Expert Revisited: Bill Browder – Putin’s #1 Enemy

Bryce: [00:00:00] Hi, Equity Mates, Bryce and Ren here, as always, a little bit of a different intro, we're coming at you with an episode from our vault that we thought we would bring back to the surface as it's quite timely given what's going on in the news at the moment, right? 

Alec: [00:00:13] That's right. Bryce. We're digging up our interview with Bill Browder for people who haven't heard of that name before. He wrote an incredibly famous book in the mid 2010s called Red Notice, and it told the story of his time in Russia and how he became Putin's number one enemy. We won't spoil the story because Bill talks about it here, but he's been in the news recently because the laws that he architected and lobbied for around the world have been the laws used to sanction all of these Russian oligarchs. And he's recently written a new book, talking about some of the the more recent efforts talking about Russian money laundering. It's called freezing order. I'm pretty sure it's out now. If it's not out now, it will be out soon. So given everything that's going on with this invasion of the Ukraine, with the seising of Russian assets around the world, we thought it was a timely episode to dig out from the vault. So hope you guys enjoy it. But before then, Bryce has two quick pieces of housekeeping two quick Ren. 

Bryce: [00:01:15] So the first one is our newest show. The dive launches next Wednesday, so make sure you are subscribed to that three times a week. We're going to be bringing you one business story in depth explained with no jargon showing you that business news can be exciting. And also, we, of course, have fin first. Make sure you register for that. It's going to be Australia's largest finance festival. Plenty of activity happening down in Barangaroo at the cutaway on October 15th, 2022 here in Sydney. Head to Equity Mates dot com slash film fest. Tickets will be going on sale soon. Bryce Ren really enjoyed this interview, so let's get into it. 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?

Alec: [00:02:23] I'm very good. Bryce very excited for this interview. We've got a guest who is, you know, an incredible investor was actually Ren the best performing fund in the world in 1997. Yes, but his life outside of investing is more interesting, and I think we're going to have a really, really great interview today. 

Bryce: [00:02:46] Yeah, very excited for this one. And it is our absolute pleasure to welcome Bill Browder to the show. Bill, Welcome. 

Bill Browder: [00:02:51] Glad to be here. 

Bryce: [00:02:52] So for those of you who haven't come across Bill before, it's quite the résumé, but we'll list a couple. Here he is the CEO and co-founder of Hermitage Capital Management, which at one time was the largest foreign portfolio investor in Russia, which will touch on a bit in a bit. And, as Ren has said in 1997, was the best performing fund in the world, up to 138 percent. Pretty incredible. Bill was the driving force behind the Magnitsky Act, a law to punish Russian human rights violators, which was signed into law by President Obama in 2012 and subsequently adopted by a number of governments around the world, including Canada in 2017 and the UK in 2018. And on top of all of that, he's the author of the bestselling book Red Notice How I Became Putin's Number One Enemy, which is certainly one of my favourite books that I have read quite recently. A phenomenal, phenomenal sort of look into bills, pass a bill, welcome. We're very excited for this. 

Alec: [00:03:53] So Bill, there's a lot we want to cover in this interview, but we want to start with a little bit about you, and we do like to start all of our interviews by hearing about people's very first investments. We generally find there's a good lesson or a good story that comes out of it. So to kick us off today, can you tell us the story of your first investment? 

Bill Browder: [00:04:12] Just a little bit about me to get to get to my first investment? Sure, I was. I'm the grandson of the head of the American Communist Party. And so when when I was going through my teenage rebellion, I decided to put on a suit and tie and become a capitalist. And I went to Stanford Business School and graduated in 1989, which was the year that the Berlin Wall came down. And as I was trying to figure out what to do with my life, I said my grandfather was the biggest communist in America and the Berlin Wall has come down. I'm going to try to become the biggest capitalist in Eastern Europe, and my very first job at a business school was working for the Boston Consulting Group, which was a management consulting firm and in London. And I said to them, Listen, I want to be your Eastern European guy. And for a while, there was nothing going on in Eastern Europe, and then one day that the partner knocked on my office door and said, Hey, you were the guy who wanted to go to Eastern Europe? Well, now's your shot. And they sent me out to a little town in Poland on the six hours from Warsaw on the Ukrainian border, where there was this bus factory and the bus factory was basically collapsing in every possible way, financially, physically, etc. And BCG had been hired by the World Bank to go in and advise on how to fix this failing bus factory, and they couldn't really afford the proper team. So I'm sitting at this Polish bus factory not knowing anything about buses or anything else, and I have this translator who goes around with me everywhere. And so we were walking along the factory floor one day and I noticed that he's got this newspaper under his arm and what appears to be a bunch of financial statements on the front page of the newspaper. And so I, I say to him, his name is less, shall I say, check what's that? He said, are these are the very first privatisations in Poland. I thought, that's interesting. I'd like to know some more about that. So I said, So let's go to a conference room and I want you to explain to me, what's what's there? So he lays out the newspaper on the boardroom table. And I said, What's what's this number? And he says number of shares outstanding. And I said, OK, what's this number and the price per share and multiply the two numbers that gets you to $8 million, which is the market cap of the company when they do the privatisation? And they say, what's this number? And he says net profit. I said, No, no, no, go back and read it again. And he says net profit. I said, OK, now that number was $160 million situation. So. So I mean, you don't have to be a Stanford MBA or some kind of investment specialists to know that that if you can buy a company at half. For one year's earnings and effectively, all they have to do is stay in business for half a year and you've already made your money back. And and and I didn't know anything about investing. I had never even it wasn't even a thing for me. But I said to myself, Isn't this what you go to business school for? Isn't this like what you're supposed to do if you're like an MBA and a guy in finance or whatever? And and at the time, I had a total life savings of two thousand dollars and I had it all with me in full and in traveller's checks and American Express traveller's checks that people use traveller's checks anymore. But this was back then. I cover my traveller's checks to Dollars, and then I converted the Dollars to Polish zloty, and then I go down to the post office with less check. My translator and we subscribe to the very first privatisations, and about a year later, my $2000 had turned into twenty thousand dollars. And and what I can tell you is that having it be your first investment, be a 10 bagger is the it's like the financial equivalent of crack cocaine and you just want to keep on getting experience. And at that point, I knew exactly what I wanted to do, which was go around scouring Eastern Europe to pick up cheap privatisations, which is what I ended up doing. 

Bryce: [00:08:26] It is. It's quite the first investment. I must admit. I don't think we've had anyone who's had had quite that story. But Bill, have you managed to build your own personal investing philosophy and how would you describe it? 

Bill Browder: [00:08:40] Well, I mean, in a certain way, what this experience did was totally ruin me as an investor because I mean, it made me as an investor and it ruined me as an investor. Because when so I discovered that that that company and a few others were trading at some ridiculously low multiples of earnings. And then I ended up going to Russia, which I'm sure we'll talk about in a minute where I discovered that the same type of things. And so what basically I became is is a value investor, but a value investor of proportions of undervaluation that you've never seen before. And so my investment philosophy and to this day is, you know, the metrics have to work. You know, the stories don't matter as much as the metrics. If I can look at the valuation, you know, half of one year's earnings or or, you know, 99 percent discount per barrel of oil reserves or whatever it is, you know, it's got to be some metric where I can feel comfortable about that. It's just, you know, undervalued and undervalued in a way that's measurable and clear. And it's interesting because that seems so straightforward to me. And, you know, I'm fifty seven years old. I've been in this business now for more than 30 years, and I've had a lot of young, medium aged people working with me and working for me and so on. And a lot of people don't don't start out thinking that way. I mean, people, people approach investments from all sorts of different vantage points. But I always start out with the metrics. And even if I'm on a value, I mean, this day and age, it's pretty hard to do value investing. But even if you're doing growth investing, the metrics have to jump at you. The numbers have to jump at you. And they did in Eastern Europe at the time for me, and that's how I ended up sort of running my investment life. 

Alec: [00:10:24] So you went from that Polish bus shelter to co-founding and leading Hermitage Capital Management, and I think I read that you told your initial investors at the time or are going to make a lot of money or were going to lose everything. So can you tell us what that what that process was of, you know, starting that fund, focussing on Russia and some of those post-Soviet economies? You know, we hear that it was, I guess, a bit of a Wild West at the time. What was that like as a young investor starting your first fund? 

Bill Browder: [00:10:57] It was pretty unbelievable. It was truly, really Wild West sort of gold rush. So what happened was in in the when when Russia split from the Soviet Union and president Russia at the time was a guy named Boris Yeltsin, and he wanted to go from communism to capitalism. And the way that he wanted to do that was to basically give all state property away for free. And so they created something called the voucher privatisation programme, where they gave every person in the country a physical voucher. And those vouchers were then exchangeable for shares in all the Russian companies. And again, I did the maths in pretty simple maths that the there's a hundred and fifty million people in the country, which meant there's 150 million vouchers. The voucher is traded. There were freely tradable instruments that were about $20 each. And so $20 times one hundred and fifty million gets you three billion, which is the market cap of the voucher programme. And those $3 billion worth of vouchers were exchangeable for 30 percent of the share capital. Every single company in Russia, which meant that the market capitalisation of the whole country was $10 billion. This is a country with thirty five percent of the world's natural gas, 10 percent of the world's oil, 10 percent of the world's aluminium 10 percent. The world steal electricity, car companies, insurance companies, telephone companies, everything, everything. Ten billion dollars you couldn't buy. I think at the time it was like one sixth, the value the entire country, Russia was one sixth, the valuation of Wal-Mart. 

Alec: [00:12:21] Whoa. 

Bill Browder: [00:12:22] So, so I mean, it was just crazy the way that they were effectively giving everything away for free. And so the real question was not. Is it undervalued, the real question was, would they let you keep it? You know, with they, would you buy it? And then a year later, the government changes and renationalise it or whatever, because if they didn't renationalise it, then you could make, you know, just holding on to it if it's trading at a 90. If an oil company is trading in ninety nine point seven percent discount and you hold it, you know, you make, you know, just, you know, you can make 10 times, 20 times, 30 times your money without any problem. And so I looked at this and I said, OK, I don't really know what the probabilities are one way or the other, but let's just assign a 50 percent probability that that it doesn't work out and a 50 percent probability that that that they're not going to take it away from you, which means that you make 10 times your money. That means that that the expected value of that investment minus 50 percent times minus 100 percent, plus 50 percent times 500 percent, gets you to four hundred and fifty percent expected value of that particular investment on a probability weighted basis. And so I said to myself and I said to my clients, You know, you know, if you if you put it like a half a percent of your portfolio with me and it goes up 10 times, then then you know, that's a five percent return for your whole portfolio. And if it goes down to zero, you know, losing half a percent, it's not great, but it's not going to change your life. And that was the that was the advice and that in the sort of investment logic I shared with my clients and to be honest, not very few people signed up. Most, like I was 19 out of 20 said, You know, nice to meet you. Thank you very much. But but the people who did did pretty well. 

Alec: [00:14:07] So Bill, we read that while you were investing in Russia in the 90s, you were quite an activist investor. And for people who were unfamiliar with that term, you know, it means you're actively speaking to companies and trying to get them to change. You know what they're doing or, you know, different aspects of their business, which I imagine is difficult at the best of times, but particularly difficult when you're talking to, you know, post-Soviet oligarchs in Russia. What was that like being an activist investor in Russia in the 90s? 

Bill Browder: [00:14:41] So you have to understand that when when they privatised all these companies, when the state transferred all of them to private hands, it was kind of like they built a house, but they hadn't thought about putting in plumbing and electricity. And so in the case, the Russian stock market, the plumbing electricity was a rule of law and property rights. And so what would happen is you would buy a share of a company, but you really wouldn't own a share of anything because the oligarchs who owned or controlled these companies were stealing all the money out the back door. And I mean, like really all the money out the back door. So you'd have these enormous companies that you know, the size of BP or Exxon that were effectively had zero profit. And in real economic terms, they didn't have real profitability, net zero profit. But what happened was these guys would sell all the oil to their own trading company, you know, below market. And then and then the trading company would make all the profits between the price they paid and the real market price, and they would also strip assets and do all sorts of crazy stuff. And so I was watching all this going on, and I said to myself, this is really ugly and awful and unprofitable. And and so I said then I said, Well, how do I stop it? And the answer is that in Russia, it wasn't like there was a regulator who could stop it or the government agencies that would do something or the police or the prosecutor's office because they were all basically on the payroll of the oligarchs. So but there was one thing that I could do, and I have the skills to do it, which is that I and my team are really good at research. We were good at researching stuff and and and so we would research how they went about doing the stealing. We did something which I have coined the term. For this, we would be stealing analysis of a Russian companies and then we would take the stealing analysis and and share it with journalists and international media, the Financial Times, Wall Street Journal, etc. And they loved us because we were doing a lot of the work for them. And and interestingly, by by researching the stealing and then exposing it, it had had a dramatic effect on the share price for one really strange reason, which is that at the time that Vladimir Putin came to power. Fighting with the same guys I was fighting with, the oligarchs were stealing power from him at the same time as they were stealing money from me. And I've never met Putin. Reagan had a conversation with him, but there's this expression your enemies enemy is your friend. And so I would put out these big scandals about big Russian companies. And these were people who are enemies of Putin's and Putin were then step in and use whatever the power he had to make life difficult for them. And as a result, whenever he would step in, I would publicise something he would step in and the share price would go up. And and so I had the best performing fund in the world in 1997 because of this. And in fact, you know, if you had put your money in on day one, you'd mix and took it out. You know, 10 years later, he made you would have made something like 30 times your money. Wow. Because it was just such a great investment strategy for such a strange place. 

Bryce: [00:17:59] Before we move on, we're just going to take a quick break and hear from our sponsors. Let's move forward then, so in the 2000s, you went from, you know, a large foreign investor in Russia and just off the back of achieving a 238 per cent return in 1997 to then the number one enemy of the Russian state. So can you tell us the backstory to this Bill and how that actually happened?

Bill Browder: [00:18:29] Well, so as you can imagine, exposing multibillion dollar corruption is going to mess up and annoy a lot of people. And what happened was that I was doing this for a while and Putin was it was helping Putin. But Putin wasn't interested in in, you know, he wasn't interested in truth and honesty. He was interested in fighting with the oligarchs and winning his fight with the oligarchs. And so one day he decided he was going to go for broke. And finally, once and for all, when his fight with the oligarchs by arresting the richest oligarch in the country, a man named Mikhail Khodorkovsky was the owner of oil company called Yukos and and he arrested him on his private jet in Siberia. He brought him back to Moscow. He put him on trial in in Russia. When you go on trial, you sit in a cage. And he allowed the television cameras to come in and filmed the richest man in Russia on trial sitting in a cage. Now imagine you're the 17th richest guy in Russia and you're on your yacht. It's parked off the Hotel Du Cop in empty France. You finished up with your mistress in the bedroom. You wander out to the living room you flick on CNN and there before you as a guy, far richer, far smarter and far more powerful than you sitting in a cage. What's your natural reaction going to be? You want to go back to Putin and say, What do I have to do to not sit in the cage? And that's what they did, and they all went to Putin. What do I have to do to not sit in the cage? And he said 50 percent and 50 percent for the Russian government or 50 percent for the presidential administration of Russia, but 50 percent for Vladimir Putin personally. And at that moment in time, he became the richest man in the world. And at that moment in time, the oligarchs went from being his enemies to being his business partners. And I was still going after the oligarchs. But now I wasn't going after, you know, I was now hurting his own personal financial interests and. And so what happened was in November of 2005, I was flying back to Russia from a weekend trip to London, and I was stopped at the border. I was arrested and is put in the airport detention centre. And then I was deported back the next day to London and declared a threat to national security not to be allowed in Russia after that. And then the real trouble began. But then my offices were raided in Moscow. They seised all of my documents. They raided my law firm, the law firm office that I use. They seised all my documents there. And then the documents were used in a complex scam where they ended up stealing, where a bunch of police officers working together with corrupt officials stole $230 million of taxes. My firm paid to the Russian government from the Russian government. And this was the point where I hired a really bright young lawyer named Sergei Magnitsky to help me investigate and stop what was going on. And Sergei, he figured out the whole tax scam. He wrote criminal complaints for me to every different law enforcement agency in Russia. He went and testified against the officials involved, and in retaliation, he was subsequently arrested by the same officials who testified against put in pre-trial detention, where they then tortured him for three hundred and fifty eight days and ultimately killed him on November 16th, 2009, at the age of thirty seven. 

Alec: [00:21:46] Mm hmm. It's an incredibly sad story, and Sergei is name lives on partly through the lobbying work that you've led some. Some people who are listening may be familiar with the Magnitsky Act. But for those that aren't. Can you tell us what the Magnitsky Act does and what was the process that you sort of followed behind the scenes to lobby governments to get firstly, the U.S. and then other governments around the world to adopt their own versions of the Magnitsky Act?

Bill Browder: [00:22:19] After I got the news of Sergei's murder the next morning after he was killed. For me, it was like the most horrifying, traumatic, soul destroying news I could have ever gotten. He was effectively killed because he was my lawyer. If he hadn't been working for me, he'd still be alive today. And I made a vow on that day to his memory, to this family and to myself that I was going to put aside everything else I was doing. Stop doing business and devote all of my time, all of my resources and all of my energies to go after the people who killed him and make sure they face justice. And that's what I've been doing for the last 11 years. And at first, I thought that we would be able to get justice inside of Russia. Sergei had done something very unusual, which is, he wrote down everything that happened in his 358 days in detention. He wrote four hundred and fifty complaints documenting all of the abuse and mistreatment, and he was tortured and all sorts of terrible ways. And once a month or so, he would take a hand a stack of these complaints to his lawyer. His lawyer would file them. The Russian authorities ignored them, but we got copies, and from these copies, we were able to construct. The most granular, well-documented, detailed account of human rights abuses come out of Russia in the last thirty five years. And because of that, we expected some measure of justice inside of Russia, but it didn't happen. The Russian authorities circled the wagons. Vladimir Putin personally got involved in the cover up, and they gave promotions of state honours to some of the people most complicit. And it became obvious to me that that's the word we were never going to get justice in Russia. And so I then said, Well, then we need to get justice outside of Russia. And that's what I came up with this idea. And it's interesting because I'm not a human, I'm not a lawyer or human rights activist. I'm a hedge fund manager. But being a hedge fund manager allowed me to have an idea that was different than any other than an idea that a lawyer or human rights activist would have, which is that I know who these people were, and I knew how they operated as a businessperson. And they they did all this stuff for money. And I know how these people operate with their money. They don't keep their money in Russia because it's it's too dangerous to keep their money in Russia. They keep their money in in Swiss banks and British banks, they buy properties in the south of France. They send their kids to boarding school in England and Switzerland. Then they send their girlfriends on shopping trips to Milan. And so it became obvious to me that, you know, maybe we couldn't prosecute them in the West for these terrible crimes, but we can certainly not let them travel to the West or spend their money or you or invest in the West. And so I went to Washington after surrogate was killed and I met two senators, a Democrat from Maryland named Benjamin Cardin and Republican from Arizona, that everyone's ever sort of the late Senator John McCain. And I said, you know, told them the story that I've just shared with you, and I said, can we freeze their assets and ban their visas? And these two senators said yes. And that became known as the Magnitsky Act. And the Magnitsky Act really took off and it passed ninety two to four in the Senate. It passed with 89 percent of the House of Representatives, and it was signed into law by President Obama on the 14th of December 2012. And the moment it was signed into law, Putin went out of his mind. He was so angry. He was so angry because this potentially put his vast fortune at risk, and he made it his single largest foreign policy priority to repeal the Magnitsky Act. And he even lashed out at Americans by banning American adoptions of Russian orphans, which is just the most hideous thing one could do since most of these orphans were sick and their lives are being saved by American families. And he thought that that lashing out like this would make it make the senators think twice and maybe think about repealing the act or something. But in fact, his is is apoplectic. Reaction had just the opposite effect, and these two senators said, Well, wait a second. If Putin is so upset by this, there's a lot of other bad guys and dictators around the world who would be you? Who would be? We have said and should be targeted as well. And then it became known as the Global Magnitsky Act. And so the Global Magnitsky Act went after people doing similar things everywhere in the world, and it was passed in in December of 2016. Following from that, I travelled to Canada and the Canadian parliament unanimously passed the Canadian Magnitsky Act in October of 2017, followed by the Lithuanian Parliament, followed by the Estonian and Latvian parliament. And then the British Parliament passed the Magnitsky Act in 2018 after the Salisbury Novichok poisoning of the Skripals. And then at the end of last year, the European Union passed a European Union Magnitsky Act. And so we now have 31 countries with Magnitsky Acts. And one of the big outliers that I think is on deck is Australia. Australia. The Australian parliament had a full one year public enquiry into an Australian Magnitsky Act, and it was unanimous recommendation from this committee in parliament to the government to do it. And now we're just sitting and waiting to see when, if and when the government is going to act. 

Bryce: [00:27:43] So just on that bill, it is. It is pretty fascinating that we have had that recommendation from the Australian parliamentary committee. Yet the government is yet to act on that recommendation. What would you tell Scott Morrison and the Australian government in terms of adopting this Magnitsky Act? 

Bill Browder: [00:28:02] Well, I think that the most obvious thing that happened was that the Magnitsky Act was used very recently to go after the Chinese officials, who are most complicit in the concentration camps against the weaker minority in Xinjiang. And as you know, there's a massive genocide taking place. The Chinese basically want to wipe an entire ethnic group off the map, kind of similar to what the Nazis were doing in Germany and and everybody is shocked by it all over the world. And what happened was that the EU, the US, UK and Canada. And so there was 30, 30 countries in total in this group sanctioned the Chinese officials involved. And and and the best Australia could do is was make an announcement saying we support what everyone else is doing. And really, I have to say, when I saw that announcement, I thought that is just the most weak. I mean, just it was just humiliating for Australia to be in that position where Australia couldn't join the rest of the civilised world in taking action. And I wouldn't be proud to have seen that as an Australian, and I think Australia should join up with the rest of the world and do what's right. Moreover, by not having a Magnitsky Act, the the Australian government is basically creating a massive incentive programme for for for human rights abusers and kleptocrats to keep their money in Australia because it's the one place that's safe. If everyone else is basically creating a hostile environment for these bad guys. 

Alec: [00:29:39] Yeah, I think that's definitely going to make Bryce and I reflect on on being Australian. Get your act together, ScoMo and get that passed. I guess while we're in the in the frame of asking you what you would say to different governments around the world, if if you had a chance to speak to Vladimir Putin, you know, after being his number one enemy after he's tried to arrest you so many times after everything that's happened? What would you say to Putin? 

Bill Browder: [00:30:12] I've got nothing to say to Vladimir Putin. I've got nothing to say to him at all. It's true. I only want one thing, which is for him to give up power and go to jail and  face justice for the crimes that he's committed. 

Bryce: [00:30:27] Mm-Hmm. So recently, the US-Russian relationship has been characterised by low level cyber intrusions, allegations of election interference and a weird bromance between Mr Trump and Putin. But with Biden back in power now, what do you think the future holds for this US-Russian relationship? 

Bill Browder: [00:30:48] I don't think anything good for Putin. Biden has made it clear right from the from the get go, he said. He he said very clearly that Putin is a killer. He's imposed sanctions recently and and he's not he's not going to be pushed around in the way that Trump or Trump wasn't pushed around. Trump was voluntarily pushing himself around on behalf of Putin. But even before Trump, Obama really didn't he? He was trying to sort of reset relations with Russia. He thought he could somehow appease Putin. And so I think that this is probably going to be one of the darkest times for Putin because the United States has really kind of drawn a line and a lot of the stuff that Putin could get away with in the past, he won't be able to get away with with Biden. There is one sort of very frustrating intermediate part of this whole situation, though, which is that in Europe, there's a number of countries that really don't understand that it's not in their interest to appease Putin. And just, for example, the German foreign minister a couple of days ago said, you know, maybe we should try dialogue instead of sanctions. And that sounds all very reasonable, except in a situation for 20 years, everyone tried that, and Putin has just been blowing up planes out of the sky, invading foreign countries, poisoning dissidents and so on, so forth. And dialogue doesn't work with a criminal like him. 

Alec: [00:32:18] Bill, it's it's it's pretty incredible the work that you've done. So I think, you know, you should be proud and you know, we're pretty proud to speak to you about it. We're going to we're going to try and do a hard pivot now back to investing, which which I don't think we have the skills to pull off, but let's give it a try. But I think, you know, if people want to hear more about your story and also this story about Sergei Magnitsky and you know, I guess Putin, we can't recommend more picking up your book Red Notice. It's it's it's a fascinating read, and it's a really important story that you're telling in that you're continuing to fight on. Thank you. All right. Now, I'm going to try now I'm going to try and do the hard pivot, but investigate me. So obviously, now most of your time is taken up with this fight. And, you know, lobbying governments around the world, including Australia. Come on, Australia, get your act together. Are you investing today and are you paying much attention to financial markets in 2021? 

Bill Browder: [00:33:21] I no longer manage other people's money, but I do invest my own money and I've gone from being a investor in public equities, in emerging markets now to being a an investor only in developed markets with the rule of law and generally in private companies as opposed to public companies. And so my whole sort of modus operandi has shifted, and I'm no longer a value investor because I think there's not much value left out of there out there. And so I'm now, you know, like almost everybody else, understanding the world is being disrupted. By different technologies and trying to find ways of, you know, picking the beneficiaries of the disruption and avoiding the victims of it. 

Bryce: [00:34:07] What are some of the key, I guess, areas or semantics that you're investing in at the moment in the private sector that are capturing your interest? If it's in that sort of growth sector or stage of the business, yeah, what's what are you excited about? 

Bill Browder: [00:34:21] I'm excited about anything where you know where, where, where one can bring technology to improve efficiency and in any industry. And and that's and generally it's interesting because I'm not looking for people in my generation. I'm looking for young people to invest with because people, my generation, just, you know, we're not hardwired to to see the opportunities. I have a son who's 25, who went to Stanford and then started a company to replace lawyers with artificial intelligence. His name is Josh Browder, whose company is called Do Not Pay, and all of a sudden he, you know, he went from a standing start to having this enormous business with a huge number of users where he's now trying to put lawyers out of business. And I meet his friends and they're all doing amazing things and all sorts of different areas. And so, you know, really, I'm focussed on, you know, young disruptors who can who are going to change the world. And it's a totally different mindset and a different investment style than anything I did before. And it's not that it almost feels unnatural to do what I'm doing, but it feels like the right thing at the same time. 

Alec: [00:35:31] I've heard of Do Not Pay, I didn't realise it was founded by by your son, but that was started to like automatically contest parking tickets. Is that is that right? 

Bill Browder: [00:35:42] That's exactly right. But now it does 200 different things, but it's a remarkable story. And you know, he's he really is. He's just ripping the cover off the ball. 

Alec: [00:35:53] Wow. Wow, that's that's incredible. I mean, Bryce should be a little bit nervous. His partner is a lawyer. So, yeah, true. 

Bryce: [00:35:59] Hang on a second. 

Alec: [00:36:02] So, bill, you you know, emerging markets for the Equity Mates community is a is a really big, I guess, area of interest. But you know, it's incredibly hard to invest in those spaces for a lot of the reasons that you just touched on, you know, less regulation, less adherence to rule of law and stuff like that. But you know, as your experience in post-Soviet Russia exemplifies that there are some incredible opportunities. If you can navigate those markets effectively. When you look around the world today, do you see any emerging markets that you think display similar characteristics to that post-Soviet Russia in the 1990s? 

Bill Browder: [00:36:45] I do not. I don't think that anything will ever compare to the crazy, you know, sort of mismanaged privatisation programme that created those opportunities. Having said that, I think that we're going through such a world of cataclysm with Covid and global warming and alternative energy and so on that there's going to be so many dramatic winners and losers in the future. In in other areas. But it's not going to be so obvious as a ninety nine point nine percent discount that we saw in Russia. You're going to have to do be doing a lot of homework and you're going to have to like, have a view and take that view and live with that to you. And it's it's definitely not going to be so obvious in the in your face as things are, things were when I was doing Russia.

Alec: [00:37:30] Yeah, yeah. Well, if you ever do find any companies with 99 percent discounts, make sure you let us know about. 

Bill Browder: [00:37:40] Well, you know, it's interesting because I was telling everybody in Russia about Russia back at the time. As I said, 19 out of 20 people didn't want to hear it. Yeah, yeah, yeah, 

Alec: [00:37:48] yeah, yeah. I bet they're kicking themselves now. So bill, we almost return of our time. We do like to end these interviews with the same final three questions, but before we do, we want to firstly say massive. Thank you for joining us. And then secondly, aside from buying your book Red Notice, is there any way if people want to find out more about you or follow you online? Is there anywhere in particular that you should be going? 

Bill Browder: [00:38:16] Probably the best thing to do is to follow me on Twitter at Bill Browder. I'm active. I'm commenting on lots of things, I'm announcing lots of things and I get lots of things to say there. And I'm just finishing my second book, which won't be out until probably early next year, almost fully written called Freezing Order, which will bring everybody up to date from when red notice was red. Notice stopped in around 2012. The story and this one will bring us right back to where we are today, right? 

Alec: [00:38:48] So first of the final three questions do you have any books that you consider? Must reads? 

Bill Browder: [00:38:56] So I've got so many books that are considered must reads. There's a book that that I had an opportunity to read ahead of time before it is being published. It's called red roulette and it's it's written by a guy that I met who who basically lifts the hood on Chinese corruption. And and it's he was he was like busy doing wheeling and dealing in China and with the lid on the whole thing. And it tells from an insider what it's like to be a businessman, an investor in China and who's doing what to whom. And I thought that was really coming out soon. Red Roulette, another one which I thought was just shocking and hilarious, was a book called The Billion Dollar Whale about that. The 1MDB scandal really well written, really funny, and just amazing. What it just shows how all the institutions got completely hoodwinked by this guy. Joe Lo, those are the two, the two sort of ones that would be most relevant to to you guys and your audience.

Bryce: [00:39:58] Fascinating story.

Alec: [00:39:59] Billion dollar wild. That blew my mind. That's just how you can still have the best of them. Yeah, yeah. Still out there. So the next question is in 60 seconds or less. What's the best company you've ever come across? 

Bill Browder: [00:40:15] Well, I have to say, my son's company do not pay, 

Alec: [00:40:21] good as I get, as I'm sure a lot of listeners at this point have Google do not pay and are saying if they can get him to contest their own ticket. 

Bryce: [00:40:29] All graduate lawyers are also Googling new jobs 

Alec: [00:40:36] and then final question bill. If you think back to the early days in your career when you're at Stanford or when you're in that Polish boss factory, what advice would you give to your younger self or knowing? 

Bill Browder: [00:40:49] Then what I know now I would have stopped in Poland and never gone to Russia because the the most terrible things happened. You know, we've lost the life of a young man. You know, the Russian government has been pursuing his family, pursuing me and pursuing everyone around me. I could have had just as good a life if I had stayed in California and focussed on technology instead of Russia. And so for me that the staying away from Russia would have been the best, best thing. And I advise you and all your listeners, no matter what anyone says, don't invest in Russia now. 

Bryce: [00:41:23] Good. Good advice to finish on no intentions to invest in Russia in my sights. Bill, we will have to leave it there. But it's been a truly fascinating conversation, as we said at the start. You know, you've done some pretty amazing work and the efforts that your you're doing to still lobby for the Magnitsky Act around the world is impressive. We would love to invite. You are looking forward to inviting you to Australia. When the Australian government passed the Magnitsky Act here and doing a follow up interview in person, that would be an absolute pleasure. But again, thank you for your time. We know that our audience would have got a lot out of that. So thank you very much.