Jacob Miller and Matthew Rubin explore how long-term alignment fuels innovation in private markets.
Jacob Miller: Hi, I’m Jacob Miller, co-founder of Opto Investments.
Matthew Rubin: Hi, I’m Matthew Rubin, chief investment officer of Cary Street Partners.
Jacob Miller: One thing that I really like about private markets, too, is it’s a chance to think long term. Where is the world going to be in five, ten years? I partner with managers where hopefully they find multiple ways to win. But what are the bets that seem like something I want to be a part of?
It’s pretty interesting for our industry right now, how some of the things happening in terms of innovation are actually applying to our field. And so what is AI going to do to wealth management? What’s it going to do in investment? What’s it going to do to the world? How could I play this such that, you know, if in small ways AI starts to transform logistics, health care, wealth management, how can my investors participate in that?
Matthew Rubin: So much of that is happening in the private markets. You see it every day in the managers that you’re invested in—things that you’re not seeing in the public markets yet, things that the public markets might not be ready for. But innovation that can happen in the context of private companies, where they tend to be leading edge, they tend to be cutting edge in many of the industries.
You talked about many more industries, and that will continue to happen. As we talk about this, there’s so much access to capital in the space today that there’s so much innovation that’s just being allowed in the space, and that’s going to continue to happen.
Jacob Miller: You know, the incentives for a private company are different. You’re backed by long-term investors. You don’t have to show next quarter’s profit margin increase. You have to show that you’re building something that’s going to define a category. That might take a few years, but I think that’s why we get bigger ideas out of private markets.
That’s not just high-tech stuff. That’s lenders changing the way that people access capital. That’s real estate firms reimagining what office space looks like in the new hybrid world. Those bets take time. And being aligned with investors who have that time frame, I think allows for a lot more ingenuity.
Matthew Rubin: It gives those companies a huge advantage. And it’s a lot of low tech as well. It’s a lot of stuff that you’ll read about every day that’s cutting edge. It’s a lot of real economy stuff that’s happening in those spaces—a lot of family-owned businesses in the private markets that are first getting access to real capital this way.