The Art of Finding World Class Opportunities

[Music] good afternoon everyone and a really really warm welcome to this session first of all I would like to congratulate Abu Dhabi Global Market and Abu Dhabi Finance week for putting up such a fantastic show so along could you please give them a huge round of applause please investing in the transition era um so if there is one sector that is definitely going through the transition era is family offices that openness that we are seeing now we have never seen before and it is really important for them to understand what sort of opportunities investment opportunities are there to discuss that we have two of the most prominent names in the industry we have Matt Higgins CEO of RSC Ventures you must have seen Matt on Shark Tank interacting with entrepreneurs and understanding business models and making successful Investments and we do have Joe banford as well coming from a successful business family and focusing on Net Zero and responsible investing so starting with you Matt first thing first I mean you have interacted with a lot of entrepreneurs in the last few decades what do they actually think about family offices and from family offices perspective how do they increase the deal flow yeah it's a great question um for a little bit of background so I'm partners with Steven Ross owner of the Miami Dolphins so we have a wide variety of investments in sports entertainment technology Hospitality anybody here no banana pudding from Magnolia Bakery we own exactly we own we own Magnolia Bakery uh so we have a whole wide range of Investments and when I first started about a decade ago one of the challenges when you want to do direct Investments but family offices are seen as risk adverse a little bit sleepy not necessarily entrepreneurial uh and so the if you want to attract the best deal flow you've got to mimic the behavior so we started building a brand in the United States to reflect the kind of deal we want to attract so our reputation is founder friendly it's uh patient Capital it's basically leaning into all the things that actually make family offices an asset compared to an Institutional fund right we've done hundreds of deals and I don't have a single exit provision in any single investment because our view is we'll sell when the founder wants to sell so my number one advice I talk when I talked to family office is if you want to attract the best deal flow you want to avoid adverse selection you got to build a brand and I think a lot of family offices tend to want to hide below the radar we're not consumer facing we don't need to be on Instagram and I actually think the total opposite we would not have been able to attract the kind of deal flow that we've been able to attract if we didn't put ourselves out there and also be laser focused what do we want to stand for so the bottom line is we're Nimble Capital we're willing to do an incubation we're willing to do Angel Investing and we invest in every single followon Round And if you're uh you know a DTC company out there today you're not going to find an Institutional Investor that's going to be there for your angel check and it's going to be there in your series C but a family office can be so my overall advice is lean into that which makes us differentiated and Joe uh you are someone who has been investing in the responsible investing space so my question to you would be how do family offices align their investment style or investment strategy with responsible investing in Net Zero targets well I can tell you how we've been investing we as a family we're the third largest manufacturer construction equipment in the world and I spent most of my life in manufacturing we've recently set up our own private Equity Fund to invest across the hydrogen value chain and a net zero value chain so for us we look at ecosystem build outs uh we make buses uh we make construction Machinery we also put charging stations in or hydrogen filling stations and we also make hydrogen and deliver the whole value chain and actually we're profitable which not a lot of people are really profitable in this sustainable um um market so that's what we're looking at doing we're taking people out of our own businesses and putting them across the value chain hiring really good people to try and run these businesses and make them all work together to try and give ultimately a solution to a customer that ultimately costs the same as much as possible and take the prop way of Net Zero to the customer and find their Solutions and my next question would be from both of you Matt and Joe U so when we talk about investment I mean investors face a lot of challenges when we talk about from family officers perspective what sort of challenges are they facing and how to overcome those challenges on the entrepreneurs or from the uh from the from family officers perspective investors yeah like I I think uh just from what I've seen there's a lot of desire to be in the most dynamic you know deal flow but a lot of insecurity that you don't have enough expertise for example to vet artificial intelligence and so this I find a a lack of discomfort but a lot of desire and you know my my my advice at the end of the day if you want to Source the best deal flow find a dynamic special person who has access to that deal flow and give them the capital to be able to enable them to put some money to work the best deals I've done are what seem so Random for example uh we created a Communications firm called darus in the United States 27 year old kid gave him a few million dollars to launch the firm but we had an idea that he was going to end up being the darling for all these DTC Brands and then we allowed them to put some money to work no private Equity or Venture firm would have given this young guy money a decade later we have 100 Investments 15 unicorns number one Communications firm in the country to represent these kinds of things so I'd say get over the insecurity by finding somebody you know dynamic that you could give a little bit of money let them be your expert rather than trying to incubate that expertise in house and man how do they find I mean what would be your suggestion how do you find them that is a great question uh you look really hard well number one it starts by having a brand so many people are insecure about putting out a brand I remember I had this debate my partner Stephen Ross when we first started it goes we're B2B why do we need a brand I said because we want to attract the best and we want to uh push back on adverse election right so actually putting yourself out there and letting the world know hey I'm willing to back somebody who maybe has great deal flow but doesn't have the institutional experience to get backed by a you know a a large Venture fund and say I'll give you 10 million bucks to put to work I mean but you first have to H you know basically hang a shingle and say you're open for business and Joe your take on this yes so look for me ultimately you think about you started where did you start from you normally started from your own family business somewhere along the line so enhance and look at that entrepreneurial spirit and if you still own that family business andest upstream and down stream of it and take people out of your own business and then ultimately consolidate upstream or Downstream and then potentially sell them off um so work through and and finding the right people to run your businesses it's all about people ultimately and how do you find people some arrive some come through Head Hunters it's really difficult finding the right people but when you find the right person you know you've got to send them work with them and put the right team around them to deliver a vision and that's really where in our case we come into it we we come in with a vision and then try and find the right people to deliver that Solution that's actually a great point just to pick up on what you said everybody in here who runs a family office that money began somewhere with some core expertise in our case my partner Stephen is the largest real estate developer in the United States right we use that as a nucleus to begin to do direct investing well some of the most amazing food brands when they look to scale they topple over because they make terrible real estate divisions decisions so the way we were able to partner with Moma fuku David Chang and Magnolia Bakery and Milk Bar all these other great Brands is because we said let us help you with your real estate decision so I think the best way to start is within these fears of influence that emanate from your core expertise that built up the money in the first place and could I just maybe add because it does bring something forward you know a lot of our investors in our own hydrogen fund are family offices so you know part of the other thing is to find people who are strong where you're weak and ultimately vice versa we can invest with people where we're we're not very strong and finding the right people in our case we've got a lot of family offices investing in our hyrien fund and our Net Zero fund because they want to have exposure and decide where they want to co-invest do they want to co co invest Upstream making Renewable Power or hydrogen or Downstream with manufactured goods and that's actually quite a good way of doing it and sort of trying to understand how to get into these new areas and Matt let's talk about artificial intelligence who have been pretty vocal about the technology I mean we are seeing AI literally everywhere in every landscape how do you filter out investment opportunities within AI yeah so first of all I think AI is the greatest wealth creator of our time um stating something that probably everybody in this room agrees with but from an investment standpoint I I think it's actually this is one area where I'm going to contradict myself unless you fully commit to understanding the AI space it's very dangerous to write throw checks around unless you're doing it just to get smart I approach AI differently I as a family office who's got hundreds of Investments I use our convening power to take the best tools the most Cutting Edge tools and I push that information down to our portfolio I'm doing the work on behalf of the CEOs that they maybe don't have time to do and filtering out what works but only from a commercial sense and I think it's way too early to figure out which AI product is going to end up being a commodity or already is a commodity versus something that is uh truly novel so my overall advice is don't chase the money but chase the tools and do your thoughts on AI I'm not really into AI but myself i' learn from people like him I'm really into Net Zero and getting the new energy transition just like you picking a very very large Market in the future and trying to understand what it is and how it's going to change our lives Net Zero for me is going to change our lives in a huge way I mean energy is always one of the largest markets in the world and actually how to get that right how to deliver a solution to customers that's what I've been looking out for 15 years uh you know you have to marry up supply and demand and drive a TCO a value case from a customer to deliver zero emissions AI probably will come into it at some point ultimately you know it's computers it's technology to turn around to a customer and say Here's an uptime Center you can look at your whole value chain end to end and get it to be be costing the right thing and zero emission that would be very cool and that's what we do I I am finding across our consumer portfolio that a a AI has quickly been reduced to a buzzword and yet and I find most CEOs are actually behind the adoption curve because the word word exists as a buzzword and there isn't a place to go for the latest tools people always say where do I go to get educated you know Twitter is basically you're where you go and I'll give you an example of a area where consumer CEOs are behind Innovation uh meta has a product called Advantage Plus I don't know how many people have heard Advantage Plus but Advantage Plus enables any consumer company to basically hand over your advertising buy to meta and say optimize this for me and something interesting is happening whereas customer acquisition costs have been broken with direct a consumer uh Advantage Plus using AI is actually making uh consumer buys much more efficient and yet in your portfolio if you have consumer businesses I would argue that 95% of the CEOs do not know that they do not realize that you could be using AI tools right now to reduce your customer acquis costs and improve improve your margins and so from an family stand family office standpoint I think becoming having one person on your team whose job it is to spend all night instead of watching Netflix playing with AI tools so you could push down that information to your CEOs because they're most of them I would say are lagging because they just don't have time to sift through those tools and Joe talking about Net Zero which regions are taking a lead in when we talk about Net Zero and responsible investing well look firstly we're here in Abid and that is you know this is a place that's got all the most wonderful attributes to get to next area you've got lots of solar cheapest form of energy in the world ultimately you've got to try and drive that to an export Market you've got people doing oil in gas so you can transfer those people to moving a gas around for me hydrogen is that form of doing it the biggest problem with solo is ultimately there's not enough people here consum so you then have to turn it into something else to move it around and for me that's hydrogen when you can move that around and then ultimately you need to find customers in other parts of the world well Europe is massively driving uh Net Zero and so is America um and those are export markets traditionally that this part of the world has has um exported its energy too and you could do exactly the same thing but you have to look at the end to end use cases uh and the stimulus at the moment in America is massive the stimulus in places like German Germany is massive get this right uh and to do to get to a cost bace that ultimately works I think the most difficult thing to change are people so for me the so you can give people a solution that most replicates their behavior particularly on transport if I can give someone a car that fills up like their car does today does a similar distance and ultimately gets able to cost the same um then I think you get massive option and what makes abha be special when we talk about implementation of Net Zero targets well look I was you know very lucky to meet Dr sulan and I know he's had you know some bad press but to be honest with you if you look at what he's been doing you know he is one of the best investors in the world in zero Mission okay he set up M start and worked his way through it now he's sitting in the oil company and using those oil and gas money to try and transition to net hero hugely passionate man wonderful about and that's what I'm AB is starting to do is is driving this net zero solution using the profits from what it is today to get to tomorrow's future you can't change the Paradigm okay you can't get rid of capitalism okay you need to use capitalism and that's what this compan is doing to get to next area and M what are your thoughts about the Venture Capital landscape here in abudhabi I mean I it's really remarkable I mean one of the reasons why I'm spending time I was here four or five weeks ago I'm back again now I brought three of our CEOs with me is that there's a perception in the UN I'm just going to talk from a consumer lens that coming to the Middle East region is something you do 10 years into your Evolution when you've already penetrated Walmart and Target and wall Whole Foods and you've saturated the US market and I don't think that needs to be the case so back to family offices one of the roles that I'm always looking to perform is where are there gaps in understanding across my portfolio and how could I take the lead and fill them so one of the gaps is there's a lack of understanding about the magic that is taking place here in UAE there's a lack of understanding about the entrepreneurial culture and there's a discomfort through uh just through ignorance and so if I could be the Catalyst and then make it comfortable and easy I believe there an opportunity to Short Circuit or truncate the amount of time it takes for Brands to come to this region and that's just one example so so big picture the the landscape is dynamic entrepreneurial I worked in government for many years I helped oversee the rebuilding of the World Trade Center after 911 so I have a lot of government experience in addition to investing and I've never experienced anything like the culture here and the bias toward action so from a venture standpoint the US market is seized up we're still paralyzed we're waiting for this recession that never came which I believe comes I don't believe in a soft landing and I think it'd be a very very hard painful Landing in 2024 but nonetheless this uh this region is open for business so my personal objective is let me make it EAS easier for Brands to cross the divide and come here a lot sooner than they would have otherwise come in their evolution and you both need to share some investment secrets with that I have to say some investment secrets you have to share so which sectors you think are currently providing the best return of investment oh well I'm I'm very very passionate about this series of uh glp1 drugs what's interesting so I said on a lot of boards of consumer companies right everybody here knows about glp presumably Eli L has mongero and OIC and whatnot but I sit on Boards of all these consumer package companies that should be afraid that the preferences of uh taste are changing to give you quick little statistic those who take glp1 drugs are 14% less likely to buy sugary carbohydrate products right and so I think one of the opportunities honestly is to invest all around that thesis which I'm doing shorting some of the consumer package products investing in other companies but to me that's that's a Tailwind that's going to last for years and years and years and Joe your thoughts on this please well look I'm clearly of course going to talk about Net Zero and and the future at the end of 2019 I bought a bus manufacturing business out of bankruptcy in Northern Ireland at that time it was doing 95% of all the buses for diesel we're now at 100% zero Mission we're full for this year we've doubled our volume every year we've doubled our turnover we're 85% full for next year and we're we 40% full in 2025 there's such a draw to changing to changing um the way people operate in that transport and that is a really really exciting future everyone is going to NSO and all of these all of these machines all of these buses all of these trucks all these cars you've got to go to that solution and you've got to put the power in and you've got to deliver all of that such an exciting market and we're really really enjoying investing and just we have last minute what would be your message to offices who are looking for right investment opportunities uh don't be afraid to have a voice build a brand let let the if you want to do direct investing that is if you don't want to do then fine and put your money in treasuries or whatever if you want to do direct investing you need to stand for something and you need to be value ad you need to be the opposite of an Institutional Investor which is patient Nimble helpful not fearful don't focus on exit positions be found or L I wrote a whole book about it's called burn the boat so here's a shamess for my book but talks about all the different companies that I've backed but that's my number one investment my advice don't be afraid to have a consumer facing brand J well I'm afraid say I didn't write a book and I haven't had got got this one from earlier look firstly I would just say simply remember where you got the money from you're highly entrepreneurial don't stagnate okay it's very very easy you get the money you sold a family business you set up a family firm um a family office and you become highly conservative TR hold on to Capital secondly you know invest in areas you know well try and find people you know that from your previous life or your family business and that you you can invest well with where you where you don't understand that you think it's a big Market go and find other family offices or other people who invested in that market I'm GNA try and join you well thank you Matt and Joe for for joining us and thank you everyone for staying with us thank you very much