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00:00Bob let me start with you. You got some experts now it just with banks but also with tech and specifically fintech with your major deal involving Circle. So give me your sense. Typically it's thought that tech gets beaten up with higher rates. Is that true now. Is this a time not to invest in tech. Well again come back to higher rates. David we're talking about just getting back to neutral. So we're talking about maybe a 10 year in the higher end of one and a half to three percent and rather than the lower end and we're talking about two percent said funds rate. So no I don't think there'll be a negative impact on our investments. Our last three or four investments and outlets working capital of all had a very very strong tech angle to them. We're very very positive overall on the fintech sector. Stable coins in particular. As you know we we announced in concrete acquisition core for merger with Circle. And I think payments technology stable coins you know the ability to to impact the cost of commercial services the opportunity to increase economic stability. All these things we think are very very positive. So there will be winners and losers. I think there were periods in the market where anything with a tech angle whether it was fintech or outside of finance you know had a good bid. And I think it's appropriate that there are a little bit more selective in terms of the platforms that will be most successful. But within financial services the impact of technology and the impact of technology focused platforms is significant. And we really like it as is a broad area to invest. And I think that the news out of JP Morgan this morning this really confirms that they are spending because competition is up and they need to become more efficient. And where are they going to get that technology. Well some of it will be internal. But if you go beyond the big money center banks think of all the regional banks community banks. They also need to become more efficient. And so a lot of the fintech names that are providing some of those capabilities whether it's a smaller name like an Encino or a larger name you know they got thrown out too over the last several months with all those multiples coming down. So you know it's like the babies got thrown out bathwater over the last several months. And I think this year we're going to see quality names really come back. So as Bob will say we're going to have to be really selective. But I think investors are going to start looking more carefully at the companies to see if they actually have customers a well-defined market and customers that have money to spend. And some of these companies have proven themselves already and they're multiples still got crushed. So I think there's a real opportunity for tech investing right now. You don't want to buy tech necessarily when it's really high. You want to buy it when the market is panicking and when the numbers have really come down as they have over the last months. And Joe Joanne I would also say you and I have talked about this but there are sectors like using stable coins again where you know we should really embrace and encourage clear regulation. And I think in the case of Serco we certainly do embrace regulation. And I think that can also help separate platform from those that are more investable than than others. And Joanne I wonder if that takes us to another big story of the week actually was the nomination by President Biden of Sarah Bloom Raskin to be the vice chair of the Fed for supervision because she worked when she was a Treasury. She worked specifically on regulatory crypto. I'm told she's one of the first people to say we need to regulate this thing people with a paper on it. So does that mean that we're going to have that regulation sooner rather than later and maybe haven't been formed. Yeah I think that's right. I mean she has a stellar reputation and she's pretty highly respected and she certainly has the experience in her various areas of work over the past many years to be able to think and lead discussions pretty pretty well on that. But you know I think people again not separating which company actually benefit from more concise more thorough regulation and which ones might lose. You have the whole area trade down on the fear of more regulation when actually it should be viewed as a positive for the development of products in that sense. And I think people probably misread that. So once again going forward I think we're going to get some clarity on the direction which regulation is likely to go. And I think that could actually help some of the better. Joy I couldn't agree more. I think there is a there's a perception that you know regulation is negative. Regulations that negative you know good sound regulation will make it more clear who are the winners and who are the losers and in which you know can operate within a highly regulated financial services industry. My understanding is that the Fed white paper unstable coins is coming out very soon. And I think that will add to some some clarity around that as well. So Bob you've mentioned stable coins a couple of times and really focus if you would on the payment companies because you do have experience you've got investments in the area. What would be the difference between the sheep and the goats if I can put it that way. Because there are a lot of companies out there right now. Which ones will survive and flourish and which ones will follow the wayside. So there are there are stable coin companies or companies that have platforms that expect to be that would prefer to be offshore that would prefer to be outside of the regulatory perimeter. And I think I think those will be very challenged in terms of becoming you know really used is payments. And there are others like Circle which has said they plan to apply with the FCC for a full reserve banking license. That's how that's how much they would prefer to be within the regulatory perimeter of the U.S. financial system. So I think I think we'll see it with more clarity. David going forward. But I think we can say it. And there's our there's already a separation from those that I'd prefer to stay outside of the regulatory perimeter and those that would prefer to operate inside. Join I'm really curious again for you as a portfolio manager. We hear increasingly people say even the more skeptical of cryptocurrency overall that there is a role in your portfolio for some of it for various reasons. Do you feel that way. Do you look to balance to some extent have some role for cryptocurrency whether stable coin or a different sort. Yeah you know there can be a role for it as Bob was saying it's at this point a bit of the Wild West right summer quality. And they're really careful about adhering to what is likely to be regulatory frameworks that keep them safe and create transparency. But we do create opportunity for our clients to be involved in some of the crypto currencies. We like the ones that have a more rounded foundation in the underlying blocking technology. But you know it's a bit hard right now to get too too involved because again there is going to be a shakeout among those who are more careful about keeping those transparency guardrails in place and keeping out some of the more to various activities that have been used in those platforms. And also you know the potential for hacking and other things. So one really has to be careful. But you know it's really speculative you know potentially a lot of upside but also a riskier position. So one wants to limit exposure. I think that that realm at this point. And lessen the impact on the economy can be real if you look at you know being able to do commercial payments not consumer necessarily but business to business instantaneously 24/7 on a weekend in the middle of the night at the speed of the Internet but also with the cost of those transactions being driven virtually to zero. This can have a significantly positive impact on on the economy and on inclusion in the financial services.

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Focus on Fintech

Is it the right time to invest in fintech? JoAnne Feeney, Advisors Capital Management Partner and Bob Diamond, Atlas Merchant Capital CEO debate if it's a good idea to place your money in the sector. (Source: Bloomberg)

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