The Pomp Podcast - #1534 Erik Hirsch | Wall Street Legend on the Future of Finance

Episode Date: April 21, 2025

Erik Hirsch is the Co-Chief Executive Officer at Hamilton Lane. In this conversation we talk about global uncertainty, bitcoin, gold, investing strategies, tokenization, and why they are putting so much effort and time into it. ===================Core is the leading Bitcoin scaling solution, enabling you to lock in yield by locking up your Bitcoin. Simply lock it on the Bitcoin blockchain to secure the Core network, and get rewards. No bridging. No lending. Just holding. Still your keys. Still your coins. Now your yield. Start at stake.coredao.org/pomp.===================Bitwise is one of the largest and fastest-growing crypto asset managers. As of December 31, 2021, the company managed over $1.3 billion across an expanding suite of investment solutions, which include the world's largest crypto index fund and other innovative products spanning Bitcoin, Ethereum, DeFi, and crypto equities. Whether you’re an individual, advisor, or institution, Bitwise provides intelligent access to crypto with your unique circumstances in mind. Visit www.bitwiseinvestments.com to learn more. Certain of the Bitwise investment products may be subject to the extreme risks associated with investing in crypto assets. Visit www.bitwiseinvestments.com/disclosures/ to learn more.

What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's going on, guys? Today, we've got an amazing episode with Eric Hirsch. Eric is the co-chief executive officer of Hamilton Lane. Hamilton Lane is massive. They have about 800

employees. They're coming up on a trillion dollars in assets under management. And Eric, he's super into what's going on in the crypto industry. We talk about the global uncertainty. We talk about Bitcoin and gold. And then we get into tokenization and why Hamilton Lane, a well-respected player in the institutional world of the incumbent financial system. Why are they going so heavy into this? And what do they think the advantages are? What do they think the trade-offs are? And why are they spending so much time, money, and energy

trying to figure out how to tokenize their funds so that anyone, regardless of accreditation status, can invest in their funds? This conversation is going to blow your mind. I walked away super amped up because somebody like Eric coming from the traditional system being this bullish on this technology is something that is going to really show us

what's going to happen in the future. Here's my latest conversation with Eric Hirsch. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Today's episode is brought to you by Core. You can earn yield on your Bitcoin by just

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My partner, Bitwise, is the first and only Bitcoin ETF provider to openly publish its Bitcoin wallet addresses, allowing anyone to verify the fund's holdings. I believe this level of transparency is exactly the kind of innovation that only crypto makes possible. Bitwise is also the only ETF issuer that is a crypto specialist asset manager, meaning their team solely focuses on Bitcoin and they have the research, education and support to help investors navigate the space with confidence. All of that is great, but what I love most about Bitwise is probably their commitment to developers. Bitwise donates 10% of their ETFs profits to Bitcoin open source developers. Bitcoin developers are the unsung heroes working tirelessly to maintain, improve

and innovate the blockchain. Their efforts ensure that Bitcoin remains true to its promise as a decentralized system that is built to last. Go to bitwisepomp.com to learn more about their ETF and other services. Once again, that's bitwisepomp.com, bitwisepomp.com. As always, remember investing is risky and carefully consider the extreme risks associated with crypto before you invest. All right, Eric, I thought a great place to start this conversation is there's tons of uncertainty in the economy and in the investing world. You run a very large organization. You have about 800 employees. You guys are global in nature, both in terms of your team, but also the markets you invest in. How are you guys thinking through this right now,

given how quickly the dynamic market is changing? I think uncertainty might be an understatement in this case right now. I think there is massive market gyrations. Today is no exception to that. I think right now this is sort of an analogous to it's a multivariable calculus issue, which is almost too many variables going on to actually solve the equation. And so right now, there's not a lot of action among the larger institutional investors. They're waiting to see some of this actually start to settle out to begin to formulate investment plans. So what we're seeing right now in the private markets is just a lot of inactivity, not a lot of new deals getting done, not a lot of companies being sold. People are sort of in a wait and see mode. It becomes really hard to price an

asset today when you're not exactly sure of kind of the depth and the duration of these tariff challenges. What's interesting about, you know, not only the assets themselves, but you mentioned pricing, and some of the liquidity there, it does feel like whenever there's that uncertainty, people want to go to cash, obviously, and correlations kind of go towards one. But there's been a massive focus in the institutional world to get more exposure to private equity. And so do you think that that focus may actually diminish some moving forward, because people kind of get reminded of the illiquidity? Or is the promise of these large institutions having very, very long time horizon is going to play out and people will just say, hey, look, I can write out whatever it

is. This isn't going to last for 10 years. Yeah, I think it's more of the latter. So if we kind of step back and think big picture, we've all been sort of told that the optimal portfolio to kind of have the proper retirement savings is a classic 60-40 portfolio, 60% public equities, 40% bonds. And that's sort of what's been beaten into our head, frankly, for a couple of decades of That's the prudent way to do it. When you look at the math on that in today's environment, and frankly, even a pre-tariff environment, that's not the solution. A lot of volatility in the public markets, a lot of concentration in the public markets.

This is relatively new. We weren't talking 15, 20 years ago about a huge portion of the public markets being totally dominated by seven stocks. That wasn't a thing. We might talk about the public markets being dominated by a particular industry or sector, but we weren't sitting here talking about seven specific stocks. So that level of concentration, particularly when you think about the wave of the 60-40 portfolio, came with a huge focus on you got to be passive, you got to be passive, pay

the lowest fees possible, be passive. That becomes even more problematic in a highly concentrated environment. So I think then the short answer is people are going to be willing to trade off some level of liquidity for more diversification and better longer term performance. And so I don't think that trend is a short term. I think it's a long term. And when you look at kind of the different data points every morning, right, I always ask investors, you walk into the office when there's uncertainty, you're trying to get a sense of just which way is north, right? What's going on and where am I headed? What are the data points that you're looking at on a daily basis that is really kind of helping guide you?

I literally wake up before 5 a.m. and I am rolling through lots of news sources because right now we're in an odd environment where, frankly, the news cycle, if you will, is going to impact the markets more than the fundamentals of the economy. So has there been a new political announcement? Is there something happening geopolitically? Is there another conflict that has arisen right now? those are becoming these big extraneous events are becoming a big factor. So I think about the markets, sort of, we talk about the markets. I think about the markets as kind of a river. And as an investor, we don't get to control the speed of the river, how high the water is. And frankly, we're not controlling right now who's dropping boulders in the river in front of us. Our job is to simply kind of steer our vessel around through that river best we possibly can. So I think the news cycle is the first place to start.

And then the second piece here is what's happening to the consumer? Our economy in the U.S. is so dominated by what the consumer is doing that we're looking for data points on, are they dining out more or less? Are they traveling more or less? Are they going to the movie theater more or less? What are they doing and what are they telling you from a confidence standpoint about how they're feeling? I think once you leave the consumer, you start looking at the corporations, their level of

confidence, their spending or lack thereof. What are they doing? What are their earnings telling you? And I think that starts to give you the best picture possible. One of the things that has really, I think, surprised people is gold and the recent rise in that asset. It obviously had a banner year last year and year to date has done very well. I think the mainstream kind of consensus is that central banks are buying it. Investors are buying it out of that uncertainty and that fear. But people are also surprised that maybe something like Bitcoin, which is that digital version, those two assets seem to have done very well over the last decade and play very nicely into this uncertainty.

I think what's interesting about you all is you guys are not investing in liquid markets for the most part. You're very focused on other parts. But maybe you can talk about the economic data or signal you get from things like Bitcoin or gold as you're trying to figure out what you're going to do with your investors or your investment portfolios. Well, I would sort of I'll throw it out there and say, I think it's very unlikely that the person who's buying gold today is the exact same person that's buying Bitcoin.

I think what you're seeing is those are two different camps, but they're both attracted to their respective areas for the same reason. It's more comfortable. And so for the hardcore sort of Bitcoin believer that has a view that it's more decoupled from the overall economy, that it's going to become its own ecosystem, that becomes a bit of a flight to safety. And the same thing is true on gold. Different institutional mindset, again, more traditional asset, people viewing that as when the world is bumpy, rocky, and scary, I'm going to go for the thing that has tangible value, and I'm going to put capital there.

Now, I think you're not seeing a lot of institutional investors putting a lot of exposure into Bitcoin. So there's that also a disconnect of institutional investor much more likely to be taking positions in gold, individual investors much more likely to be taking positions in Bitcoin. So again, a little bit of a generational disconnect, a little bit of a mindset disconnect, but both trying to solve for the same thing. Which asset can I get that's more decoupled from what's happening in kind of the overall economy around me? What I think a lot of people who are going to watch or listen to this are going to be surprised by is you run a very large organization, very well-respected organization in the institutional world. And you can sit and

talk and debate Bitcoin or gold or sound money and kind of all these things with great nuance and I think intricacy, but it's not something that you guys focus on. So talk a little bit as to as crypto or digital assets, tokenization, all these things have kind of come onto the scene in the last really 10 years or so. How have you guys thought through where do we want to play and where do we want to understand, but maybe sit out on? So if you think about Hamilton Lane, we sort of position ourselves as a private market solutions provider. We're really here to help investors of all different shapes and sizes access the private markets. And the private markets today are large, really large, very diverse, representing all kinds of different

sub-asset classes and geographies and industries. So that gives us sort of a big purview on the world. And a lot of our client base is institutional. So think some of the largest, most sophisticated investors in the world, sovereign wealth funds, banks, insurance companies, endowments, foundations, et cetera. So part of being successful is that we're sitting here, big client base, big broad view of the market, trying to provide guidance and perspective to our customers. So I think it's incumbent on us to be able to talk about all of these different things and how they might impact the economy. For us, big believers actually in the tokenization movement. And I think that might sound contrary to a firm that is more rooted in kind of the

institutional world. And you mentioned our size and scale. Today, AUM, assets under management and advisement, getting very close to $1 trillion. So huge amounts of scale and deployment. But at the core, one of the things Hamilton Lane believes in strongly is just simply trying to simplify. And we think that tokenization and accessing our asset class and others via tokens is just a better, cheaper, faster, simpler way to do things. And we're a big fan of that. Now, I know you guys are doing a bunch of stuff, and we'll talk about that in a second. But when you guys first start looking at tokenization, do you have a point of view or perspective as to where this is going to show up in kind of the broader global financial system or areas that

you think are really ripe for this type of technology to come in and make an improvement on day one? I think it lends itself today mostly to things that are evergreen in nature. So in our traditional private markets world, you're familiar with the notion that most private equity funds are drawdown funds. Capital is called as it's needed. Increasingly, we're seeing more and more vehicles be more evergreen in nature, which is more akin to what you would see in a mutual fund or an ETF where the capital is always invested. Positions may change around, but the investors are not getting a capital call.

So as our world migrates to that evergreen vehicle, we think the token is simply allowing for a better transaction method. I joke and say our asset class been around for 50 plus years and we invest in a lot of technology. It's one of the things private equity is known for, you know, venture capital innovation. And yet as an asset class, we're awful. We've barely innovated. I mean, we look very similar today as we did 50 years ago. And the analogy I use is we're the asset class that is literally still getting to the end of the grocery store and pulling out the checkbook and asking the grocery teller, you know, who do I make this out to? And then sort of taking the long time to actually write the check. Tokens to me are much more akin to Apple Pay.

And so this is really about getting away from this very antiquated subscription model that has sort of plagued private equity to date and moving into the world of Apple Pay where it's kind of click and go. So what's interesting to me is you understand the technology, you have a point of view, but you guys are not just sitting there talking about it. You're actually doing something. I know you have this new tokenized fund that is kind of in partnership or using Republic as a platform, but maybe talk through like the journey to deciding this fund with this technology at this time, and maybe even the investment strategy that you guys are using here. So we've absolutely put our money where our mouth is around this. We've been using Hamilton Lane's balance sheet capital to actually invest directly and take ownership stakes in a variety of these token exchanges. Today, they're regulated, so they operate in different geographies. They are each marketing and trying to appeal to a slightly different kind of investor.

And today, they're all trying to be successful, but it's very early. And so we've actually formed a group of strategic partnerships, again, putting our capital behind them and using them as a partner to actually tokenize some of our funds. So, across different exchanges and different geographies, we have tokenized many, many of our Hamilton Lane funds, trying to provide easier access to investors who find that to be more comfortable. Republic is really the most recent example. It's noteworthy in that case in particular because we're not even now talking about just catering to the accredited investor, still someone who's very wealthy. we're talking about really catering to any investor because the minimum investment size for our latest product with Republic is 500 US dollars. So the other theme for us is not only

the ease and simplicity, it's really about democratizing the access to this asset class. To date, as you know, this has only been kind of the purview of big institutions and super duper rich people. We don't think that's been fair or healthy or a good long-term strategy. So bringing this asset class into the hands of truly everybody feels like a better way to go. One of the things that people outside of maybe hardcore finance may not realize that is happening is when the word retail has previously been used, it has very much through decades been almost like, hey, those people aren't as smart as the institutions. The institutions are the smart money. Retail is not. I think that's changing in the eyes of a lot of people. And you now see

very, very large asset managers start talking about, we need to figure out a way to get to the self-directed investor, right? So the language changes and now people are realizing like, wait a second, there's some distrust that people may have with financial advisors or RIAs or traditional kind of channels. And so can we have solutions for those channels, but also have solutions that go direct to these people because they want to direct their money. And so this fund that you have is doing that. How do you think through like the investment strategies that may appeal to them versus a sovereign wealth fund or, you know, a large public pension fund? Are they the same type of investment strategies or do you guys see something that may be a little bit different?

So great question. And I agree with your statement wholeheartedly. We need to sort of throw away the vernacular of this versus that or X versus Y. I think instead what we should be talking about is institutions, smart, sophisticated, savvy, and a lot of individuals, smart, sophisticated, and savvy. I think this is really more about what kind of investment tool or what kind of investment structure best accomplishes your goals. That's really what we're talking about. The public equity market has done a much better job of evolving and innovating than the private markets. So if we go back on the public equity market, for a long time, it was either you had to hire a stock broker to go pick stocks for you and buy them. And then we moved into a world

of mutual funds. And then we quickly moved into a world of ETFs and the ETF world continued to really innovate and become very niche in its strategies where you could sort of cover the whole market or something very, very tiny. This is exactly where our market is heading as well. We're moving away from simply offering drawdown funds. That's again, one strategy or one flavor to offering funds that are more evergreen in nature, that have a multitude of strategies. So I think it's not so much that the investment strategies that we're executing vary for the customer, they don't. We think, for example, with our partnership with Republic, we're investing in global infrastructure opportunities, ridges, data centers, toll roads, airports, etc. A lot of need

for infrastructure in this country and outside of this country. Private partners are a great way to be financing, building, and executing on that. It's a terrific asset class to invest in. But our institutional clients want that. And individual investors want that as well. It's simply figuring out what investment vehicle is the best match for each of them. What's interesting to me, I think, about this evergreen idea and the tokenization that you're talking about is we've seen people try to create kind of permanent capital, closed-end, publicly traded funds in the past. And a lot of times they struggle with the liquidity in those shares and therefore they trade at discounts. And so people very much say, hey, if I buy this, it may be hard

to get out. When you expand the investor pool of people who can go and actually buy this, you lower the minimums, you really kind of change the liquidity dynamics of the fund, I would think. Maybe that's like the theory behind it. Do you guys have any data points yet that suggest that there is more liquidity with some of these funds? And really the idea being that you can address maybe one of the biggest issues people have historically had with these like closed end or kind of permanent capital type vehicles? Yeah. So a couple of points there. One, these are non-traded in the sense that you're not having the public market sort of strike a value. And so I think you do away with some of that notion of it trades at a discount, which is helpful.

Two, they're evergreen, but they're also known as semi-liquid. There is actually a liquidity provision that allows investors to take out a portion of the fund's net asset value during each liquidity period. To the extent that your fund becomes very large, that's a lot of liquidity that's being offered continually. So that helps. And so our data has been investors who want to get complete liquidity have been able to do so to date. That's a good and healthy thing. But the tokens have another advantage. I think as we start to see the token world continue to mature, expand, evolve, you're going to be able to have tokens trading on those exchanges. So you're not going to have to simply wait for the liquidity window that opens up by your fund provider.

you'll be able to take your token and freely trade it across that exchange. I think all of this is, again, kind of this maturation of how do you make sure that you're evolving the ecosystem to meet the needs of the customer? That's a good thing. But the last point I'll say is despite all of this,

one of the other encouraging trends that we're seeing is that we're seeing investors of all different sizes and shapes embrace the notion that having total liquidity on every asset that they own is unnecessary and overrated, particularly if you're talking about individual investors who were saying, hey, you're saving for retirement. If you're putting away that money for 10, 20, 30, 50 years, why the focus on having all of it be completely liquid all at once?

It frankly saves you from potentially your own bad behavior of wanting to kind of make an investment decision at the exact wrong time. What I think is maybe part of where I really agree with you guys is look at the public markets. There used to be 8,000 publicly traded companies. Now there's 4,000. And so people say, oh my God, public markets have become less popular. But I look at it and I say to myself, well, hold on.

Every young person I know under the age of 30 or 35 years old, they have a very large public liquid portfolio. It's just not in public stocks. It's in cryptocurrencies or whatever else. And so this idea of liquidity being valuable is not a new concept that only older people understood, right? It's everyone gets it. It's just they've chosen to go into a new market.

And so if you guys are the pioneer, which I tend to think that you are one of the pioneers here and figuring out to use this new technology for these funds, does every private fund manager say, hey, we got to go and do this? Like, how do you kind of see this technology permeating into the financial system? And maybe like, what are the big changes that will happen if this is the future of how these funds will be structured. I think the big question is whether this is going to be just for these evergreen or whether this will ultimately lend itself to drawdown. I think it's going to be more evergreen. And in that case, everyone is not really equipped to do that. In order to deal

properly with an evergreen fund, you have to be able to take in capital and redeem capital on a monthly basis. That means you have to have enough deal flow that you can take in capital, find a good home for it so that you're not sitting on a bunch of cash and having a big cash drag. So I think what you're going to see is that the world of these evergreen products are increasingly going to be dominated by a relatively small number of very large private market asset management firms who have the bandwidth, the capability, the infrastructure to deal with this. Now, not everyone has been so quick to embrace the token side, so I think we've been a little bit quicker on that front. And again, in all candor, the amount of capital that's actually flown to us has actually been quite modest. So I think we are early.

We are pioneering. I do believe, I think the data says we have tokenized more products than anybody else out there in our industry, but the capital has been modest. So this is kind of the, if you build it, will they come? And we're in the phase of building it and we're waiting to see whether they're going to come. So it's very fascinating that you look at it as we have to build in front, right? We only know whether this works or not if we go and we do it.

Do you have maybe either milestones or benchmarks in your head as to what are the things that we need to see in order for this to be a success and continue versus what are the things that if we saw we would pull the plug on? And maybe not specific data points in terms of each fund or something like that, but just more so like what is the framework that you're using to evaluate? Is it just pure capital flow or something else? I think it's capital flow and brand. I think those two things go hand in hand.

And right now we're in education mode. I think right now there's a real misconception that when you say the word token, a lot of people immediately hear Bitcoin or cryptocurrency. And as you know, and a lot of your audience knows, that's just not true. They share the backbone of a technology, but they're not the same thing. So tokenizing a fund is not investing in a cryptocurrency. They simply share the blockchain commonality, and that's really where that ends. So we are in heavy, heavy education mode.

But despite the fund flows being modest, what we talk about internally is those are people that were never going to purchase a Hamilton Lane product in a traditional world. That is a group of entities that only want to exist in a digital wallet environment. They only want to deal with digital currency and digital investments. And so either you meet them where they are, or you don't meet them at all. And I'd rather meet them where they are. Yeah, that's pretty interesting that this is not necessarily something that you're looking at to replace the solution for your existing clients.

You see it as an expansive thing where you can actually now tap into new markets, new customer bases, provide maybe even new solutions to these people, and therefore you're growing your business. So it's a very additive type engagement on your part. I see this as a classic and. It's going to be better for some of our existing customers because I do think that the technology is a better, faster, cheaper, and it's going to allow us to engage with investors that we would otherwise never engage with.

So I think it can be improving the experience for existing customers and opening up our world to new customers. So a lot of people are going to listen to this conversation and be like, okay, great. Eric went on, he talked to Pomp. Obviously, he's very sympathetic to this worldview. these two guys. They think they're geniuses, but they didn't talk about any risks. And so I always think about the trade-offs that are involved. And sometimes when you do something, there are positives and there's obviously always negatives as well. And so it sounds like your

business plan moving forward is you're going to keep the traditional fund structures as you have them for a certain subset of clients. And then you will have this new digital version as well. How do you think about the trade-offs or when you come out with a new fund, should we tokenize it or should we not? What does that decision-making framework look like? we're generally leaning towards tokenizing what we can. So I think our inclination is to continue to tokenize, continue to offer that, continue to educate, and continue to be out there.

That said, I agree with you. Doesn't mean it's risk-free. So I think there's a couple of risks here that are worth talking about. One is that each of these platforms is trying to create an exchange. Well, in an exchange, we need buyers and we need sellers. And right now, what we see is that

the people who are willing to kind of come on here and buy tokens initially are coming on board faster than people who are willing to trade tokens on the secondary market. You're going to want those to be in more equilibrium. So you're going to want the exchanges to actually be able to exchange. That helps the liquidity aspect of this. I think that creates a lot more comfort for investors. If they sort of know that there are buyers and sellers and people transacting, I think that's all a really good thing. And so right now, I would say that isn't as healthy and as balanced as it should be. The second thing, like all things new, I think we're a great company. I'm a little bit biased, as you can

imagine, but we've got a 30 plus year history and are managing almost a trillion dollars of assets. There are plenty of fund managers who are extremely tiny, who are not capable of raising institutional capital, who are offering tokenized products that I would say are potentially suspect, potentially not as high quality of what you'd want to see. And so you run the classic risk of investors having a bad experience and blaming kind of the structure or the exchange versus blaming what the actual problem is, which is it was just a lousy fund manager. That doesn't mean that tokenization is bad or the exchange is bad, but there's certainly a branding and reputational risk that I think also exists right now. What's interesting about the brand component is that

I think people in the crypto or tokenization world would be like, oh my God, Hamilton Lane getting involved is a legitimizing data point, right? Their brand lends credibility to this. What you're arguing is that may be true, but also there is risk in that, right? Anytime your brand is associated. And so how did you get comfortable with that? Was it a, we're just going to be okay with it. And we know as long as we do the right thing, we think people will get over the fact that there could be issues with this structure and we'll be able to navigate that. Or were there other things that you guys did to kind of mitigate maybe the brand risk associated? I think it was just the former. I just don't think we have a choice. I think there's just

too much of a probability that the world is going to be continuing to embrace digital assets. And so if we want to continue to be an industry leader and a thought leader to say, well, we won't participate and stick our toe in the water until it's a fully mature, fully baked out sort of success, that's in stark contrast to what we stand for. So we recognize that there is some brand risk. There's frankly brand risk with you and I here today. You hear me evangelizing that I think this is all going to happen. We could wake up in 10 years and this hasn't actually developed in the way that we think it will. There's risk to that. But I think we'd rather be leaning in, be forward thinking, because again, at the end of the day, we're trying to

make the customer experience better. None of these things are necessarily better for us. Sure, they could bring us more customers. That's a good thing. But what we're really trying to do is say, look, the client wants to transact this way. Let's make sure they can. What about like this idea of safety in numbers, right? One of the things I've learned through my career is if you're the first person with an idea or an investment strategy, and it may be either contrarian or early, people kind of look at you like you're weird. But if you can find two, three, four, five other people who are also doing the same thing, you still may be a small group, but at least you're a group rather than a single person.

And so some of your peers on the asset management side seem to also be interested in this. Is that helping the cause and your clients are kind of hearing from multiple parties about this, and that is making them a little bit more open-minded? People have said I'm weird for a long time. So that I've gotten over a while ago, but I think you're right. I think as you start to see other credible, great, large-scale firms, KKR, BlackRock, and others kind of coming into the space, I think all of that just sort of we're giving credence to each other. It's sort of saying, hey, look, we're not alone in believing this. There are other people who have great franchises and great brands who also believe in this. So I think all of that helps. The customer

needs that education, to your point, and it's hard to do that by yourself. It's much easier to do that when there's a group of people who are all sort of telling a similar story about why this is beneficial and why this could be really the way of transacting in the future. And then my last question for you is around regulation and legal kind of components, right? Anytime that you've got what I call kind of a big mothership, obviously you think a lot about risk mitigation. And we've talked a little bit about the brand component, we've talked about the technology, but it does feel like there has been debate in the past in crypto in general. It's like, what rules apply and how do those rules apply? This actually feels like an area where maybe there's not as many

questions because people are openly coming out and saying, hey, these are securities, they're tokenized, et cetera. But what regulatory or legal considerations have you guys kind of worked through that maybe people wouldn't be aware of? I think the good news is this is really regulated. And it's, I think, in a good and healthy way. One, if you think about us and the peers I mentioned, we're all regulated. Many of us are publicly traded companies, let alone registered by the SEC and other regulatory entities, and the exchanges themselves are also regulated. So I think I don't run from that. I think, frankly, some level of appropriate regulation is a good and healthy thing. I think it provides assurance to the underlying customer

that they're dealing with a credible platform that's playing by a set of rules that are known and understood. And the services are being provided by a credible provider who also is regulated. All of that to me seems healthy. None of it right now feels overly onerous. And to your point, we're tokenizing things that are clearly securities. And I think that just makes that just easier and cleaner. And then I actually have one other question for you. What's the biggest surprise been so far, right? Like I imagine that you guys had this big internal debate. Should we go do this? You start to do it. There's enough early signs like, okay, let's do it again and again and again. You obviously very much understand the technology and kind of have

a viewpoint of where the world's going. But what have you been surprised by on this journey for HamiltonLane? I think surprised and disappointed that there is still so much confusion between tokens and crypto coins. I mean, I think the fact that we're still sort of dealing with no, no, these are different is concerning. And I think certainly for your audience, Right now, there's a huge eye roll taking place with the look at this old man. I can't believe anyone thinks these are the same things. But I would sort of say to your audience that institutional world is really lagging behind where you are.

And we need both to kind of come along in this journey. I don't think having this be a one or the other is the great outcome. I think big, healthy markets have investors of all shapes and sizes. That's what makes them big and healthy. that the stock market's big and healthy. You've got small individual investors. You got huge institutional investors. That's a good thing.

That's exactly what we want to see in the token world as well. We need to do a lot more education for them. And I think, frankly, channels like this are a great way to sort of start that process and continue to lean in there. Eric, you know, now in the comments, everyone's going to say,

look at this young, smart guy who understands where the future of the finance is going, obviously. That's you I think they're going to be talking about. But I do think that it's an important point because it's an opportunity as well, right? Obviously, you know, you mentioned that it's disappointing and surprising and all that. But one of the things that people always ask me about is like, you know, hey, what should I be doing?

What should I be thinking about? I say, whether it's Bitcoin or whatever area you're interested in is educate people, right? And it really does happen one-to-one. You know, I know some of the stories of many of the folks that probably you and I know together that were skeptics and became, you know, believers or supporters or buyers or, whatever their kind of role is. And it really was like, oh, my friend just wouldn't leave me alone about it. They literally just kept at it, kept at it. I talked to a second one, a third one, then this person that I really respected, they started talking about it. And eventually I

understood it. And so I think that you mentioned at some point in the conversation, this is really an education exercise. You guys have the funds, but you're actually out on the ground meeting with clients, educating them on how this works. And if we learn anything from kind of the Bitcoin journey, it's going to be, you know, five or 10 year period of education. And then it'll kind of all happen at once. And it'll be exciting for those that are out in the front, kind of as the pioneers as you all are. I agree with you. I mean, we're built for marathons, not sprints. So that's good for us as a company. And at the end of the day, there are very few things in the finance world that when they're cheaper for the customer, that they don't go. You go back to sort of writing

checks is an expensive thing because in the institutional world of writing checks, there's a lawyer overseeing the check writing, and then there's finance people overseeing that the check got written correctly. Apple pays way cheaper and way faster. And again, I think that's where we're trying to migrate here. I love it. Well, I appreciate you taking the time to do this. I'm super excited about what you guys are doing.

I think that people who understand the institutional world realize what a big deal it is that not only are you guys doing this, but you're out publicly talking about it. And so I appreciate your time today and we'll definitely do it again in the future. Hey, thoroughly enjoyed it. Thanks for the opportunity.