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Fintech Leaders
Rob Heyvaert, Motive Partners Founder: Investing Billions to Build the Future of Finance
00:53:20
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- [00:00]
Rob Haber
There's no such thing as work life balance. As an entrepreneur, your work is your life and your life is your work and my life is motive. And my kids. I can imagine that we can run. I don't know if we will. Some of these financial institutions with 5% of the people they have and have better customer service and have better clarity in risk management, success is very dangerous. In my humble opinion. You need it, otherwise they wouldn't be sitting here. But I think the tweaking we did to become successful came from our failures, not the other way around. I had my first liquidity event when I was 27 years old. The first thing I did is bought a house for my mother.
- [00:31]
Miguel Armaza
Welcome to Fintech Leaders. I'm Miguel Armaza and over the last six years I've recorded nearly 400 conversations with the top leaders in fintech. I also co founded Gilgamesh ventures, a fintech VC where we've backed almost 50 companies around the world. In this show we extract how the best builders and investors in fintech think, what they've learned and how you can apply some of these lessons to your own work. If you enjoyed this conversation, I invite you to leave a review on Apple, Spotify or YouTube. I sat down with Rob Haber, founder and Managing partner of Motive Partners, a fintech focused private equity firm with over $6 billion in assets under management, over 80 portfolio companies that represent over $15 trillion in assets on the wealth management sector. Rob is a serial entrepreneur and a real fintech leader. He started his first company at age 24 and sold it to IBM. He started his second company at age 36 and sold it to FIS for hundreds of millions of dollars and then launched Motif partners back in 2016. He is a true builder and it was inspiring to learn from him. We recorded this episode live motives New York City's offices with an audience of entrepreneurs, investors and builders in fintech and financial services. We did this as part of New York Fintech Week and it was just an outstanding conversation. I hope you enjoy it as much as I did. Thank you, Rob, for doing this. Thanks to everyone for joining us for a special live recording of the Fintech Leaders podcast. Rob, I want to talk about your entrepreneurial journey. You were 24 when you started your first business. I think it was called simab.
- [02:38]
Rob Haber
It was two, four years ago. Yeah, yeah, a couple of years ago. Yeah, Fresh joke is out. Yeah, no, it was 64 actually.
- [02:47]
Miguel Armaza
I think it's like, well, before we talk about that, what drove that entrepreneurial spirit and we have Some founders in the room who, some of them started in their early 20s, others started a little bit later. For you on the early side, tell
- [03:03]
Rob Haber
us about early style. Yeah, for those days it was very early. Now it's sort of like old. When you're a 24 year old entrepreneur you've, you've had your days. Now I think it was a combination of the fact that I am a dreamer. I come from a very, very. And I don't want to make it too emotional here to start up, but a very humble beginning. And so humble that my mother was in big debt and we couldn't even afford my study. So I was like, so I'm going to save my mother, I'm going to say, because she was a mother on her own. So my father had left us, so that was a big drive. And then I had a problem with authority, which I still have sometimes. So it was very hard for me to listen to somebody who I thought was either stupid or didn't know what they were talking about. So I was in the military, came out and I had, did something that I still do today and I'm very humbled about it. Feel out great people around me. So. And my partner then was 10 years older than I was and I looked very young. I tried to grow a mustache then I was. But it was very hard to do. But still. But I had this dream and then the second thing that happened is in the military I was basically confronted with technology and we had a very special mission to do certain stuff on computers and I got to know, I got a passion for infrastructure, technology and that's how we started. So it's actually very simple. We said, we had a slogan that said we were going to make a difference but we didn't know where we were going to make a difference. But then the notion of having the ambition in those days to go and this was a newspaper to go through the newspaper and say ah, here there's an RFP for a real time settlement system for the euro. We should respond to that. Me, myself and I and my partner and we were four people. But we had this idea around real time settlement. Long story short, we ended up responding to that rfp. We ended up going to IBM as sort of, we were that time we were like 10 engineers. We had a small approach going on at the Belgium Stock Exchange. So we were very early on kind of interested in infrastructure and real time settlement. So very pretty sort of trading technology like stuff. And we went to IBM and said would you want to team up with Us and they said, sure, we're never going to win this contract. So if you want to use our paper, go for it. And we had a nine month cycle and we ended up winning that contract, a $1.4 billion contract. And IBM said what? We won the contract so we better buy you. So they bought us. So now that I have a very early on as a young entrepreneur, I was still very quickly to have my first exit, which is one of the most coolest things as an entrepreneur, is to have an exit. Sorry, but that's where it all started.
- [05:26]
Miguel Armaza
You obviously have a very strong work ethic. Does that come from your bringing at home with a single mother or that also maybe the military shaped that.
- [05:36]
Rob Haber
I think it's my lack of balancing things more to be quite honest, it's my ability to. I'm so focused and I think life and when say what's your work life balance, I think there's no such thing as an entrepreneur. Your work is your life and your life is your work. And so for me it's very hard to sort of turn stuff off. And that's maybe more my DNA than anything else. I'm sure like you just talked about helped or did not hurt for sure, but it's more how you're wired as an individual. And I always felt that for me my life is motive and my kids and so on, but my kids know more about motive than most motive. People sort of break the ice here.
- [06:14]
Miguel Armaza
And between Sima, your first company and motive, there was another one, right, That's Capco, which you also sold to.
- [06:22]
Rob Haber
Was it fis.
- [06:24]
Miguel Armaza
Yes. For not a small sum.
- [06:26]
Rob Haber
Correct.
- [06:27]
Miguel Armaza
Maybe from the data as you sell your companies every of years.
- [06:30]
Rob Haber
Right, yeah. Don't do that to me. Don't do that to me. That's true. Actually we have two more years to go, so I know I don't say that we'll cut that out but. So what's more important is I think there's a tradition or a red sort of like storyline through the whole to. To my career is that it's all been always been about infrastructure and, and when we started in 24, we didn't have whiteboards, we had blackboards then. And we wrote, I wrote one day in the afternoon, it was Friday afternoon. We didn't know what to do. Let's co invent a slogan or something. And then I said let's form the future of finance because it has three Fs and I loved it by the way. This is early 90s to be clear, late 80s, early 90s no, it's late early 90s and we said form the future of finance. And if you go back and you look at what we did with the clearing system, simple Hitlerman system with IBM and then later on with Capcom, it was really being Capco was an advisor and a builder of infrastructure for financial institutions. And if you look now we're still using the same slogan, forming the future of finance. And I think it has three horizons. You learn, you lead and you coach. And I feel I'm in the coaching zone already. The learning is that you learn a lot from your environment. So you keep on learning. Then you have a moment in time where you lead and that's another 10, 15 year journey. And I think an investor is more of a coaching of other people than leading yourself. And so that's sort of the third mark of my thing. And the difference with motive is it's exponential. Everything is almost linear. When you build a company, a single company, when you have the knowledge and the capability and the wherewithal as us as an infrastructure to give capital to entrepreneurs, you can be exponential. You can just do it at several people at the same time. And so that's what we want to be actually. And I think that's not a 12 year journey. That's something I hopefully and some of the people in the room here, that they are the next generation of being able to carry that through. And we are shareholders in a certain moment in time for entrepreneurs where it's important, where the network's important, where advice is important. But we are temporary shareholders. We have to sort of let them fly and make them fly actually. And that's what we should do. And there's no time limit on that. Well, with CAPCO and eventually cmat, there was an end destination for that company. It's not the case here.
- [08:48]
Miguel Armaza
Obviously we're here to talk about Fintech and the through line of your career. The last couple of years of your entire career has been obviously technology. Right? It's not that the financial sector started modernizing with this recent wave of Fintech. In fact, my co founder at the Ventures just wrote a book called Is Finance Technology? Because finance as we know it wouldn't exist without technological innovations. And that's been true since the beginning of your career. What is different now? Because it seems like for the entire history of our industry people have been trying to modernize it. Right. But something feels different today.
- [09:31]
Rob Haber
Yeah, for sure. I mean what is different is this unbelievable powerful result of years of research and years of building and we got this unbelievable Power technology called artificial intelligence, where you come to think about it, and I talk about it all the time. Another buzzword of myself has always been, and actually, you won't believe it, but don't tell anybody, because we're not broadcasting.
- [09:55]
Miguel Armaza
I don't know.
- [09:56]
Rob Haber
So the original name of motive was the Beginner's Mind Collective. And I had to. I was just like at the very beginning, it was 2015 or 16, and I was at an event like this and I was pitching my idea about no money raised and so on, and somebody walks up to me and says, oh, are you a political party or a communist or a socialist? I said, no, no, we're not. We're. That's not that the day was not good. But the Beginner's Mind Collective was more the collective than the beginner's mind. That was an issue, I think. But the collective, the beginner's mind, means this whole notion of being able to begin again and to really redesign. And I've said this for the last 20, 30 years. We now have technology, that availability of us to reinvent how we do finance, how we deal with money, and that's never been so powerful. It's harder. It's getting very harder to become an investor. In the old days, like the last 10 years, you just look at what your cash flows were, how you did, how your client satisfaction is, and we're going to project the next five or 10 years, all those rules are out of the window. There's this really, this notion of we have to begin again from scratch. And when the Industrial Revolution, I picked this up from someone else, Industrial Revolution, they started putting these machines on the shop floor and saying, oh, this machine can do now that we have. Don't have to be. And they realized that the shop floor was not meant to have that machine. And I think I feel a bit the same here in AI, where it's not just about that one specific question or at one specific skill. It's our ability to reinvent how we think and to be that bridge between these powerful models and ultimately the reality that exists today. And I've never been more bullish about it, but also I've never seen that kind of technology. I'm sure everybody now experimented with AI already. I can imagine that we can run. I don't know if we will. Some of these financial institutions with 5% of the people they have, and have better customer service and have better clarity and risky risk management. But it's not about how many people will do it. It's about how we are going to invent ourselves towards the workflow. And I think that's super powerful. And I've never seen that in my life. It scares me. I don't know if it scares you, it scares me. But it energizes me also to say, okay, what can we do? What will stay, what won't stay? And this exercise in motive going on is if I ask my IR person, he will say nothing has changed. Rob, you're not better prepared than anybody because remember, so why did we create motive 2015? We said we have a lot of good investors out there already, but what if we could bring the investor skill alongside an operator skill alongside an innovation skill and bring those three skills together and do better judgment, be better at sourcing, be better at when you're a shareholder to be value creation and be better at exiting these investments. And if you come to think about it, we over indexed on the operational and innovation part of the business because investment was very important. We have some of the brightest people coming out of the industry who know how to underwrite a deal, who are creating private equity grading venture. The question was, what have we been waiting for? And to be honest, nobody was waiting for yet another private equity or another venture firm in 2015 or 16. What they potentially we felt were waiting for is somebody who have a deep conviction on where the future of wealth management is going, where's the future of payments going and then with conviction try to be a value add for entrepreneurs. And we've tried, I think we've succeeded. We have a long way to go. But we've got gained the trust in some of the largest LPs and said, you know what, if I want to specialize, if I want to personally put some capital to work in places where people really know where we're going, I'll put them with motive versus a big general partner. So that notion of bringing that skill to life is now more relevant than ever because it's no longer about, I've looked at the seven years of cash flow they're going to do. This is now about, okay, where's the future of wealth going? So you saw almost our portfolio now represents $15 trillion in the wealth management space, which is massive. And that came about with our conviction that the manufacturer of products and the ultimate person that consumes the product, that a wealth manager or somebody who was at the end of that chain, that that was not digitized properly and we started slowly chipping away in the venture side, in the growth side, in the buyout side, and we assembled now roughly 40 companies from Venture all the way to buyouts and we represent 15 trillion with one common thought, one common API layer, one data structure. And that's so powerful. And you couldn't do that if you're a generic investor.
- [14:16]
Miguel Armaza
If it's harder than ever to be an investor as you've said on the flip side, we've talked about also how you strongly believe that this is the best time to be an entrepreneur. That a lot of the power has come back to the builder. Right. So how do you navigate that?
- [14:34]
Rob Haber
You read my letter. You read my letter. I wrote a letter to my colleagues and they talked about that. I think the entrepreneur is back at the center. Clearly I've had and by the way, I'm just one guy in an amazing firm. To be clear, I have the privilege to sit here and represent many of you in the room here. So I don't want to be over pedantic but the power of basically getting a team that can execute on that is so, so, so, so amazing. And I feel as an entrepreneur that everything's getting democratized. These models are so powerful and it's now again to the next generation and Generation could be 70 and have an idea. It could be 20 have an idea. But there's more people at 20 that have an idea that have no barriers anymore than they used to have. When sound like an old man now. But when I started my business we needed capital. There was no capital. It was impossible to get capital. So I got capital from somebody who never expected. I went to a bank and signed up with sort of this horrible loan where they would come and get everything. There was nothing to go get. So I said that's a good trade, I'll do that. But nevertheless it would follow you forever. This something that by the way the US does so well. They have this venture capital and can imagine 35 years ago that wasn't even the case. And now not only is venture capital easy to get, but the way to start businesses is so much easier in the sense of the democratization. And now with the, the models that are out there, I think you can just. It's in your own imagination. And I think the rightfully so the entrepreneur is back at the center in my humble opinion and it should be. Yeah, yeah.
- [16:08]
Miguel Armaza
And we actually see that as well in our portfolio. The deflationary nature of AI is starting to take shape in terms of the number of people in each company.
- [16:20]
Rob Haber
Right.
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Miguel Armaza
As compared to the exact same results of companies 10 years ago in your report. Report that I think might have come out today or this week on a. The impact of AI.
- [16:28]
Rob Haber
Please read.
- [16:28]
Miguel Armaza
It's mandatory.
- [16:31]
Rob Haber
You got to read it.
- [16:33]
Miguel Armaza
There's this interesting ratio of 10 to 1 right. In the financial sector, for every dollar that every company spends, you know, $10 are going into labor, human labor, $1 is going to software. You're betting that that's going to invert.
- [16:51]
Rob Haber
Yeah, I mean, we call it finished work and we can talk about the hygiene and everybody talked about already. So you have to have. If you have modes, you have to have modes. You have to sort of be sure that you don't have something that I can just ask Claude to go do. So that's a given. What's not a given is you could ask Claude as much as you want. And there is these sophisticated workflows that are sitting around these software assets, or in any asset for that matter. And we believe that that is the holistic transfer. You should read the document. It does a better job than I will ever do here. Holistic transformation of a shift that we're going to be able to deliver that finished work at half the price that it is done today and still increase massively the profitability of the companies that can go on to that wave. And the opposite, the people who are losing out of it because they don't have the modes and it just forgets. It's not because somebody can come up with an idea and say, oh, I can redo. And I'm not going to say Salesforce or something because it's much more sophisticated. It's books to reconcile. But I can do a piece of software somewhere and I can just redo that software over the weekend. With Claude, that's like 5% of the issue or 10% of the issue. The real issue is it's embedded in a workflow. It's how we do business, it's how we underwrite credit, it's how we name all the functions that financial services do and that reinvent that as a holistic finished work, those actors. And it will be just powered, still powered by software, by the way, because it will be fundamental, will shift completely. And I think you're going to be able to pick your service providers, several of them, who have finished work from A to Z, who plug into certain main functions at financial institutions and it will be a much faster adoption space. And I think we ain't seen nothing yet when it comes to that. But the question is, which one do you pick? How do you morph it and how do you educate? Because everybody at the top of the house in financial institutions or anywhere in the world is using AI and AI as a buzzword and it's very hard. They all don't know what to do with it. Where do they start? Which function is it? So it's still the early innings and the educational forward deployment of some of that stuff. Who knows? And I think there's a big role to play by service providers to go do that. I don't know if they're going to call them back. That's a different story because I've been in professional service my whole life. Capcom is a massive company. I think if anything there's going to be more demand for certain capability. But the end, as everybody knows, the terminal value at the end is not known. And I think if you don't shift to what we talked about, I think you have a fundamental issue with terminal value as an investor. So we are super focused on that.
- [19:30]
Miguel Armaza
You mentioned 40 companies in the overall portfolio.
- [19:34]
Rob Haber
It's 80, but 40ish in the wealth related stuff. Yeah, got it.
- [19:38]
Miguel Armaza
So 80 overall. Sequoia has this thing where they question every partner and also at the firm level to kind of define the type of company that is like a rob company in this case. So if you had to explain the type of entrepreneur type of company that you like to work with, what comes to mind?
- [20:00]
Rob Haber
I mean, of course it's somebody on the entrepreneur side, somebody with an extreme level of conviction that the thing she or he is passionate about is actually in this case of a level to back. So if somebody says, and we have a good example, I think the way we're doing mortgages, either on the distribution side or execution side, it's been like this for a very long time. I have this conviction and this is how I think and this is what I need. So we need somebody with tremendous amount of conviction, somebody with ideally a truly beginner's mind. So in other words, somebody who is not saying I'm going to do the same that somebody else did, but actually really reinvent something holistically. In our case it will be either a process or a capability. And then he or she also needs help. Help in the sense of helping to scale, helping to think through stuff. We'd love to be involved and not to police anybody actually if anything to give them wings and to do stuff faster because actually it's all about speed and adoption and certainly now in today's world it's all about. So that is something we like a lot and of course we like when it comes when there's moat as you can imagine. And also when people believe themselves that in the end state, it's amazing, but they have incremental capability to get there. One thing I've learned is it's unbelievably powerful to say at the end of the day, I want to transform this, but what am I doing tomorrow? And somebody who can be grounded and think about tomorrow and dream about dreams years and then sort of have those two devils in your head at the same time that, okay, I want to go there, but what does it mean between 90 days and sort of the sense of urgency and where we're going to be in five years and be a coach by doing that? So that's super powerful for us.
- [21:48]
Miguel Armaza
And when you relate to your days as a founder, especially your pre motive days, what were kind of some of the critical mistakes that maybe you made that you often talk about when working with founders and also with your team?
- [22:06]
Rob Haber
Of course, not to be a good listener and not to embrace. I wouldn't say them coach, but people that sort of become your mentor and that they go. They change over time. But I'm such a believable in mentors. I still have several of them today for myself. So I should have been a better listener, was a pretty good communicator. But what I also didn't do so well is, and I think I've learned a lot from. By the way, you learn from your failures, not from your successes. I think success is very dangerous. In my humble opinion, you need it. Otherwise I wouldn't be sitting here. But I think the tweaking we did to become successful came from our failures, not the other way around, for what it's worth. And then the other thing is, and I do it quite well now, I think is you believe so much in other people. I think that is still important. But everybody's a different entrepreneur. Somebody can sit here and conclude over the weekend and build an amazing piece of software and on Monday largely that he's successful. That's not me. I am more of a connector. I hope we do a good job at motive from somebody who joins at 22 to somebody who is a chairman, who's run some of the largest companies in the world to have them work together and to have a sort of like a heterogeneous team, but a common goal. And then your job is to make sure that the talent keeps coming in. And if I look back at my history, it was too much dependent on me as an individual. And I've evolved tremendously. But I still would say my Only nine and nine out of ten is my strength, is that ability to bring amazing people around the table, around the common vision, and there's nothing more powerful. That could be like a little thing you did 25, 30 years ago, little became the infrastructure of the euro. Not that little. Or you're like you have 30,000 alumni sitting around the world or 50,000 from capital. Or if it's now motive, it's that ability to say, okay, we're all fighting for the same thing, to digitize financial services, to do it with passion and to start small and to be able to back take private $10 billion. Take private or give an entrepreneur $500,000 to disrupt the mortgage industry. But it's the same common theme. But if I look back, what would I do differently? I think one thing I've learned also is to become much more patient. Also at the end of the day, I believe you have cycles. As I said, you learn, you lead, you coach. And it's a wonderful thing to coach. But at the same time it's a huge responsibility because coaching means that I start from A to B. And at B you need to be a fuller person. You need to have led the company in the right direction. So it asks a lot of skill. And it also means that you have a very collaborative culture. I think the authoritarian founder that knows everything that goes against the tide, I think that is not what I would support. It's the opposite. It's empowering people that surround themselves with great people.
- [24:51]
Miguel Armaza
You've talked a lot about customer obsession being key for not just financial services, but obviously any company. But how it's really coming to financial services in many ways. Before we talk about that, I'm curious at motive. Who do you consider your customers?
- [25:09]
Rob Haber
Three of them. RLP's. I have to start with that. They entrust us with blind pool capital. That's a huge responsibility. I don't know if some of you are in the room here. That's a huge responsibility. That's a blank check that people give you. And clearly you have a fiduciary responsibility, but you have a commitment that you'll do everything you can to bring to take $1 and bring $3 back. We've done very well so far, so get a lot of trust. The second is the participants in the community that can be an entrepreneur, but in our case it's also the people that consume the products that you guys build. And I don't know what the audience is made of if it's all entrepreneurs or investors, a combination of both. But if you're in many sectors as a generic investor, it's very hard. They say, oh, we'll introduce you to this. And we know, Jamie, we know that, we know that you. In reality it's a phone call and that's it. We've tried to create what we call and I know it's a buzzword, my apologies. An ecosystem where we not only can make a call to some of these large financial institutions that could be your clients, but we really understand where they're going and how your product might fit and how we can help you make it fit or any disruptor for that matter. And we also want to do. This is very important to us. We want to lead with conviction. And we are convinced, and we were right seven, eight years ago, that wealth management was underserved and that the digitization from origination, somebody who built a financial product all the way down to somebody that consumes that product, that that journey was an amazing journey. That's a multi trillion dollars you can imagine with it. So that ability to use that as an infrastructure is super, super, super, super powerful.
- [26:48]
Miguel Armaza
I'm actually curious how many founders in the room, good amount and how many investors and I'm guessing everyone else. Operators, we need everyone. And what is driving that customer session for financial services? Because a lot of the criticism for banks and for example, someone like Nigel Morris that I interviewed in the past, he talks about this a lot, how inconvenience drives a lot of the customers staying with a certain financial company. Right. And now obviously they're feeling that pressure. You have this fintechs that were tiny eight years ago, now they're becoming bigger than.
- [27:28]
Rob Haber
Yeah, it's the vengeance. I think this industry has lived and still lives of inefficiency. The middleman still makes tremendous amount of money and the middleman could be anything or anybody that sits in the middle between actual transaction and a value creation event that involves money or payment or whatever. So I'm glad that this is a pendulum that you see going back and forth. I remember that people said oh I'm super afraid of fintech. And then you had some investment. I won't even name the companies. Three floors incubators. 20 years ago, hundreds of million stars dead come back up. But in reality I think the fintechs are gaining and the reason why is because ultimately innovation is something very interesting. Innovation, when you see it, it's too late. And you always dismiss innovation as being, oh, this is not a pickle to me. It's very hard for them to compete with me. Because I've got all this, I've got distribution, I've got infrastructure, I've got trust, I've got risk. And you're seeing now slowly but surely that some of these early adopters and some of these people that came in like Revolut and Robinhood and so on and those people really build something set by the clients and not unencumbered by legacy which you can then dismiss because they don't have adoption but they're becoming massive. And why? Because they are so close to bringing a value proposition that is not product silo based for example, but still are financially seduced are very product silo based and being focused on one capability and doing it so well with modern technology is something that financial institution can't say. Most of financial institutions, 70% of their money goes to maintenance to maintain their system. So some goes to 80%. So then to be able to have a white piece of paper and certainly now today I think I'm very bullish on those, I would say disruptors of the traditional industry. I'm also very bullish about some of the large institutions being able to adapt themselves and reinvent themselves. But it's adapt, adapt, adapt or die. But I mean I'm sure that, and Isaac's been a great example how he's been able to back the right companies to do so. But it's, it's a very powerful world now for those people.
- [29:36]
Miguel Armaza
Yeah, just yesterday there was a report published by our good friends at FT Partners and also Blue Dot and they looked at the top 100 companies in the private market, fintech and the top 100 in the public market. And just if you add them all up, none of these companies existed 20 years ago. Combined they have about 4 trillion in market cap and roughly 350 to 400 billion in annual revenue. So this industry is no joke.
- [30:07]
Rob Haber
No, no.
- [30:08]
Miguel Armaza
So the interesting part now is that there's a new wave as you've mentioned, of maybe the future 100. They're all going to be AI native startups, maybe add motifs. One thing you've said is you have to have the courage and then the patience to wait for the right moment. Right. How often does that lead you to pass an opportunity and wait until you're sure that this technology has actually become a big thing.
- [30:42]
Rob Haber
You read up on me all with the things I said. So that's good, it's good research. But I think you, sadly I was telling that somebody a few minutes ago we don't get judged on the deals we miss. We get judged on the deal, we do wrong, that go wrong. So it's funny. And there's a corporate world and entrepreneurial world. Somebody said, what's the difference between the corporate world and the entrepreneurial world? That's very simple. In the corporate world, you want to keep your job. In the entrepreneurial world, you want to create something and they commingle. But it's fascinating because when you lose your job, it's gone and you have to lose your company to lose. So it's a very different dynamic called bourgeois capitalism. You should look it up. It's an interesting podcast from I think in Sam Harris or something who talks about that. So it's hard and it's going to get harder. It's getting so hard. And some of the companies I love, I can't afford anymore. So it's our job to sort of find those companies. And by the way, there's different parts. The nice thing about us, and I would say that because this is a bit of a promotional video here, but when we find a large company that we can transform, we are very good at that. And you only can be good at that if you think through and say, okay, this is missed. This is oversold. It used to trade at 20 times EBITDA. It's trading at 9 times EBITDA. We're going to go get it because we're going to reinvent it. And it comes out a participant on the other side. You have to find those entrepreneurs that ultimately are going to do the right thing. And I think we like to be there earlier and we've been very successful as a small company. We ended up backing in Ireland and actually the Irish government gave us a lot of capital. Tunisia gave us a lot of capital because they felt we did such a good job there. Small group of people building a stock option plan system and one led to the other. We invest 40% the company. We put money in the company at 40% of the company, helped it grew for 3, 4, 5 years and sold it for 10x to JP Morgan, which was phenomenal for us. And if you go back and ask those people what they felt, they said, okay, you were there to scale my technology. You introduced me to certain clients. It was a win, win. So that's when we are very good. I mean, some companies I love, it's too late for us because we promise you, if you give me a dollar, I'll give you $3 back. That's what we. That's our. So as a result, it's very hard. Sometimes somebody with $50 million of ARR at $3 billion valuation. It's very hard for us to make a difference. We missed a lot of amazing companies. I'm not going to give all the names because we have a new person came in our firm and they said, rob, could you, before we start next week, could you give the 10 companies you missed? And I did the exercise. I needed Prozac for four days. Seriously, give us wine. No, I want. I'm disciplined here. My PR people are here. But what's very important is there is a patent. And I'm going to name one very large Brazilian new bank came into our offices years ago and said, oh, I heard so much about you. If I take that investment. There's one of the people who's building a large LLM model today who somebody said three years ago he's going to start his own thing. You should go talk to him. And I never find this card again in my inbox. But you learn from that. And what's more important is it's the deals you do, honestly. And if we think about the cycles we've been through, we think the new cycle that we're seeing in front of us, I separate it in two things. Being able to imagine where the future is going and it's hard, so where are payments going? And then look back and say, okay, who we back that believe that have an opportunity to do something about that. And then on the other hand, too, which we think is phenomenal, we think there's so much hype in the industry and the people, the analysts that are covering the software industry and covering part of the fintech, some are wrong, they've oversold out or whatever. And this is what our paper is all about as you read it. So that transition from software to workflow, finished work, and to really reinventing how actually financial institutions are consuming technology and how technology is pushing financial services, that hasn't been done. Honestly, the idea that you have this amazing experience in financial service hasn't happened. I don't know. Do you have amazing experience? I mean, some people say I have a great experience with Revolut, but that's personal banking capability, that super app, that ability to really have this seamless experience is something still that we were looking for. And we're looking to back companies that have that sort of those ingredients.
- [35:11]
Miguel Armaza
Just a couple of weeks ago, interviewed Max Levchin and we talked about the Citrini reporting. He essentially called it a piece of fiction in many ways. So that'll come up soon. I'll send it to you. Let's talk a bit about a recent streak that. That you had at Motive. You had a bunch of M and A happen a bunch of companies that sold and short exits they call them.
- [35:35]
Rob Haber
Yeah, exit just want to make sure they're the good.
- [35:40]
Miguel Armaza
The biggest one I believe was called with Intelligence. You had. You sold to S and P only two years after your original investment, is that right?
- [35:50]
Rob Haber
That is correct.
- [35:51]
Miguel Armaza
You sold for 1.8 billion. Did the thesis materialize much quicker than you expected within two years? It's a big exit.
- [35:59]
Rob Haber
It is by the way. To be fair, it was the perfect situation for us. It was a founder that was open and listening who had already built a very cool company. Some people, this is funny, some people saw an event organization by the way, I don't know if you know who's with intelligence. We've Intelligence organizes events for investors in the UK and grants prices to the best hedge fund, the best whatever. And they have also journalists and they collect data and they build proprietary data sources that you can subscribe to. It's very proprietary and. And they were on this journey to go from an event driven business where they got a lot of data by the way and then generalistic capability and then specific data sources, private data sources. And we said to them we like your company. We like Charlie a lot. Who is the founder because why. Because we talked about this a few minutes ago. He was a great listener and more importantly he had this sort of. He understood what it took to. To make. To make his quarter and he could dream big and saying we're going to be the largest, most interesting private data. And we said listen, what are you missing? Oh, I'm. I want to be more important in the US So we went on this value creation journey with him and was he a good listener? We had the right technology people from our mode of create and it was so. And we could control the company in the sense we bought the whole business, we kept the founder, we took everybody else out and we sort of went dark in the sense we didn't have to explain to anybody. And we had this collegial approach with the operators in motive, the innovators and we started building a firm with him quarter after quarter. All the M and A he was doing. We were supported from here. So we had scouting all these specific databases. We bought five or six companies over the last two years and we had a relationship with S and P which is a phenomenal company by the way. And we understood that they wanted to be more aggressive in private markets. No other firm could probably do that. Because what you do is once you think your company's ready, you go to a bank and say, can you sell my asset? Or you call up your gp, you call up and say, you want to buy my company? No, we don't. So it's a different conversation when we go talk as a strategic participant, Motive partners with S and P about their future of their private markets. And that ongoing dialogue of the ecosystem that I talked to you about was decoupled from with intelligence. And at one point in time they came together and we said, you know what, it's early in the journey, but I know where you're going. Martina and Sally and the people and Sagata, the people, those are pre names of the senior leaders at S and P. We know we're your ambitions in private markets. What do you think about this? And we spent six months thinking through how it should go. And then these came together and it was usually synergetic for them. Valuation is a result of synergy, not the other way around. You haven't talked to me about valuations. Valuations are very simple. There are discounted cash flows going forward with a sense of confidence. And the higher the confidence, the lower the discount rate and the more synergetic capability, the higher probability that you and then pops out of valuation. It's pretty simple. And now with Claude, it really pops up because you don't have to do anything anymore. Sorry, guys. So it's extremely, very simple model, but that was a beautiful example. But we were really are working with S and P every day now on other stuff and it's been a great experience.
- [39:14]
Miguel Armaza
Sounds like an intelligent investment.
- [39:17]
Rob Haber
Yeah, I knew I could buy.
- [39:21]
Miguel Armaza
So staying a little bit in private markets, wealth management, obviously that's a huge part of your thesis. And you've said that shiny apps are a lot less important in wealth management. What really matters is infra. And how does infra get transformed these days?
- [39:42]
Rob Haber
It's funny and I don't know if I'm allowed to quote it, so I won't do it, but one of the top leading LLM model providers, CEO, sat on stage with somebody who was kind of in charge of executing and he said, I don't need more Einsteins from you. Go for it. If you can build your models that you have Einsteins, I think it's powerful. But my problem is not that you have a smarter model. My problem is that this all works in the context of existing workflows and existing execution as a result. So if you go back to wealth management, we might talk about these shiny objects. In reality, we are still querying a private placement memorandum from uptown to downtown and back and forth. So you think that work, wealth management is digitized? No way. If you see all the complexity from the product manufacturing and I'm talking now asset managers, all the, it's a massive complex and, and the problem is not the shiny and certainly now it's, it's like you can do it on the spot. It's that plumbing underneath that can also be solved. It's not rocket science, but we believe that the infrastructure, if we can fix that, then you can build amazing stuff. And that's why we've been collecting assets that have that role. And then we transform. As you saw, we 15 trillion, as I said to you at the beginning of the broadcast, that's a lot of trillions. And that is execution, that is clearing, that is settlement. And if you get those things right and we get to workflow because everybody always looked in silos. I mean it comes from the capital market side. When you say okay, I'm going to do this and I'm going to do it well, I'm going to do this. But there is your client, there's alm, there's onboarding, there's positioning, there's distribution and nobody has looked at it holistically and stepped take a step up and say okay, what if we reinvented everything and that's what we're working. And then you say okay, this is the first startup, this is for a more mature company or this is a clear and settlement entity we want. So that is what we've been doing. We're sort of a mosaic. But then give them all the same mission to create a frictionless network or friction execution. We have a company as you know, InvestCloud working on that private markets network. We have Betanex which is a very successful company and it was bet it was very powerful self clearing in the United States. It's called Betanex for a reason. It's now actually really trailblazing in the whole full execution of the workflow. That's sort of where we think the power lies. But there's a lot of work to be done between the Einstein models and the reality. It's day and night and I don't think it's going to happen in 18 months. I think it's a 10 year journey. The Databrick CEO said nicely to get this done. It's a 10 year journey. Yeah.
- [42:23]
Miguel Armaza
I used to work at a bank that was just a few blocks from Here, going north. And I spent a year in ops and tech and I learned that the fax industry was thriving. The processes were very dated. And so I think that's a little
- [42:38]
Rob Haber
bit of what you're talking about. What I also hear a lot is these people are getting pushed from everybody. They're getting pushed from their analysts, getting pushed from their boards. What is your AI strategy? What is your AI strategy? And I think it's the wrong way to look at it. And they want quick wins and they grab a process. I think you almost have to look back and say, okay, how can we reinvent it holistically? And there's a moment in time where there's a reckoning going to come where people are going to make bolder moves. And I think some of the leading providers that I know, traditional players are working on some of that stuff. And then it's going to come out by switching up certain things and switching on other things. And everybody knows what migrations mean and how they can go wrong. So it's going to be fascinating.
- [43:20]
Miguel Armaza
A lot of work stay on wealth management. What is the role of the retail investor going to be going forward? Do you think it's going to become even more important as it kind of has strengthened over the last especially five years, but even more so the last 25 years.
- [43:37]
Rob Haber
It's a controversial topic. Somebody said, if the retail investor comes in, I'm getting out. And on the other hand, I think it's. I think that's not correct. I would argue that everything is getting democratized. So the retail investor is starting to get and will get access to really sophisticated products they couldn't get before. And that simplification is, is there are some trailblazers out there that are making sure that that's the case. And then I'm not going to name some company, but they're doing a very good job. Even some traditional banks do a very good job. And I think we're going to see a revolution. I think what people don't understand is already today you could have a thousand dollars and you can vet as smart as you can follow someone who used to only have access to if you have 50 or $100 million. That's a trend all over the world. I mean, I think Warren Buffett says it so nicely. My Neighbor lives off $100,000, but he has better electricity than Rockefeller had when he was a billionaire. So there is this constant, and I think it has to with civilization also sort of rising up of infrastructure that is available to more. And what we're going to see on the retail side is they're going to have access. I think they're still going to need a proper advice because I think the trust factor is going to be super key because it'll be very hard for people to judge what that means. But I think everything's getting democratized so the retail investor will have access to everything that other people have. Now education around that is going to be super important because you saw that one press article and suddenly apparently private credit is horrible and everybody. And so the redemption everybody pulls back and then probably that's the we lost the plot somebody said on that. And that's probably true. And it's very hard for a retail investor. So I think we still have a long way to go for education and to protect them. I think people are going to like that. I think regulators have a role to play there too. So. But it's going to be a fascinating journey.
- [45:23]
Miguel Armaza
One thing is reputation. Nothing is also obviously related, but it's also brand. Right now that retail is more important. Does that mean that branding for companies become more important than ever?
- [45:38]
Rob Haber
I would argue is the brand and trust coming together, the brand that represents that trust? Absolutely. And I still think that that's the biggest thing some of these brands have going for themselves or big, big, big, big legacy players are going for self. There is a trust that's being built. And I remember sitting with the CEO of one of the largest investment banks and he was talking about this retail people coming into private markets and I love it when he said wait until something bad happens and how they'll quit us out as quickly as they came in. So that the notion of being able to have a trusted brand that does stuff for you in your interest I think is still absolutely key. It's going to be complex, but it's fascinating at the same time.
- [46:19]
Miguel Armaza
Rob, I wanted to ask you something on your relationship with money and wealth and the reason I asked this, your exits. Very large multibillion dollar exits.
- [46:31]
Rob Haber
Yeah.
- [46:31]
Miguel Armaza
UAM of Motif in the several billions. You've done very well for yourself. How would you describe your relationship with. With wealth and money?
- [46:45]
Rob Haber
That was none of that prep email. You didn't send me a prep email. So I'm sorry, that's not the case. You did not. To be clear, you did not before your fingers is open. It's interesting and it's very personal. You have to personal question. You need a personal answer. So I had my first liquidity event when I was 27 years old and the first thing I did is don't start crying. And the first thing I did is bought a house for my mother and put people around her because she was like she worked her life. And that gave me tremendous amount of satisfaction. And then I will also realize, and I'm not going to disclose any numbers, that it will be ridiculous for me to just assume that I'm going to live this life of luxury without doing stuff for other people. And it starts with your own surroundings. And the power of getting liquidity early is that you kind of realize that for me you can do stuff with it. So very early on I decided to live a great life and to have a family and to have kids, but at the same time to do well. And I want to be very private about it. But I think if you don't do that, I think it's a very shellfish situation. And I sometimes worry that we lose that power that exists in understanding that it's not about self promotion and how rich you can be. It's responsibility. Sounds corny. My apologies. It's a responsibility you have when you get to that wealth. And, and I've always tried to be. That sounds also very sophisticated. All of us are very personal. Is to be a good person in doing that, which I think is very important. And honestly, I think that the wealth that sometimes created the divide between wealth and non wealth, I think it's an issue and I think everybody will have to do. What I like about this country is that for example, what Michael Dell did from when he was going to write these checks, that's phenomenal. And we should shame everybody who has wealth not doing something. Maybe not all at that scale. But I think this is what I like about America also because they have done such a good job. Some of these wealthy people have done such amazing things and it's almost like if you don't do it, it's not a good thing. So it's powerful.
- [48:41]
Miguel Armaza
There's a culture of giving back in this country.
- [48:43]
Rob Haber
Yeah, very much so.
- [48:44]
Miguel Armaza
How about in Belgium where you're from?
- [48:46]
Rob Haber
Less so, but also there's less wealth, of course, and it's much more private. The difference is in Belgium, it's a phenomenal country, by the way, and they have a lot of wealthy people and they do their thing, but there's much more hidden. I like the discrete giving more than saying I've signed this and I've signed this.
- [49:02]
Miguel Armaza
No buildings carved in stone.
- [49:04]
Rob Haber
No, no, not.
- [49:06]
Miguel Armaza
All right, so before we wrap up, we're, we're going to do a couple of rapid fire Questions, feel free to answer in 10 seconds or 10 minutes. If you want a book you recommend
- [49:17]
Rob Haber
I read a lot. There's one book that I recommend everybody to read is on Grand Strategy. Who read that from Jatis? It's. It's unbelievable.
- [49:27]
Miguel Armaza
Please.
- [49:28]
Rob Haber
So drop everything, go home, buy it. Buy the book or, or read. Listen to it. It's On Grand Strategy. I think it's sort of like a must read.
- [49:36]
Miguel Armaza
Why is it so good?
- [49:37]
Rob Haber
It talks about what leadership means, what it means to go to war, what it means to create an empire, why empires fall, why empires succeed, why people succeed. It's phenomenal. Book on grand strategy.
- [49:50]
Miguel Armaza
I'll be getting it.
- [49:51]
Rob Haber
Okay, cool. Remember rapid fires, you have to move to the next minute.
- [49:56]
Miguel Armaza
If not Belgium, who will win the World Cup?
- [50:00]
Rob Haber
My son Ethan knows that better than I would. I don't know. I think he, he will tell. Would we say Argentina? No, I don't know. I mean, we actually. Are you watching? Yeah, absolutely. What do you think?
- [50:12]
Miguel Armaza
Good question. I think Spain will get it.
- [50:15]
Rob Haber
Okay. All right.
- [50:17]
Miguel Armaza
Favorite cocktail.
- [50:19]
Rob Haber
Negroni, hands down. Negronis, I should say. Sorry.
- [50:26]
Miguel Armaza
Favorite restaurant or bar in New York City.
- [50:29]
Rob Haber
Restaurant Anderschean, which has been there forever. So it gives away with it and the famous bar. It's a very good question.
- [50:36]
Miguel Armaza
Nope, we can say.
- [50:39]
Rob Haber
I'll come back to you.
- [50:42]
Miguel Armaza
And final question. Most memorable.
- [50:44]
Rob Haber
Elvis around the corner from you, of course. Elvis, yeah, you should go. Elvis. Very cool. Elvis. Yeah.
- [50:49]
Miguel Armaza
All right. Never heard of it.
- [50:50]
Rob Haber
Yeah, it's very cool. Good, good, good.
- [50:52]
Miguel Armaza
Final question. Most memorable motif. Moment.
- [50:57]
Rob Haber
First close, first fund. The hardest thing, professionally, it's not to start a company, it's not to find capital, is to wake up as a, let's say, 40ish year old man and say we're going to build a private equity firm. And this is the vision and these are all the talent that some of the stylists in this room. And see what we did amazing together. We did 200 companies, we have 20 years of experience, we transformed this and this and this. And then you sit in front of them and I'll pee. You say, okay, can I get your track record, please? Yeah, but it's not. It's an operational track. No, no, no, no, no. So this notion, and I think Schwarzman put it in his book also at Blackstone, his opening remarks, that's the hardest thing he's done, is to raise his first fund. First close. That joyful moment we had at 401 Broadway was phenomenal. And those investors, those second best moment. I know you're going to ask that is the first close of the first fund, now being the first closer in our next fund. So I'm not making the ad, but the fact that they stay with you and they go on the journey, that satisfaction is also powerful because it's naive to think that everything always goes well. Certainly in our world, if you look back at the last 10 years, what kind of cycles have we gone through? We gone through from abundance, like who's first to nobody put risk off to suddenly having the technology that nobody saw coming and to be able to come to become better. And this is the other thing I think advice I would give to everybody, not that I want to be pedantic, is it's important you get better. And you get better through experiences, to failures, to successes, of course, also, but more importantly, to have the empathy and understanding to learn from others. And that sort of world has shaped us as a firm. Very much so.
- [52:40]
Miguel Armaza
Well, Rob, thank you.
- [52:42]
Rob Haber
My pleasure.
- [52:42]
Miguel Armaza
For hosting us. And I always say this is the most beautiful investor office in New York.
- [52:48]
Rob Haber
Thank you. Thank you very much.
- [52:52]
Miguel Armaza
Thanks for tuning in and I hope you enjoyed this great episode with Rob from Motif Partners. If you want more interviews, please make sure to subscribe, follow and leave a review on Apple, Spotify, YouTube or wherever you get your shows. It helps and truly means a lot. And if you have any suggestions or thoughts about the show, just drop me a line on LinkedIn. See you next time.