ASX week: Chris Demasi – Private equity, Public markets

Bryce: [00:00:15] Welcome to another episode of Equity Mates, a podcast that follows our journey of investing, whether you're an absolute beginner or approaching Warren Buffett status. Our aim is to help break down your barriers from beginning to dividend. My name is Bryce, and as always, I'm joined by my equity buddy Ren. How are you going? 

Alec: [00:00:30] I'm very good. Bryce. Great to be back here for another instalment of our ASX week. We're featuring some of the best presenters from the ASX Investor Day, and I'm excited for this one because we're going to be talking about an area of the market that we traditionally haven't been able to access. But there's been some unbelievable returns and that's in the private equity world. 

Bryce: [00:00:53] That's it. It is our pleasure to welcome Chris Demasi. Chris, welcome. 

Chris Demasi: [00:00:57] Thanks for having me, Bryce.

Bryce: [00:00:58] So Chris is the co-founder and portfolio manager of Manteca Global Investments. Monte Carlo run two ASX listed funds the Muntaka Global long only equities funds. The ticker is Mo J.l and the Muntaka Global Extension Funds. The ticker is m'kay ASX and, as Ren said, the presentation that created for the ASX Investor Day focussed on the opportunity that investing in private markets has and how we can access that through the ASX. So we're going to unpack all that today, Chris. 

Alec: [00:01:30] So Chris, let's start with a definition of people who are hearing private markets and unsure what we're talking about. What do we mean when we talk about private markets, 

Chris Demasi: [00:01:39] private markets, just the investing markets that aren't tradable? So we're used to the public markets like like stock exchanges all around the world. Private markets are different in that they're not accessible by the general public. They're typically the domain of wholesale and institutional investors that directly invest in companies or projects or lend lend money. And it's another defining feature of the private markets is that they're they're relatively illiquid as well. Once once these big institutions have invested, they can't get their money back. So, so, so quickly.

Bryce: [00:02:14] So, Chris, why private markets? How is the opportunity set with private markets different to those that you know, the public markets? I mean,

Chris Demasi: [00:02:22] it's really two questions why private markets for the big investors in the private market funds and then why private markets for us where we see an opportunity as well. But I'll focus on on the first and what we've seen in private markets is that there are just more and better opportunities in that space and that's leading to better returns as well over long periods of time for these investors so they can commit capital to to opportunities they wouldn't have had access to in the public markets. And I can get better returns, often with lower risk. In doing that, it 

Alec: [00:03:02] would be good to sort of set the scene and and understand what's been happening over the past decade, more more than a decade. Because, you know, we hear about that opportunity in private markets and you know, some of the crazy companies that are staying private for longer or choosing not to go public. So help us put it in context, like what has been happening in private markets. Ren, if you go back 

Chris Demasi: [00:03:24] and 20 years now, sounds like a long time, but it's it's really just going back to the early, early 2000s private markets where we're really just a speck, just a little dot, and they've expanded 10 times between then and now. So it's a seven trillion dollar plus market. And at the same time, what's been going on there is that there's been less and less opportunities available in public markets and just a greater number of opportunities available in the in the private market. So you take the equity space, for example, the number of equities listed on public stock exchanges around the world has halved in the last 20 years. Yeah, and at the same time, the private equity owned companies have multiplied by five. So there's just plenty more opportunities in that space.

Alec: [00:04:10] I think people would be really surprised by that that in, you know, in the last 20 years, it feels like so many more people have been interested in investing in. So many new companies have come to market, and yet the number of listed companies has halved. Well, that's 

Chris Demasi: [00:04:23] right. There's been there's actually been an increase in the age of companies that are coming public, especially especially in the most attractive areas. So in the areas like technology, some of the companies that are that are at the forefront of of digital transformations. And so for example, if you go back to 1997 and Amazon came public that year, it was just three years old and the company wasn't even worth a billion dollars at the time. And now it's worth $1.7 billion in sort of fast forward and you look at all of the, you know, the technology companies that have listed over the last couple of years, like the Ubers and the Airbnbs. I mean, they're 10, 12 years old or more and they're coming to market with tens of. Billions of dollars of market cap, sometimes even even more more than that. Well, I think what's really interesting for investors there is that public market investors were able to participate in all of that value creation, along with Jeff Bezos in the Amazon. Almost the whole of the one point seven trillion dollars is sitting in in Jeff's and public market investors hands. Whereas if you look at something like an Airbnb or an Uber, they'd already created so much value by the time they came public that all of that value creation has happened for the founders in the private market investors. So to get a piece of that, to participate in that you really need investors really need to turn more and more to the private market, and that's exactly what they have been doing over the last couple of decades. 

Alec: [00:06:01] And I mean, the most extreme example of that is the two companies that I think everyone in the world wants to invest in today, which is Stripe and Space X, both of which may never need to go public. But if they do, it will be at $100 billion plus valuations. 

Chris Demasi: [00:06:17] Yeah, I mean, they're both. If one's almost touching $100 billion valuation, the other one's just a tick over. But that's a great point. They they don't necessarily need to become public, and it's a bit of a chicken and an egg. So as the opportunity set has really broadened out in the private markets, more and more money is flooded in. And as more and more money comes in, more companies don't find the need to go public to raise money, to fund their losses and to fund their investments because the there's plenty of money around in the private markets for them to do that. And so you end up in this situation where you really need to to be investing in private markets to be able to access these returns as well. 

Bryce: [00:07:00] So we're seeing a shift away from the public, well, you know, away from public into into more private. But what is that being reflected in portfolios like in terms of allocation private market sector? Is that shift really starting to happen as well? 

Chris Demasi: [00:07:14] Well, the shift is happening. Is it being reflected in portfolios to date? No, it's not. So if you look across investor portfolios today, only about seven per cent of portfolios are allocated to private market investments. I'm looking wide and broad, so I'm looking at institutional portfolios. Sovereign wealth funds, the big endowments, insurance companies, investment portfolios and even wealthy individuals, their portfolio. So across all of them, seven, just seven per cent of their portfolios are in private markets today. But that is changing. And there's this shift towards the private markets. And of course, coming off such a low base, you only need small changes to make a really big difference. And so there's there's already a lot of intent and we're seeing a lot of money moving towards the private markets. And by 2025, that seven percent is going to go to 10 per cent. But what that means is an extra six trillion dollars wow is going to come into the space and it's just staggering the amount. And I mean, I mean, it's only we're only sort of touching the tip of the iceberg, really to think about the opportunities that we're talking about during the private markets, but to still only have 10 percent of your portfolio allocated to the asset class. I mean, there's a long there's a long, long runway for growth ahead. 

Alec: [00:08:40] It's pretty fascinating. So let's get some let's get a bit specific and let's talk about some of the big names in the space. Who should we be aware of either individuals or companies that are big players in this private in these private markets? 

Chris Demasi: [00:08:55] Is there a handful of companies really matter? So across the world today, there's about 11000 firms that manage money in the private investment arena. The five of them, five of them come in 30 per cent of the assets there. So you get seven trillion dollars in assets, two trillion points with just five companies now five managers. And you know, I'd like to say they're the household names, but really those we've found out along the way because private markets have been the domain of big wholesale investors. Then all these managers aren't really well known to everybody. But the big names there are Blackstone that's by far and away the number one in the market, but also Apollo, KKR Carlyle and areas out of New York as well, where invested in three out of the out of the five 

Alec: [00:09:48] of those all American 

Chris Demasi: [00:09:50] of the of that set. Yeah, you could say they're American, but they they have global operations. Yeah, yeah, yeah. I mean, it's come so far. I mean, even, you know, you go back, go back to the 90s and really private market investing was private equity and it was actually all about us leveraged buyouts. Yeah. The stuff that Richard is doing, I'm pretty woman, it's that it's that it's bad and you fast forward today, and that's sort of that style of investing is less than 20 per cent of private market investing. It's just ballooned in so. So you know, there's new styles of investing. There's new asset classes like we've gone into venture capital and growth equity, but also distressed lending and real estate projects. But but it's also expanded geographically. Yeah, and there's plenty that's being done outside of the US. In fact, last year there was more money raised to go into Asian equity funds and there was money raised going to US funds. Right. So so it's truly a global business, and all of these managers have operations 

Alec: [00:10:55] all over the world. Yeah, I mean, even in Australia, where preparing to interview the CEO of BW Works, the natural beauty and skincare company, and they had a private equity company, Bain, try and buy them out a few years ago. So like, it's touching everywhere. 

Chris Demasi: [00:11:12] They're in our backyard as well. Yeah, yeah. Yeah.

Bryce: [00:11:14] Well, I wanted to ask on that. We are going to do a bit of a deep dive on Blackstone in a moment, but what's the landscape like here in Australia for four private markets? You know, there's some big global players, but you know, how does Australia compare it? 

Chris Demasi: [00:11:27] We're pretty sophisticated market. So, you know, when we've looked at private markets, we've looked at private markets around the world because we're global investors. But even just having a look around Australia, a lot of the big names are here. Blackstone, KKR here. Some of the big banks have private investing activities, whether they do it off their own balance sheet or they raise money, it could even be overseas to invest in our markets like, for example, Goldman Sachs. And then there's just a swathe of other mid-market and smaller private investment managers. Probably, you know, part of the group of 11000 that aren't the top four. 

Alec: [00:12:08] So when we talk about private markets, we're talking about those big five sort of private equity players. That's sort of what you'd call them. There's also a number of big names in the venture capital space, the Sequoia's of the world. How do you think about them? Are they just in terms of assets just nowhere near as big as those players? Or do you sort of separate them and think of them differently, differently? 

Chris Demasi: [00:12:29] Because because I play in one one space? Yeah. So it's it's venture capital or venture equity. And then when I think about the global asset managers that we're talking about, they do that as well as a range of things so that they are so much bigger, but they are so much bigger because they are large within venture capital now and becoming more and more so because that's what their clients are demanding. Yet they're also being in different asset classes. Yeah, growth, equity, distressed lending, special situations, real estate, natural resources, you know, some of the, you know, the venture capital specialists aren't doing such a wide range of investing. Yeah, and that comes with a whole set of advantages for those big asset managers because they can do everything for their clients. 

Alec: [00:13:18] Full service, one stop shop. Yeah, yeah, that's a way to win it. Equity Mates needs to get it of one of them and then we can get everything done, all that natural resources lending. 

Bryce: [00:13:30] So, Chris, we've set the scene. We kind of understand what's going on in this space. Let's take a look at how we actually can invest in private markets, because that's the interesting stuff. But before we do, we'll take a quick word from our sponsors. So most people, if they were to invest in private markets, they'd be investing in private funds like KKR, Blackstone. You know, we've spoken about, but Monty could take a different approach and believe investing in the managers themselves is a better option. Can you expand on that? 

Chris Demasi: [00:14:02] Yeah, absolutely. I mean, the funds have done really well. If you could get invested in those in those funds, you'd probably do okay as well. Yeah, you do pretty well. But I'll say to you, I mean, it's an interesting question how would you invest in those funds? 

Bryce: [00:14:17] Well, that's going to be my next question. 

Chris Demasi: [00:14:19] The cash, right? Right. You do. And then and then if I gave you a menu of them, how would you pick which one you want to be investing for? Yeah. And so what's so attractive to us about the managers beyond being very accessible and I'll come to that is that they win no matter what. OK, so it doesn't matter which funds do well, which strategies are asset classes do well. These large asset managers, they do well when the whole industry does well, and they also are able to take advantage not just of the performance of the funds, but also the growth in the industry and the expansion of the space. So more and more flows coming into the space, more assets being allocated, even separate to the performance and the returns that are coming out of the space that they're able to make money out of both of these things. You know, if you're an investor in the fund, you might do well out of one particular fund or you might not. You're an investor in the asset manager. It doesn't matter which of them does, does well, you're going to do well and you also get to benefit from more money being allocated to these strategies over time. 

Alec: [00:15:26] And just to really spell that out for people, is it similar to like a hedge fund manager that has a management say and then a performance fee? 

Chris Demasi: [00:15:34] Yeah, that's right. So that look, they make money a few different ways, and that's really attractive, too. So private market asset managers, they do. They make they make a management fee, so they take a percentage of the assets for managing them. 

Alec: [00:15:45] And so for more money coming into the space, regardless of how well it does management fees, you're going to make more money. 

Chris Demasi: [00:15:52] And I, if you can perform well, the asset base grows and your clients place that money in through that back with you again. And so so you make money when you perform well, even just off the management, say. And look, this is a second way that they make money from performance fees, so they take a share of the profits. And again, if the funds perform well or the better that the funds perform, the higher that profit share is. But if you run a larger asset base, you can take a clip of the profits of many more Dollars of of assets of performance and so that they can make money that way, too. And then thirdly, look like a lot of these firms often tip their own money into their deals and their investments. And so they can they can make additional gains by investing in their own, in their own funds. There's several ways that they make money and and it's across two dimensions. It's it's across getting better performance, but also aggregating the assets as well.

Alec: [00:16:49] So in your presentation for the ASX Investor Day, you identified one private manager that you think is the best opportunity and we want to get to that. But before we do, you mentioned earlier, you said you owned three of the biggest five. You obviously don't think the one that we're going to get to is the only opportunity. I guess why? Why the three and not the other two

Chris Demasi: [00:17:13] there are quite similar. They're all quite similar. They're all going to do really, really well with the expansion of the universe of private market investments. But they all have slightly nuanced differences as well across a couple of couple of different dimensions. And, you know, one is probably a little bit more advanced or further along its journey than the other. Some of them invest more of their money in their own deals than others, so they do things a little bit differently. But in total, they're all very, very attractive because they're all so well placed to do well out of this trend because at the end of the day, they're the the biggest and the best in the world and really splitting hairs when you start. 

Alec: [00:17:54] So it's not like they're wildly different. It's then it's about the process that you guys through go through to identify the best opportunities. 

Chris Demasi: [00:18:01] Absolutely. And then for us, at the end of the day, you know, there's a value equation there as well. So it's understanding for us which of these businesses are going to be the winners, who's going to lead the growth in the space? And we, you know, we know that there is there's plenty of growth in that market and then really trying to understand which ones are being underappreciated or undervalued by the marketing. And you know, honestly, we think each and every one of those three KKR, Blackstone and Carlyle are really being underappreciated today.

Alec: [00:18:31] Yeah. So we've kept people in suspense long enough. We've told them that you're going to tell us which you think the best, which one you think is the best opportunity. So in your presentation, you said it was Blackstone. Which trades on the New York Stock Exchange, ticker B X. What specifically does the company do? Does it focus on any area of private equity? And why do you think it's better than its competitors? Yeah. 

Chris Demasi: [00:18:57] So Blackstone is the biggest and the best. It's the the gold class in the private market investing space. So they number one, they have seven hundred and eighty one billion dollars under management and with it with a B.. Yeah, I mean, if they keep 

Alec: [00:19:16] growing, it will soon be with a T..

Chris Demasi: [00:19:17] Well, this is what's amazing. It absolutely will still be with the team. In fact, we think it's only going to be a few years before they're a trillion and a two trillion dollar manager. And it's because of the scale advantage that they have there, the biggest and the best in the market. And that meant has been over time that they've been able to get bigger and leverage that scale and really start to spin their own flywheel of success, we would say. So they they started from a point where they were trusted partner for their clients and they made them excellent returns. So Blackstone's key funds have made on average 15 per cent per year for over 30 years. JS And then as a client, you're pretty happy with that return. And so not only are you willing to put your money back with Blackstone, but you probably happy to chip in more money. And in fact, we've seen more clients come to Blackstone as well, so they end up earning a lot more in fees. Of course, they have invested that back in their platform, in their business over time. And so that means that they've been able to get the best talent, build up the scale of their operations, see the best deals to service their clients the best. And at the end of the day, what that means is that they offer better client solutions and better performance, and it just it just starts to feed on itself. Yeah, and that's happened for the last thirty five years in Blackstone's case, and that flywheel doesn't slow down. In fact, it keeps spinning with its own momentum, and we think that that's going to happen for the better part of the next decade or more. 

Bryce: [00:20:59] You speak about the benefits of scale fees on assets under management. Seven hundred and eighty one billion sounds great, but the big guy, BlackRock sitting with nine point five trillion. What's the argument for Blackstone against someone like BlackRock? 

Chris Demasi: [00:21:15] You're having to play seven hundred and eighty one? I mean, is 

Bryce: [00:21:19] it enough on the top end of town to say, 

Chris Demasi: [00:21:23] Look, there you could. Absolutely. You could be absolutely right. But it is two different beast. Blackstone is involved in the private markets as a very active investor and the value proposition there is really strong outperformance and you pay for that as management fees are relatively high, but you pay for it because of the strong performance, whereas BlackRock has a different value proposition. What they're selling is broad market exposure at a very, very low and falling cost. So they both have their place for institutional investors and even the retail market. But it is doing two very different things, and we prefer to be in a space where the fees in the margins are higher and the value proposition is away from just a very cheap price. Yeah, whereas you know, BlackRock, BlackRock is doing something very different and they're competing on fees, and they can do that because they have they have such enormous scale, but they really need to have those $9 billion in there, and they just don't make as much of that $9 billion as what Blackstone does. You know, they've got 12 times as much assets, but they don't really make more than maybe double Blackstone is making in fees because of the different, the different markets. That's interesting on that 

Alec: [00:22:46] point around, say so. We've seen in the listed equity space fees have come right down. You know, ETFs have driven the charge, but all active managers have had to really follow suit with the big five in the private equity space. Do you expect a similar competition around phase and like a lowering of phase two to get more assets in 

Chris Demasi: [00:23:08] what's been really nice in that space and really nice as an investor in the manager is that those fees have been very persistent over a long period of time. And there's a couple of reasons why. What we've seen happen in the public space is returns have compressed around the average or the the median. That hasn't been the case in private markets is really large dispersion. And so the the top performing funds do really, really well. They do much better than the pack and investors are willing to pay for the. All of that outperformance again. So that's that's one that's one reason why we see fees being quite persistent in the private arena going forward. And the other reason is because it's not as easy to invest in the space. So in the public, in the public space, you can put your money in and it's you can, you know, it's this whole rise of passive investing that doesn't exist in private markets. There's no way to access this space without going to the private equity or the private capital asset managers. They really see it right in the centre of this expanding universe, and they're controlling the flows and controlling the investment opportunities and making a lot of money in the middle. And there's not much about that. We could say that's going to disrupt that. Like what has happened in the in the public arena? Yeah. And so that's that's really valuable as a shareholder in those businesses. Is that pricing persistency?

Bryce: [00:24:43] So Chris, you obviously have a thesis for Blackstone. It's 10 bagged over the past decade must be nice. And so that, I guess begs the question how big do you think it can get to over the next decade?

Chris Demasi: [00:24:57] The 10 bagger over the last 10 years would have been really nice, but we've only been going for six years. What has been excellent is it's doubled just this year. And so, so so it's been a great contributor to the portfolio. But I think what's more important is we don't see that coming to an end. And so there's still there's still plenty left in the stock. And even after doubling this year, I still think that the stock is under appreciating what the true future earnings potential is going to be. And Blackstone, so you start today with just under $4 billion of earnings. And when you think through the basic building blocks of industry growth and Blackstone's ability to increase their share and their increasing profitability over time and those additional performance fees and profit share and you package all of that up, where we get to is $20 billion of future earnings power, so it's a five fold increase. And while that's happening, profit margins are going up and the fees are getting stickier and more predictable, and that's much more valuable as well. So look, I'm not ruling out a 10 bagger over time again, but we definitely see a path to the stock appreciating by five times or more from here. 

Alec: [00:26:16] Yes, that's what we want to hear. Does it get to a point where the amount of money in the space is bigger than the opportunity set like than they have to start chasing worse deals? Or that's just not enough places to put all this money had 

Chris Demasi: [00:26:28] the same question in our internal sales meeting this morning. With the guys side, you're on the same page. I feel like the story is such a good one that people are trying to find. What's wrong with this? Yeah, there's plenty of money in the private equity space looking for a home right now? A couple of trillion dollars, even though that's the most on record compared to the size of the markets and the amount of activity that's going on. It's actually not going to take very long to deploy, but probably less than two years to deploy that money. But I think what you've got to do is come back to the the size of the investment market universe. While there's trillions of dollars sitting there waiting to be deployed in private equity in the space of private markets is a seven trillion dollar industry. Compare that to the amount of assets in the world that are being managed. It's over $100 billion today, and there's four and a half trillion dollars in private equity funds. Just the equity part is one hundred and sixteen trillion dollars of market cap on global public stock exchanges. So there's plenty of places where that money can be deployed. There's plenty of assets that it can be bought, plenty of companies that can be invested in plenty of places for them to go and lend and to fund projects. So I don't think that that's going to be a problem because while we're talking trillions of dollars of money that needs to find a home, there's tens and hundreds of trillions of dollars of opportunities out there. 

Alec: [00:28:01] It's just the scale of it. All is mind boggling. The funds as well, 

Chris Demasi: [00:28:05] like the goalpost, the Chinese new wings is going to billions is gone. Yeah, we're operating in a world of of trillions. Yeah. It just shows the growth, the extent of the growth opportunity. 

Alec: [00:28:15] I think one thing Bryce just said, it's probably worth expanding on. So you mentioned super funds, but that those really long term patient capital allocators, the super funds, the endowments, you know, the family offices of the world, they've been moving quite heavily to private equity. It's probably worth us just, you know, touching on what you're saying there because, you know, we love talking about long term investing here at Equity Mates and and those guys are true long term investors.

Chris Demasi: [00:28:43] They are, and they've led. The way and if you look around the world, the biggest allocated to private markets, even beyond private equity, have been the endowments, typically the university endowments out of the United States. And so as a group, they've allocated about 27 per cent of their portfolios to private markets, 

Alec: [00:29:02] compared to seven percent, which is the 

Chris Demasi: [00:29:04] industry. And so and so who's under indexing there? Well, while there's a couple of other institutions, it's also the insurance companies and retail money. And when I say retail money, it's everywhere from those high net worth individuals all the way down to sort of just the mass market and the retail market's huge. I mean, Blackstone, a couple of months ago talked about the opportunity set outside of just the institutional investors. So that's a 60 trillion dollar market. But then they talked about insurance being $30 trillion dollars and the retail market being another 60 as there being another 80 trillion dollars of market opportunity. So yeah, you're right, there are there are some pioneers out there, and some super funds have really been leading the way in investing in private markets. There's a lot that haven't been, yeah, there's still got a lot of sort of making up to do. And then there's insurance companies in and the retail space that is still under indexing and, you know, they're only just getting going. 

Alec: [00:30:10] Well, I think talking about retail investors and how they can access the space is a good segue way to talk about the two funds that you run. So both listed on the ASX, M0, JL and K acts are the tickers. What can you explain what the differences are? Do they both offer access to this private equity somatic? Do they do it in different ways? 

Chris Demasi: [00:30:33] Yeah, the and impacts. And they're both pretty similar, and they've absolutely both offer access to the private market thing that we've been we've been talking about. Look, they they both have the same mission and that is to achieve superior compounding of our investors capital. And that's right alongside our money as well because we invest in in both of these funds. So mogul mogul does that by investing in a concentrated portfolio of about two dozen holdings. Day to day the business winners in these attractive markets, like the private markets, we've been talking about their underappreciated. So Mogul is a long only fund that holds those two dozen opportunities, and we're patient holders and we see those compound returns happen over time. Impacts, on the other hand, is a little bit different. It has an extra compounding power. So, so if you you think about mobile impacts, is investing in the same portfolio. But we're increasing the amount of investment in those holdings by typically 30 per cent. For the same investment, you get 30 per cent more investment in those in those excellent companies. And we do that by running a short portfolio. So we take the proceeds of shorting some other stocks that we don't like, and we invested into that concentrated portfolio of stocks that we really do like. 

Alec: [00:31:59] Interesting, but it's been a tough market to short the last sort of 18 months. Do you always get proceeds out of the shorts?

Chris Demasi: [00:32:06] Yeah. So we get prices just bought by the by the nature of shorting. So we short those stocks, the money comes in and then we use that extra money to invest more in the long in those those loans. Nice. 

Bryce: [00:32:18] Well, Chris, it's been a fascinating conversation. Private markets, not one that we often get to touch on here at Equity Mates. So thank you very much for your time. We do have a final three questions, but before we get to that, if they would like more info on what you're doing at Muntaka, where would be the best place to go? 

Chris Demasi: [00:32:35] I just jump on the website Montego dot com easy. 

Bryce: [00:32:38] Are you on Twitter or Tik-tok? 

Chris Demasi: [00:32:40] We're personally less so 

Alec: [00:32:46] than the last one, and if people want to hear more about Blackstone, they can check out your presentation on the ASX Investor Day website. The link to that will be in the show notes to this episode. But let's get stuck into the final three questions. The first one is, do you have any books that you consider? Must read?

Chris Demasi: [00:33:04] So when it comes to investing, the must read for me was a book called Margin of Safety. Was this comment? Yeah. And I think that's just a great way to learn the fundamentals of value investing and to really understand, really understand different assets, different markets and how to value them. But the other, I think, required reading these days are Jeff Bezos letters. And so you can read them like a book. You can start in 1997 and go through to the to the current version, kind of like packaging up Buffett's Berkshire letters back in the day. I think they're they're a great way to understand how to really create. Tremendous long term value build, wonderful advantages in business and then apply them to just massive markets and you know, that's that's what we're trying to do every every single day. So I think you've got to be a student of Jeff Bezos as well as its other one to look out for. 

Alec: [00:34:01] Yeah, love that love margin of safety as well. I think it's the best investing book ever read. Difficult to get your hands on. I think it goes on Amazon Typekit Grant these days. But if you can get yourself a copy online, you

Chris Demasi: [00:34:13] can secretly get a copy that you didn't hear from me.

Alec: [00:34:16] Yeah, yeah, yeah. Next question we like to ask. Forget valuation or anything like that. Just purely fundamentally, what's the best company you've ever seen? 

Chris Demasi: [00:34:28] One really big one and one, really small one. Yeah. They get to two for a year or two for your money. One really big one at the top end of town is Microsoft. I think it's the greatest company in the world. I think it it's just been amazing how they've taken a monopoly position in the PC market paradigm of, you know, the 80s and the 90s and transitioned that into almost an equally dominant position in cloud software and computing. And they've really got a licence to print money for a long, long time, incredible pricing power, incredible scalability. And it's just a fantastic company. And then it's at the other end of the spectrum and in our own backyard has been REIT or real estate dot com that I. I mean, it's the dominant number one in a two horse race, and it similarly has a licence to increase prices and and print money over a long, long period of time, albeit in a in a smaller, smaller space down here in Australia.

Alec: [00:35:32] It's fascinating that of we asked this question. We've answered every interview we've done this year and we've got some of the ones you'd expect. We've got the alphabets of the world. We've had Microsoft. But I think number one response is REA Group, which is, yeah, yeah, yeah, yeah. 

Bryce: [00:35:49] It is just a home country bias. Maybe home know might 

Alec: [00:35:51] be a little bit, but it's just like, it is amazing how well we can 

Chris Demasi: [00:35:54] look all over the world and we and we do, and it's the one stop that we have had or have in our portfolio from Australia. And we've had it from day one. And it's been it's been an excellent performer because over time you just see those compound gains come through. 

Alec: [00:36:07] Yeah. And I think for me, like those two answers are just a classic example of how investing in what you know and what you see around you is just so important. Like, we all use Microsoft products. If we bought a house, we've all looked on, you know, real estate dot com, it's like these, these great businesses are in front of us. It's just about really saying, Yeah. So final question, if you think back to your early days, you know, just starting out as an investor, what advice would you have for your younger self? 

Chris Demasi: [00:36:36] Probably a few things that I've learnt along the way that might be a little bit esoteric, but it's they continue to to learn how to learn, continue to understand your own biases. And I'd say the the other important piece of advice would be look for opinions different to yours and look for sources of information, eclectic sources of information different to to what other people are looking looking at. I think the other ways that you can really get ahead in investing and probably in life as well, 

Alec: [00:37:10] all of it. 

Bryce: [00:37:11] Well, thanks, Chris. It's been an absolute pleasure. As I said, not often we get to chat about this. So it's been really interesting and I know that a lot of our community would have enjoyed as well. So thank you for your time. Make sure you go and check out Chris's presyo on the ASX website. It'll also be on our YouTube channel. This podcast will be filmed on our website as well, so been a pleasure. Thank you very much. Thank you. 

Chris Demasi: [00:37:34] Thanks for having me. 

Bryce: [00:37:36] Hey, thanks for listening to this episode of Equity Mates. We love hearing from you, so drop us a line at contact@equitymates.com or even better, go to your podcast player and leave a five star review. Also, a reminder that the Equity Mates content train doesn't stop when you've run out of episodes to binge. We've got a brand new website, a Facebook discussion group where on Instagram, YouTube and slowly making our way as an influencer on Tik-tok. That's Ren. So come and say hello and join the community. We'd love to welcome you. Until next time.