Signals by AlphaSense: Recent Episodes
AlphaSense
Signals by AlphaSense features conversations with executives, experts, journalists, and analysts. These deep - but quick - insights from the world of finance, business, and research will help you make better decisions every day.
Episode Summary
In the latest episode of Signals, host Nick Mazing sits down with Peter Atwater, Adjust Professor of Economics at William and Mary, and the author of "The Confidence Map." Peter dives deep into the essence of confidence, distinguishing its two core elements: predictability and preparedness. He emphasizes that while many perceive these elements as intertwined, they stand separate, and are foundational to understanding confidence.
The conversation takes a turn towards the main theme of the book, the four quadrants, which maps situations based on levels of certainty and control. The two key quadrants discussed are the Stress Zone quadrant, characterized by low certainty and control, and the Launchpad quadrant, marked by high control amidst uncertainty. These quadrants shed light on human behaviors, from feelings of powerlessness in the Stress Quadrant to the entrepreneurial spirit in the Launchpad.
Atwater concludes by highlighting the power of narratives. He asserts that our perception of the future, especially when navigating uncertainty, is a direct reflection of our present confidence levels.
Guest-at-a-Glance
💡 Name: Peter Atwater
💡What he does: Book Author
💡Company: The Confidence Map
💡Where to find Peter: LinkedIn
Key Insights
The True Elements of Confidence
Peter Atwater breaks down the often-misunderstood concept of confidence into two distinct elements: predictability and preparedness. While many conflate the two, Atwater emphasizes their individual importance. Predictability revolves around our ability to foresee what's coming, giving us a sense of security about the future. Preparedness, on the other hand, is about being adequately trained and ready for upcoming challenges. Together, these elements form the bedrock of genuine confidence, guiding our actions and decisions in various situations.
Navigating the Quadrants of Certainty and Control
Nick Mazing introduces a quadrant framework that categorizes situations based on their levels of certainty and control. Two pivotal quadrants discussed are the Stress Quadrant, where individuals feel powerless due to low certainty and control, and the Launchpad Quadrant, characterized by high control in the face of uncertainty. These quadrants not only illuminate human behaviors but also provide insights into decision-making processes, especially in challenging times.
The Power of Narratives in Shaping Perception
Peter underscores the significant role stories play in shaping our perceptions, especially when navigating uncertain terrains. He notes that our imagination of the future is often a mirror reflection of our current confidence level. This insight is crucial for leaders and decision-makers, as understanding the narratives can help in steering teams and organizations towards desired outcomes. By recognizing and harnessing the power of stories, one can effectively influence perceptions and drive positive change.
Episode Summary
In the latest episode of Signals, Nick Mazing sits down with Chris Semenuk, Portfolio Manager at Tema Global Royalties ETF (ROYA). Together, they unravel the multifaceted world of royalties. While many associate royalties primarily with music, they extend far beyond, touching areas like pharmaceuticals and natural resources such as oil and gold.
Chris delves into the unique appeal of royalty companies. Shareholders not only gain access to distinct assets, be it a high-potential oil property or a promising oncology drug, but also benefit from the expertise of seasoned management teams. These companies offer a blend of unique asset exposure and experienced leadership.
Rounding off the discussion, Chris introduces the Tema Global Royalties ETF. This fund aims to provide investors with diversified exposure to the best royalties across various sectors. It's a deep dive into the potential and intricacies of an often-overlooked asset class.
Guest-at-a-Glance
💡 Name: Chris Semenuk
💡What they do: Portfolio Manager
💡Company: Tema Global Royalties ETF
💡Noteworthy: Worked as a global fund manager for 20 years at a large US pension fund, specializing in active stock picking.
💡 Where to find them: LinkedIn
Key Insights
The Broad Spectrum of Royalties
Royalties aren't just about music. In the episode, Chris Semenuk and Nick Mazing explore the landscape of royalties, highlighting that they encompass a wide range of intellectual properties. From the familiar music royalties that artists like Taylor Swift earn from streaming platforms to more complex areas like pharmaceuticals and natural resources such as oil and gold. These royalties can be paid to individuals, companies, or even governments. The discussion underscores the multifaceted nature of royalties and their significance in various industries.
Unique Appeal of Royalty Companies
Chris Semenuk delves deep into what makes royalty companies stand out. Shareholders in these companies gain a unique exposure to assets, whether it's a promising drug in the oncology sector or a high-potential oil property in the Permian Basin. Beyond the assets, there's the added advantage of experienced management. Many executives in royalty companies come from industries related to the assets they oversee, bringing a wealth of expertise. This combination of unique assets and seasoned leadership makes royalty companies an attractive proposition for investors.
Tema Global Royalties ETF: Diversified Royalty Exposure
Chris introduces the Tema Global Royalties ETF, aiming to offer investors a diversified exposure to top-tier royalties across various sectors. The fund's objective is to give shareholders access to the best royalties available, spanning different asset categories. Currently, 70% of the fund is invested in commodities like precious metals, base metals, and oil and gas. However, the ETF also ventures into non-commodity sectors, such as the pharmaceutical industry. This diversified approach ensures that investors get a broad spectrum of the royalty landscape, maximizing potential returns while spreading risk.
Episode Summary
In the latest episode of Signals, host Nick Mazing reconnects with Michael Maloof from Earnest Analytics, and a former Bulge Bracket bank TMT analyst.
Michael first discussed the use of alternative data by investment funds in general, with a specific focus on credit card transaction data. The guest covers the “mosaic” approach to investing: looking at many disparate data sets to arrive at a combined picture.
The next part of the conversation focuses on AI applications in alternative data. Alt data is a natural candidate for artificial intelligence applications given the large volume of data points. More specifically, Michael discusses the rollout of Earnest AI, the new predictive application of AI on top of Earnest data. As an example of its accuracy, the guest cited the model accurately predicting within 0.01% (one hundredth of one percent) the decline in a key KPI for a retailer while the Wall Street consensus was an increase in that KPI. The model has also enabled earlier prediction for a wider range of companies, and Michael sees the industry fully embracing the predictive power of AI.
Guest-at-a-Glance
💡 Name: Michael Maloof
💡 What he does: Director of Marketing
💡 Company: Earnest Analytics and Earnest AI release
💡 Noteworthy: Michael Maloof: Former equity analyst at Goldman Sachs, now head of marketing at Earnest Analytics.
💡 Where to find Michael: LinkedIn
Key Insights
Earnest AI's Remarkable Accuracy in Predictive Analysis
Michael Maloof highlights the groundbreaking accuracy of Earnest AI since its August 2023 launch. This generative tool can predict reported metrics for hundreds of U.S. companies, significantly reducing the time analysts spend on predictive modeling. One standout example Michael cites is Earnest AI's prediction of a large national wholesaler's sales growth. While Wall Street anticipated positive growth, Earnest AI accurately foresaw a negative year-on-year sales print, coming astonishingly close to the actual result. This level of precision underscores the tool's potential to revolutionize data analysis in the financial sector.
The Evolution of Alternative Data with AI
Alternative data's landscape is undergoing a significant transformation with the integration of AI. Michael dives into how Earnest Analytics has been utilizing machine learning to ensure data quality. With the introduction of Earnest AI, the company has taken a leap forward, using generative artificial intelligence to derive signals from vast data sets. This AI-driven approach not only streamlines the data analysis process but also enhances the accuracy and speed of predictions, empowering investors to make more informed decisions.
The Future of AI in Alternative Data
Michael provides a glimpse into the future of AI in the realm of alternative data. While Earnest AI started with a single feature of reported metric predictions, its roadmap is expansive. Soon, it will power predictive metrics across various data sets, creating composite earnings and underpinning metrics for non-public entities. As data platforms grapple with billions of rows of data daily, AI emerges as the solution to derive meaningful signals from this vast information, marking a new chapter for companies like Earnest Analytics.
Episode Summary
In this episode of Signals, Nick Mazing sits down with Jess Raggio, VP of Revenue Marketing at AlphaSense. They dive deep into what Revenue Marketing (aka Demand Generation) does, as well as the modern marketing technology stack that enables sophisticated programs at scale.
First Jess discusses what a modern B2B SaaS revenue marketing team does, going over touchpoints, and flows across the buyer’s journey. Then she discusses the variety of platforms and tools that are involved in the execution of marketing programs, starting with CRM (Customer Relationship Management) platforms like Marketo and HubSpot. She then goes over the basics of email marketing and email marketing campaigns. Jess also covers a number of considerations regarding webinars and webinar technologies. In the next part, Jess covers the importance of the website: from scalable content management, to instant personalization based on visitor industry and persona. The final program that Jess discusses with us is search and display ads.
The episode provides a great overview of the building blocks of modern B2B SaaS marketing programs, and the technology stack behind them.
Guest-at-a-Glance
💡 Name: Jess Raggio
💡What they do: VP of Revenue Marketing
💡Company: AlphaSense
💡Noteworthy: Experienced in B2B marketing for nearly 20 years, witnessed and contributed to numerous marketing transformations.
💡 Where to find them: LinkedIn
Key Insights
The Role of Modern Marketing Technology
Jess Raggio delves into the significance of marketing technology (MarTech) in today's B2B landscape. With buyers present across various channels, it's crucial for marketers to ensure a seamless brand experience. This includes interactions with sales reps and marketing engagements. The challenge lies in scaling these efforts, especially with limited resources. Tools like HubSpot and Marketo, foundational CRM tools, store customer data and automate processes. They also harness AI to offer personalized experiences across channels, understanding buyer intent and guiding them through their journey.
The Power of Websites in B2B Marketing
Websites play a pivotal role in the B2B marketing engine. Most buying activities, from research to product comparisons, occur digitally. A website is the primary interface between prospects, customers, partners, and investors. Modern websites need to be scalable, built on easy-to-manage content management systems like WordPress. This allows for regular updates without heavy reliance on developers. Personalization is key, with tools like Mutiny offering tailored experiences based on visitor traits.
The Impact of Paid Media in B2B Marketing
Paid media, encompassing paid search and display ads, is a potent channel for marketers. It targets buyers at various journey stages with ads tailored to their current needs. Paid search ads, for instance, appear based on keyword searches on platforms like Google. They target high-intent leads, even those unfamiliar with the brand. Display ads, on the other hand, build awareness among potential future customers. Integrating these with CRM systems offers insights into lead quality and enhances campaign impact.
Episode Summary
In this episode of Signals, Nick Mazing sits down with Camila Sarmiento, a ESG analyst from HSBC, based in New York.
First, Camila covers the surge in renewable energy investments in the United States, driven, in part, by the Inflation Reduction Act. The US is still playing catch-up in the area.
Then Camila discussed the current state of the US grid: from the lack of a single national grid, to the complex relationship between utilities, local governments, and federal regulators. A major concern is the age of the grid, with 70% being more than 30 years old.
Finally, the guest goes over the new challenges and potential solutions that the grid faces. Historically, the grid was fed by few, relatively large energy sources while now, with increasing renewables, the size of the sources is smaller but there are a lot more of them. Further, balancing demand with production is harder due to the intermittency of renewable energy.
Guest-at-a-Glance
💡 Name: Camila Sarmiento
💡 What she does: ESG Analyst
💡 Company: HSBC
💡 Noteworthy: Camila Sarmiento is an ESG analyst at HSBC, based in New York. With years of experience in the ESG space, she has extensively covered themes across environmental, social, and governance, particularly focusing on the United States. Her insights are especially relevant given the US's strong push towards a climate agenda, including rejoining the Paris Agreement and making historic investments in climate change and clean technology.
💡 Where to find Camila: LinkedIn / Apple Podcasts / Spotify Podcasts / Global Research
Key Insights
The Need for a Modernized Grid
As billions of dollars flow into renewable energy projects, there's a pressing need for a modern grid system. This grid should not only connect these projects but also ensure the delivery of low-carbon and reliable electricity around the clock. The transition to greener solutions has led to a surge in demand for dependable electricity, emphasizing the importance of a robust grid system.
The Impact of the Inflation Reduction Act on Renewables
The Inflation Reduction Act (IRA) is a significant piece of US industrial policy that has far-reaching effects, including on renewables. The act invests an unprecedented $370 billion for energy security and climate change. It has extended and expanded renewable tax credits, thereby driving growth in the renewable energy sector. This has led to an increase in investments in renewables and a surge in renewable projects wanting to connect to the grid.
Challenges and Solutions for the US Grid
The US grid faces both physical and administrative challenges. One major solution is increasing transmission capacity, allowing for efficient electricity delivery and connecting regions for electricity sharing. The idea is to have a more interconnected "macro grid" rather than the current fragmented system. This would help address peak electricity demands and ensure a steady supply even during supply interruptions.
Episode Summary
In this episode of Signals, Nick Mazing welcomes Sara Stahl, Director of Research, Healthcare, at AlphaSense Expert Insights. They explore the new generation of weight loss drugs, a hot topic that's making waves everywhere.
The conversation focuses on the efficacy of these drugs and the massive market potential they hold. Sara highlights the rising obesity epidemic and the potential these drugs have in combating it. She discusses the mechanism of action of the GLP-1 agonists, as well as the pipeline for several companies. Sara also covers the negative side effects of these drugs, the strong demand by consumers, as well as the effects on obesity-related comorbidities.
The discussion also touches on the potential impacts of these drugs on related industries. From bariatric surgery to diabetes devices, the ripple effects are far-reaching. The episode wraps up with a look at the challenges and opportunities these drugs present for insurance coverage.
Guest-at-a-Glance
💡 Name: Sara Stahl
💡What she does: Director of Research, Healthcare at AlphaSense Expert Insights
💡Company: AlphaSense Expert Insights
💡 Where to find Sara: LinkedIn
Key Insights
The Rising Demand for Weight Loss Drugs
Sara and Nick talk about the growing interest in weight loss drugs, especially among those outside the healthcare sector. These drugs, such as Ozempic, Wegovy, and Mounjaro, are gaining popularity due to their efficacy in combating obesity. The demand is so high that people are going to great lengths to get them, including traveling to other countries. This surge in demand is also giving rise to telehealth companies selling these drugs directly to consumers.
The Impact of Weight Loss Drugs on Related Industries
Sara elaborates on the potential impacts of these weight-loss drugs on related industries. For instance, bariatric surgery could become obsolete if these drugs prove to be highly effective. Other areas potentially affected include cardiovascular stents, statins, insulin pumps, and continuous glucose monitors for diabetes patients. However, she also highlights that it's too early to write off these players in the healthcare sector.
The Challenge of Insurance Coverage for Weight Loss Drugs
Our interlocutors touch on the challenges of insurance coverage for these weight-loss drugs. Despite their potential to control severe comorbid conditions and lower overall healthcare spending, the short-term cost to cover these drugs is high. Sara suggests that linking obesity to other comorbid conditions in studies could be a strategy to facilitate insurance coverage.
Episode Summary
**In this episode of Signals, Nick Mazing sits down with Xavier Smith, Director of Research, Energy/Industrials at AlphaSense Expert Insights. They dive into the evolving industrial sector, focusing on key trends such as the adoption of electric vehicles and the ongoing energy transition. Smith's insights shed light on how interest rates are shaping the construction cycle, a critical aspect of the industrial landscape.
Xavier first discusses the more dynamic “tech adjacent” sectors of industrials: EVs and energy transition, as well as the IRA (Inflation Reduction Act) effect on both. On the EV side, the episode covers costs, charging standards, range improvements, affordability, adoption curves, and more. On the energy transition side, Xavier discusses industrial battery storage, costs vs fossil fuels, geographic aspects, as well as newer technologies like offshore solar.
In more traditional industrials, we discuss construction and building materials, and, more specifically, the bifurcation between home building holding up despite the increase in interest rates versus the difficult situation in office CRE.
Guest-at-a-Glance**
💡 Name: Xavier Smith
💡What he does: Director of Research, Energy/Industrials
💡Company: AlphaSense Expert Insights
💡Noteworthy: Xavier is the Director of Research for Industrials and Energy at AlphaSense, former hedge fund and long-only firm professional.
💡 Where to find Xavier: LinkedIn
Key Insights
Historic Shift: Clean Energy Investments Outpace Fossil Fuels
For the first time, investments in clean energy are set to outpace those in fossil fuels. A whopping $1.7 trillion is projected to be invested in renewable energy in 2023, almost double the CapEx number for fossil fuels. This shift is a clear indicator of the growing interest and confidence in renewable energy sources.
Energy Storage: The Game Changer in Energy Transition
**Energy storage, particularly industrialized batteries, is revolutionizing the energy transition. These batteries address the intermittent nature of renewable energy sources like wind and solar, allowing power usage to be shifted according to need. The industry has tripled over the last three years, from a $50 billion business in 2020 to $160 billion today. This growth is expected to continue, making energy storage a key player in the energy transition.
Interest Rates and Their Bifurcated Impact on Construction**
Interest rates are significantly influencing the construction cycle, creating a bifurcated market. Despite high interest rates, home builders are performing well due to the difficulty in purchasing existing houses. However, the commercial real estate sector, particularly office space, is experiencing challenges.
Episode Summary
In this episode of Signals, Nick Mazing hosts James Pomeroy, Global Economist at HSBC. They delve into the complex world of demographics and its impact on the global economy. James shares his expertise in collating country forecasts and creating a global view, while also touching on his thematic views on the digital economy, urbanization, and demographics.
First, James discusses the basic demographic data types, like Total Fertility Rate (TFR), working age population, and dependency ratios.
James recently published a report on the potential shock to demographic projections caused by climate change and migration. This report sheds light on the intricate relationship between these global phenomena and their potential to reshape our world.
James then covers the complex dynamics of intra- and inter-country migrations, and the implications for population growth around the world. While demographic and migration projects over decades are very difficult, it is possible that small and currently “cold climate” economies, such as Canada and Scandinavia, experience population growth substantially above current projections, while Africa, currently viewed as the largest source of global population growth, experiences a decline in population over decades-long timeframe.
Finally, we discuss the major social challenges that come along with increased migration, from housing to integration into the workforce.
Guest-at-a-Glance
💡 Name: James Pomeroy
💡What they do: Global Economist
💡Company: HSBC
💡Noteworthy: Expert in global economics with a focus on demographics and climate change.
💡 Where to find them: HSBC The Macro Brief podcast: AppleSpotify
Key Insights
The Role of a Global Economist
James Pomeroy, a Global Economist at HSBC, explains his multifaceted role. His responsibilities include collating individual country forecasts from HSBC's team of economists around the world to form a coherent global view. Additionally, he develops overarching thematic views on long-term trends driving global economies. These themes span a variety of topics, including the digital economy, urbanization trends, and demographics. Pomeroy emphasizes the importance of considering these themes, particularly demographics, in today's world.
Climate Change and Migration
Pomeroy discusses his recent report titled "Climate Change and Migration: A Potential Shock to Demographic Projections". He highlights the significant challenges posed by demographics and explores the less obvious effects of climate change and migration on these trends. He emphasizes the need for proper housing and integration of displaced people into the workforce and society, as climate change is likely to cause greater global migration flows.
The Impact of Climate Change on Migration
Pomeroy brings up the concept of climate refugees and climate migrants - people forced to migrate due to climate change. He explains that over time, climate change is likely to make more economies inhospitable, causing outflows of people. He also notes that certain economies, such as the UK, Australia, and Canada, which have historically taken in a lot of inward migrants, could be significantly affected by these migration flows.
Episode Summary
In this episode of Signals, Nick Mazing hosts Erik Ellingson, Partner at CMT Digital. They delve into the world of blockchain, discussing its potential and the opportunities it presents.
Ellingson sheds light on CMT Digital's focus on early-stage investments in the blockchain ecosystem. He emphasizes the importance of core infrastructure opportunities, including blockchain tools and infrastructure, payment systems, and global on-off ramps. These elements, he believes, are crucial for making blockchain technology accessible to the masses.
In addition, Ellingson highlights the potential of content generation within the blockchain ecosystem. He points to the builder economy, digital fashion, gaming, sports, and loyalty programs as key areas of focus. He also discusses the potential for AI and blockchain to come together, hinting at a future where these two technologies could revolutionize various sectors.
Tune in to Signals for a deep dive into the blockchain ecosystem and its future prospects.
Guest-at-a-Glance
💡 Name: Erik Ellingson
💡What they do: Partner
💡Company: CMT Digital
💡Noteworthy: Erik is a seasoned investor in the blockchain ecosystem, with a keen focus on early-stage investments. His insights into the potential of blockchain technology, especially in the context of core infrastructure opportunities, are noteworthy.
💡 Where to find them: LinkedIn
Key Insights
The Importance of Core Infrastructure in Blockchain
Erik Ellingson highlights the significance of core infrastructure in the blockchain ecosystem. He emphasizes the need for tools and infrastructure that simplify the user experience on blockchains, making it more accessible for non-technical teams. He also mentions the importance of payment systems and global on-off ramps, which are crucial for bringing blockchain technology to the masses. Ellingson believes that these elements are key to serving the broader community and driving the adoption of blockchain technology.
Content Generation and Blockchain
Ellingson identifies content generation as a key area of focus within the blockchain ecosystem. He points to the builder economy, digital fashion, gaming, sports, and loyalty programs tied to big brands as potential areas for blockchain application. He suggests that the integration of real-world and Metaverse technology through blockchain could drive engagement and rewards, making it a promising use case for the technology in the next five years.
The Need for Regulatory Frameworks
Ellingson discusses the need for a regulatory framework for blockchain technology, particularly in the US. He suggests that the US needs to follow suit with other countries that have established regulatory frameworks for blockchain and crypto. Ellingson believes that regulation is necessary and that the US lawmakers will eventually get it right. He also mentions the importance of partnerships with organizations like the Blockchain Association and the Chamber of Digital Commerce in developing such frameworks.
Episode Summary
In this episode of Signals, Nick Mazing sits down with Daniella Woolf, Director at Danesmead ESG. They dive into the alphabet soup of ESG and sustainability acronyms. The focus is on the TCFD framework, a key tool for disclosing climate-related risks and opportunities, along with the different stages of maturity of the ESG frameworks across the globe. The conversation also covers CSRD, ISSB, and PRI.
Danesmead ESG, a UK-based consultancy, works with asset managers, hedge funds, private equity managers, allocators, and corporates across the US, UK/EU and APAC.
The driving force behind this surge in ESG initiatives is investor demand. More and more, investors are looking for companies that not only turn a profit, but also make a positive impact on the world. Tune in to learn more about this evolving landscape.
Guest-at-a-Glance
💡 Name: Daniella Woolf
💡What she does: Director, ESG Consulting
💡Company: Danesmead ESG
💡Noteworthy: As the Director of Danesmead ESG, Daniella Woolf brings a wealth of experience in ESG consultancy, having worked on ESG initiatives at a bulge bracket bank, as well as at an investment management firm, prior to joining Danesmead.
💡 Where to find Daniella: LinkedIn
Key Insights
Navigating the ESG Acronym Jungle
The ESG landscape is a maze of acronyms, with over 350 representing different regulations, conventions, standards, and industry bodies. Key ones include TCFD (Task Force for Climate-Related Financial Disclosures), a framework for disclosing climate-related risks and opportunities, and ISSB (International Sustainability Standards Board), an initiative to develop sustainability-related reporting standards. The goal is to create a global standard incorporating other standards, including TCFD and SASB.
Danesmead ESG: Guiding Global Entities Through ESG Implementation
Danesmead ESG, a UK-based consultancy, has worked with over 40 global hedge funds, private equity firms, and corporates. They assist clients with various ESG implementation and alignment projects, often in relation to regulatory sustainable investment type labels or alignment to other industry bodies like the Principles for Responsible Investment (PRI). The majority of their clients are driven by investor demand for ESG initiatives.
Unraveling the Net Zero vs. Carbon Neutrality Conundrum
The terms 'net zero' and 'carbon neutrality' are often used interchangeably but have distinct meanings. Carbon neutrality involves offsetting emissions by investing in projects that reduce carbon emissions elsewhere. On the other hand, net zero is a longer-term goal of reducing all emissions as much as possible and only offsetting what's left. Understanding these differences is crucial when evaluating company disclosures and claims about their environmental impact.
Episode Summary
In this episode of Signals, Nick Mazing sits down with Nelson Chu, Founder and CEO of Percent. They dive into the world of private credit, an asset class growing in popularity. Chu, who started his career at Merrill Lynch and BofA, shares how his platform is revolutionizing the way borrowers tap into the private credit market.
Chu explains how Percent has been filling a gap left by banks since the 2008 financial crisis. With technology, they're enabling borrowers to raise money faster, more efficiently, and transparently. Chu also discusses the challenges of building compliance attestation tools, order book management systems, and asset surveillance tools. Nelson also discusses building out a three-sided marketplace, bringing together borrowers, underwriters, and investors, and growing it to $1.2 billion in funded loans.
The conversation wraps up with a look at the future of private credit. Chu is optimistic, citing regulatory changes and the rapid growth of private credit as reasons for his confidence. He also shares how Percent's technology empowers borrowers, investors, and underwriters to collaborate more effectively. This episode offers a deep dive into the evolving landscape of private credit and the role of technology in shaping its future.
Guest-at-a-Glance
💡 Name: Nelson Chu
💡What he does: Founder and CEO
💡Company: Percent
💡Noteworthy: Nelson brings a traditional finance background and a vision for revolutionizing private credit.
💡 Where to find Nelson: LinkedIn
Key Insights
Private Credit: A Powerful Tool for Borrowers
Nelson discusses the potential of private credit as a tool for borrowers. He explains how Percent empowers borrowers in need of debt capital to tap into capital markets using technology. This allows them to raise money faster, more efficiently, and more transparently. Private credit growth as an asset class is a testament to its effectiveness and potential for future expansion.
Technology: The Game-Changer in Private Credit
Chu highlights the transformative role of technology in the private credit industry. He shares how Percent's technology has enabled the company to facilitate everything from sourcing deals to structuring them, syndicating them, and ultimately surveilling and servicing them post-close. This technological innovation is set to be transformative for an industry poised to take off.
Private Credit: A Bright Future Ahead
Nelson shares his optimistic outlook on the future of private credit. He notes that the non-bank lending sector will become even more important to fill the gap created by banks leaving this space. With private credit growing rapidly and a huge market opportunity in emerging markets, Nelson believes that the future of private credit is promising.
Episode Summary
In this episode of Signals, Nick Mazing sits down with Parth Chanda from Lextegrity. They dive deep into data and its role in preventing corruption in global organizations. Experts estimate that 5% of an organization's revenue is lost to fraud and corruption. Data, as they discuss, is a powerful tool to combat this.
The conversation then shifts to the Foreign Corrupt Practices Act (FCPA), a fundamental US law prohibiting transnational corruption. Its enforcement has far-reaching implications, affecting US-based companies and those interacting with US capital markets.
With his rich experience as a white-collar defense attorney, Parth Chanda brings unique insights into FCPA-related laws. His expertise adds depth to the discussion, making this episode a must-listen for anyone interested in data, corruption, and the law.
Guest-at-a-Glance
💡 Name: Parth Chanda
💡What he does: Founder and CEO
💡Company: Lextegrity
💡Noteworthy: Parth is a lawyer by training with 20 years of experience in compliance work, particularly related to the FCPA and anti-corruption. He has a rich background, starting as an intern at the World Bank, becoming a white-collar litigator, and later an in-house anti-corruption lawyer at large global companies. Now, he leads Lextegrity, a compliance data analytics and workflow platform that helps international organizations prevent and detect corruption and fraud.
💡 Where to find Parth: LinkedIn
Key Insights
Harnessing Data Analytics for Effective Compliance
Parth emphasizes data analytics to ensure effective compliance. He differentiates between traditional metrics and the insights that can be drawn from deep financial data. For example, organizations can prioritize high-risk transactions for review by risk-scoring every transactional line item in real time. Such an approach reduces false positives and provides a multi-dimensional view of every transaction. Notably, the components of the risk algorithm should be customizable to cater to each organization's unique risks and historical patterns.
The Changing Landscape of Anti-Corruption Measures
The podcast highlights the evolution of anti-corruption measures over the past two decades. Parth Chanda points out that 20 years ago, organizations could deduct bribe payments on their taxes in many countries. Today, the focus on governance has increased significantly, and the traditional approach of process checks and balances, while necessary, is not sufficient. The challenge lies in identifying the small percentage of employees who may bypass the process or collude with vendors, making data analytics a crucial tool in modern compliance programs.
Data-Driven Compliance: The Future of Anti-Corruption Efforts
Parth predicts a more data-driven future for compliance. Traditional approaches may not provide sufficient comfort to leaders about the effectiveness of their compliance programs. However, data-driven strategies, which involve comprehensive testing of all transactions, can provide more objective comfort about the level of compliance or non-compliance in an organization. The shift towards data-driven compliance is good news for leaders, as it promises more effective anti-corruption efforts.
Episode Summary
In this episode of Signals by AlphaSense, host Nick Mazing sits down with Saish Setty from Parallaxes Capital. The conversation begins with a deep dive into the world of Tax Receivable Agreements (TRAs), an emerging asset class whose prominence has grown over the last few years, and are an increasingly common feature in Initial Public Offerings (IPOs). TRAs are transferable corporate tax assets that historically have had little secondary market liquidity. Interestingly, TRAs might be the only asset class that benefits from higher corporate tax rates.
The discussion then shifts to the valuation of TRAs. Saish explains the three main considerations when valuing a TRA: understanding the tax collateral, forecasting taxable income, and constructing a discount rate. He emphasizes the need for a deep understanding of the tax benefits, or assets subject to the TRA, which requires extensive knowledge of the tax code.
The episode concludes with Saish discussing the market inefficiencies that their strategy benefits from. He shares the BAIT framework (Behavioral, Analytical, Informational, Technical inefficiencies) and how Parallaxes Capital has an edge due to its domain expertise and different view on duration. Saish also touches on the ESG angle of TRAs, highlighting how they further social and governance goals.
Guest-at-a-Glance
💡 Name: Saish Setty
💡What he does: General Counsel
💡Company: Parallaxes Capital
💡Noteworthy: Saish is a specialist in TRAs and shares his unique insights into this emerging asset class.
💡 Where to find Saish: LinkedIn
Key Insights
The BAIT Framework: A Unique Approach to Market Inefficiencies
Saish Setty introduces the BAIT framework (Behavioral, Analytical, Informational, Technical inefficiencies) as a tool for identifying market inefficiencies. In addition, he explains how Parallaxes Capital leverages this framework to gain an edge in the market. They focus on areas where other investors may not be looking, weigh information differently due to their deep tax knowledge, and take advantage of technical inefficiencies where market participants buy or sell assets for reasons unrelated to fundamental concerns.
Decoding the Valuation of Tax Receivable Agreements
Saish breaks down the process of valuing a Tax Receivable Agreement (TRA). He outlines three main considerations: understanding the tax collateral, forecasting taxable income, and constructing a discount rate. This process requires a deep understanding of the tax code and the ability to predict taxable income accurately. The discount rate is built by aggregating perceived risks, including credit, duration, illiquidity, and legislative risks.
The ESG Potential of Tax Receivable Agreements
Saish discusses the ESG (Environmental, Social, Governance) angle of TRAs. He suggests that tax-related strategies can be a powerful tool to incentivize good behavior and affect ESG goals. TRAs, in particular, can further these goals, especially in the social and governance aspects. For example, companies can support tax policies that promote long-term value creation rather than just tax minimization. This perspective offers a fresh look at how TRAs can contribute to sustainable and responsible business practices.
Episode Summary
In this episode of Psychedelic Investment Insights, host Nick Mazing from AlphaSense sits down with Dan Ahrens, the portfolio manager at AdvisorShares Psychedelics ETF (NYSE: PSIL). Together, they delve into the rapidly evolving world of psychedelic investments and the key differences between investing in the psychedelic and cannabis sectors. Dan highlights the importance of understanding the psychedelic market as a biotech-driven industry and discusses its unique challenges and opportunities.
Throughout the conversation, Dan outlines the factors investors should consider when examining psychedelic companies, such as their intellectual property and FDA pipeline. He also shares valuable insights about the major players in the sector, including Compass Pathways and Cybin, and how their groundbreaking treatments have the potential to revolutionize mental health care.
Finally, the discussion turns to the advantages of investing in a psychedelics-focused ETF, like AdvisorShares' PSIL, which offers investors transparency and exposure to a curated selection of innovative companies within the industry. This episode is a must-listen for anyone interested in the growing field of psychedelic investments and the future of mental health treatments.
Guest-at-a-Glance
💡 Name: Dan Ahrens
💡What they do: Portfolio Manager, AdvisorShares Psychedelics ETF (NYSE:PSIL)
💡Company: AdvisorShares
💡Noteworthy: Expert in cannabis and psychedelic investments
💡 Where to find them: LinkedInTwitterDan’s Book on Cannabis Investing
Key Insights
Differentiating Cannabis and Psychedelic Investments
In the episode, Dan Ahrens highlights the key differences between investing in cannabis and psychedelics. While cannabis stocks are evaluated based on revenue, cash flow, balance sheet, and survivability, psychedelic investments are treated more like biotech stocks, trading on intellectual property and FDA pipeline. These investments can be volatile, but offer long-term potential. Understanding these differences is crucial for investors looking to enter the psychedelics market.
Potential Applications of Psychedelics in Mental Health Treatments
Dan Ahrens discusses various studies examining the use of psychedelics, such as ketamine and psilocybin, in mental health treatments. The episode covers potential applications for depression, treatment-resistant depression, ADHD, and Alzheimer's. These promising developments showcase the potential of psychedelics in addressing a wide range of mental health issues and underscore the value of investing in this emerging sector.
Key Holdings in AdvisorShares' Psychedelic ETF (PSIL)
Dan Ahrens shares insights on the largest holdings in the AdvisorShares Psychedelic ETF (ticker: PSIL), which offers daily transparency on its investments. Compass Pathways and Cybin are among the top holdings in the fund, both working on psilocybin-based treatments. The ETF aims to provide pure exposure to the psychedelics sector, avoiding companies that only dabble in psychedelics. This approach allows investors to gain targeted exposure to the promising world of psychedelic therapies.
Episode Summary
In this episode, host Nick Mazing from AlphaSense interviews Emily Coriale, Senior Principal Pricing & Market Access Lead at LifeSci Consulting. They discuss the far-reaching implications of the Inflation Reduction Act (IRA) on the US healthcare system, with a particular focus on drug pricing and price negotiations between the US federal government and pharmaceutical companies, as well as the impact on health plans.
Emily explains that the IRA is the most significant federal legislation in the last 20 years and highlights three main aspects of the act: drug price negotiation, prescription drug inflation rebates, and Medicare Part D redesign. These changes will not only impact profitability, investment, and strategic choices for health plans and manufacturers but also have a domino effect on the entire healthcare system, including patients, insurers, and private funding sources.
As the industry prepares for the IRA's implementation, Emily emphasizes the importance of understanding and mitigating risks, proactive stakeholder communication, and collaboration between healthcare sector partners. This episode provides a comprehensive overview of the IRA's potential impact on pharmaceutical companies and the healthcare value chain.
Guest-at-a-Glance
💡Name: Emily Coriale
💡What they do: Senior Principal Pricing & Market Access Lead
💡Company: LifeSci Consulting
💡Noteworthy: Emily is a PharmD 15+ years of healthcare leadership experience
💡Where to find them: LinkedIn
Key Insights
The Inflation Reduction Act's Three Main Components
The Inflation Reduction Act (IRA) has three key components that are expected to impact the US healthcare system. First, drug price negotiation will allow the Centers for Medicare and Medicaid Services (CMS) to negotiate with drug manufacturers for high-spend drugs within the Medicare program, a first in the US. Second, prescription drug inflation rebates will require manufacturers to pay certain rebates for Medicare Part B and Part D drugs if drug price increases exceed the rate of inflation. Lastly, the Medicare Part D redesign will reduce the maximum out-of-pocket expenses for Medicare Part D beneficiaries, shifting financial exposure to manufacturers and health plans.
IRA's Ripple Effect on the Entire Healthcare Value Chain
The Inflation Reduction Act (IRA) will not only impact Medicare but will also create a domino effect on the entire healthcare system. The reduction in out-of-pocket expenses for patients could influence investment in drug discovery and clinical development, affecting venture capital funds and public markets. The IRA's impact on drug negotiations and financial exposure could change the balance of technologies and disease states that are funded in the future.
Preparing for IRA Implementation – Manufacturers' Perspective
As the Inflation Reduction Act (IRA) is set to begin its rollout in 2023, manufacturers must understand the impact on their existing portfolio and future investments. To mitigate risks and proactively develop strategies, manufacturers need to consider their position in the development phase and the implications for their investors. Open communication and collaboration between manufacturers and health plans will be vital to navigate the challenges presented by the IRA effectively.
Episode Summary
In this episode of the Signals podcast, host Nick Mazing from AlphaSense welcomes guest Matt Melander, a successful entrepreneur in the burgeoning cannabis industry. Together, they delve into the challenges and opportunities of creating and distributing cannabis-infused beverages and edibles, highlighting Matt's journey in developing the popular LEVIA beverage line.
Matt shares his experiences navigating the uncharted territory of the cannabis market, emphasizing the importance of strong relationships and integrity in an industry that lacks the infrastructure and support of more mature sectors. He also discusses the potential landscape of cannabis consumer packaged goods (CPGs) and whether the industry will ultimately consolidate or fragment.
Finally, the conversation touches on the creative process of crafting palatable cannabis beverages and Matt’s humble beginnings with a SodaStream in a garage to sophisticated collaborations with flavor houses and experts today. This episode offers valuable insights into the dynamic world of cannabis entrepreneurship and product development.
Guest-at-a-Glance
💡Name: Matt Melander
💡What he does: Entrepreneur, Co-founder
💡Company: LEVIA Cannabis Beverages (now a part of AYR)
💡Noteworthy: Matt is a successful pioneer in the cannabis-infused beverage market.
💡Where to find him: LinkedIn
Key Insights
Building a Brand in the Emerging Cannabis Industry
Matt Melander, the co-founder of LEVIA Cannabis Beverages, discusses the challenges and opportunities of building a brand in the cannabis industry. Due to the lack of established infrastructure, businesses need to rely on small-time relationship-based selling and one-on-one conversations with retailers. Matt highlights the importance of integrity and collaboration in the industry, with contributors working together to build a viable future enterprise.
The Evolution of Cannabis CPGs and the Potential for National Brands
Matt shares his thoughts on the future of cannabis CPGs and the possibility of national brands emerging in the industry. While he believes there is a chance for a Coca-Cola or Budweiser equivalent, he also sees value in regional players thriving and creating jobs. He compares the growth of the market to the rise of the craft beer industry, with a focus on product quality and consistency.
The Art and Science of Cannabis Beverage Formulation
From its humble beginnings as a fun experiment with a SodaStream, cannabis beverage formulation has evolved into a sophisticated process. Matt explains how flavor experts from the wine and craft cocktail industries have entered the cannabis space and elevated product development. The process has shifted from being an art to incorporating rigorous engineering and testing for quality control.
Episode Summary
In this episode we spoke with John Zolidis, President at Quo Vadis Capital. John has over 25 years of Wall Street experience analyzing unit-based businesses, such as restaurants and retailers.
We covered a number of topics including unit economics, Return on Invested Capital (ROIC), and Return on Incremental Invested Capital (ROIIC). John also discussed specific aspects of ROIIC, including cohorting, differences in capital allocation decisions of public and private concepts, understanding franchisee economics in the case of franchised businesses, and a lot more. The guest explains in detail the work that goes into understanding the true performance of the newest cohort of stores, finding inflection points in ROIIC which leads to estimate and revision changes.
Guest-at-a-Glance
💡 Name: John Zolidis
💡 What he does: He's the president of Quo Vadis Capital.
💡 Company: Quo Vadis Capital
💡 Noteworthy: John has over 25 years of experience analyzing unit-based businesses, such as retailers and restaurants, and is a very sophisticated practitioner in the space.
💡 Where to find John: LinkedIn
Key Insights
⚡ What is Return on incremental Invested Capital (ROIIC)? We use ROIIC to make investment decisions and determine the impact of strategic investments on a business. But what is ROIIC? John explains, "Unit-level ROIC is what is the return metric of the average store restaurant, et cetera of a business. When we talk about return on incremental invested capital, what we mean is what's the return profile of the most recent cohort of stores, restaurants, et cetera, that a business has opened. Put differently, what is the return profile of the most recent dollar being allocated by the business into growth."
⚡ The return that the franchisees get is essential. When analyzing franchised businesses, John pays very close attention to franchisee performance. John explains, "Nevertheless, the return that the franchisees achieve with their stores or restaurants or car washes or whatever it is, that, among the list that you mentioned, is really important. And it's important for a couple of reasons, but I think the main reason from a Wall Street investment standpoint is that the returns that the franchisees generate act as a direct governor on growth, which is to say the cash flow produced at the unit level relative to the cost of opening up a new unit tells you how fast the franchisees can increase their system and that's important to the franchisor, the parent company, which is where the equity in Wall Street typically is. So it is relevant to see what the return metrics are like for the franchise. It does have a direct implication on growth. And then, I think it's also important to know that you're investing in a concept that creates value for all members of the chain, not just the parent company. And that is a sustainable continuous business that you can feel good about being involved with."
⚡ There are different criteria for determining whether a certain stock is a ‘buy’ or ‘sell.’ How can you use ROIIC to determine whether a certain stock should be bought or sold? John explains. "There's a ton of work. It is quite tedious. I wouldn't say it's a lot of fun to build the models that generate all of these metrics. But essentially, we have a battery of tests that we apply to the output of this. So the first one is a quality filter. [...] The second piece is a trend analysis. [...] Then, the third filter is related to return on incremental invested capital. So this is where we zero in on the company's most recently opened cohort of stores. [...] Then lastly there, we also have a valuation-based approach for unit-level concepts."
Episode Summary
The haphazard state-level legalization of cannabis in the US has created a patchwork of vastly different regulations across states, from growing to retail licensing. How do we make sense of the opportunities that exist?
**We spoke with Aaron Edelheit, an investor in both public and private companies in the space. Aaron gave us an overview of the absurdities at the federal level, including how cannabis ended up as a Schedule I drug, what states have been doing over time in terms of medical and recreational use legalization.
He also dives deep into the inefficiencies created in the market, in part because most institutional investors cannot participate. As one of the pioneers who turned the single-family house rentals into an institutional asset class, Aaron is reminded of how he was alone buying foreclosed houses literally on the steps of courthouses in the Southeast for years before “the big boys” showed up and prices skyrocketed.
We further talked about the challenges of the cultivation of consistent product at scale, and why a certain grower in California is well-positioned with a large bank of greenhouse capacity and perfect climate. Further, we look into the future: will it be a brand-dominated industry, or will it be a commodity? We also touched on Aaron’s book, where he meticulously researched the benefits of unplugging from it all for one day a week.**
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Guest-at-a-Glance
💡 Name: Aaron Edelheit
💡 What he does: He’s the CEO of Mindset Capital.
💡 Company: Mindset Capital
💡 Noteworthy: Aaron is a crossover investor who is very heavily involved in the emerging cannabis space. Additionally, he is the published author of The Hard Break: The Case For The 24/6 Lifestyle.
💡 Where to find Aaron: LinkedIn | Twitter
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Key Insights
⚡ Cannabis has medicinal value despite being classified as a Schedule I drug. Cannabis is a Schedule I controlled substance, meaning it has huge abuse potential and no accepted medicinal purpose. But is this really accurate? Aaron says, “How many people have overdosed from cannabis this year? Zero. How many people have overdosed from cannabis last year? Zero. So the medicinal value is we know that it helps cancer patients tolerate their drugs. It is clear pain relief. It helps people with anxiety, post-traumatic stress disorder. There is an approved FDA drug that is a synthetic form of cannabis that treats kids with epilepsy. So there are just so many, and now we're finding that it could possibly work against COVID. We're just starting to explore really how cannabis works and how it can work.”
⚡ There’s a conflict between federal and state law when it comes to cannabis legalization. More and more states are legalizing marijuana, but it is still illegal on the federal level. Aaron talks about this conflict. He says, “You have like 38 or 39 states that have basically, like, we're just going to ignore the federal government, and we're going to legalize it in our state for medical. And then you have a number of states who are like, we're just going to make adult use. And what happened? The reason why more and more states are legalizing it is they legalize it, and then they're like, everything gets a little bit better.”
⚡ The cannabis industry is a huge opportunity for investors. As an investor heavily involved in the cannabis space, Aaron thinks that it’s one of the most promising investments. He says, “This is just a small
Episode Summary
**While traditionally excluded by ESG investors, tobacco companies have made great strides over the last few years with the introduction of a wide range of reduced risk products (RRPs).
In this episode we sat down with Andrea Sefler, PhD, Director of Research at Broyhill Asset Management, to discuss the topic. Andrea’s PhD in Organic Chemistry and 15 years of pharma experience comes in handy as she walks us through the risk spectrum, starting with heat-not-burn products, then vapor products, and finally, the various forms of oral nicotine, like tobacco-free nicotine pouches. We cover everything, from absorption and metabolism, to device form-factor considerations.
We then discuss the difference between expressing views as a consumer versus as an investor, how purchasing stock from another shareholder does not really help or hurt a company directly, and why the tobacco industry players are best positioned to reduce tobacco harm.**
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Guest-at-a-Glance
💡 Name: Andrea Sefler, Ph.D.
💡 What she does: She's the director of Research at Broyhill Asset Management.
💡 Company: Broyhill Asset Management
💡 Noteworthy: Andrea has a Ph.D. in organic chemistry and is an experienced investor in the space.
💡 Where to find Andrea: LinkedIn
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Key Insights
⚡ The tobacco industry is constantly innovating. Heated tobacco products are a major innovation on the market. Andrea explains, "There's not really much they can do anymore to innovate around a cigarette, or manufacturing a cigarette, or distributing a cigarette, or whatever to offset that decline, so all they can do is increase the price, but these HTUs now and heated tobacco products, that is an innovation, and you've broken that pack model unit and direct price comparisons to competitors. So now the business model is almost a subscription-based business."
⚡ The absorption of nicotine differs from product to product. One of the most significant differences between heated tobacco, vapes, and cigarettes is how they're absorbed. Andrea explains, "I like the logic behind this conversational arc that you've set up here. So what we're doing is moving down the risk spectrum of the nicotine products that are currently on the market. So you've got combustible cigarettes and tobacco, and then you've got heated tobacco, then you've got vaping, and now we're down at oral nicotine. So what is different now is what we're talking about is what's called buckle absorption of nicotine. So absorbing nicotine through your mouth or gum membranes as opposed to through your lungs. That's very different. And to understand why I've got to throw out a couple of concepts around blood circulation and metabolism."
⚡ Safety improvements are always a good thing. It's crucial to develop and bring safer features for tobacco users constantly. Andrea says, "Like you, I do believe that most of the time, those best positioned to make meaningful changes in an industry are those that are actively participating in it with products, marketing, distribution, and, more importantly, customers that they're looking to, and have the incentive to, best serve in the long run. I don't think avoidance of a thing — that's not the same as fixing it. The bottom line is that people enjoy the effects of nicotine. Some people like to smoke and have been doing so for millennia, so unless we're willing to try another run at a prohibition experiment, I think it's in some ways very irresponsible not to develop and offer safer means for people to consume nicotine that choose to do so."
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Episode Summary
In this episode we spoke with Linda Lebrun from Substack Inc., a VC-backed publishing platform that has gained prominence in recent years as the go-to place for starting and monetizing email newsletters.
We discuss a wide range of topics covering the technology, content, and business aspects of Substack Inc. While neither email newsletters nor blogs are new, Substack’s singular focus on email-first has been very successful. Another part of the success has been easy writer and user experiences, and transparent revenue splits. We also covered why Substack Inc. does not facilitate advertising, and how the platform’s commitment to free speech stands out.
Guest-at-a-Glance
- Name: Linda Lebrun
- What she does: Linda leads writer relations at Substack.
- Company: Substack Inc.
- Noteworthy: Linda joined Substack two years ago, transitioning from the investment space to tech.
- Where to find Linda: LinkedInTwitter
Key Insights
🎙️Substack’s success comes from the email-first strategy. Neither email nor blogs are new. It was the focused approach that centered on ''coming to users' doors'' — their inboxes — instead of waiting for them to come to the platform that enabled Substack’s growth. ''The analogy I saw somebody making in a Tweet was when you have a blog, it's like opening up a cafe, and you wait for somebody to come by and poke their head in, and maybe it's empty, and they don't come in. But when you have an email-first — an email newsletter-first — structure, it is like Uber Eats. And we see it in the data because more than 95% of the interaction people do with Substack content is either in the email inbox or the app.''
🎙️Writers should be focused on content and audience-building, not technology. Substack offers tools for both established writers with existing audiences, and for experts looking to build an audience. ''If you're Andrew Sullivan, and you have this huge audience that likes you, or if you have a big email list to port in, then that's a great way to get started, and you can grow from there. But [...] what if I'm not Andrew Sullivan? So in our roadmap, we are very focused on building features that will help people get found, and then we'll help them create a way for people to go — it's very MBA-style to talk about a funnel of monetization — if people want to fully participate in what you are doing, and if you want your writing to be a business and a living, it works if you are given tools to move people down that path and say, 'Hey, if you want to enjoy everything that I'm doing, if you become a paid subscriber, you will.'''
🎙️ Substack deliberately does not focus on advertising. Substack's business model is helping authors make an extra income, a living, or as Linda says, in some cases, a fortune publishing articles on the platform. They do this by making it easy to launch paid subscriptions. ''This seems to be working; it seems to be gelling to give people a way to get paid. [...] The vast majority of people on Substack would be individuals or small teams. The biggest priority for them is to focus their time and attention on what will help their content business — for lack of a better word — grow, which is probably spending their time on writing and marketing and to try also to have an ad sales department; it's a tough one if you are independent.''
Episode Summary
**Expert interview transcript libraries are the easiest way to access primary research, which fuels better decisions for both investors and corporate professionals. But how are compliance issues resolved both on the library side, and on the client side?
In this episode, we spoke with Sean Farrell, Chief Compliance Officer at Stream by AlphaSense, the market’s leading library of proprietary expert interview transcripts. Sean has extensive experience in the area, including work as an examiner in the New York office of the SEC, Chief Compliance Officer at large asset managers, as well as a compliance consultant.**
Sean covers in detail the pre- and post-call reviews, meeting the highest standards of the world’s largest funds, client-level compliance workflows, compliance around direct calls with experts from the library, and how to screen out bad actors.
Guest-at-a-Glance
💡 Name: Sean Farrell
💡 What he does: He's the CCO of Stream by AlphaSense and MD of IQ-EQ.
💡 Company: Stream by AlphaSense
💡 Noteworthy: Sean has over 20 years of experience with the major US securities regulator, the SEC, some of the most well-known asset managers, and as a consultant.
💡 Where to find Sean: LinkedIn
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Key Insights
⚡ Achieving “highest common denominator” compliance is of paramount importance. Because of the nature of expert interviews and unique insights into company details, highest level compliance is key. Sean says, "The scrutiny's really very heavy as prospective subscribers complete very impressive due diligence processes on us, and it can be really tough to go through that crucible from time to time, but it's very satisfying from a professional perspective when that prospective client achieves happiness with the robustness of our compliance program."
⚡ Standardized, multi-layered processes are key. No single transcript is more important than the integrity of the entire library. Sean explains, "We have an automated workflow for this; so, no transcripts can move outside of the pre-designated workflow. The compliance review team is reviewing each recording and transcription. As I mentioned, nothing can make it to the library without affirmative compliance approval. So it'll just sit in the queue until we approve it or kill it. It can't move past that. We make compliance edits to remove information that doesn't meet our compliance standards. And sometimes we do have to kill a transcript because it just can't be cured no matter how much compliance editing you do."
⚡ Bad actors tend to stay away from recorded calls. As the memories of the 2009-2013 period have faded, there are bad actors looking to monetize material non-public information. Sean says, "The intentional bad actors avoid platforms where their calls are being recorded. They don't provide consent to have their calls recorded. And, of course, then a call won't occur with them on our platform. The act of recording is such a significant and powerful deterrent to those bad actors; it just keeps them off the platform."
In this episode, we spoke with Michael Maloof from Earnest Analytics, a leading provider of alternative data.
Our broad topic was the expanding use of alternative data, such as credit card transactions and geolocation data, by corporations and consultancies.
While "alt data" has been widely used by hedge funds for many years, its use in the corporate world is still relatively nascent.
Michael went over a number of specific examples, such as cohort analysis, promotion effectiveness, and Customer Lifetime Value (CLV) calculations.
**We also covered data delivery and usage: while historically only hedge funds could afford sophisticated database analysis and API expertise, alt data providers have made great strides in creating "consumer app level" interfaces for broad use.
Guest-at-a-Glance**
💡Name: Michael Maloof
💡What he does: Michael is the director of Marketing at Earnest Analytics, a leading alternative data provider for hedge funds, asset managers, consultants, and corporations.
💡Company: Earnest Analytics
💡Noteworthy: Michael started his career as an equity analyst at Goldman Sachs, covering tech and telecom, and this is where he started to appreciate alternative data sets
💡Where to find them: LinkedIn｜Insights Blog｜Free Dashboards｜Twitter
In this episode, we spoke with James Pomeroy, UK-based global economist at HSBC, and we covered a number of macroeconomic topics.
Starting off with inflation, the dominant 2022 macro theme, we explored the different drivers of inflation globally, highlighting the differences in the drivers between regions.
While energy drove the inflation jump in Europe, North America saw excessive shelter inflation, while the heavier weighing of food drove inflation in Emerging Markets.
Linked to inflation, we covered deglobalization and near-shoring. While generally perceived as inflationary, James brought up a few factors where it might not be.
We then discussed rates: we are seeing the first synchronized global central bank tightening in many years.
However rates as a policy transmission mechanism vary substantially from country to country: James contrasted the predominantly fixed mortgage rates in the US versus Sweden where the housing market has already softened considerably.
We then covered what might be the end of the US dollar bull market.
Finally, we touched upon global demographics: given China's entering a period of population decline, we discussed global labor force dynamics, and how the aging and shrinking of the workforce can be counteracted through robotics.
In this episode, we spoke with Meb Faber, CEO of Cambria Investment Management, an ETF manager that just hit $2 bn in assets.
Our focus was on how Cambria has been able to grow and thrive in a world where the ETF giants have Assets Under Management (AUM) in the trillions through offering differentiated "quant lite" strategies.
Joining us from his Manhattan Beach, California, office, Meb covered the strategies that fueled their growth, starting with shareholder yield, which goes beyond dividend yield and includes stock buybacks.
We covered factor investing broadly, and how Cambria productized some of the strategies by combining them. We also spoke about tail risk protection, and how to think about global asset allocation.
We also touched on Meb's popular podcast and email newsletter.
Episode Summary
In this episode we go over a framework for financial institutions failure, with Marc Rubinstein, a former financials analyst and portfolio manager, currently writing Net Interest.
We cover the three main ways failures happen. First, we discuss fraud, both external and internal. Then we discuss underwriting, which affects both lending institutions and insurance companies. Finally, we discuss asset-liability mismatches, known as a “run on the bank”. We go back to the 1800s to today, when these happen (mostly) digitally.
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Guest-at-a-Glance
💡 Name: Marc Rubinstein
💡 What he does: He's the writer of the newsletter Net Interest and a former financial analyst and portfolio manager.
💡 Company: Net Interest
💡 Noteworthy: He's an investment professional with 25+ years of experience in researching and investing in financial services companies. He's also a retired partner from one of Europe's largest hedge fund firms.
💡 Where to find Marc: LinkedInTwitter
Episode Summary
Understanding and avoiding common red flags in corporate filings with the US Securities and Exchanges Commission (SEC) is essential for buyside and sellside analysts, auditors, and external reporting teams. In this episode, we spoke with Michelle Leder, founder of Footnoted and author of “Financial Fine Print”, to discuss her top red flags both in terms of content and “metadata” like the timing of the filing itself. We also spoke about what are some of the best practices for external reporting teams at corporations.
Guest-at-a-Glance
- Name: Michelle Leder
- What she does: Michelle is the founder of Footnoted.
- Company: Footnoted
- Noteworthy: Michelle is also an author. Her book ‘Financial Fine Print: Uncovering a Company's True Value’ came out almost two decades ago, and she started the site, Footnoted, to promote it. Soon, Michelle started posting about the red flags she found buried in their routine SEC filings. From 2008 to 2018, she ran a subscription-based service focused on actionable disclosures in the SEC filings. After a five-year break, she has returned with Friday Night Dump. ''We call it the Friday Night Dump because what it does is it looks at the filings that are made after 4:00 p.m. on a Friday,'' explains Michelle.
- Where to find Michelle: Mastodon｜Twitter｜Amazon
Episode Summary
**Should your company “take a stand” on anything? How should this decision be approached? Will your action, or inaction, become news? In this episode of Signals, we try to answer these questions with Andrew Edgecliffe-Johnson, the US Business Editor at the Financial Times.
We first discussed environmental issues, where the interests of shareholders and the broader stakeholders are often very aligned. Andrew discusses how Walmart has become a leader through both its scale and a thoughtful, detailed approach. Social issues vary quite a bit by geography and type, so Andrew offers a framework for decision-making. Finally, we discussed governance issues from a broader perspective, going beyond purely corporate governance mechanics.**
Guest-at-a-Glance
- Name: Andrew Edgecliffe-Johnson
- What he does: Andrew is the US business editor at the Financial Times.
- Company: Financial Times
- Noteworthy: As the US Business Editor, Andrew focuses on themes and concerns running through boardrooms in every industry and the people leading the debate on how business should intersect with consumers, employees, investors, policymakers, the economy, and society.
- Where to find Andrew: LinkedIn｜Twitter｜FT Profile
Episode Summary
**In this episode, we sat down with Kevin Erdmann, the author of "Shut Out" and "Building from the Ground Up” for an extensive conversation on US housing, starting in the early 2000’s through today.
His research points to inadequate housing supply in key large cities, such as New York and Los Angeles, driving the 2008 housing crisis rather than oversupply in “destination” cities such as Phoenix and Las Vegas.**
Misdiagnosing the problem led to a severe underbuilding following the crisis, as tight credit conditions effectively prevented new entry-level housing from being built just as the millennial generation was entering the prime home buying age. Covid, then, led to further dislocations especially in smaller markets. We ended the conversation with some policy recommendations.
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Guest-at-a-Glance
💡 Name: Kevin Erdmann
💡 What he does: Kevin Erdmann is the author of "Shut Out" and "Building from the Ground Up."
💡 Company: Independent Housing Researcher
💡 Noteworthy: Kevin Erdmann is a former small businessman and a researcher in housing, monetary policy, and financial markets. In 2015, Erdmann began to reconsider a range of evidence contradicting commonly held beliefs about the pre-2007 American housing boom. His first book "Shut Out" was published with the support of The Mercatus Center at George Mason University, where he continued to develop a revolutionary new approach to the practical roles of housing, debt, and money in recent American economic trends.
💡 Where to find Kevin: Website l Twitter
Episode SummaryInitial Public Offers, or IPOs, have been the traditional way for companies to offer shares to public investors. But in recent years we have seen several marquee deals doing this through a Direct Listing, bypassing a number of the IPO processes. Will this trend continue? We sat down with Dakin Campbell, author of “Going Public” and Chief Finance Correspondent, Insider, to discuss his book chronicling a number of notable offerings in the last few years, and what the future might hold.
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Guest-at-a-Glance
💡 Name: Dakin Campbell
💡 What he does: He's the author of ‘Going Public’ and the chief finance correspondent at Insider.
💡 Company: Insider
💡 Noteworthy: ‘Going Public’ is based on over 150 interviews with bankers, executives, and other direct participants in the marquee deals of the 2010s.
💡 Where to find Dakin: LinkedIn, Book Website, Amazon, Insider, Twitter
Episode SummaryIndex investing has been a very successful, low-costing investing strategy that has grown considerably over the last few decades. But there have been a number of concerns regarding the growth of indexing and the influence of index fund managers. These issues revolve around governance, fears of anti-competitive behavior due to cross-ownership, fiduciary duty implications, and the distortion of market signals. We sat down with Robin Wigglesworth, author of “Trillions”: the definitive book on the past, present and future of passive investing, and editor at FT’s Alphaville, to discuss all these issues.
Guest-at-a-Glance
💡 Name: Robin Wigglesworth
💡 What he does: Robin is the editor at Financial Times Alphaville.
💡 Company: Financial Times Alphaville
💡 Noteworthy: He is also the author of ''Trillions'', a book on the origins, growth, and implications of index investing
💡 Where to find Robin: LinkedIn｜Twitter｜www.robinwigglesworth.com
Episode Summary
Private equity has become an increasingly important asset class in recent years, as institutional investors have allocated more of their portfolios to private equity strategies. This is due in part to the attractive returns that private equity firms have been able to generate, as well as the diversification benefits that private equity investments can provide.
We invited Miriam Gottfried, the private equity reporter at The Wall Street Journal, to join us on the first episode of Signals by AlphaSense. Miriam and our host Nick Mazing, the Director of Research at AlphaSense, discuss the biggest trends in private equity today.
So, if you want to learn more, keep reading or tune in to the first episode of AlphaSense’s Signals podcast.
Guest-at-a-Glance
- Name: Miriam Gottfried
- What she does: Miriam is the private equity reporter at The Wall Street Journal.
- Company: The Wall Street Journal
- Noteworthy: Miriam began working at The Wall Street Journal a decade ago, and for the past five years she has been focused on all things private equity.
- Where to find Miriam: LinkedIn｜Twitter｜Her Wall Street Journal page