoring it and saying that this is a crap business.

44:15We really can't rely on AI. But, you know, maybe I'll take some AI data here or there or some suggestions. So I think it's very early and it's going to be interesting to see how it plays out. But our investment universe, our managers really need to be focused on AI as well. Hey, everyone. We're going to take another quick break and hear a word from our partners, and then we'll be right back.

44:40Yeah, and I just think it plays into that core thesis of blockchain technology so much. The blockchain element, here's a question I've not asked you, Matt, is have you guys talked to people like whoever, Franklin Templeton or Fidelity and said, look, you know, we're happy to test one of your blockchain money market funds or we're happy to test a bond offering that's done on Ethereum. How active are you in actually using within the business, let alone investing with it? So spoken with all of them, have a lot of respect for those groups you just mentioned, but we have not been active in piloting or being a participant in the technology yet.

45:20We've started investing in venture capital through dedicated digital asset and crypto investment managers. and I think it's a very logical next step is to think about how we can become a more active participant using the technology in our organization. I mean, don't forget, if you guys say, look, you know, we're happy to give this a go. The more people like you who do it, the more activity is on chain, the better your portfolio goes up, the better your pensioners are, everybody wins, right? Yeah. Yeah. Yeah, it's just being mentioned, we have to be very cautious as we integrate new technologies into our business.

46:05I'm a big believer in the value that will be created by all of those different things you just mentioned, Raul. And my job is to continue to develop more knowledge, use our network, and to deliver that type of an incremental next step. and manage those risks so that people understand, all right, guys, here's what we're doing. Here's why we're doing it. It just takes time. Yeah, it takes time. And I mean, I was fed and clothed by the mainframe. I mean, my dad worked at EDS early days with the Ross Perot. And I started ringing Adele and I was like, dad, the PC's going to crush the mainframe. The mainframe's toast and the mainframe is not toast.

46:52The mainframe, you know, Most of our general ledger transactions at most banking systems around the world run on mainframes. So this idea that the financial world is ready for innovation, well, it's never been more ready. And the mainframe may eventually go away. But the reality is that what you're saying is so true, that the lack of innovation there, because of the risk return to go and do some of the things you need to do, step off the mainframe and step into a blockchain-enabled world. It's happening in pockets. I'll credit Apollo as a great organization that's moving ahead to do that. And I think there's major first mover advantage for the organization's technologies that can jump that risk chasm to get tokenization, to get repos to settle at blockchain.

47:39The list of inefficiencies is locked. I mean, I'll tell you a great story. I had my global macro investor roundtable. We were in Majorca, and one of the guys has been a member for a long time, Ozzy. he ran like trading treasury and everything else at one of the big Aussie banks and he just retired and he said you know I've been really busy with blockchain stuff I'm like what are you you know what are you looking at what are you doing there he goes oh we built five stable coins in different currencies I'm like what's the point he's like oh you don't understand the US is going to t plus one settlement we're in Australia FX is t plus two plus we've got the overnight issue he said sometimes is three-day settlement.

48:22And in which case, we have to pay, we have to give tens of billions of dollars to like Morgan Stanley or Goldman as our broker to settle stuff on time, which we don't want to do because it's an inefficient use of capital. So we had to set up stable coins. I'm like, okay, that's really interesting. Yeah. Yeah. And we go to bed at night knowing that the money's in our checking account. So the general ledger works, but you're absolutely right as interest rates go up or these t-plus whatever problems and the legal realities around them as well as the cost what's the tipping point comes over i think these technologies are going to flood it and i think crypto is going to be the big one over there yeah i think so so matt how are you investing in the space are you holding bitcoin in the funds or or are you all vc or you know explain to people how you're approaching this space at this phase in the journey because you It's a big organization.

49:18It takes time to get stuff through. But whereabouts are you in that journey? Yeah, so we began almost three years ago presenting a broader business plan to our management team about how we thought a professional digital assets investment portfolio should look. And just in an oversimplified format, it is early stage, small specialist blockchain venture funds paired with effectively a public portfolio or a token portfolio, giving you exposure to really the complete market at that point in time. Where we made a decision to begin and start investing, start learning was in the venture space. So we've made quite a few investments in crypto specialist venture funds that are focused primarily on the pre-seed seed and to a lesser extent, series A financing rounds in blockchain venture.

50:24Over time, I would expect that to broaden dramatically. I do think it's important to have the ability to invest in both the public and private markets in anything. And digital assets are no exception to that. What do you think when you talk about public markets and digital assets, you'll talk about holding the other one. Like you said, Bitcoin, Ether, Solana, whatever it might be. And we're going to see a growing number of interesting protocols, applications, companies that are going to be investable. Yeah. I mean, the day we get to pay our 1.3 or 1.4 million at growing daily beneficiaries that rely on TRS and Bitcoin, that would change our strategy.

51:05But we are not there. We are very much paying people's pensions in dollars. And so we have to be focused on that. Our CIO is very aware of that. And I think putting this in the venture bucket, which is an area that gives us a lot more latitude, take more risks because it's a venture portfolio, puts us in position to have good visibility to where things are going. Because to Matt's point, it's going to become a more stable part of our portfolio at some point. It's really simple. And again, where we started, our job is to target big markets. And it's pretty clear, I think, at this point that it is conceivable or plausible that the digital asset industry, crypto, blockchain, whatever you want to call it, could plausibly be an enormous market.

51:54and very very simplistically we looked at it and said there is a bunch of different verticals and companies that can be built out of this you have a lot of different ways to win you have very sound downside protection unless you get the entire category wrong off of today's prices but you know this is open source software and in many cases the cost to build You know, winning companies or protocols is generally people and compute, maybe data as well now. And so we thought that value would disproportionately accrue to the pre-seed and seed financing rounds and that it was unclear whether or not there were going to be enormous growth capital needs for many of the big winners in the space.

52:44and so the value in going early and going first and our view was going to be rewarded at the same time you had a global pandemic that was creating you know a very different approach to working you have a very different culture in crypto that's very young it's global it is not the i don't know how mike fits in there i've no i'm trying i'm trying to stay young i mean i'm not afraid to fail. That's me trying to ride the wave. I embrace technologies and I appreciate that I might fail. And by the way, I will point out the obvious that there is some wisdom that can be applied to crypto. I'm not going to point to all the faults that we've experienced in the industry so far, but some of them may have been avoided with a little bit of wisdom.

53:31so people are learning and it's a young industry um you know it's it's this it's this brave new market structure that's it's very crazy and how how it's organized um and you have it's a cultural movement as well in many ways um which a lot of that i love about it um but it has had very bad branding like any new marketplace there are a lot of frauds and scams there were in the past there still are today. By the way, that's what's to be expected. Yeah. It's what's to be expected. Yeah, exactly. Mobile phones and the internet are like the essence of frauds. Absolutely. I just think like, look, you need to continue improving.

54:14You need to learn from the mistakes of the past. There's an increasing amount of professionalization that's coming into the business. But I do believe that there's a bunch of winners that will happen in the future that are not the legacy Silicon Valley venture funds. And so we also saw an opportunity to back the new talent and new firms that are going to be big winners in the future. Our view is that if we're a good partner, we'll be rewarded with a long-term opportunity to grow with these winners as the industry evolves. And we think there's a shot that there's a changing of the guard in many ways.

54:50And I think you have to pay attention to that. I mean, credit derivatives took down Lehman Brothers, right? So there is definitely, you know, but credit derivatives are still around. You know, I've never seen an 11 ,000 year prison sentence, but one just got handed down last night in Turkey. So I'm just saying some of the bad behavior is good as coming out of the system. But we have to stay focused on innovators. You know, and Yatsu, who handed me his business card, like this is a business card. I mean, And I love Yap, right? And Yap Tom is a cool guy. Been in the industry since he was doing coding for Atari, but I now have to be able to figure out how this turns into a business card.

55:30So it's important that you just find the right people is what I'm saying. I think you have to find the people that are the innovators, people that have character and frankly business models that are sustainable that you have to look through and think things through and there will be some great opportunities for us to invest there. And that's our focus. Yeah, I think a lot of institutions feel like, hey, they can pick firms that are going to outperform. And I guess it's possible. It's really hard to do. I think our job is to identify the markets, understand the underlying market dynamics, and understand where risk is present.

56:11And then just find partners that have an aligned vision that you can get the appropriate incentive structure with, that you think have a culture that are built the right way. And if you get the first two right, you should do well enough. I think it's very hard to just go out there and say, I'm going to pick the one or two venture funds that are going to win. Maybe that was true in the past with the Sequoias and benchmarks of the world. I think that's very difficult to do in crypto. And so you see that reflected in our portfolio and partnerships with, you know, a lot higher quantity of investments we've made, much smaller investment sizes than we would traditionally do.

56:51And that's just a reflection of it's early and we're learning. Yeah. And if the mega trend is big enough, you'll be fine. You don't need to nail it. You don't need the alpha when the beta alone is good enough. Right. Yeah. And the biggest mistake I think institutions have made and should be careful of making is not embracing the fundamental change in what it takes to invest in crypto. It's like you want to have this bridge between traditional finance and crypto and that doesn't work. That's what has led a lot of these frauds like Celsius and FTX to get capitalized. And it was done for reasons that are understandable, but you can't go halfway.

57:34If you're going to invest in crypto and blockchain, I think you have to understand the technology. It's fundamentally different than traditional markets. And you need to invest with people. It's not a traditional market wrapper. It's different. No, no, it's very different. The Uniswap ruling showed that, actually. That was really interesting, the regulatory ruling on Uniswap. Basically, you said code. And you see the groups that financed it were crypto-native funds. That's who got the 1 ,000x on Uniswap. Something that goes to your point, Mike, is right at the very beginning is like, mostly when people think you're slightly crazy and nobody understands it, is usually the time.

58:13Like Josh Wolf talks about this. It's like, if it sounds the most ridiculous idea, but your kids are doing it, you better pay attention. Yep. My kids were making videos on Musical.ly and showing me how cool they were. I was like, oh, that's so cute. Great. Which was acquired, became TikTok. So, yes. Yes. The future is in the kit. Final question for you. One of them's come up a reasonable amount. One was mentioned in passing. Electricity. Energy. Big problem. I just learned that there are several organizations trying to build a more distributed grid here in Texas using batteries. There's obviously wind and sources of energy.

59:02Electricity is a problem. It's going to be 108 degrees today, a record smashing number for September 8th here in Austin, Texas. And we're getting regular pings from our grid that we need to be conserving power. So hopefully our state is working to solve this and we're going to be there to help find the innovative products to help them. Yeah, it feels like in your bucket, Matt, this fits Swayle in there as well. Yeah, I mean, I'm as bullish on the potential of Texas as anyone. and this is very clearly the number one issue that has to be addressed by the state is reliability of the grid. But this is unique to Texas.

59:41I think power and water will be the two big ones that have to be thought about to invest. And how fast is the renewables part of Texas going? And what you're observing in the U.S. and then the nuclear mix, you know, people are talking about it. it's early stage it's just interesting it feels like it's in your kind of wheelhouse as well yeah and i'm not an expert by any means on on power but i'm trying to learn as much as i possibly can because it's become increasingly clear that for us to be successful investing in real estate we now have to understand power water and natural resources in a way that just weren't as relevant it's the it's the velocity of of migration to new markets you know it is the acceleration of the consumption of power for for computing and for um all the technology needs that are are becoming increasingly clear and so you know the short answer ral is i don't know but we are spending an enormous amount of time in an area that has not been relevant to our core business No, because Texas had energy and everything's fine, but it's not fine.

1:00:59That's right. It's not fine. I mean, Texas, we are a carbon-first state, and that's going to be the way it is for a long time. Obviously, Europe, with natural gas at the whim of the Russians, has become a problem. And I would just say for us here in the investment world, innovation, fusion, fission, wind, hydro, we'll look at all of them. I think you have to be very open-minded and not pick which of those alternatives is going to be the worst. And the distributed system, I think, is the important one here. And that's a great point. Not have single points of failure. That's right. You can have the best generation capacity in the world, but if it's all bleeding off or you don't have the transmission lines or the proper grid technology.

1:01:43And the other issue is we've got cyber, right? There's cyber attacks all the time. And if you have central points of failure for a state like Texas, that's a huge problem. But yes, we definitely have to be thinking about cyber, about the sources of power, and just being very thoughtful because it's a very important point. Final question. Are you seeing, because again, it's very relevant to Texas. Are you doing much in the VC side in space? It's a really interesting market. Love it. Can't get enough. I think there's winners. They're obvious who they are, and we are very focused on investing with winners.

1:02:17We like to win. but overall that industry is exploding no pun intended you don't want it to explode that's the one thing you don't want to explode but frankly the supply demand imbalance and the number of ideas and frankly the innovation in space some of the things i've seen heard are just things that you couldn't have even thought about because all the technologies and again this is my concept of riding the wave we're at the point now with lower lower cost lift we're at the point now with innovations in underlying technologies. Quantum computing fits into space as well. But we're at a point now where the convergence of all these is going to open up brand new markets that will be game-changing for humanity.

1:03:01That's my view. Not just getting on Mars, but I think here on Earth, it's going to help improve the quality of life for people that didn't tend to stay on Earth, which I do. Matt, do you think all of this changes the productivity? Does it get us out of the trap? Again, you and I have talked about this, the kind of trap of low GDP growth, high debt growth, aging populations. And yeah, we're seeing it everywhere. Do we think we're on the edge over the next 10, 15, 20 years where suddenly we finally see per capita GDP rising? Obviously, populations are going to shrink somewhat and growth coming back and productivity leading because of all of these technologies.

1:03:48Hard to say. I don't know, Raul. I do think it's interesting to think about GDP. It's always been people physically, you know, within our borders. One of the things that I wonder about that captures my imagination with networking and blockchain is, do you have the ability now to pull in productivity from people outside of your borders? to identify talent, to educate talent everywhere across the world, reward that talent in dollars, and to avoid all the strain on the physical infrastructure that makes immigration, I think, a political issue. I think it's plausible that you could envision a world where that productivity is harnessed by the United States or by other countries in a kind of like call it distributed GDP.

1:04:50I don't know. Well, I'm writing an article on this. I'm analyzing Ethereum as if it was an economy that digital nation-state idea. Because if we look at that nation-state, it's a bunch of immigrants, of which we're all part of those immigrants. We spend time in the nation-state. There's GDP. There's a financial system. There's asset system. There's everything there. And maybe what we think of as GDP is just the physical nation state we live in. But as you were suggesting, Matt, there's a whole distributed global connected world that this technology now deals with. Yeah. And I mean, there's thinkers like, you know, Balaji has talked about this and the network state.

1:05:29I think there's some really interesting ideas out there by people that have explored this design space that are worth paying attention to. So it certainly doesn't seem like there's any solution with respect to population growth that's going to get things moving in the direction that you describe. You know, productivity in general has been kind of underwhelming for quite some time, even with what's perceived as very large technological advances. I do think AI is different with respect to the ability to power discovery. So I don't know, your guess is as good as mine there. But I think this theme of how do we as nation states work with the most productive people in the world, create more productive people, and capture that in an ecosystem in a way that was not possible prior to these technological advances.

1:06:29I think that's interesting, but no idea, no idea what that means. Mike, Jimmy? But I do know that people out at Burning Man aren't going to solve this problem. Like enabling the people of Africa to contribute to a global society and have the types of things the Western world has had, you know, helping to improve our climate, like that, what Matt and you were alluding to is definitely helpful. and Ruel, I just want to say, Ronald, thank you, because without you, Matt and I would have been a lot more lost than we were in navigating the maze of getting into this space. You were very helpful along the way, your insights, your support.

1:07:08So I just want to thank you on air that you were very instrumental in helping us get on our way. So thank you very much. Thank you. And thank you for you guys for always sharing your journey as well, because we're all on the journey together, right? That's the whole point, is we've got this new frontier, this new emerging digital nation states, whatever's going on, and we're in it together. It's fun. It's just fun. It is fun. It's each other's brains thinking, hey, you think about this? What does that mean? It's great. Yeah. So thank you guys as well. Yes. Everything's bigger in Texas. Thank you.

1:07:36And thank you for coming on Real Vision. I appreciate it. And it's just interesting because I don't think a lot of people will realize what you guys have been up to. You're real pioneers and people will look back in 10, 20 years time and go, these people were pioneers and they didn't realize it. That's our hope. And TRS will be here long after we're gone. I mean, we're definitely an institution that's serving the people of Texas long after we're done. So, be careful for serving others. Brilliant, guys. Thanks for saying that, Raoul. Thanks so much. See, it's amazing when you talk to a prestigious large institution.

1:08:13They're in the top six largest pension funds in the United States. And people think of pension funds as stayed and out of date. And here we are with Texas at the center of everything. And it's amazing to see. And they've just started their journey. I love how they're thinking through, how does this impact real estate? And not at the superficial level, but really, what is the structure? What do they need? What can they finance that's going to help this new economy, the exponential age develop? and how can they use crypto to better the opportunity set for their pension holders? Because that's what they do.

1:08:55I mean, they're not VCs who do random stuff. I mean, their job is to make sure the pension holders get a good pension. And they've realized that the opportunity set in technology and crypto is higher than other areas. Yes, it comes with risks, but the risk-adjusted returns over time are essentially what drives their decisions in this space. so I think it's amazing and I know many of you ask me all the time well when are the institutions coming they're here and I keep bringing them on real vision and everyone still asks the same question when are the institutions coming they're here but they're in the first 10 % of their journey and over the next cycle they'll be at 50 % of their journey and more people will join them so all it is is a matter of momentum and price to bring people back into the market more fully and some more liquidity conditions.

1:09:45Because again, here in September 2023, liquidity is tight. But as liquidity starts to come back, and we start looking through recession and looking to recovery, we'll see money flowing back into the space where the harsh returns lie. Anyway, I hope you enjoy it. And I will take you back down the rabbit hole at the nexus of macro, crypto, and technology in the next episode.

1:10:14what's up revolutionaries thanks for tuning in for more content like this head over to realvision.com and get unfiltered access to the very best brightest and biggest names in finance