George Ilafaris (3:14)

If you look at my career, which started in finance but has not been a straight line for sure, well, it started pretty straightforward way. I liked maths when I was a kid, but not enough to fully dedicate myself to that. So I studied business in finance in Paris at hec. After that I worked in financial markets in Paris, Singapore, London and in various roles and always commercial roles across sales, structuring, marketing. I thoroughly enjoyed it. I thoroughly enjoyed the diversity of it. Many different institutions from many different countries and sophistication of the products. I was dealing with structured products, derivatives, alternative strategies. It was great until at some point maybe I thought that this innovation was mainly financial engineering. And you know, a couple of crises in 2012 when I was covering credit crisis also helped to shape my view on that. But yes, financial innovation meant financial engineering. Not necessarily something that I thought was always meaningful. There was also a realization that I would advise my friends and family if they asked me to probably not get involved in all those products, not all of them. There was a bit of dissonance here and I thought that was a key factor in making me leave the industry about a decade ago and thought, oh, I'm going to turn my back to it and never return. And I launched a very different business, creative industry, Orama and we were dealing mainly with, let's say lifestyle industry. And my claim to fame from that period is that we were filming chefs, Michelin star chefs around the world, fascinating people. But eventually this financial market bug, I wasn't completely cured and I was always interested in having to invest my own money. And I realized as well that if I had been, you know, at the forefront of innovation, financial markets doesn't mean that I knew how to invest in the plain and simple terms that I needed. I also realized that across me this is something very important. Investment. It's not something that you can just skip because you're responsible now for your own future. Also discovered that things were changing and as a Way to get back into it. So that was Covid times. I launched a YouTube channel where I was taking clips from a series like Billions or movies like Wolf of Wall street and analyzing them, trying to bring in my financial expertise. I was kind of starting to get back into it. And then I rediscovered this world of fintech and I realized, okay, it's also another way of claiming finance for the good society to get inspired from Robert Shiller in a more determined way. And I also launched a podcast on fintech and that's how we had a conversation. And also the YouTube channel grew to 20,000 subscribers. So then I was kind of back into it. And anyway, many pivots and various little turns later. Now my company is mainly creating podcasts, mainly for the financial industry and fintech. And I keep learning about it, exploring it through my own conversation in the Investology podcast, which is about rethinking investment management. Sorry, I forgot the last bit, but that's the important bit to deliver better outcome for investors. And that might be a sentence that you're familiar with. I might even have borrowed it, but I hope there's no trademark there. That's where I'm at currently. So it's been a roller coaster, but still very much interested in this wonderful world of financial markets.

Bill Kelly (6:48)

I didn't trademark it. Maybe I did say it. But the only caveat I would put on better outcomes over the long term. I'm going to discuss what I think is one of the biggest problems in our industry is the failure to grasp a long term investment plan. But we'll come to that in a moment. But it's always interesting, George, when I have guests on and I ask them to give the background, it gives me a nuanced way of thinking about things. And when you talked about this magnetic poll from the Michelin star restaurant back into this industry, it's an industry that has served me very well for over four decades. I just love it. And what I love about it most is I learned something new almost every single day. Very little is static. And if you think about it and just listening to you say it, even the Michelin star chef and the person washing the dishes in that restaurant, they're managing a financial empire. They've got a P and L, they've got a balance sheet, they got a statement of cash flow, they have inventory of stuff they've accumulated over life. They have longevity, risk, they have dependents who are maybe their employees and how are they going to provide for them well into the future. So for any one of us and this goes for all the listeners, for us to think, well, financial services, that's somebody else's responsibility. You can outsource it, but when you turn 75 and there's no money left in the retirement plan, there is nobody to go see about that. So you do have to have at least a bit of an active interest and understand you can outsource some of the services, but the ultimate responsibility resides with you. So I thought I would just emphasize that point. It's interesting as you talked about this latest iteration and I can relate to this, George, being in the seat of a podcaster, you do learn something new from all your guests. Each one of them posits an idea, and I think it's formative in terms of somebody's views. And maybe I'll start with some of your views that you're sitting there with today, particularly as it relates to the private markets, as we're in full windup mode and maybe a few pitches have clearly been thrown, to use a baseball analogy, in this democratization move. And I think there's good points and bad points there. But start with your overall state of the union of the private markets from your vantage point.

George Ilafaris (9:05)

I can talk as well a bit about my own journey because I was looking into this, thinking about my asset allocation. I was very excited about the new opportunities, art, wine, things that are sometimes called als. And also somehow I've been approached by some of them through my YouTube channel to sponsor it. And what I quickly realized there is that they all look like they're outperforming tremendously. The first layer of thinking is, oh, I should absolutely jump on this. It's opening now. But when you look at it carefully, where I see the big challenge or the big issue with this democratization alternative, that I think the marketing is a bit unfair because all those demonstrate show you a chart that really outperforms the S&P 500. Because I guess if you wouldn't, then you're out of business. But when you look at it a bit closer, let's talk about wine or art. They managed to produce a chart when there's no in the S&P 500. I can buy at pretty much any point in the chart and sell at the other point. When you Compare with something that is a reconstructed chart based on their own index, etc. The first thing is it looks great, but if you look at it with a kaya hat, you look that definitely there's some issues. It's not what it seems. The performance is very much constructed and so on and so forth. We have been used to think in terms of public markets, but really you need a different approach. And I think that's where when you look at the private democratization, that's where there's really a big gap in education in terms of how we see performance, which is kind of the foundation of accessing or not the asset class. So I don't know if that's the state of union you ask for, but that has been my entry point and I've gone from well, this is an amazing opportunity to being overall very skeptic. Some of my guests have also hinted as if it's open now, is it because it's the end of the cycle. You could also have a Groucho market analogy, which is I don't want to be part of a club that would invite people like me. You need to be trading carefully before going there.

Bill Kelly (11:07)

Absolutely. Well, this brings a few openings in play and I want to come back to the comment you made later on on financial engineering, but this is the opening for long termism or lack thereof. And it's not a complicated story, but maybe a little bit on the longer side. So bear with me for a moment. And this came out of a conversation I did on a Spanish speaking program just last week. And I speak no Spanish. I think there's an algorithm that translates my staccato New York based English, so hopefully they got it all right. But I put a couple of things together that I thought were very interesting. I'm writing a blog post on this as well. So every year I believe Morningstar comes out with a piece called Mind the Gap, which happens to be the name of a PR program that Kaya put together in the London tube about 10 years ago where we took down the big billboard in the bank street stop on the central line and put mine the gap up there. And the gap was meant to be. You have traditional on one side of the chasm and alts on the other. And how do you get to the other side? It's not all that simple. And education is critically, critically important. But before you even think about crossing the chasm, what is in the garden that you're standing in today? It's the public markets and this Morningstar report that they put out called Mind the Gap. They do this every year and on a rolling 10 year period they look back and say how did the average shareholder do versus what the fund itself did? And they break it down across maybe six or seven categories, including a proxy for long, short equities. There's an alternative sort of mutual fund proxy in there, long term equities, long term bonds, there might be a commodity one in there as well. And they add this up and it's invariably pretty much the same on a rolling 10 year basis. The average investor leaves 110 basis points on the table every single year because they're trading in and out. Somebody says something, they don't like tariff wars, they don't like Trump, they don't like this, they sell out and they come back in at the most inopportune times and they trade their way back to leaving 110 basis points, but let's call it 100 basis points because it makes the math so easy. So those are facts and you can go and read Morningstar's assumptions, but it's not like they're trying to reconstruct an IRR proxy to time weighted return. It's a pretty straightforward exercise and simple arithmetic. So now if we go to that same investor and said, come into the deep end of the pool, come invest like David Swensen, come and buy private equity and let's stick with private equity. I know private capital, there's many more sleeves there. But with private equity and most proxies, if you look at Kaya, Cambridge Associates, they'll say adjusted for this, that and the other thing, private Equity delivers a 500 basis point premium over the public market. So we can dispute the assumptions there, but just take that as a fact for a moment. In order for that client to get the same a hundred basis points they're leaving on the table in the public markets, they need to put 20% into private equity. 20% of 500 basis points outperformance for that sleeve in your asset allocation is the same hundred basis points, points. So I'm sitting back and saying, okay, I'm not at this point diminishing the power and the purpose of the private markets and there's reasons why we should pay attention to it, which we'll cover too. But if I'm giving up 100 basis points in the public markets because I don't understand long termism and I'm going from 0 to 20%, which is a tremendous commitment to the private markets and going to get, when all this dust settles, 100 basis points per annum, there's a lot of assumptions going in there. And I'm saying why not grab the low hanging fruit first under the Morningstar scenario, figure out long termism first and then let's go to the private markets and to finish this narrative, I'll get Your comments? If you look at the Swensen endowment model way of investing, their holding period is forever. They don't want leaky valves, they don't want interval funds, they don't want any co investor that's taking money out when they're not ready to take money out. It's a drawdown fund and you invest my money, it's held for five to seven years and you return and hopefully I've got a good return. So to think that the institutional proxy is 500 basis points over the public market when you stick those same holdings into interval funds or day traded ETFs, I don't know. I don't think you're going to get the 500 basis points. So as I said, George, it was a long but not very complicated storyline. But maybe get some of your reactions to all of that.

George Ilafaris (15:46)

There's a few things there. First of all, this staying the course is another way of thinking the long term. It's something that Bogle has been saying for a very long time. I mean, I can see that. I can also see how we cannot just interpret investment from a simple return basis. I think there's a lot more layers to it. I know that I should stay for the long term, but I often trade because I can help myself. It's fun. I think I pitch my brain against the brain of the rest of the market. It can be, you know, conversation starters. It can be something that you might be feeling good about because it's green or whatever. There's all that and maybe that comes in the way. The other thing is long term, I think, yeah, it's also asset liability management. One of the challenges as investors is to think of your liabilities because that's the only way to invest properly. But it's hard to think and also to put into consideration. So that's a couple of things about that. And the other thing about the Swenson example, it's often quoted and the returns have been stellar, et cetera. But I think it's also one of the most perhaps misunderstood aspect of broad diversification through alternatives is that he also said that it required a huge amount of skills and effort and like you said, commitment requirements, things that people are just not able to do. And therefore it's often used as, oh, you can do like Swensen, you can copy this very sophisticated portfolio. But no you can't because you're not Swensen, just like I'm not Warren Buffett and so on. You have to understand your skills. This has really been taken into the myth making of private markets. But it's been removed from its original sense, which is it's very, very complicated. And yes, some people manage, but not everyone will and definitely not the private investor in such a complicated asset class as private equity.

Bill Kelly (17:38)

I've had several guests, and I've written about this too, George, that when you have a lot of uncertainty and inefficiencies in the market, that's where you find alpha. And when you have very few GPs and most of them are controlled and quote unquote owned by the big endowments, there's a tremendous opportunity there. As the industry gets bigger and there's probably now 10,000 funds in the marketplace, maybe 10,000 plus, it's gotten quite crowded. And when trades get crowded, it starts to feel more like beta and performance dispersion. Quartiles get very, very wide and due diligence becomes critically important. Getting access to the very, very talented managers in that top quartile become very, very difficult. And nobody wants to admit they own the median manager, but collectively we own the median managers. So I think there are some challenges there. And as I said a moment ago, I'm not anti private markets and maybe an observation there is that if you think about wealth creation, I think for most of us it's better to be done a little bit at a time. Have an asset allocation mix, have a game plan, have a steady investment rotation rebalance, not every single day, but maybe annually or quarterly, and let the power of compounding take care of itself. Now there are some in this world, and I'll put myself in this category, but not at the Elon Musk level where there is an opportunity, where you become an entrepreneur, you start a business up and you're able to grow a business, grow the EBITDA and sell it to somebody else. And that's a bit of a step function in your balance sheet. Now, failure is always an option, but the outcome can be very, very good. And if you look at most of the ultra high net worth individuals in this world, other than inheritance, the vast majority of them have made that capital in the private market. So there is a tremendous opportunity. But it is a question about what you're going to get exposure to. And if the hurt money and the entrepreneur is not the same as me starting a business where I know the business and failure cannot be an option for me because I care so much about it, the outcomes can be very, very different. So I think that's the ying and the yang. But you mentioned some of these alternative alternatives. I think we should maybe just spend a moment on that as well. Because if I like baseball cards or art or wine or race cars, then there could be somewhere between a hobby and an investment because I just love being in the game. But be very careful about when you're crossing that line. And if you're putting 20% of your net worth into something that you like but maybe don't fully understand and have great transparency to, you got to be very, very careful. So I think for the listeners and maybe some of you using this, George, is that I think those are maybe more natural entry points because it's something we understand a little bit. And if we understand it more than a little bit, there are some wine based funds, for instance, that can be very, very profitable and those are more niche offerings and less efficient market. So the alpha upside is greater. But maybe talk about the contrast between alternative alternatives and the alternatives that most of these big PE shops are trying to bring to the average retail investor.

George Ilafaris (20:55)

Let's just talk about wine investing. There's platforms where you invest in wine. The pitch is that it's going to go up. That's what they offer you. But from what I gather you can also this is custodied carefully and under your name. And if anything goes wrong, you can access their wine and there's something you can do with it if it's not investing. So I can totally see that the mix of lifestyle benefits and potential investment, why not? Where I think it's a bit more problematic is for example, a certain art platform for retail investors where you don't see the art, you're not going to get a piece of your Picasso or whatever it is at home. So it's not like you have any chance of enjoying it. And on top of that they use the typical metrics that are for relatively liquid alternative things, such as a Sharpe ratio, stuff like that, the volatility of a painter's market and of course the result look fantastic. But I think this type of marketing is abusing the latitude they have in terms of pitching those things. And then if we look back at what's available on more traditional things, there's also something that I think I'm always looking at on a marketing angle, but those perpetual funds, they also have somehow an unfair advantage in terms of marketing because we've seen some funds, I don't know if I can mention them, but it's one of the biggest real estate funds, the biggest real estate fund. I think they managed to deliver an amazing user experience to their user because what users want is stable dividends stable or growing valuations. And that's what they've been delivering. But really it's a huge effort. And really the real estate market goes up and down. It's only because there's limited liquidity that they could do that. So there's this advantage of the private market which you have more control of the volatility or the valuation and it paints a picture that's fantastic. But it's a bit too good compared to the true nature of it. It doesn't mean that private real estate, private equity is not good, but very easily confused for someone who's not an expert. Just like IRR is something that's really easily confused with returns. You cannot say that people are not someone that's wealthy. You know, high net worth individual will generally understand that we're talking about very two very different things. So those are the things that as someone that's been working in marketing in these financial markets, I'm particularly aware of when we talk about democratization is the way we present things. I think it needs a lot more. I don't know if it's regulation or some kind of change in the rules.

Bill Kelly (23:26)

A couple things in that I want to talk about Picasso and also maybe first real estate. And I assume in the example you were talking about may or may not have been. I'm guessing it might have been B. Reit. A couple observations there. One is, I think it underscored the wrapper problem. We have not found the killer app for the wrapper for the retail investor. And what do they want? They want liquidity. Should they have it? No, Swensen didn't have it. And you look at what happens when we give them liquidity in the aforementioned Morningstar example, they trade their way to leaving 100 basis points on the table. And if we do that with the private markets, with these quarterly windows, I just don't know how that's going to end well. And I would almost like to envision a scenario where there are no windows. Liquidity will be when liquidity is available. But we have to create these vehicles with 1099s as opposed to K1s because people don't want more taxes. But every compromise to please the end investor. I would love to see somebody reconcile the basis points cost of that because it's not only the 2 and 20 on the tin, it's the cost of bidding spreads, transaction costs, et cetera. But I will say you look at the Financial Times as an example and not exactly lovers of alternative investments. Sometimes they get it Right. Sometimes they get it wrong. And I think where they got it wrong with B REIT and ESRI and others is that the poor shareholder that wanted to get out couldn't get out. And I'm saying they should have never come in in the first place. And if I'm a shareholder and I understood the value proposition, I did my due diligence, I knew There was a 5% quarterly window, but I came in. My expectation is everybody to my left and right bought in as well. And that liquidity valve is sort of a break the glass in cases of emergency situation. Not because you don't like the short term trade between publicly traded REITs and private real estate, but the glass is broken by too many people and the fund then gated. So I think that we've got to fix that issue, which is, I think we have a tendency to get the investor what they want because it's an easier sale. But is it a better outcome? Is it a better asset gathering mechanism for the GP but less of a value creation mechanism for the end investor? And I think time has told us again and again that given too much liquidity, the investor's not trained well enough to understand what they should do with it. Therein I think lies a big problem with the wrappers. But I'll park that for a second. You can comment on it when I finish my segue to Picasso. George. And you're going to say, how the hell is this guy going from real estate to Picasso? You open an interesting door there to too. It would be virtually impossible for you, myself or the average listener to go out and buy a Picasso. But art is an interesting opaque asset class. It's largely inefficient. Price discovery is challenging. But if you look at some of these big art holders, like Steve COHEN at point 72, he's made a boatload of money trading art. But if somebody came to me and said that they have the ability to fractionalize a Picasso and it's very, very transparent, I'm going to buy it for $100 million and I have 100 million shareholders and every fractional share is worth a buck, what should I put you down for? And if I trust the person buying it and there's a governance structure where they're going to sell it when it reaches a certain price, now I can participate as a buyer at a fair price, hold it for long term and sell it as well. And I think that could be interesting. But the ability to do that is most likely going to be on blockchain and the power distributed ledger and going from Tradfi to Defi. So I dumped a lot on your front doorstep there, from wrappers to Picasso to Defi. But I'll let you take that and run with it in whatever direction you choose.

George Ilafaris (27:20)

Yeah, I'll try to take it. Their order, I think. Yes, indeed. This liquidity is such a ridiculous thing. The example we give is imagine if you're in your house and your neighbors knocks at the door every day and I don't know, you bought it 100,000. And he knocks and said I buy it, you can buy mine. 100,101, one day, 100, 299, etc, that's what the stock market does and it would drive you crazy. The answer to that is, I guess the Buffett way to say, oh, I will not listen to anything except if it's silly. Whatever he says, he wakes up, the neighbor comes and says, you bought it a hundred thousand. Today it's 300,000. Oh well, I might take opportunity of that. So that would be the wise way to do it, to believe in it, in those assets for the long term. And well, if Mr. Market is going crazy, let's take the opportunity. But it's extremely hard to do the second thing just in terms of those wrappers if those things are not liquid. Really you cannot invent liquidity. I mean you can gate it somehow, but when you need the liquidity is when it doesn't work. And REITS has done a tremendous job at maintaining it, doing this incredible deal with the University of California. This fund is a tremendous success. They raised 70 billion at some point. It's almost $1 billion in fees in record time. I mean the next biggest real estate fund, which is the vanguard world real estate, is an ETF that trades in a 10 basis point or something like that, maybe 20. And it has 20 billion. It's like the giant. So they received 70 billion. And I don't think if they had been fully transparent in terms of what the liquidity really, really is, they would have gone anything close to that. So you need to find this balance, the second aspect. So that's more technical. Blockchain. Yes. And some people do that, they tokenize the paintings. I think what they do is actually quite funny. I mean there might be different ways, but I saw some that actually cut. I mean not cut, but read the painting and say, hey, we own each one square centimeters and therefore you own each nft. This is not a share of the painting, it's a non fungible aspect of it. What you have to look at is looking back at the incentives since we've been talking about it. I really like this idea. But one of the things for the company that I hadn't mentioned but Masterworks is they do that without tokenization, the kind of IPO thing. But they take 11% upfront, and then their fees are not very high. 2% management fee, 20% carry, and they take 11% upfront. So you need to dig to find this out. And what does it mean? Taking a large percentage of Florida means you have an incentive to distribute those to the public much more than you have an incentive to realize the investment. And therefore the incentive is to market it. Those are all wonderful things. And yes, why not tokenize paintings and distribute. I don't know if art has really proven itself to be such a good asset class, but we hear those stories. But anyway, it's wonderful. Imagine saying you can own a Picasso. That comes into the other dimension of investing that I mentioned. I paid for the ability to talk about it at dinner parties, if I was into that. But there's always going to be more. And therefore you have to be very careful when jumping on those weird and wonderful ideas. Unless you do it totally for fun. But some people on the other side are not doing it for fun. So that would be my note of caution on this thing. And that has been, I would say, unfortunately, my journey so far when really looking at this enthusiastically and then turning around realizing, okay, now I see the trick is here and there. So this democratization of als, ALS is something to be careful of. There's this company called als, and they typically do these kind of things. Basically, they give access to all sorts of things. One thing that struck me is they do a tequila trip to invest into tequila. So you go there, you visit the things, et cetera, and obviously, I guess you taste it. And this is not the right time to make investment decision. But what a wonderful idea. If you're grounded and you're not going to put like a significant amount of your assets. This is, again, not black and white. There's different aspects to it.

Bill Kelly (31:21)

Tequila and also timeshares. And how many people have bought timeshares while they're maybe having a couple of shots Tequila on vacation? And how many people regret doing that? I think most do. But a couple of things George, I want to cover in the remaining minutes. It's an interesting tactic because coming into this, thought about what am I going to talk to George about? Governance was not on my list. But I see that you sit on a couple of boards and governance is so very important. And you just gave me a bit of an opening here with what went on with B REIT as an example. And I think part of this democratization move is that if I'm pick any gp, it doesn't have to be Blackstone, pick any single one from small, medium to large. In terms of AUM in the institutional space, they're accountable to maybe 7 to 10 investors in that fund. And they may have to fly over to Abu Dhabi Investment Authority and explain what went wrong with this particular investment. And there are very informed and maybe difficult discussions, but you've got a lot of smart people on both sides of the table. And there's this concept of an LPAC, a limited partner advisory committee, that is the shareholders of the shareholders, the LPs of the LPs, who have certain rights that are codified in a limited partnership agreement with that same gp. When we move toward democratization, where is the retail investor's lpac? When do they have the big GP fly to their home and explain what went right and what went wrong? And if you look at V REIT is an example, sure, University of California Regents has far greater understanding and access to what's going on behind that curtain than the average retail investor. But they're in that fund, Perry Passu, so you don't necessarily need to comment on any of that. But I think if we're going to move into the direction of greater access, the governance model has got to move in conjunction with that. And there can be a lag and a gap, but it's gotta be some plan to catch it back up again. I don't know if I see it. And maybe a smart alec would say, well, is it any different with a public mutual fund in the long term equity space where there's a whole bunch of shareholders? Yes and no. There's independent directors that have oversight and accountability and responsibility. So there's some structure there, but the ability to get hurt around that median is very, very tight. And then you as a shareholder can decide you're going to go invest in another fund or index your money. There's a lot of other risk factors in play and unless the governance moves in that direction, I think we're setting ourselves up for median type results or maybe even to some degree failure, however one defines it. So what are your thoughts about where we are based on your governance experience in mind, where the governance model is vis a vis democratization and has it become an afterthought that really nobody is paying close attention to?

George Ilafaris (34:18)

I think One of the pitches to say, look, you can now do what the most sophisticated investors do for access to those same asset classes. But it's a very different ballgame if you draw the parallel with the public funds. But private equity, what's wonderful about this is that there's so many things you can do right now because it's slowing down. It's kind of like you say, lengthening, merging with private credit secondaries. Anyway, it's a very creative space. There's a lot more leeway in the manager. Plus they own the company fully. What the public equity manager can do is maybe just sell it or not own it. And that's valid. So therefore there's this dynamic between LP and GP and it's extremely complicated. If things go wrong, it's like, okay, my lawyers, talk to your lawyers and we'll see. That's excluded from this. I don't know where we're heading into this, but it's okay if people have this perception of, okay, I'm in a feeder farm, I'm here for the ride. I'm definitely not thinking of myself as Swenson, the GP in these things. That means as well that your allocation to this has to be proportionate to the risk you're taking. And the risk you're taking is very significant. That's why as well, the idea that a significant portion of your assets should be tied to this I think is problematic. But again, if you're diversifying away, maybe that's the right approach until these things evolve. And I don't know how the balance can go a bit further into this high net worth individual that are participating, but that's it. I think one of the things, maybe big picture is democratization should be opening slowly and people should be able to dip their toes experiences for years and years and years, see the outcome and then open a bit faster. But obviously the problem is that it's not happening.

Bill Kelly (36:02)

You mentioned Jack Bogle earlier and he had a great piece well over 20, 30 years ago on not being able to serve two masters. And there are inherent conflicts of interest and we all are aware of that. The GP has responsibility to clients, but also to partners and shareholders. And many of these big gps are public companies. So we have to recognize there are going to be certain conflicts of interest. And the person making the decision about accessing that product might be an ria, it's not an employee of that big gp. So it's complicated to use that phrase. And when I think about who's watching my back when I'm Sleeping. There are governance structures in place for some of these offerings. But the concept of the institutional relationship, though, with an lpac, where there's greater accountability and transparency back to the individual investor, it's not there. And you can't possibly have a big firm. And let's leave Blackstone alone for the time being. A big firm like KKR or Apollo, flying their jet to every individual shareholder, even the cutoff is $50,000. That's a lot of mouths to feed. So how is that wholesomely communicated on a regular basis? And what are the blocks or the blocking power that those LPs, because I guess they're technically LPs, but more shareholders. How do we manifest that self, that itself? I don't know. And I guess maybe the good news, George, is it's not for you and I to solve because we're on a different side of the table. But you and I talk to a lot of very, very smart people. We talk to people making decisions. And this platform is one of discovery. And I don't know if I really have gone too deeply into this governance structure and LPACs versus no LPAC. So if nothing else, you've given me something new to think about. And maybe you can come back someday with an answer when you talk to your very, very smart guests on your platform as well.

George Ilafaris (37:57)

Well, we did start the conversation by saying we need to continue it, so there's something to discuss for the next episode. If I just hint on one second on this, I think there's this educational thing. The answer might be, I'm putting words in their mouth from GPS that they're doing a lot of efforts for educating IRAs. They all have their academies. But really you need to think of what sort of education. I mean, I'm sure it's quality education, but it's obviously very biased. And therefore I think that's where other institutions not with a vested interest have to play a greater role. CAIA and other people.

Bill Kelly (38:32)

That's a great point. And it would be a good place to leave it. And I don't directly have governance responsibility for KAYA anymore, but did for over a decade, an organization I've loved and now continue to reap food for, like you as a member, because I think that they are completely independent and their goal is to not be pro or con when it comes to alts. They're just got to be a rabid source of transparency and education and arm the end investor with as much knowledge as possible. And that could make them very well equipped to access the many, many risks in the private markets. But without democratizing education first, I feel the value proposition is going to be left wanting and maybe even something worse than that. So, George, as you alluded to a moment ago, we're going to continue this conversation on your platform. I think that this episode and yours might be released around the same time, and I think you're using video. You're ahead of us a little bit. So there might be some opportunities there when people see our smiling faces and the animation that comes with this conversation, which you don't get when you're just listening to it. But I look forward to that as well. And I think having this dual release is something new for me. But I appreciate your membership, your curiosity, which I think is the most important aspect of being a good podcast host, and look forward to being back on your platform someday very, very soon.

George Ilafaris (39:58)

Absolutely, Bill, it's been a great pleasure. Thank you so much.

Bill Kelly (40:02)

And I will say happy Greek Independence Day today. I'm not sure when this will be aired, but it's 25th of March today, George, and I know your heritage.

George Ilafaris (40:10)

Thank you.

Bill Kelly (40:12)

Thank you for listening to Educational Alpha. I'm your host, Bill Kelly. Learn more about the CHIA association and subscribe to the show@caia.org that's C A I A dot org. See you next time.