Investing Billions - E128: iCapital CEO Lawrence Calcano on the New $145 Trillion Entering Private Markets

Episode Date: January 10, 2025

In this episode of How I Invest, I sit down with Lawrence Calcano, Chairman and CEO of iCapital, to explore the transformative potential of alternative investments in the wealth management space. Lawrence shares his journey from Goldman Sachs to building iCapital, a platform managing over $200 billion in alternative assets. We dive deep into the challenges and opportunities in democratizing access to private markets, the role of technology in scaling the alternatives industry, and the growing appetite for private equity and credit among high-net-worth investors. If you're curious about the future of wealth management and the intersection of technology and alternatives, this episode is a must-listen.

Well, so Bain did a study every year they do a study of the wealth market and the 23 study had an estimate of about $145 trillion that was owned by retail on a global basis. So if you think about that. $145 trillion. $145 trillion. It really rivals the size of the institutional market. And if you think about some percentage of that being allocated to alts, it's a fairly large addressable market for the community.

If you're successful, what will iCapital look like in 2030? So what is the mission of iCapital? Give me a sense for the scale of the business today. Sure. So the mission of iCapital is to create opportunities and access for financial advisors to be able to invest in the highest quality alternative products.

The same types of products, for example, that institutions would have access to. And at the same time, it's to help GPs access the very fragmented wealth management market. Today, the business is about $205 billion in assets on the platform and alternatives. We have about $170 billion in structured notes that we manage in their life cycle and nearly a half a trillion dollars of data assets that we report on. So walk me through going from Goldman Sachs to the founding story of iCapital in 2013. Sure. So at Goldman, I ran tech banking and we spent a lot of time taking companies public, doing M&A and making a lot of investments.

And you know, so fast forward to iCapital, there's a great group of people that had the same idea around bringing automation into this alternative space to provide both that access I talked about, but not just access itself, i.e. I can now have a chance to buy the product. Importantly, my whole experience would be based in technology and would be automated. A lot of the early advisors that we served at iCapital, they were managing a lot of money, but were fundamentally still small businesses. And so they didn't have the capability or the desire frankly to hire lots of operational people, administrative people, etc. So they needed to be able to leverage technology to sort of manage the life cycle from learning about funds to subscribing to

funds through all of the post subscription activities like capital calls, distributions, reporting, et cetera. And being able to rely on a tech platform was critical for them to be able to really implement the technology or the product in their platforms. Spoken to some of the top private equity funds in the world, and they're all focused on this wealth channel. Why is that?

Well, so Bain did a study every year, they do a study of the wealth market and the 23 study had an estimate of about $145 trillion that was owned by retail on a global basis. So if you think about that. 145 trillion. 145 trillion, it really rivals the size of the institutional market.

And if you think about some percentage of that being allocated to alts, it's a fairly large addressable market for the community. And I will tell you, when we started the business, most of the GPs that we talked to, not all, but most, were not really focused on this channel. Historically, they raised all their money from institutions. And so over time, as it's become very obvious that the channel is large, it is also stickier

than I think a lot of people assumed when they first started thinking about the channel. They realized that they could build a foundational part of their fundraising strategy within this channel And so that's really what's evolved over the last, you know decade was it difficult when you started you had this contrarian thesis You saw the world differently was it difficult to build something that a lot of people didn't think should exist Well, I don't know that they thought it shouldn't exist versus they just didn't think about the question. And I think the hard thing was the classic chicken or the egg problem, right?

So if you would go to independent financial advisors and say, we're gonna bring you a platform that will provide access to alternatives, the first question is, well, which managers are on the platform? And if you go to the managers and you say, we've built a platform that's going to give you access to this massive and distributed wealth management channel, they're going to say, well, how much money is on the platform?

Which advisors are on the platform, et cetera? And so building that or managing that chicken or the egg problem, so both sides of the equation, if you will, sort of grow over time, was really the critical challenge that we were able to overcome throughout the last decade. And what surprised you the most about the interests of high net worth investors versus traditional institutional investors?

You know, I think probably the biggest threshold issue for a lot of individual investors is illiquidity. Institutions are very used to that, right? They're investing in these assets to fund longer term liabilities. Whereas individuals, you know, illiquidity is a less natural and or comfortable topic. Yeah. And so managing their perception of illiquidity is a less natural and or comfortable topic. Yeah.

And so managing their perception of illiquidity and thinking about how do they properly incorporate these types of products into their portfolio, you know, has been and continues to be a really important challenge for the industry. Which if you think about the market as being efficient, efficient market hypothesis, one of the only true ways to outperform

is with illiquidity, the illiquidity premium. So not being able to take advantage of that really disadvantages high-net-worth investors. It does. And I'll tell you, I say this a lot, the illiquidity is not a bug, it's a feature. And if you think about how these asset managers generate, you know, returns for their shareholders, that period of illiquidity is fundamental to what they do.

If you think of private equity, for example, it's probably the ultimate active asset class where they're not just investing and following a company, they're investing in the company, they're taking a seat or several seats on the board, they may control the company, they're hiring management, maybe they're firing management, they're buying divisions, selling divisions, launching new products, changing prices, growing geographically. There's a lot of really fundamental activities that this, you know that these asset managers are undertaking. As we think about the asset class and as we think about how do we evaluate the individual

managers, probably one of the most important things we think about is what impact do they have on their portfolio during this sort of active management period? What are they actually doing to improve the revenues and profitability of a company? And while they can generate some return, maybe with leverage or multiple expansion, the real value in the differentiator, the alpha, if you will, is in what they do with the companies and how those companies grow and improve their financial characteristics over time. So when you're looking at high net worth investors today, Q1 2025, what are they looking for? So right now people are beginning to shift

their interest back to equity. Over the last two years, I would say credit has really dominated the calendar. And what's been behind this credit, interest in credit? Yeah, so if you go back to 22, it's a great question. If you go back to 22, the markets were in a bad place. People were expecting the Fed to raise interest rates. And in a rising rate environment,

people are looking to be hedged, right? So they tend to be more risk off. They want shorter duration, and with respect to private credit, most of the private credit structures are floating rate. So if you think the Fed's gonna raise rates, it creates a hedge for you. And over time, as the Fed did in fact raise rates,

at one point rates were maybe four or 5%, the absolute return to private credit was 10 to 12 percent. So even the absolute return was attractive. Now that we're seeing rates begin to come back down, we're seeing more of a sort of reopening, if you will, of private equity into the market. Right now, if I look at this year to date, actually, if you go back to the first half of the year, private credit was roughly 45% of the flows

and equity about 35% of the flows. That reversed in the third quarter and we had equity at close to 50% of the flows and private credit in the low 30s. So we're already seeing that shift in extension into the private equity strategies, which we expect to continue. To double click on the equity dispersion,

what asset classes are we talking about? So it's growth equity, bio-equity, technology is one of the themes that people are very interested in, but it really is across the board. I think one of the themes that people are very interested in But it really is across the board I think one of the important things about our platform is all of the different Strategies and underlying sort of industrial focuses are on the platform So you can get private equity private credit private real estate private infrastructure all the hedge funds

You can get funds that are focused on financial institutions or technology or energy or healthcare, etc. And so the important thing about the platform is that any advisor can build a portfolio for their clients irrespective of the market environment. So if we're back in 22 and people are risk off and they expect rates to go up, they can buy a full cadre of private credit products. If the market's rallying and rates are coming down

and people are focused on equity, there's a full menu of equity products they can buy. And being able to provide that over time is really critical for advisors to serve their whole client base. You've made a bet on the Wealth Channel, you've also made a bet on alternatives. Tell me about the future of the alternatives industry.

We think it's a good bet. I mean, if you look today and you do a survey of where the wealth manager CIOs are suggesting allocating to alts, you'll find ranges from 15 to as high as 40% suggested allocation to alts. If you then look empirically and see where people are actually allocated, what you'll find is, you know, mid-, low to mid-single-digit allocations.

So we think there's a very substantial amount of room to grow into the allocations. In fact, I like to think about two phenomena as a way to think about where we are in the market cycle. The first is the participation rate, and that speaks to how many financial advisors are actually doing the business, right? And today, you probably have 20% of the advisors driving close to 80% of the volume. So the participation rate is still quite low. If you then look at the allocation rate as I was just describing, it too is way

below the sort of targeted allocation suggestions by the CIOs. So I think both those dynamics as the participation rate grows and as the allocation rate grows, you've got significant potential flows into the asset class. I think you could also look at it from what is the efficient? What should you be efficiently allocated to alts versus what's the reality? And if you look at what is efficient, you have to look at the endowment world, right?

Probably some of the sharpest investors in the world, the Yale model, specifically the David Swenson model, most endowments are roughly 35 to 40% and sometimes up to 50% of their entire portfolio. And then you go to the wealth channels and you see the low single digits. What's the reason for that dispersion? So first of all, I played golf over the summer

with the CIO of an Ivy League school that has a 60% allocation to alts. Okay, I understand it. So your point is exactly right though. And I think the issue, there's multiple reasons and I think probably to start the most significant is just access. Institutions have been buying these assets

or investing in these assets for 45, 50 years when the industry first really started. And individuals, except for the wealthiest family offices. You're talking about billion dollar plus families. Yeah, real family offices that frankly are just like foundations and endowments in many respects. Many others, however, haven't really had that systematic access I was talking about to alternatives.

And so that has changed a lot and now people do have access. But what's needed is the automation I talked about and also the tools and education and I would say probably today if you looked at one of the biggest reasons for the ALTS allocation where it is broadly education is still really what's needed. There's still a lot of advisors that are newer to the asset class and obviously most responsible advisors aren't going to the asset class, and obviously most responsible advisors aren't going to suggest products

that they first don't totally understand, and understand the applicability of those products for their clients. And so as that education process happens, and as advisors get more comfortable with the asset class, and it's really happening, I think you'll see those numbers start to grow. Whether they get to 40, 50, 60 percent, I'm not sure they're going to get that high.

But fundamentally, the reasons why institutions invest in these assets are every bit as germane to individuals, right? They have long dated liabilities. Retirement is a long dated liability that you have to save for. They have other events in their life they have to save for. They wanna protect their portfolio. They want diversification and assets that aren't totally correlated with their liquid assets.

So all of the things that drive institutions to invest are the same types of things that are attractive from an individual's perspective as to why they should invest as well. How do you know that the wealth channels are not being adversely selected when it comes to these funds? You have a large fund. They want to go to endowment or pension fund.

Why would they want to allocate to a wealth channel? So it's a super question. And before I answer that, I'm going to make one observation that strengthens the question further, which is to say, within alternatives, you take private equity again, the difference between the top performing manager and the fourth quartile could be over a thousand basis points, 10 plus percent. You're in a totally different asset class if you're not in the right managers.

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with a focus on growth, efficiency and customization because every client's challenges are unique and their solutions should be too. I'm proud to partner with Reed Smith, a firm that continually adapts to meet their clients' needs. Some say venture capital is the best asset class but also is the worst, depending on which core carrier. It depends who you're with, right?

If you're with the top in venture, the pool is even smaller, I would argue. But with respect to really all of these alternative strategies, you've got to be with the best managers. And part of what we're trying to deliver as a platform is access to those managers. I think historically, when people haven't really had robust access, you really have the adverse selection problem because they have a friend who's running a real estate fund or they know someone who's in a private equity fund.

If you don't have robust access and you don't have robust information to understand how any given fund performs, it's hard to make a relative decision about who the top performer is and who's not. And so information quality. Is that also the standardization of information? Cause I think that's one of the top performer is and who's not. And so information quality. Is that also the standardization of information? Because I think that's one of the difficult things.

Some are not even RIAs. I'm assuming you work mostly with RIAs. Sometimes it's hard to even standardize and look at different asset classes. I think access and standardization, knowing that you have all the relevant material, is really important. We try to provide that. We try to provide due diligence for many of the funds on the platform. So there's another lens, another analysis for an advisor to talk

about with their clients. I talked about how the best managers generate returns. That's one of the things, for example, in our diligence reports we're really focused on which of the managers are driving underlying portfolio company growth and improvement. Again, the alpha. Where's the value add? Where's the value add? Exactly.

iCapital has both the platform, but also you have a curated set of managers. Talk to me about that. The underlying thought as we were building this company is we needed to build the full automated platform. And I talked about that in terms of how important that was for people to be able to really drive and grow the business. But there was also, as we're discussing now, a lot of importance around making sure you have access to the right managers.

One of the things as we go to market is that we don't require people to use all of what we offer. We simply say, here's what we have to offer an end-to-end technology platform, access to great managers, research around great managers, and you choose what components of the offering is most valuable or important to you to achieve your goals and objectives. For many of the independent RIAs they use both the full platform from an automation perspective and they also use the products that we've curated and made available to them. Many of the large banks for example that have their own

historic access and incredible set of relationships might just use the technology or some of the services that we offer around managing the business. Same for the GPs. And that's part of, you know, sort of meet the customer base where they are in terms of providing the solutions they need and not requiring people to take things they don't. There's a saying in private equity and alternatives that nothing takes more time to manage than a $25,000 check. You make an exception for a friend and family and you end up spending more time than the $25 million check. How do you

obfuscate the investor relations pains of dealing with small check writers and how does iCapital help? Good question and this really speaks to one of the important services that we provide for GPs in addition to technology is this aggregation. And so if you look at the infrastructures of most general partners, because of where they've always raised money, they're tuned to getting a very small number of really large commitments.

The high net worth space, however, is the exact opposite, a really large number of smaller commitments. And so their infrastructures aren't tuned for that new reality. So we step in and we aggregate in lots of different ways all of these smaller tickets. And so we look to a GP like one large institution. And so we can interact and connect to their infrastructure a lot more seamlessly than 2,000, 50,000, or $100,000 investors. And that's a big part of the service offering to the GPs, as well as helping to create access

to this fragmented group of people in the first place. You mentioned earlier in the interview something that surprised me, that the wealth channel is sticky. A lot of managers would look at high net worth individuals as the last one on the boat, first one off. Why is the wealth channel sticky? Well, I think it's like anything else in life. If people are having a good experience with a manager,

and the manager is delivering what they've promised and what they promise beyond just, I'm going to invest in these strategies in this way, and it's going to generate X returns, it's also, and I'm gonna report to you, I'm gonna have transparent reporting. The user experience matters as much as the objective. Yes, and I think in a lot of cases,

there's a relationship that forms with the manager and delivering consistent returns, being transparent about your investments, your reporting, your fees, etc. is how you go about building that relationship because it develops trust. And just like institutions that, you know, have good experiences with some managers and they grow their relationship, and maybe with others they don't and they probably shrink or eliminate those relationships, this channel is the same way. And I think it represents an incredibly long-term channel for GPs.

And I'll tell you, going back to 2014, running around talking to GPs and having many GPs say, you know, why would I ever need to be in that channel as we talked about. Today I would say almost every GP that we talk to understands my comment from the Bain Report, the size of the market, and now they're all very focused on figuring out what is the right way for them to access this channel. It's also the final frontier. A lot of the top institutional investors have made their allocations, have made their bets on their horses, and they don't typically change that often.

So you almost have to, if you're an emerging manager, you almost have to go after that channel. Yeah, I think you're right. I think a lot of the newer managers tend to have sort of a friends and family sort of origin to their capital base. And then as they create track record and they have demonstrated success, then they tend to go out and raise more institutional money. But I

will tell you, the decision-making, having spent a lot of time with these advisors, whether they're, you know, on a bank platform or independent RAs or IBDs, they're very smart and they're very discerning. And what no manager should think is that this channel is any less discerning, any less shrewd and thoughtful as the institutional channel. And as you see, one of the big trends in wealth management is this sort of growing aggregation.

The RIAs are combining, creating much larger entities and as they do, they represent more dollars. They've got, you know, mature built-out staffs and they will look to the GPs like the banks look to GPs today in terms of their size, their reach, their breadth, et cetera. And so it's a very exciting market. And I think we're gonna see, as we talked about earlier, a growing amount of allocation to this asset class. I think every top hundred private equity firm

will have a head of private wealth within the next five years. They most already do. And it's coming down the line. One of the really interesting things in the earlier days is that as people started to embrace this channel, they asked some of their institutional fundraisers to kind of manage the channel off the side of their desk.

And that's not the right way to do it. And you don't have focus, this channel needs focus just like any other channel. How does that scale? How does focus scale in the wealth channel? So it's building relationships, you know, with certainly the wires create lots of scale because they represent-

The large banks, the JP Morgan's. Yes, JP Goldman Sachs, UBS, Morgan Stanley, B of A. They represent very large pools of money. And over the years, the banks have done a lot to educate advisors on how these assets fit in the portfolio. So they represent very attractive places for the GPs to invest. But as we were just discussing, theIA channel is also quite attractive, particularly as we've seen the M&A trend that has created larger and larger

entities, which now therefore represent more money and have the sophistication and the interest. The economics are very attractive in rolling up these RIAs. They pay for themselves very quickly. It's a great trade. Yeah, that's the thought. And they continue to grow.

And I think the more M&A we see in the RA space, the more integration and automation we're also going to need to see. Because they need to take disparate platforms and integrate them so that not only do they have asset growth, but they also have margin growth. And by the way, the private equity space is investing very actively in this trend. So it's really interesting how these worlds

are coming together in a powerful way, exactly. So how do you invest your portfolio? You know, somewhat conservatively, you know, I have a significant allocation to alternatives, you know, both in terms of the funds I have as well as, you know, iCapital is a private company and I own private equity, if you will, in my equity in iCapital. You own essentially a small piece of each fund through your ownership of the parent company.

No, iCapital doesn't own its funds, right? And so there are a handful of funds that I have invested in. And then obviously, iCapital is a big position. And then a lot of what else I do is invest in municipal bonds, private credit. And so I have a bit of a barbell. And what are some mistakes that you made early on in your investing career that drive

how you are as an investor today? Probably the biggest thing is investing in things I didn't understand. And in my life, growing up in investment banking, we had a number of chances to invest in certain things and in some cases, they sounded good. And I did a cursory review and invested and didn't really understand how it was going to perform under different market environments. And so I would say probably the biggest mistakes was investing in things I hadn't fully taken the time to really dig into, which is why frankly with iCapital we're so focused on making sure people are understanding

what they're doing. Not everything works out the way you expect, but if you really understand, then when rates go way up, you'll have an expectation of what's going to happen in your portfolio. If they go down, the market goes up, it goes down. You should have a set of expectations for what's going to happen to your investments. I think that's one of the things that makes Warren Buffett so good, his buy box. He's one of the most disciplined investors ever. And I've had a lot of people that complain about this and say, you can't move him from his buy box. So you've been building iCapital, but alongside it,

you've been building a large organization. What are the lessons learned from building such a large organization? The most important thing is creating a cohesive culture. You know, when I grew up at Goldman Sachs and culture was really important there and it was something that was very obvious. And I would say sort of one of the most significant unifying principles in that culture was that our client's interests always come first.

And I would say here at iCapital, I write a letter to the company every weekend. I've been doing that for nearly a decade. And it's so that people understand what we're trying to do and why we're trying to do it, and they get a readout or a report on what's happening. And in every one of those, I make two observations, which is that, you know, everything we do has to help our clients succeed. And the

second thing is everything we do, we have to do together as a team. We're offering a, I think, a very valuable and complex service, and you need to work together lots of different, you know, people with different skills coming together to provide that service and or technology to help our clients meet their objectives. And I would say that culture is a differentiating thing in companies. Because companies... For retention, for recruiting? Yes.

Where does it help the most? Everywhere. Everywhere. Everywhere, I mean. And does that mean you have to be anti-something to be pro-something in your culture? No, no, you need to be pro-team. You need to understand that your success

is a function of the whole team's success. And if you are the type of person that needs to do things on your own, this may not be the right place. We have incredibly talented people here who understand that by working with other incredibly talented people, they'll get a lot more done.

And so I think that desire to work together as a team is a really important thing. And I think always understanding that the only reason any companies exist is so they can deliver something of value that somebody else will buy and use to achieve a goal. And keeping that sort of end customer in mind, I think, is really critical in everything you do. It's like a roadmap. You know, as

you get bigger and, you know, when you're small and you can have line of sight manage, you can see what everyone is doing and everybody can hear everybody and you know what's happening. As you get to be 1,700 people and beyond, you know, people have to know what are the things that are important to the company. So that while they're making the hundreds or more decisions they make every day on their own, they're guided by these two things. I've read a lot of leaders of organizations, the bigger the organization, the more pithy the sayings and the fewer there are.

They go around and say kind of the same two, three, four things, how do you make your culture stick? I think it's a thousand little things, right? It's how you compensate people, it's how you promote people. It's your behavior more than what you say. It's what you say is interesting but what you do. But I do think that there is value in consistency and repetitiveness, right?

So if, I remember, you know, at Golan we had 14 business principles and they were all incredibly powerful. When we were smaller, the first thing that occurred to me is that's a lot of things for people to remember. At least as we thought about it, you know, what are the handful of, what are the most important things that we never want anybody to forget? And so what's happened, you know, is we've really

distilled what we're doing to those two things as the root of our culture. I mean, excellence is important, integrity is important, but the way I look at it is if you're focused on your client's success, then you're going to be excellent. You're going to have integrity in terms of how you deal with your colleagues and your clients. And so repeating the same things over and over again, it just reinforces what matters to the company. If you're successful, what will iCapital look like in 2030?

I think iCapital is going to be a company that has really built out the infrastructure for the global wealth managers and asset managers to scale very large businesses, either as consumers of or managers of these private assets across all the different strategies. What we're really trying to do is create that operating system, just like a major stock exchange creates a platform and a mechanism for people to buy and sell you know stocks for example very efficiently and easily we want to

create a platform for people to be able to learn about and buy and and sell and manage alternative assets of all different strategies. What do you think the biggest challenges facing the alternatives industry and iCapital? I would say probably the biggest thing today is sort of education, right? You've got a lot of advisors who are newer to the asset class. We've talked about the allocation rates being low. And so that next wave of advisors, which is a really big wave, by the way, is just by definition less familiar with the asset class.

And so making sure that they're educated in a way they really understand the product and can represent it and show it to their clients kind of one by one. And I think this is frankly a multi-year journey that everybody needs to be involved with. And I would say that, you know that when there's a lot of excitement around something, there's often a tendency to rush, move quickly, et cetera. And I think this is one where the opportunity is so large in terms of what alternatives can become relative

to these client portfolios, that everybody is better off just making sure that the investment is made and the education, all the GPs are doing what they can to help educate advisors and clients. We certainly need to be doing that and others so that people invest in a really thoughtful and knowledgeable way.

You guys are investing heavily into technology. What are the problems you're solving with your technology for your clients? Sure, so we're looking at a couple of different things that are important. One is around decision making, right? Two is around data collection. How do you, as you grow your business,

as you make more alternative investments, as you do more M&A, you've got data in lots of places, how do you bring that all together and turn it into useful information? Three is how do you connect the ecosystem, right? So you've got managers, administrators, tax preparers, I-Capital, wealth managers, you've got lots of different people that are dealing with information,

often with an old or different version. Are we going to be getting our K1s before September? That's a harder question. That's a hard one to solve. That's a harder question, but a very good one. That's 2030. I do think that using technology like AI to help automate how information is collected, extracted, aggregated is really important.

Using AI to help people get to the types of products and strategies they want to get to more quickly is really important. Using the distributed ledger to be able to connect the ecosystem in a really powerful and automated way so that people aren't reconciled. I'll give you an example. In a typical private fund, all of the constituents, six different constituents in that private fund are going to reconcile every transaction that happens. So there's an onboarding, there's a subscription,

there's a capital call, a distribution, a redemption, a report, every, the GP, the wealth managers, the administrators, the tax- A lot of repetitive work. A lot of repetitive work in different systems. And so what we're trying to do is leverage the distributed ledger and have people connect into the APIs

so that whenever there's a change in the main system, so maybe an administrator has an update, everybody's system can consume that update immediately and you don't have people keying in that information in separate systems, which obviously leads to some mistakes. And so bringing the industry together is a powerful part of where we're investing and how we think we can improve the experience for the whole ecosystem. You have people like Christopher Zook

and Tony Robbins lobbying Congress to allow more people to become a credit investor as their credit investor rule. What are your thoughts on this? So we had a rewrite or an expansion of the rule, you know, a handful of years ago where people who, you know, may not have met the wealth test can meet the test with experience,

their place of business, et cetera. I think that was a smart thing to do because it allowed people who were truly qualified to invest to have a chance to invest, even if they weren't, you weren't at a certain wealth level. I do think that it's about people understanding what they're doing, right? And you can have some very wealthy people

who don't fully understand these investments, and you can have some people who aren't as wealthy who understand them really thoroughly. And so I think that behind that definition needs to be an understanding, a true understanding of the products and how they work so people can make thoughtful decisions. You could have a university professor

that is not an accredited investor, maybe even a university professor in finance. Right, that's exactly what I'm talking about. And you have a third generation wealthy person that's never, you know, that doesn't even know what an alternative is, that is accredited. Yeah, exactly.

And so I think, you know, whatever the rules, however they evolve, they I think should be based substantively or fundamentally on, you know, on what people understand about what they're investing in. Absolutely. Well, Lawrence, I've really enjoyed the podcast. Thanks for jumping on.

Thank you. Great to be here. Thanks.