How to perform due diligence like a pro?
Watch the full interview below.
Chris Carsley, our Chief Investment Officer, joins IRA Club for another webinar. He talks about how to perform due diligence like a pro with insights from industry professionals on their non-negotiables when evaluating an investment opportunity. If you want to level up your investment due diligence, you should not miss this video!
Video Highlights:
What is Due Diligence?
What are the different types of Due Diligence?
What are the non-negotiables of industry professionals?
“Investment due diligence is not where most of your failures occur.”
“Something super complex doesn’t always generate an excess return, but it certainly means it has a lot more ways it can break.”
“If you’ve identified your three to five non-negotiables, no matter what happens, you can just skip over funds that do not meet them easily.”
Watch the full video below.
Transcript
Ramez: Chris, how are you? Ramez Fakhoury here at the IRA club joined and you were just about to jump in, Chris, so go ahead, introduce yourself real quickly.
Chris: I'm, uh, Chris Carsley, uh, Chief Investment Officer for Kirkland Capital Group.
And, uh, we're gonna be talking about, uh, some practices of due diligence, which, yes, uh, I have spent a lot of my career pro performing a variety of different due diligence across a number of different types of funds. So we'll kind of hit some high level aspects of things to consider and then we'll have a little bit of a jump in on some, uh, Some, uh, non-negotiables is what I call 'em.
Ramez: Nice. So actually before we jump in, typically if you are joining us for the first time, um, you know, I usually have this great PowerPoint presentation. Introducing Chris' topic is a discussion that we're gonna be going over today. Um, but for those of you that are joining us for the first time, IRA Club is a full administrator that allows you to use a portion of your retirement funds within the Alternative space.
Now, the majority of the people that do join us, however, um, are current IRA club members, um, I will say this to you, one of the reasons why I am excited to have Chris on board is, and, and Chris, you could feel free to jump in at any time cause I love bantering with you, buddy. You're one of the best people to like, kind of go back and forth with.
I hear this all day, every day as I travel to events, Chris. I don't know what to get started on. I don't know what to do next. How do I find my investments? What am I supposed to be looking for, right? So when I get up on stage and I give this great, you know, breakdown of self-directing fee structures, things that you're supposed to be looking for, why things are currently working against you.
But ultimately what we do educate our clients on is diversification. You know, this better than most, right? This is the first thing that always comes up. What am I supposed to invest in? Or how do I identify the investment opportunity? Otherwise, who's gonna roll money over from the Fidelitys, Vanguard and Schwabs of the world's over to the IRA club.
So I am excited to have this, you know, uh, uh, uh, you know, have you jump on board. And again, the title is How to Perform, you know, Due Diligence Like a Pro when it comes to Alternative investments. Um, And Chris, I know, uh, most people don't know this about me and you, we actually, uh, you know, we've known each other for a little three, three years plus I would say, right?
Uh, three years plus. We have quite a few IRA club members that actually have invested with your company. Um, you know, our process intimately. Now, one of the things that Chris and he said like, the topic of discussions that we are gonna be going over is how to perform due diligence, right? And then what are the different types of due diligence that are out there and what are non-negotiables, as Chris just said.
And then lastly, and I said this to Chris before everybody jumped on, right outta respect to Kirkland Capital Group and Chris, I'm gonna show you a little portion of the new website where we have streamlined the process. And I want to thank you, Chris, right, for making the introduction to Formidium. Um, again, outta respect to you and your team, I think you should be the first, uh, um, example that I give this to.
So if the timing couldn't be right, Right. There you go. This is it, it all just kind of fell into place With the new website launching next month, um, we're gonna kind of go over that process and what it's gonna look like. But in the meantime, Chris, why don't you tell us a little bit about Kirkland Capital Group.
How, how did you know, how did it all start? How'd it come to fruition?
Chris: Sure. I'll run through the quick story. Um, I've always been in the investment management world and through many, many contacts I kept on hearing in, you know, from 2013, '14, '15, and on, um, all the RIAs and wealth managers were like, listen, where am I gonna get yield without going on the risk curve?
I didn't really have an answer for 'em at that time. I, I, I was hunting and looking for things and I was doing a lot of work in venture and some startups, so not exactly what people were coming to me and, and looking for. And then in 2019, my, uh, other partner, Brock Freeman, uh, who came from the real estate and technology side of the business, ran underwriting crews.
Um, he came to me and, uh, said, you know, I, I have just a, a very large network of, uh, loan brokers that are pinging me more and more and just saying they cannot find financing for micro balance. I mean, at first they were selling small balances, but in the world of real estate, small can still mean a pretty large dollar amount.
Mm-hmm. So micro balance, bridge financing for purchase or refinance of, uh, projects in secondary, tertiary markets. Now, of course, I knew it was a little bit dangerous, I had to go do a bunch of research, put a number of things together, and that was the beginning of where we launched the, uh, uh, Kirkland Income Fund in January of 2020.
So, um, right product, right Timing was very interesting. Um, not exactly, uh, expecting what was gonna happen in March. Um, so that made things, uh, fairly interesting, but we decided to move forward cause it was just what I was hearing from everyone. This is what they needed. So on both sides, we had the investors who were looking for that yield, and we had the borrowers that were definitely looking for a consistent source of money that they could trust.
And that was really how it was formed.
Ramez: Thank you Chris, for the breakdown. Um, you know, before I was actually looking at my notes, I just wanna make sure that everybody understands, especially current IRA club members. The reasons why we do these webinars are for educational purposes only. So I want you to understand that you still have to perform your due diligence, even though this is the topic of discussion, to make sure that you still reach out to your fiduciaries, your registered investment advisors, if you guys are utilizing, re utilizing those, your CPAs, your lawyers, before you jump into any investment opportunity.
Again, because the IRA Club can never talk about companies, the investment opportunities themselves, that is the reason why I ask certain people like Chris to come on board because they just do such a fantastic job to touch those things that I can't talk about. Right? So, without further ado, Chris, and before I pass it off to Chris, there is something I wanna share with everybody.
Write down, I mean, actually write down your questions either within the chat or the Q&A. Alright. And we'll make sure that we can get to every single one of those. If, for those of you that are gonna be looking at the recording, um, I just wanna let you know there will be a contact link so you could schedule your calls with Chris and his team.
Uh, we will go through, um, what, uh, where to find Chris on Investors Row within his website, um, also, and lastly, uh, an ebook. Uh, you wanna tell us a little bit about the ebook that I'm going to attach and make sure that everybody receives it.
Chris: Um, which ebook or are Oh, there's an,
Ramez: 8 factors to determine.
Chris: Yeah. Okay. Yeah, we got a lot of, we got a lot of
Ramez: Know. I was, I know you got a lot. That was the one one.
Chris: Um, yeah. No, that particular, we're talking about a number of different factors that you need to consider when going into Alternative investments, um, and things to really help you hone in and some of the things we'll talk about in this conversation today.
Right. But it'll just be some extra paper you guys can have and it'll, it'll cover a little, a few things in greater depth cuz, um, due diligence, uh, as I think most people join this phone call is a huge effort. It is, um, a very large hill to climb, and that's just dealing with one fund. Um, there are so many different things to cover, uh, and, uh, I think I've done some due diligence, uh, webinars for people that went for like four hours.
Um, and we still didn't really complete most things. So, um, it, yeah, that, that, that book will just sort of expand on some of the other aspects of what, what we're talking about today.
Ramez: All right. Sorry. Four hours. We don't have that today. We're gonna be respectful people. I'll shut my mouth on Chris, let me be quiet.
Let me pass it along to you. Why don't you go ahead and jump into your presentation and I'll just kind jump back and forth. Um, but without further ado, Chris from Kirkland Capital Group. Please, buddy.
Chris: Let's see if we can't share this screen. I'm, uh, There you go. I got these, I got all these fancy screens.
And, um, normally the person who, uh, shares screens, uh, couldn't make it today. Um, no. As you can see, um, you know, we're talking about due diligence. Um, I'm sorry, you know, some of my screens. I'll just have to, uh, kinda look over here, um, and move through on a number of different things. Um, as you can see, um, let's see here.
There we go. Uh, we already talked about that guy. Um, a little bit of my background. Um, we don't need a drone too much on him. Let's get to the meat of this if you guys want. I mean, I'm on LinkedIn. I'm not hard to find, there's not a lot of Carsley, these, so, um, you guys can look up, love to connect with you on LinkedIn if you got any questions or anything else like that.
Um, here's our general agenda. You know, we're gonna walk through the types of due diligence. And some of the non-negotiables. Um, and I think this might be a new way to think about due diligence with regards to maybe some other people you've talked to, cuz um, most people tend to focus on, um, one factor or another due diligence.
And there's really four factors you need to think about. What is, this is just a quick definition. I'm not gonna read this. This is the basis of what due diligence is, but it is arduous. It is long, and I, I really, um, I had, uh, I don't get to take full credit for this, um, but they said an institutional quality level of due diligence.
Um, and, you know, hopefully I don't offend anybody. This he says can be really like a full enema. Um, it's long, you know, you can spend hours and hours going through materials. You can have onsite verification aspects and then further quantitative analysis of numbers. Um, not everybody on this call has a team of people, has the time to do that, or has the monetary means to complete that level of research.
So one of the things that, as we go through this, put in your mind what is feasible for you. To come in and really create for your due diligence process that makes sure you understand what you're investing in, what you're looking at, and one, why do you wanna add it to your portfolio? You know, don't get into this like, oh, my neighbor did this, or My best friend thinks this is a great thing.
You really need to make sure it's like, why am I adding this Alternative Investment to my portfolio? Am I trying to enhance a return? Am I trying to mitigate risk, whether it be on the equity or the fixed income side? These are all things that you have to think about before you really even start diving into what, what am I looking at and why?
Um, you need to hone in and understand. And one of the things I also had someone tell me once, and I totally agree with this, go with what you're passionate about. There's so many things to go after. If you're passionate about something, find that you'll want to do the research, you'll want to dive in, you'll have a background and an excitement to get it done.
Um, and so find that passion, go after that. And once you really identify and build that into your portfolio, well then you can go for the other things and say, okay, you know what? I know I need to think a little bit more about Alternative aspects of fixed income. Um, trust me, having done fixed income, equity, esoteric trading, uh, funds throughout my career, fixed income was, you know, sometimes a little boring.
But it's, uh, it's, it's pretty important because as we saw in 2022, you know, it breaks and, uh, you need to be a little bit more prepared. And, you know, even though we've got rates that are fairly high right now in traditional fixed income, yeah, well, that inflation number's, uh, not really helping those returns, you know, offer, um, a return that's gonna, you know, maintain the purchasing power of your capital.
Um, So types of due diligence, the one that everyone loves, uh, investment. Uh, let's go in, let's figure out. This is where everyone spends most of their time. This is where most of the people will come in and say, Hey, you, you should really un understand most of the investment aspects, not arguing. It's super important, but I'll let you know.
Um, and you'll see this factoid on one of the, uh, sh or later sheets here is investment due diligence is not actually where most of your failures occur. Um, and especially when you're looking at smaller or emerging managers, you really gotta make sure that you know, they have the other aspects. They have the operational due diligence in place.
Does the team have the knowledge and understanding of how to run and operate a fund? Do they have the right business due diligence? And I'll go through and define all these in some later slides. And then lastly is some level of economic due diligence. Um, I'm not a proponent if you are a long-term investor, uh, about timing things, but it is something definitely to consider what is going on in today's world and is it right to be looking at one investment or another, um, For your portfolio.
Um, so we'll walk through, you know, a number of those things. And I love this quote. You'll hear me say this a lot. Um, these four components are really about how do I get to my no faster? I mean, I'm sure everyone on here, if you haven't, you're gonna do it soon. You're gonna pick up a PPM and an operating agreement.
A PPM is a private placement memorandum that's put out by, uh, all private investments. You're gonna look at that and you're gonna go, wow, that is a lot of legal documents that I have to go through. Um, so some of the things that we're gonna be talking about is what can you do ahead of time to help you get to your no faster?
Because I don't wanna read a hundred pages, I wanna read 20 pages and be able to identify is this something I want to continue reading about and dive in? Or did they already kind of hit some of my non-negotiables that, you know what, I can just kind of stop reading. I can move on. This is just not gonna be an investment for me for whatever reason that might be.
Cuz I can give you a lot of things to think about. Well walk through some real examples that professional managers actually said were their non-negotiables. They're not necessarily your non-negotiables though. Those are things that you gotta form on your own. Um, so moving on, investment due diligence, the exciting part of things.
You know, what cool things are they gonna do? What are the fascinating investments they're gonna put together to create an excess return? You've gotta understand the market strategy. You've gotta understand what instruments they're using. The risk behind instruments. Um, is there inherent leverage? You know, a lot of different hedge funds use derivative structures.
Okay, well, what leverage do they have inherent at the, uh, hedge fund level? Are they borrowing any money? And what's the inherent leverage of the instruments they're deploying? Okay, well understand that. What kind of volatility can occur in those types of structures? If you're looking at, you know, a hedge fund, um, if you're looking, you know, at a venture fund, are they sort of looking across an entire spectrum?
Are they specializing in sort, in, in one particular area of, of, you know, venture? Um, Understand what they're doing. Educate yourself. If you don't know everything, they're going to ask the questions, go Google it. Try to get into a network that can help answer some of the questions about various investment strategies you may or may not understand. If you don't understand it and even when someone like the manager explains it to you, You still don't understand it. I kind of have a rule, um, having seen a lot of things, if I can't really understand after the person who's supposed to know it inside and out, tried to explain it to me and I still don't get it, it's probably a pass that's, that's one of my rules.
If, if I really cannot back into the strategy and, and the instruments they're using and understand how this is gonna work and why it works. You should probably just walk away. Uh, something super complex, uh, doesn't always generate, uh, excess return, but it certainly has a lot of ways it can break, uh, complexity gives, uh, lots of ways the machine can break.
So that's one of the things you gotta think about. Um, you'll also hear me, um, in a lot of my webinars, I talk, this is the point where you're trying to identify the inefficiency. So when you're looking at the, and there's some overlap with edge here too, but the inefficiency, uh, if you believe in the efficient market hypothesis and in some aspects, um, it does make sense, but I think we all understand in your niche inefficient spaces, you can find opportunities and find managers that produce excess returns.
This is the type of due diligence you're diving in to say, not only do I understand the market strategy, How are these guys creating excess return? How are they gonna do it continuously and repeatedly or is it a one-off? Um, you know, you need to identify what you're stepping into and what's the nature of that and that key aspect of, you know, it's gotta be an inefficient space.
It's gotta have a ton of different factors about it that are creating supply and demand imbalances. There's a particular rule or regulation. Um, these people have a particular network that allows them to do things and capture that inefficiency. So, and this is where I'm sort of leading into a little bit where we bleed into edge.
Um, edge gets pretty complex. So I think once you really dive into math and you understand the strategy and the instruments, that's the easy part. When it gets hard is when you start to, to assess team and structure. And I think I understand the trade and I've educated myself on it, but now does this team have the edge that's gonna capture that inefficiency on a consistent basis?
Um, so there's a little bit of an investment overlap here, but now we're starting to get into the background of the team. You know, one of the things that a lot of people are looking at now is have these people been through a cycle? Have they been through some level of hardship so that they can navigate the fund, uh, through these, uh, rough waters?
Um, and, you know, preserve principle or maintain, uh, a certain expected return, whatever you happen to be looking at, or whatever they said that they were gonna try and offer in that fund. Um, so that's where that network comes in, what is the particular edge that allows them to create or take advantage of this inefficiency?
Sometimes it's a software system. Maybe they have some level low latency, or in today's world, they're using a unique database that accesses, um, you know, through AI they have data that they can go out and grab all the public data, but they also have data that other competitors don't have that gives them a certain edge and they've been able to train a model that can be a step ahead.
These are all these little inefficiencies and edges that you're looking for, um, in a variety of different aspects, whether you're looking at venture or hedge or like my world in private debt, or you're looking at, you know, The long only real estate, um, you're looking at, you know, even a syndication. All of these factors should exist across all of these different Alternative investments.
And you have to be able to identify 'em. And if you don't, well then that should cause pause for further research, um, and or may even cause you to be like, well, I, I I don't really want to move forward with that. Um,
Let's see. Let's move on. Um, and yeah, I mean that, you'll see the note on the side over there. Um, what you're trying to find is also how does this break? Everything breaks, everything can break. Um, we used to joke, um, we did a particular arbitrage back in the day and we used to put our feet up on the table and say, man, there's, there's no way what we do is not gonna print money every day. Literally, the only thing that could possibly happen is if you had a major bank failure, and that's never gonna happen. Um, and that was in 2007. We used to make that comment and we all, um, know what happened with Lehman and Bear Stearns and everybody else at that time.
So we were proven wrong and it did put a lot of stress into some of the trades that we were doing at the particular fund I was trading for at that time. Um, so sometimes even the absurd can happen. So just, uh, think about that from, okay, is it probable? And that goes back to a little bit of that economic, uh, due diligence aspect of like, well, what's the probability of the i, the, the things that I identified, um, with my, uh, due diligence, you know, that could break this.
Is that happening right now? So that's something
Ramez: Listen, I just actually, I just want to chime in a little bit. Like most people Yeah, I'm, and I'm speaking cuz I want you to understand, cuz we here at the IRA club talk to thousands of our clients, right. And when they talk to me personally, like, well, You know, I was told so many times that alternatives are risky.
Don't, you know, by, by my fiduciaries and registered investment advisors don't do that. Well, I try to explain it in a different aspect or a different scenario better yet. We understand that me and you better yet understand that all investments have risk. It doesn't matter what you're getting involved in.
And the way that I try to characterize it is, well look at the stock market last year, right? So how much did we, how much did your 401k, your IRA lose last year, right? 23% according to Fidelity. Um, 19, uh, 19.55%. Your IRAs. 403Bs lost just under 19%. So it doesn't matter. The point is every investment's got risk.
What Chris is educating you on is calculated risks, right? Educating yourself first. And I love that you said that phrase, choose investments, you know and understand. That's one of my models. Actually, I say that all the time. If you don't understand it, don't do it.
Chris: No, it doesn't mean you can't go educate yourself.
I mean, you can on,
Ramez: that's the point that I'm at, like, especially
Chris: when you get into this, you're starting your due diligence training and how you're gonna bail out your standing operating procedure of due diligence. Start with something you're passionate and understand it'll help you
Ramez: hundred percent
Chris: Think through everything better.
Um, but your point is exactly right. And I know that goes on a lot nowadays is, um, and it's not necessarily anyone's fault, but this is just a fact of the universe. Uh, you know, most, you know, financial advisors, RIAs, whatever you wanna call them, wealth managers, you know, for many, many years you didn't need alternatives.
Um, um, they were always used by big institutions. They've been the primary, uh, purchasers. And I think 2020 was a little bit of a wake up call that, okay, hey, traditional markets can have some flux. And alternatives, you know, really can have a place within your portfolio, whether it be on the equity side or fixed income side.
Um, and I've got other webinars that talk about that, but mm-hmm. You know, and they're not right for everybody. Let's just be honest. I mean, it's um,
Ramez: very true.
Chris: You know, it's one of these things where, you know, Alternative, Investment, you've gotta make the decision. It's something I need some level of diversification in my equity portfolio.
I'm gonna go out and look at some level of private equity or. Maybe I came into some money and I've got a little bit more that I can go on the edge and maybe I can go to an early Stage angel or seed level or venture fund, something of that nature. All of them have risks. I mean, the public market, I mean, there's nothing, you don't make money without taking risks.
So if you've made money in the stock market, well guess what? You took a risk. And anyone who wants to get into the math of it, um, I'll share some numbers from 20 20, 22. They're pretty, pretty ugly and pretty fascinating at the same time. Um, but alternatives. Have different risk factors. Mm-hmm. And so you need to be able to assess what those risk factors are.
And some of this due diligence we're walking through is to understand it. And what makes it complex is there's not some number or earnings report or some balance sheet that you went through when you were assessing some public stock. Like I said, some of the hardest part is walking through what we're looking at here.
The operational due diligence side is a little bit of that team, a little bit of process and procedure that they've actually put in place around risk management. Because when you go into an Alternative Investment, not only are you taking the risk of the investment, you're also taking that risk of the manager who's running that investment.
And so you really need to understand those two steps. Does it mean it's not a great investment? Of course not. It just means there's some extra steps and things that you need to be thinking about and who you want to decide to work with. Um, you know, like we say in real estate, the property very rarely has a problem.
It's usually the operator. Um, and you know, you'll see a fact there on that little slide that I have over here, 50 to 66%. I'm sure that number fluctuates around. Um, but that was the latest, uh, you know, fact that I sort of pulled off the internet. It used to be 66 and higher back in, uh, '08, '09 '10, uh, where we had massive operational failures, um, where people just weren't at the wheel.
Um, there were a lot of rules and regulations that weren't in place that are now, um, one of the biggest things that came out of that, um, is a, the requirement to have a fund administrator in place. So having a third party fund administrator is someone looking over their shoulders, but it's not just as simple as, Hey, I'm gonna drop the name of a fund administrator I use.
What is their integration? What are they checking? How often are they going through? What kind of transparency and visibility do they have into the fund? What are they responsible for? All of that came out of, you know, 2008, 2009, and now if you're really a fund that is looking to be on your path to institutional quality, You're gonna have those service providers in place that are looking over your shoulder controlling things.
Maybe, you know, they're calculating the management fees. They're calculating the operating expenses, they're, they're going through every last number that impacts an investor's capital account. I mean, for my fund, that's what my fund administrator does. I mean, they actually calculate everything. And I'm the one that runs the shadow books.
They run the primary books. So that's one of those operational due diligence items that you can go in and understand, Hey, who are your service providers? What kind of control do they have? Um, and, you know, who's watching you manage the fund? Um, and so, you know, one of my jokes is, yes, I'm the chief investment officer.
I, I, I may, I'm involved in every decision of the fund, but myself, I can do nothing alone. Everything in our entire company is dual control. So that could be a point where you're going out and saying, Hey, what is dual control? What are the cash controls? Who can set up wires? Who can do these various things operationally to ensure that, uh, investors capital is as safe as it can be?
Um, you know, nothing is 100% foolproof, but those are the kinds of things on the operational side that you are looking for. You know, what's their process and procedure manuals, what do you know, you know, what do they say they do? How do they get things done? How do they double check and peer review themselves?
Um, and you know, one of the things I love to ask is what does the manager think its investment risks are? What are its operational risks? What do they not have in place yet? Um, you know, these are things that you can go in and ask managers and say, well, well, what have you not done? Um, y you know, there's tons and tons of factors.
I mean, we could do an entire webinar just on operational due diligence. There's so many people who've written, you know, a hundred page, 200 page books on this idea. Um, because there are so many factors that go in because you are really doing the assessment of a company. And you're understanding who works there, what do they do?
What's their, did they ask for background checks? You know, there's so many factors that go into operational due diligence. Um, you know, so you're assessing technology, you're assessing, you know, people process, you know, are there external events that kind of gets into where we got something new to think about.
Cuz when I was back in my day and I was, uh, hacking away at companies, you know, in 2010, 11, 12, 13, we didn't have a lot of cybersecurity issues. Well, now that's a big pillar that everyone's gotta be concerned about. You know, what have you put in place, um, you know, To protect information that might be important within the company.
Is it trade information? Is it investor information? I think investor information is always important regardless of the strategy. How are they controlling that? Um, all these things in place for cybersecurity now, what is the impact And sort of what they start getting into business continuity plans. Do they have a business continuity plan?
Have they thought through what they need to do? Do they have multiple offices? These are all kind of related to what I mean by external events. I mean, that's a very broad category, but it's all related to business continuity. And so ask your manager, ask the fund, Hey, do you have a business continuity plan in place that walks through everything you've done, whether it's an earthquake or a cybersecurity hack or something of that nature.
Um, so, uh, there's, there's lots of things to consider on that.
Next is business due diligence. And this sometimes throws people for a little bit of a loop of, whoa, what, what, what's, what's operational due diligence? What's business due diligence? Operational due diligence is all the operational people and systems and things in place that directly relate to whatever they're trading in.
Um, so you'll wanna walk through trade systems on the operational side. On the business due diligence side, it's all the operational or structure in place that has to do more with the business and doesn't directly relate to the trade. So you might have physical facilities, security of the facility. I mean, people might not think about the security of the facility, but back in the day, um, for fun, I used to just walk up the elevator.
Um, you know, there'd be nobody at the front desk. I'd walk right in and walk right onto a trading desk, and some people would look at me kind of funny, but you'd be amazed. A lot of people would be like, who the heck is that guy? And how'd he get in here? Um, it would take people a while to understand that I, I didn't belong there.
Um, and that was my view as like, okay, that's a, that's a kind of a big security breach. Um, you just had someone walk right off the street, right into your firm and right into your business, into a sensitive area where there are people trading and, and, and operating computers, and perhaps even computers that could, you know, transfer cash and have wire capabilities.
So, um, those are kinds of things about physical, uh, you know, you know, the physical infrastructure that's available. Also, one of the things is like, hey, do, if they're in an office these days, I know that's not always, um, you know, common, especially in small funds. I mean, we run, you know, purely virtual. Now we do have an office in downtown Seattle that we go to every once in a while, but it's, it's, it's a shared a, a access, uh, you know, open desk at WeWork.
Um, You know, most people don't need offices. So it's made some of your onsite due diligence a little bit, uh, and verification a little bit more difficult. Um, but I still have had investors, they come in, they meet me there and we open the computer and I walk them through spreadsheets and models and access to our lending program so that we can go through and, you know, look at, you know, loans in the pipeline.
All kinds of different things for onsite verification can still be done in almost any location in some of these virtual companies. Um, but there are still a number of big firms, if you're going after big hedge fund investments or most venture funds, um, they will have a physical office. You should, you should go in, you should verify they exist.
Um, and you know, that'll also give you an insight to some of their business continuity aspects. So, um, code of ethics, this is kinda where it gets into code of ethics and human resources. You know, what, what is their plan? How do they operate that? Um, cuz one of the things that I know, um, Having built a lot of small startups and things like that and worked with those people, there's a lot of human resource issues.
Um, there's a lot of changing rules and regulations and employment laws by state these days. So understanding some of that is super important.
Um, and then lastly, economic due diligence. And these are just, this will shift and I just kind of grabbed what was kind of going on right now. Obviously, inflation's a big one.
This isn't everyone's face. Um, it is something no one's really cared about for a long time, but it's, it's pretty material right now. Um, so how's that affecting your investment? Uh, what is the future outlook of, you know, the investment dollars if you have something that's making four or 5% right now? Well, inflation's pretty much eroding that return all by itself, regardless of fees and taxes and everything else.
So that's, you know, one thing to definitely be concerned about, you know, interest rates. You know, we've had wars recently, it was still going on. Um, you know, count on humans. If we're done with one, we'll probably find some idiotic reason to have another. Um, and so how is that gonna impact that investment?
Is it if you're investing in emerging markets, um, and you're gonna be finding something, you know, in what might be a hostile area? Well, okay, that's something to be concerned about. What's political stability? What's the situation? Who are the trade partners in that area? Understanding what strife might hit a certain geographic area, um, could be rather important to your investment, depending on, you know, what it is.
Um, so this is where I get into looking through and walking through these economic factors and how they will impact your fund. You'd be amazed. I mean, it's, I, I love this part of the due diligence aspect because it's a little bit of like putting a puzzle together. Um, and hopefully the manager can really walk through and has a deep understanding of what historically has hurt their trade or caused it to have, uh, you know, excess volatility.
Um, so cuz a lot of trades are what they call cyclical, um, in certain types of events, they will do really well. Others, they won't, um, you know, long short hedge funds recently, I, I mean they're having a heyday because I'm not gonna go in, but what they call dispersion between longs and shorts and, you know, having that dispersion allows their book to have a wider spread and make more return when everything's in utopia and everything's fine and money's free.
Well, there's not a lot of dispersion. So hedge funds for the last 10 years, some have done fairly well, but not as well as they've done historically when we had some volatility in the market and, and dispersion, uh, available. So, I mean, You know, right now there's some uncertainty. So, and dispersions back in the water.
So, you know, a lot of your long short equity, uh, you know, long short equity funds are having, you know, time of their day. It's, uh, it's, uh, you know, better than the last 10 years. Um, you know, and then you have elections, a strong dollar, maybe you're looking, you know, the dollar's been, you know, very, very strong recently.
Well, maybe your investments are in another currency and you're gonna translate back to the US dollars. And that's something to consider. That's a factor of like, well, what's my US dollar based return? Or do they have a hedged product? Um, or if you think, hey, The dollar's, you know, strong, I'm gonna convert, invest abroad, and I think it's gonna get weaker.
Well, maybe that'll be y you know, a boon and a tailwind for an investment that might be in another country in the, I'm just giving examples. But this is that economic aspect. We do live in a more global market. There's just a ton of things going on. Um, you know, it creates positives and negatives.
The negative I always view to globalization, as well, when something happens in another country, it affects us a lot more. So, um, the old days of saying, I'm gonna invest in US stocks, uh, and then I'm gonna invest in some form of international stocks. Well, Those might be more correlated in today's market than, you know, we, we've seen historically.
So understanding how those have interacted, go to your financial advisor. Hopefully they can find out that answer and run, you know, returns and see, well wow, during times of stress, how correlated have these, uh, mutual funds or ETFs, whatever they're investing in or individual stocks have been. I mean, they should be able to answer that question.
It's pretty, pretty easy stuff these days. Um, alright, now the fun part, non-negotiables. This is where you're gonna get into and this is something you gotta form for yourself. You've gotta figure out, regardless of the investment I'm looking at, This manager or this investment can't be doing a certain number of things.
This is gonna help you identify a short list. And it doesn't have to be long. I mean, you don't have to, you have, you have 30 non-negotiables, you're probably never gonna find anything to invest in. So, um, draw out your list and then figure out, hey, what's actually, you know, feasible? And if I've got, you know, three or four, maybe five non-negotiables, no matter what happens, well I can just skip over that fund, uh, as I'm reviewing that.
And we'll walk through. I mean, you know, some people gave me some stuff, oh, hey, well whatever I invest in gotta be first position. And some of these are a little bit more related to, you know, real estate. Um, because I asked, you know, even some of our own, uh, clients, some of these questions, you know, they want to see, they, they're about, uh, preservation of principal, so they want to have nothing but, you know, first position, you know, I don't want to be sitting second fiddle with anybody.
Um, something goes wrong. I wanna be the only one at the feeding trough kind of mentality. Um, and that's definitely, you know, as the explosion of private debt. Yeah, there's a lot of mess and a lot of other things that do certainly well, and I'm not saying they're not bad investments, but, um, most of what I've been hearing is people want to be definitely in first position right now.
Um, they want shorter term, they want a variable interest rate. Um, well, interest rates have been going up. So why I put those two together is you can kind of create a little bit of variability if you're nor normally doing short term. So like for us, we do bridge financing, so we'll have loans that, you know, Eight to 12 months.
Um, you know, although the Fed did set a record of, uh, you know, raising interest rates, um, uh, you know, all in one year, uh, 5%, um, that you, that's not normal. And so, historically, and probably going forward, you're looking at a situation of where, you know, if you've got a term of six to 12 months, you're, you're very short term, uh, in the world of investments and you probably won't carry a lot of interest rate risk.
Um, and so you'll be able to capture a rising rate as you roll into new instruments. Um, they want it backed by real estate, real assets. You can see all these, you know, in today's age. I, I laugh if I, if I asked this question probably five years ago, none of this would've probably come up cuz it was all about risk on how do we make, you know, how do we take as much risk and pump out the biggest return?
Um, well, you know, a few punches in the face, it'll get you to rethink about, you know, what, what, what's important to you. And it's amazing how many people are about, uh, principal pre preservation and sort of risk management, risk control. Um, And they, you know, a lot of people wanna see core team success.
Um, they've been successful in other things. Maybe not, you know, maybe if it's a new fund, um, you know, maybe they won't, you won't have a long track record. But often not people who are in the investment world will have been successful at other things. So that's something to think about. Um, alright. Um, some of the questions that came up on fund managers, um, they want the fund manager to be articulate.
They want to be able to demonstrate the differentiated opportunities. This gets back into like, can they identify what their inefficiency was? Can they understand how they're gonna generate this excess return? Um, a definable niche. Um,
One of the things I love also is, um, Everyone will want to talk about everything that worked. I always like to go after at least one or two things that didn't work. Everybody who's running something has had something go wrong. Anyone who says, I've never had anything go wrong at all, well, you're either lucky as a person, or you're full of it.
Um, so, uh, find that trade that didn't work. Have them walk through how they got into it, what was the analysis, how it broke, and then most importantly, well, how have they fixed it or how are they still in the process of, of, you know, you know, mitigating that risk and fixing that, that trade in one form or another.
Um, unfortunately in some strategies when something breaks, you know, sometimes in venture, well that company's just out of business and you know, the money deployed to that company is zero. Um, so that's why they try to be fairly diversified. Um, Obviously in today's world, people are worried about recession.
So one of the, uh, you know, I mean these are real points brought to me by RIAs, wealth managers, people who invest in alternatives, and they run billions of dollars. They're very big. And these are the, these are the points that they threw back to me, and I just wanted to be able to share these with you guys.
Um, they want to, they want to say, well, hey, how, how, how are they gonna be dealing with, you know, you know, recession? Uh, how are they gonna plan to navigate given their strategy? Um, have these people seen that market cycle? That's a big thing right now because, um, For some people you could have been doing something for eight to 10 years and you might not have actually ever seen anything break.
This might be your first market cycle. Um, doesn't mean they're not going to make it or they're a bad manager, it just can create some undue stress that, um, you know, they may not know how to fix everything or have the answers and, you know, that can be troubling as a, as as an investor in that kind of fund.
Um, and then one guy was like, well, this person won't be investing in my fund cuz I've only been doing this particular fund for about, you know, three years. But he requires 10 years in the current strategy. Okay. Um, fund size, does the manager understand its capacity? Um, if you're, if you're generating an excess return, you're probably in something, what they call a capacity constrained trade.
Um, I found a lot of these guys when one of my jobs, uh, when I was working at a fund to fund was to go find people that could consistently create alpha in a short book. And everyone, I think here, if you don't know what shorting is, you, you, you can go look it up, but I'll just be, uh, shorting is extremely hard.
Um, it is counterintuitive to how the human brain wants to work. Um, so finding a person who can consistently do it is not that easy. And if you break down the attributions of, say, some long short hedge fund managers, you'll find that shorting has not been the best thing for them. Um, but there are some people who create that and they understand their capacity and they understand the niche of their trade.
And I found one guy that was like, listen, I can't run more than 200 million. If I get 200, if I get over that, I really can't get the allocations of the shorts I want. Um, you know, cuz it would just, you know, there's just not, you can't borrow enough stock to meet the shorts. So, um, do they understand that capacity?
Um, Because not all funds can go to a billion dollars. Um, it just doesn't work that way. Um, and if you're running billions and billions of dollars, you're probably not in something that's too terribly inefficient unless you've got amazing networks and you've got amazing systems and there are funds out there that have those so they can still create decent excess returns with a fair amount of money.
Those are fairly unique and they're pretty hard to get into these days. Um, so let's move on. Um, personnel, um, in today's world, people want to see gender diversity. They want to see some level of who else is working there. Um, you know, I'm not gonna lie, I mean, you go back in time, you know, 20 years. Um, We used to joke that some of the hedge funds were, you know, two guys and the Bloomberg.
Um, but people want to see a diversity of thought. Um, it's definitely something that's, uh, pushed in venture and a lot of things where you need multiple eyes thinking about certain trades at multiple angles. Well, if you have all the same kind of people in one room, you're, and they all graduated from the same college and they all have the same background, well, you're probably getting the same thought.
You're not getting a differentiated viewpoint, um, on whatever problem that might be in the portfolio. So, uh, having gender or, or race difference, um, or background and education, um, can be big. Um, it's something you should look into and understand who are the decision makers and how things are being done.
Um, and one guy wanted to see that whoever launched the fund has had previous experience, uh, uh, success in other funds and other ventures. Um, money, um, Big one is transparency. If you can't get transparency, you really can't do your due diligence. So if you've got a fund that's really making it difficult, uh, to obtain information and, uh, being squirrelly around the questions you're asking, well, maybe that's, uh, it's one of my big non-negotiables.
I mean, if I can't get what I need, i, I, I don't have time to waste on you. Um, thank you very much. Um, but in today's age, in my belief, you should be able to have transparency and be able to look into a number of different things that are gonna meet your requirements for due diligence. You've gotta have transparency.
You've gotta have that third party involvement like I was talking about earlier. Um, having those people look into those numbers. Um, that's all gonna be, you know, in place. Um, His example here was, um, he's like, I don't wanna buy into a portfolio, say a second close on a VC fund. You know, the holds positions that should already have been, you know, marked down.
That's a current event that was going on. A lot of venture capitalists, um, in 2022 and even into 23, not so much now. I mean, I, there's, there's a lot of data that's showing that most venture capitalists have marked their portfolio down accordingly, um, in one fashion or another where, where it's necessary.
Not all, not all of their investments are gonna go down given, uh, this current time period. Um, the successful company will buck the trend of rising cost of capital. That's just a fact. Um, but you don't want to go into something where, um, you know, say this, this individual, a venture capitalist, hasn't marked his portfolio down yet.
You're buying at a high book level and you know, You're gonna walk into a storm of where they're gonna have a lot of write downs. Um, I know that's causing some headwinds for people raising, raising money for other funds, uh, in the venture space. Um, in times of stress everyone loves the leverage. Um, I could go on about leverage.
Um, leverage has caused a lot of problems for people who don't really use it correctly or over-leverage their situation or, you know, what I call get over their skis. Um, We use leverage in a variety of different trade structures. Um, it's something you have to understand what leverage level is appropriate.
Um, it's what we get into where you're calling counterparty risks. Um, obviously the leverage adds volatility, but one of the things that's going on right now with some lenders is they have a facility line that the banks are not really doing a lot of lending and they're certainly cutting back on their lending lines that they had to other private lenders.
And so that causes a real problem. So understanding what leverage they're using and even asking for the, the document saying, Hey, send me the document of the facility from the bank and, and what are the, you know, can they just rip this thing from you? What is the process and procedure around that? You know, what kind of leeway and notification time do you have where you know you're running 20 million and you got 20 million in debt and the bank walks in and says, gimme my 20 million back.
That's a material problem for any business where you all of a sudden have to, in a short order, cut your business in half. That's a problem. You know, then you're dealing with a variety of different issues, regardless if it's a manufacturing company or a fund. Um, so understand that, dive in and understand what they're using.
But don't get into this like all leverage is bad. Um, I know a lot of people have just been beat over the head with the click bait. Big news that leverage is bad. Leverage is used in a lot of different aspects across a lot of different trading strategies. Where you need to know is the education of the investment strategy, where does leverage make sense and how much?
Um, and you know, if you don't know that answer, that's where you need to go and expand that network and build, uh, that information base for yourself so that you can hopefully answer those questions. Uh, so, um, this, uh, individual here was, uh, and I'll have to operate in a fiat currency. Well, he wants to be in US dollars.
Okay. Um, and or, or another major country, you know, euros, you know, Yuan, whatever, they didn't want to be in crypto. Um, which I mean, at the time that I think I collected this information, um, it was a little bit before the crypto crash. So obviously this person was right. That probably was, uh, a smart thing to do.
Um, yeah. And that's their, I'm not saying crypto investing's bad or this or that, um, but there is more inherent volatility and issues in that structure than most people were thinking. Um, and you might be looking down the pipe of saying, Hey, there's gonna be further regulatory actions against that area, um, to where it's all gonna be considered a security.
Um, cuz they opened that door with all these failures and frauds. So, um, it's probably coming down the pipe there. Um, so something to be wary of. Um, Independent marks, this deals with valuation. This is, uh, this is super important. Um, how are things being valued? Um, this is something you really need to understand regardless of what you're looking at.
How are they valuing a startup company? How are they valuing their books? You know, maybe you're lucky and you're looking at something that deals with all market securities. So they're marked, you know, at a, at a mid or close price on a, on a daily basis from a reputable, you know, public source. But a lot of times when you're looking at Alternative investments, you're dealing with a private investment that doesn't trade in an open exchange.
So you need to really understand. How are they valuing it? Who is valuing it and how that valuation impacts you. Um, you know, does that impact fees, does that impact the cost of my entry point? Does that impact if I needed to get out? Um, if you're in a fund that has the ability to say, you know, quarterly liquidity, how has that all worked out?
Um, you know, so you need to understand, you know, and are they getting independent marks? Um, cuz one of the things that has happened in the past is where if you've got valuation being done by the manager, I'm not saying everybody is doing, you know, crooked things, but it has been a recurring theme that funds that had trouble and they were misrepresenting to investors you often not had so they were marking their own own portfolios. So it's something to dive in and understand. Here's the problem with that is you gotta have a level of ongoing monitoring to that too. Um, so what I told you on day one when you invested may not be what I was doing two years ago. Um, so hopefully a major change in some type of process and procedure, the manager would tell you, um, but not always.
So, um, There is a level of ongoing, uh, due diligence that's needed to keep up. And that kinda gets back to the transparency, how transparent, uh, and what type of information is the fund manager actually disclosing? And it's not always about the portfolio. Sometimes you want to, Hey, did someone leave? Did someone come in?
What's the changing procedure and operations in something, you know, they should be having that in a newsletter or some type of quarterly update. Um, I know we always talk about, um, you know, any type of operational changes, um, that we're, you know, putting in place in our updates. Cuz you know, we really, really wanna be as transparent as possible.
Um, This person was from, you know, SIN related industries. Um, a lot of ESG issues. So people are looking at, you know, that, that environmental aspect and social, um, you know, obviously if you did proper research, I mean most of your governance will be covered in, you know, operational assessments and business assessments, you know, in earlier sections.
Um, and you had one manager here, I just threw this in here. It's very, very idiosyncratic. He's like, you know, can't support the privatization of prison systems. That was just their particular thing. Um, so, um, I know I've kind of gone on. I know. Ramez, do you have any questions or anyone else have further questions that, you know, they wanted me to kinda dive into a little bit more or.
Ramez: Well, I'll, I'll, okay, so the Kirkland Fund, okay, so that was actually a question that came up to the private fund. Somebody just asked out loud, does, uh, Kirkland allow for, uh, retirement funds? Uh, you know, uh, and I'm not sure, because one of the questions, and I I'm assuming that this is where they're going with this.
Some funds do not allow for retirement, uh, IRAs, 401ks to jump involved. I'm assuming Kirkland does allow for that within your fund.
Chris: Yes. Yeah. Okay.
Ramez: Awesome.
Chris: Yeah.
Ramez: One question that actually did pop up,
Chris: We got self-directed IRAs, 401ks, the people that's created for their companies. Yeah. We can facilitate a number of different qualified platforms.
Ramez: So I know where some of these questions are coming from. Uh, Chris, cuz a lot of our IRA club members know that I can't talk about the investment opportunities themselves. Um, so you guys are listening. Thank you. But one of the questions that actually did pop up was, uh, what is the minimum and followed up with a second question that came from Chris.
Chris: Oh, the minimum to our fund. Um, yeah, you read through the PPM it'll say a hundred thousand, but I'll be honest with you, a lot of people I've run into are more comfortable and it fits their portfolio better to be at 50,000. So we've let a number of people come in at 50,000. It's just, yeah, it's just an exception.
I have the ability to waive that and every time I do that, the fund administrator sends me an email and I have to approve it. Um, but um, yeah, we've tons of people. I mean, at the end of the day, I've been managing people's money in one form or another for the last 27 years. I mean, it's, I want you to actually be comfortable with what's coming in.
If you're looking, well, you, you should do this for any fund. You should actually size your portfolio and size your money in accordance to what makes you comfortable. Cuz let me tell you, if you are uncomfortable, And you are nervous, well then guess what? I'm gonna unfortunately hear from you very often and not about, Hey Chris, you're doing a great job.
It's gonna be your nervousness coming out and you know, for any manager. So I've just learned to invest what fits over time as you build confidence and understanding, um, if the fund will let you enter at that level. So that's kind of a long-winded answer, but I kind of turned that into a little bit of a due diligence aspect, uh, into the answer of, yeah, we've been bringing in people for 50K,
Ramez: 50k, and I'm assuming, same question from Chris, the accreditation.
Uh, are you talking about accredited only?
Chris: Yeah, we, um, that's something definitely you want to jump in and understand. Um, most private funds will have all these exemptions from filing with the SEC or state or something of that nature. So you need to understand one of the things in doing your due diligence is what are their exemptions and what that, um, limits them.
Uh, we are a 506c uh, exemption, so we only can take accredited, uh, investors into our fund. Um, I do have affiliations with other people that have Reg a, um, uh, offers and, you know, they invest in real estate, but it's a very different profile because they're trying to create, um, The ability to come in with much smaller amounts of money.
I think it's, you know, it's as low as a hundred bucks or something of that nature, but you can get access to private debt, you can get access to fractionalized, um, pieces of single family residential homes. There's a number of things, um, that, um, this group and, and that group's called Concreit. I mean, it's, it's, it's, you know, it's somebody that, um, I've, I've worked with that team for a while.
I actually sit on their investment committee, so all the investments that go into their fund, um, me and the rest of their investment board go through all of that. So, uh, and they've got a, you know, a Reg A plus offer that, uh, obviously allows non-accredited investors to come in.
Ramez: So, that is a conversation for, good question. Good question. Yeah. Well, well, I mean for those of you, cause you know, Chris, I try to help educate, you know, non-accredited investors as much as I do accredited investors. And Chris, maybe if you could just give a breakdown what is the difference between accredited and non-accredited? For those of you that do, do not know the terminology behind it.
Chris: Sure, yeah. Um, you know, under, under, uh, reg D, um, under the rules of accreditation, um, there are now three parameters. Um, one, you have to have two years of gross income. That is at least 200,000. So if you were to come into my fund, I'd be like, you can offer me, um, a W2 for the last couple years that shows a gross income of 200,000 or more.
The other, uh, factor to meet accredited status is, um, you have investable assets of over a million dollars. Uh, that's excluding primary residence. Um, and so, uh, I know I've had a lot of people come to me and say, Hey, I've got 400,000 in cash. Well, okay, that's great, but what's your total wealth? And they're like, oh, I'm worth about 600.
And I'm like, okay, well, that, I can't unfortunately take your money. I mean, you know, it's just, just the rules and regulations. That's how it works. Now there is a third one that just got added, and that's a little bit more around, um, Uh, education, um, is you, if you have a license, if you have your Series 7 63, um, they are now considering that ample knowledge to understand an alternative investment and the risks inherent.
And really what, at the end of the day you'll hear this sometimes is where they're, you're trying to assess does this person have the suitability, um, to have this investment in their account is that's what they're, is this suitable for you? Um, and in general, you know, if I'm requiring a hundred thousand dollars investment and you only have 300,000, that, that, that's not suitable.
That's a third of your money in one place. And as much as I believe in my fund, and yes, we are a principal preservation focused fund, as I said earlier, weird things can happen that you never thought. And I mean, y y you know, it's, I wouldn't want to be in a situation where y you know, an investor that was exposed to my fund.
It would just, it would make me very uncomfortable. So those are, those are that, uh, accredited. Now, if you're unaccredited, well, you don't meet those guidelines. Um, and there's lots of talk that they're gonna be reviewing and perhaps adding to that regulation to open up. I heard that too, if I heard that clarification.
So, I mean, we'll wait, I mean, that's always on the docket. People are always, you know, there is a very big push, and this came through Reg A Plus and Reg cf, a lot of the crowdfunding and everything else. Those were some of the big factors that came out where they are trying to open up access, um, to a variety of different investments to a broader base of investors.
Um, you know, there's good and bad to that. Um, but uh, it's, uh, if we do it calculated and carefully and there's enough education, um, I think it, it could be a very good thing for, you know, people being able to access things that historically they couldn't.
Ramez: You know, in all honesty, Chris, it bothers me about the accreditation process.
Cuz as we educate ourselves, just like you and me, we're both educators, you know, what constitutes someone becoming an accredited versus non-accredited really bothers me because if I'm teaching you and you're talking about due diligence and everyone's doing their homework, why are the non-accredited investors, which really make up 91% of Americans fall, you know, to the wayside, you know, they're off to the sidelines.
It's really the accredited investors that take advantage of self-directing. So for me, that's just the reason why we host these webinars, you know, collectively, me and you together. Um, and I love this presentation cuz I actually learned something different. I actually like the subtitles and the breakdowns that you give.
I've never seen it done that way. So, um, I, I like literally shut off my camera and I muted myself cuz I was learning myself as you were talking. So thank you for that actually. Um, and I hope
Chris: Everything else well, the other one with accreditation that I always hear from people is, um, Since when did having money mean your intelligence?
It's the other one. So it's like, um, just cuz you have a lot of money doesn't really mean you understand the investment you're making. Um, I mean that's, you know,
Ramez: And Chris, lemme tell you something.
Chris: 27 years I've been doing this, um, I don't know if the correlation is that high between those two.
Ramez: You took, you took the words right outta my mouth. There's some people, cuz we can't see everything here. Like, and you know, someone who is an accredited investor that's investing in something where I'm looking at 'em going, are you sure you want to take a portion of your retirement funds to invest in? Do you know anything about this? They're like, no. But I heard from a friend and a friend and his cousin got involved and I'm just, okay, all right. Whatever makes you happy.
Chris: Yeah, it's, yeah, it's, it's, it is a tough situation. Um, yeah. But, um, that unfortunately does happen. And last time, if someone wants to put in the effort and the time to educate themselves on something, I, I don't think they're. Their checkbook is necessarily gauging their ability to understand something if they really want to go after it.
Ramez: Agreed. Agreed. Now, I um, I know it's too on the Dot.
Um, until next time everybody I will be hosting, uh, we'll be adding our new events, um, for the month of July.
Uh, they'll be coming up at the end of this, uh, I'm sorry, the end of, uh, next week. So Chris, thank you again. Um, thank you for having me. Look forward to the new website. Thank you, Ramez. Absolutely. Thank you guys. Take care.
Chris: Thanks.
