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Okay good afternoon we we just realized that our panel was competing with the female founder event and I can see the room is about half as full as it was for the panel before this turns out we've lost one of our. Panelists I think she went to that event instead of coming here so but if she does show up we'll have a join us let me start by maybe asking my panelist to give a couple of minutes a couple of seconds whatever introduction you'd like to give the group when. Why you're here and what we get and then let's start getting into it after you do I'm Joe Landy co-ceo warburg pincus panels entitled the the future of venture capital so we we actually practice venture capital as. Well as the other sort of asset classes of growth to full-scale mature stage investing so we have a lot of opportunity to think about the different classes of investing we go we're global we invest all around the world we're. Managing for some forty five billion dollars of of assets and we invest across the spectrum from everything from from health care to technology to energy and financial services why do venture capital fund Nick hi I'm Nick result coming I'm with Khazana Nasional Berhad which is the sovereign wealth fund for Malaysia I'm at the currently heading. The private markets practice for North America and amia because I know as a sovereign wealth fund for Malaysia we're also invested in several sectors across the various asset classes the exposure currently today is probably about 60 65 % still in Malaysia and the remaining being on a see-through basis in ASEAN and also globally I'm for. For developed markets I'm actually in. Charge of also Europe and also our practice. In Turkey and not a small area of the way yeah just a little bit yeah and you know full disclosure Nick is one of my investors and so yes so we are yeah so I I promised him I'm going to only ask him the tough questions as he always. Does yeah all right so my name is Sam and I'm a partner in March capital we have a la-based fund which is about six hundred fifty million dollars but we're about five years old so I was I have a slightly different perspective and given we have. A very light panel I may have you not just the questions but some opinions as well but let's start with you Joe what you think is the most exciting part of this business today what what what do you find the most interesting what is it. That makes this business worth worth spending time on well I it depends whether you're an investor you're investing capital or actually receiving capital as an investor what I find to be most interesting is always figuring out what the next new new thing you know is where around the world one can actually generate the kinds of returns that our. Investors have come to expect so above market private equity returns which has become more challenging frankly over the last you know since the financial crisis I'd say. It's become considerably more challenging but actually trying to figure that out certain geography that you're more excited about is a certain type of business stage of business is it agnostic is it you know so what's the if you want if you had to slice and dice what's going on right now in your portfolio in your interest where is it. The most exciting well the way that Warburg Pincus which is. A little bit of a different model from the traditional Silicon Valley a venture model but. The way that we've all we started with that model at one point and we have grown it to become full scale investors and what we try to. Do is actually look out where the the best geographies are to be investing where the best technologies are to be investing in with the best management teams to back in terms of building out their business. Plans and we're doing all of that on a relative basis so everything goes into one fund each of our funds has approximately 80 businesses which is actually an interesting filter when one tries to actually assemble a diversified portfolio for our investors so when we. Look at what's been more exciting over the last handful of years our technology clearly has been. Exciting in think I'm going to surprise anyone. With sort of our SAS based software models and the success we've had in a number of businesses they're cyber security we probably have more cyber security. Investments than than any other venture slash private equity firm in the world those have been very interesting genomics and find to be very interesting and in terms of geographies half of what we do almost is in Asia these days a lot in India lot in. China that we find very interesting and again in disclosure we have a joint investment in India we have one here as well and so we know the firm well like to welcome our missing panelists may be the opposite end of the property and then getting miked up so I got to hear. Everything you were talking about yes maybe introduce yourself mitchell's Gayle venture partners where enterprise software focused a number our portfolio companies are here lever namely we've been in companies like DocuSign inbox and HubSpot and a few others like that co-founded the firm 20 years ago and a couple who done some great deals with. Warburg over time we are earlier stage investors you know Series A our focuses scaling so we take them from their first. Dollars of revenue to do something repeatable and profitable design metrics around it we have metrics available for people to use for their portfolios or CEOs yourself at scale. Studio on our site and I've been chairman of the NBC a and so done a. Lot of work across the u.s. and internationally on terms of that very well-known venture. Yeah yeah so my apologies well thanks for joining us Nick let's. Come back to you as a sovereign wealth fund which you know you inherited a bunch of old world assets yeah what do you think of venture capital and where does that fit in into this ecosystem or your ecosystem and what you're trying to build at Khazana yeah so so venture capital definitely. Constitute an important piece of what has and I was trying to achieve going forward as you rightly mentioned because I know where we started off about 25 years ago is from inheriting the the old economy type of companies and assets which continued to be very important for Malaysia's own development so you're talking about. The national telecommunications company that provides fixed and broadband services you've got a national utility company as you know we are 100% of Malaysian Airlines as well yeah yeah we've like looking at Khazana portfolio now you see we essentially splitting the portfolio into two big funds if you think about it thirty percent of the portfolio is what we call the. Strategic fund where it houses the kind of assets and companies that still. Very which we see as very important for the for the whole scheme of things for Malaysia's own development but the 70% and of which I belong to that 70% is what we term as the commercial fund and here we are actually. Looking and organizing ourselves by asset classes so it includes public equities also private equity which I'm. So fly heading for North America and Amir and we see that within those asset class that we need to be invested in different stages or difference of like life cycles there will. Be certain areas or stages type of investment where as Ana has built up experience and expertise over time and you would expect that would be your typically later stage PE type of investment more direct and more direct investments but something. In VC is something which we have never had the experience previously now via for example investing in March and building up the relationships we hope to build some like deep relationship with a few partners that. Would then help. Us along the journey mission you're not alone but I do think one critical thing about khazana for people to understand is that their chairman is 92 years old 93 93 yeah and he. Shows no signs of slowing down at all in fact the new prime minister or rather the old new prior history of Malaysia and. If you try and explain to him technology how does that go in that conversation well it's good that you mentioned he's actually quite savvy with regards to technology if you think about he was the Malaysia's fourth prime minister I believe from 1981 where. He roof about 22 years and he founded khazana he founded Khazana and he was also the if you like the architect. In terms of telco consolidation liberalizing quite a few economy supply industries and so he's actually quite at the forefront notwithstanding that he is 93. So maybe he's a little bit behind the curve but you know I just hope that he's got a bench the only reason I brought it up is that as a 92 year old while he was running for office yeah he. Used social media really well he did a great job building an image of a very young and going for runs driving. A car it's exactly back to you we the the topic here is future of Education which I would say all of us would agree is. Not static things change what do you think is the directional sort of growth or momentum of venture capital right now and I and address you know different types of funds we had this morning Softbank vision I don't know how they call themselves venture capital but write your thoughts on yeah well. A couple things when I've been doing this for over 20 years Joanne also you've been a tech investor for a long time so you've seen this I think the rate of change I mean we can come here every year and see new novel technology we invest in change disruptions for the creative destruction and I think you know in my. 20 years and having been a technologist before that an operator it's been well that's been relatively a constant in that the good news is there's more and more to investment I think the other long-term trend that's interesting is the long tail I sit on a large public. Company it's an industrial technology company they own Tektronix Fluke called for dev and watching venture and. And you know not hardware which is what they're used to big systems you know seeing it get you know Sesame Street having a venture fund investing in EdTech companies like Ford of doing investing in in startups and thinking about next-generation technology it's now not just us selling to each other within Silicon Valley or you know and within tech technologists. Selling to each other we're selling to everybody that's why 93. Year olds can know a lot about technology those things I think are our. Long-term trends I think the third trend you know 20 20 years old when I got into the business 90 plus percent of the venture investing was invested in the United States mahler dollars of course but all of it almost was here that's just over half it's a global business our startups sometimes starting. In other company countries before they're launching in the United States so I think those are long-term trends I think you can't be in venture as an LP or a GP and not. See it being incredibly cyclical see Softbank for details you know corporate venturing know and not you. Guys have been actual legitimate early stage investors as a large buyout firm because you have staffed for over a long period of time so I don't put you in this category but the hedge funds and buyout firms that create late stage you know funds who. By the way give us awesome markups because they're not. Sure how to price it and then later say gosh that was a great company but I didn't buy it well so I think there were. In a cycle and I think we have various notes to suggesting and we're at a peak but what we haven't seen is the business of venture capital change we invest in technologies we invest in change agents but the actual way our funds are structured how we process things how we what-have-you Joe may be coming to you. What is what do. You think has changed what do you think is going to change within the world we live in it's actually it's actually interesting I actually think you did. See some changes during the 2000s the go-go days where venture funds were getting larger and they're getting larger at a rapid rate and I think they learned some hard lessons. You saw some return of capital yes you saw a number of firms actually pull back decide to go back and raise smaller funds because the actual science of venture investing that has not changed one a combined management teams find interesting business plans you. Need to stage capital not just throw capital with investments one of the hard lessons we've learned every. Lesson the hard way a Warburg throughout our you know fifty some odd years in business you just can't throw capital with entrepreneurs they spend and one. Needs to so he did one guy the milestone it so you saw. That retrenchment you saw that pullback then you. Had the financial crisis and coming out of the financial crisis I actually think things got a lot better but. Now you're starting to see a number of funds actually raising a lot larger funds and it'll be interesting to see to meet where all that goes sign of. The market top of the market again its acquires new funders how big so as an LP when you look at all these. Funds and I'm sure you guys have a you know wide variety of funds what does that mean to you and how do you think of size and specialization or what what's their dialogue internally about this right so the dialogue internally in terms of when we look at and assess or go through our fine selection. Criteria being a sovereign fund there's definitely a soft like most goodness towards a. Risk aversion so we tend to try and favor the bigger funds but in the space of VC you know you brought up Sequoia for example. Being someone who is fairly new into investing to let's say VC funds even for someone like Rosanna. Is quite difficult for us to get a seat at the table so so the strategy that we have is like we would prefer prefer to work with these smaller funds where you can build personal relationships you know as because the forest is like a it's a journey for us it's a learning. Process process plus our allocation to VC will not be as big as what we allocate to let's say growth and buyouts but we still feel that it's important. To have our foot in into the VC space and the way we think about it is we want to see top performing top quartile type of managers who are a bit smaller can that personal relationship but then have that open dialogue instead of ask your loaded question had it worked it has it has so far but. They're now obviously yeah we will look to do it to be doing more yeah over time yeah so Kate another way of looking at what's changing in venture capital women we see there any other in the room nice okay awesome awesome. Okay so what's the dynamic around that from your point of view been chair of the NVC you've seen some I would say. Concentrated efforts in the last few years at least conversation if not efforts what has that changed as it changing what's what do you. See happening there well actually one of the VCS I got to know early on in the business was one of womenõs partners early on Beth if he well it certainly. Has changed I joke in 20 years on obviously many private boards I've got on one other board with one. Other woman so I chose a career where I. Didn't have to stand in line for the bathroom it's all fine it was that was and nobody else was watching me when all the guys were still having a conversation on their side and I'd have to lean over to keep. Tabs on how that conversation. Was going but I do think it's changing and I think limited partners I think you know firms like Warburg and others starting to realize it's a missed opportunity in terms. Of great VC's great entrepreneurs to back LPS are asking the question we've been very involved with Elba institutional limited partner Association who's now 80% of the LPS said. This year they will be asking and it's now part of their due diligence questionnaires and again it's different I think some of it did get I think we started working on this five. Or six years ago. Actively at the NVC a level and we're about to launch the new numbers so. I haven't seen the final numbers but I did ask the Deloitte folks give me a sense of where those numbers are it actually is up which is great. You see similar statistics very strongly in the female founder we're going to do that this afternoon in another half hour the number of female founders has gone up significantly and again it's an. Opportunity arbitrage and and same thing for investors and entrepreneurs of color both of whom are obviously incredibly underrepresented but I think we're seeing it change and it's being led not just by women and. Minorities because that. Would be a very small team of people who care about it there are a huge number of male allies I think it's starting to make a difference it's starting. To change I think it's a long way to go but I think the fact that we can have this conversation. Openly and and these guys both are nodding their heads and and that you even ask the. Question on the stage like this says we're in a very different place than. We were when I joined the industry but I want to be dressed like they. Were I would have tried to put in. Why not giorgia graphically let's say if you think about how you you have an international organization you know venture capital by the very nature of the kinds of stuff at least we do is has to be in. Some shape or. Form local because it is a lot of. Hard personal time work you've got to spend time on your companies I'm sure you do too but you have a team all over the world where do you see opportunity right now do you see certain areas. Shining what do you think of China versus India we had this conversation and lunch and John Chambers obviously is a very strong you know he he told me this morning he has to teach me how to just tell better what do you think well first of all your comment. About being local we have 10 offices around the world we're. Local in all those offices right and that has to do with the networks you create the management teams you find the business plans. Your backing the localization and cultural issues that one contends. With when you invest on a global basis so those are all very very real issues that that firm needs to contend with when creating value in terms of of you know China versus India versus Europe look our. Jobs to find needles in the haystack you try to invest behind waves so when when carmine and John we're talking about a dollar in China versus a dollar in India and my first question I leaned over and and said to Godfrey Sullivan who's next. To me I said well what's the time frame because those could be very different answers. Yeah pending on that yeah so I think the issues are significant I think we could probably do a whole conference in talking about all. Of those issues that you contend with going geography to geography but we have all these issues I mean we have the issues with our employees our professionals making sure that we're recruiting and retaining the right people so we have those issues to contend with and then. There's the whole sort of you know how do. You sort of make an investment does it have to be a control investment what are the regulatory issues it actually is a multi variable multi level issue that you know to skirt the wave tough really wouldn't do a job for your team is it driven. Top-down is it strategically you come up with a sort of allocation of globally based on what you're seeing what you know is it driven deal by deal and opportunity by opportunity we got a big matrix it's probably. Represented you know represents virtually everyone out there you know who's practicing in a certain industry you know we've got a matrix for you and each of our teams each of the leaders in our team is thesis-driven so they've developed a real time thesis that's very dynamic that changes all the. Time as to where they think the best value is is it. Earlier stage maybe it's the public markets and and doing a public to private in some way shape or form if that's the best risk reward. At that given point in time but I'm often asked the question well Joe you've been running Warburg for twenty years you've seen a lot. In this industry what's changed and I said well at Warburg really nothing about our model has. Changed in that timeframe but all those theses in which we invest have changed I'll give one quick example we when I grew up in the firm we did TMT investing we have a TMT group now TMT when I grew up it actually meant real technology businesses real telecom business fiber. In the ground real media businesses newspapers we owned we don't do any of that in the US anymore none we've done some of it in. China we've made some of those expertise into India but now the definition of what we're doing in TMT in the US is very different I talked about cybersecurity I talked about sass face business models and yeah there's logistics businesses a lot of software base this is so those have migrated and changed through the years to wherever our team. On the ground who's spending all day energizing their network building their team trying to generate returns try it what they think you know the best places to be spending the marginal dollar would be so. And and your site given that you have a global mandate as well and you have all sorts of different strategies they say they is the next ten years sort of strategically decided and then assets allocated based on that or is it based on here we're gonna we have these things we're seeing all the time. And we have to respond to them how does that balance work for you you have a very large team as well yeah so so in kisana we've recently had a relook at our portfolio again it was basically from. Last year where the change in government for the first time in 61 years essentially drove changes at the top management and even at the board of Khazana so I think we took the opportunity to and. We've we got a new MD who's come in and he used to be the MD of the Malaysian pension fund which is one of the biggest infants in the world so he has come in with an asset allocation type of strategy but one probably one of the biggest difference is that we will never do. Something like fixed income so that that one we leave the dimension guys but in relooking at our portfolio or what we realize is you know looking at it from a bottoms-up perspective there are areas where. We are probably a little bit more too overweight at the moment for example under my area of responsibility what we found is over the years we probably have done a little bit too much in let's say the Middle East and. Seeing how volatile the particular region is and is fair has been quite the challenging some large any for us to try. And monetize for example some of our investments Middle East the the conscious decision that we've made is actually to not do any sort of new investments at least for the next few years but then to then increase our exposure to develop. Markets where we are severely managing about. So so we're balancing our portfolio again somewhere like China and India is probably somewhere that we have a little bit more experience because we've been there for about 10 11 years where we actually have an office on the ground and seeing Malaysia where it is. Located in Southeast Asia China and India our biggest trading partners so there's no way that we will solve like reallocate away from from those two particular countries but going forward that's definitely a move towards more developed markets and in particular North America we have very. Little time and we're asking one last question ten years from now if you were looking back at our business venture capital do you think it looks the same well we'll be investing in very different things because we're change so that is a given I think the basic tools will be the same I'm with Joe I mean I think. The basic tools will be the same I think the question is so many folks want to get in it well that will again the cycle of everybody investing stay the same I'd say if I was going to give advice to entrepreneurs in the. Audience and Joe chime in if you feel any differently check it on the venture side you know we are in such a high risk part of you know next portfolio we have to provide outsized returns which was. Why some of the bigger funds become more of an index if they're focusing on venture than actual high returns we've decided to stay small by the way it's a barbell right now lots of small funds and a handful of big ones I think there's a lot of return potential. Which a lot of folks agree in the small ones so then hand things on to folks like like Warburg over time but I would say for you as entrepreneurs go for the big markets go for the big vision one of the things I was involved and helped write section 100 of the. JOBS Act I think when you think about exits whether you're selling to a large strategic are. You going public the markets are big there's a lot of liquidity out there overall looking for return but to clear the market and to get the kind of multiples ultimately that. You get you're the ones earning it as entrepreneurs keep asking yourself if your vision for your company is big enough I think there'll be a you know we can't invest in other products. Or features we have to invest in big companies there are so many big companies out there yet to be born so aim high and I think that will still be what people the best we'll be doing ten years from now I can keep. Going on this I know a lot we are a. Little bit over time already I. Really appreciate your time and think you know in doing this I hope it was interesting to you was to me thank. You so much and thank.


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