Investing Strategies For Crypto, ESGs, And Telecommunications

of drive nets UM. He had founded Into Sales Sol Cisco worked for them for a while UM, but now he's back out there building a bigger company. You've got, uh, I know what, two hundred two hundred million dollars in funding already. Yes, So what are you doing at drive nets? What's your main focus after coming out of Into Sell

and Cisco. I will go it's basically to change the network and the Internet infrastructure design and building operators of today, supporting with the custom of the operators like A T and T and other UM to reduce a cost per bit and to create new revenue because the way that we consume the network UM as consumer enterprise different change dramatically and the network didn't. And we are here to

support and then drive the transformation to the cloud. Yeah, you would think that a lot of that would have been accelerated to the pandemic, But somehow we look at our country and we're still pretty woefully behind. It is that fair to say? Um? If you you know, we operate worldwide, so the US market advancing in this area. But I think, um, the boorders between consumers and enterprise does not exist anymore. Our home it's our new office.

And if the operators will not focusing to all out fiber to the home five G WiFi C capability, um, we will not be able to walk to study from home and to support the demand. Yeah, I'm looking for houses right now in the Tri state area, and every place that I look at takes pains to point out there's room for a home office. It's it's recently been rewired, you know, or if it hasn't, it just stays on the market for a hundred and fifty days and nobody,

nobody wants to buy it. How is it competing ido with your former employer, with behemos like Cisco and Juniper and these gigantic companies. How do you get um, I know you recently got a contract with a T and T. How do you get contracts um with with with these huge clients when you have to compete with you know, the biggest goliaths in the world. First of all, as you mentioned, um, Um, you know Cisco was a qualet

my previous company. And I'm not forget what I'm coming from, the amazing company and also the rest of the incumbent in this industry. But because I'm coming from Cisco, I know how it's how then almost unpossible to change that you're doing business because you need to support the stock, you need to run after the quarterly revenue, and to do transformation to your technology and the way that you are selling and create a value to the customer. It's very hard, um. So you know we are here to

do challenge money. It's not our drive anymore. And we are here to transform um the network industry, begin industry and to create value and the customer. Like A T and T and other looking for the startups like us that will help them to disrupt the way that they are operate and build their network in order to again create new revenue and too, would you say the cost I'm wondering also with the shift to the home office. What the cybersecurity concerns are. I know that's a huge

issue that a lot of employers are struggling with. Yes, cybersecurity, it's a big thread all over. UM. It's not related only to home, to our mobile, to our privacy. UM. We see a lot of challenges. I think, UM, the way and the opportunity for the operators UM to help to protect our privacy and to help to drive more security to any type of device that we all connected,

if it's IoT, mobile, home, you name it. UM, it's a big opportunity and I think, UM, I cannot share too much, but I can tell you that they are walking around it and this is one of the revenue generation that they all play to have in the next coming years. And of course it would benefit of US.

I know we had recently uh a US infrastructure buil five billion dollars in new spending has earmarked a pretty sizeable piece, UM for what you're doing, and I'm sure other countries also are going to be spending money to try and improve the infrastructure. How much of a boost will that give you over the coming years. It's a huge boost boost, UM, we see it. Yes, as you mentioned, it's not only here in the state, it's all over,

it's worldwide. UM. It's help us. UM, it's help our customer to moderate their infrastructure and to think out of the box. And also for US, it's UM we're getting a big and very nice contracts to move ahead. UM.

I think it's just the beginning. I think more and more money will go from government to those infrastructure because everybody understands that if you want to move ahead with any segment, if it's healthcare, if it's education, if it's you name it, you need very robust infrastructure, networking infrastructure to support the demand of the traffic. UM. And the way to do it it's with technology like US and others as well, UM, that we help to convert it

to be cloud based solutions, software based solution. UM. So I think it's just the beginning. Yeah. Absolutely. I'm still working on upgrading my electric panels and after I get past that, then I'll boost the cloud computing power of my house. Ido, thanks so much for joining us. Ido Susan there. He is the founder of drive nets, coming out of into Cell and Cisco. Talking to us about the move away from hardware and into the cloud. That we've all taken part in over the past few years,

but we need to accelerate. I promised you we would talk about corporate governance and UM E s G investing. Maya Becker joins us. She's the director of Corporate Governance Responsible Investment with rbc UM and Maya, it's great to have you on. You know, there was a time when we would have thought of this maybe as a fat as a trend, but it now seems like a strategy. How do you see it? Yes, thank you so much

for having me. Absolutely, we are seeing that the E s G and climate change is absolutely top of mind for institutional and sters. Rbc GAM actually just completed out fifth innual Responsible Investment survey of eight hund global institutional asset managers and it showed that not only our investors concerned and interested in E s G, but climate change is their top priority after anti corruption and cyber security. And for those that care about E s G, their

top E s G concern is climate change. And this concern and this focus is really more felt, certainly by European investors who are paying the closest attention, and we see regulation as a real key driver of that. I am curious about developed versus undeveloped nations here or under

developed nations. You know, we were having a conversation this morning with a representative from Mercy Corps was doing work in Nigeria and really talking about the lack of support that they were getting as a lot of conflict was breaking out in the country over climate related issues. Do you think that these promises being made a COP twenty six or going to start moving the needle for the

countries that need it most. I think that's a great question, and what we're seeing at the COP twenty six Climate Conference is really there are a lot of high level

commitments that are being made by governments. One of the key focuses of those conversations and negotiations is how advanced economy can provide support to developing nations, exactly what you're referring to their I think what we're going to want to see moving away from COP as COPS closes very shortly, is how do those commitments start to turn into government frameworks, policies or legislations and what are the actions that governments will be taking as they walk and leave COP twenty

six with those commitments made, and will that actually generate support for developing nations too, in many ways are those that are most vulnerable to climate change, and that is

a really important piece. As the investors when we look at E. S G and we look at climate change, our focus is really on integrating climate change into the investment process, and that means looking at how climate risks and opportunities will impact different sectors and different geographies, because they'll each be impacted in different ways, and we need to be taking those considerations into account when we look

at our investments. And government has a key role to play in addressing climate change and in supporting that just an orderly transition for all global nations. And it feels to me like we'd rather pass out band aids to underdeveloped nations than fix the gaping wounds in our own Um. We can't even in the US, in Germany, in France agree to phase out internal combustion engines at our manufacturers

over the next twenty years. I mean, it's I feel like COP twenty six achieved really very little in terms of meaningful commitments from the biggest nations. Am I wrong? Am I being too cynical? Well? I think, firstly, if we think of what we can take away from COP twenty six and it is still long agoing, there's still

a few days left here. As we did see governments make some significant cap commitments that CAUGHT twenty six new climate pledges, which will do this year since it is the fifth conference after the Paris Agreement, and that is something to take encouragement from those commitments that are being made. They're also specific sectors we're so far off from We're so far off from hitting the climate pledges we made

it Paris in two thousand fifteen. I mean, what's the point in making new promises if we can't even meet the old ones. Well, what will be important is when we leave CAUGHT twenty six is seeing how these pledges and these commitments get turned into policies and practices and looking at what those sector transition plans are, because I think that's what we're talking about here. How does each

sector transition to net what does that look like? What is the price on carbon, what are the subsidies, what are the commitments that are made at a sector level, because each of those sectors needs to have a plan of how they're going to transition to net zero the climate change and why it's so complex and challenging is because it affects all sectors and all geographies, although in

different ways. And what we do need to be able to find is to be able to find solutions that bring all sectors along that pathway to that zero when he said that give us is a direction, but you're right, it doesn't give us an indication of the speed of travel and the path of that travel will take and just thirty seconds or so here may because you know, there's this great question now in the US about the disclosures needed out of the SEC. Do you think that that can be done this year in a way that's

meaningful to someone like you? Well, I think disclosures absolutely is a priority. We need a single, ideally global sustainability of reporting standard for investors in order to integrate and consider how fun it is impacting an individual issue where we need that information to be consistent, comparable, and publicly disclosed. We're starting to see more interest from regulators in putting

in place those consistent and comparable disclosures. What I would say we did here announced um during COP is the i f r S Foundation has formed a new International Sustainability Standards Boards and the hope there is that that will establish that common consistent standards for reporting, because absolutely that's something investors, Nathan, it is an important piece of all of this. Yeah, that's the key. That's that's that's got to be a key move for you and for

your clients. UM, and that's I think what listeners investing in E s G want to want to get more of. Maya, thanks so much for joining us. Maya Becker is the director of Corporate Governance and Responsible Investment over at RBC Global Asset Management, talking to us about E s G and COP Let's get to crypto right now. I am pomped to talk to our next guest. Brett Harrison is the president of f t X and UM. This is a company we've been just watching absolutely explode. Brett, thanks

so much for coming on the program with us. Let's talk about the um accept the broader acceptance crypto. It's been amazing to me. Ten years ago, I spent two weeks living only on bitcoin, stopped using dollars, and it was kind of a side show. It was a clown event. It was silly. It worked, but um, it was an oddity. Let's say, and now everybody, uh in every age group, in every walk of life wants to know something or does thinks they know something about crypto. How have you

experienced the acceptance? Yeah, I think personally, I have a similar story. You know, before joining f t X, had very little experience with crypto. I had primarily been in the proprietary trading space on the equities and equity prohibitive side for my whole career, and coming to crypto it was very new to me as well. But it does feel like it is. It's ubiquitous now. Everyone wants to know something about crypto, understand the space, either invest in

it or build on top of it. And it's more than just you know, a potential new currency or a means of transfer. It an entire technology platform that people really excited for the applications of. Now. I'm really curious about what you think about the Bitcoin versus ethereum debate, because on one hand, you know, I could talked to, for example, Elizabeth Stark of Lightning Labs last week, and for someone like her, bitcoin is the ultimate crypto to

be building things on top of. But if you talk to someone like Ken Griffin, he believes that Bitcoin will be eventually replaced in concept by ethereum. How do you make sense of a debate like that? Sure, you know, I think that one really needs to dig into the details of these different cryptos and why they're built and what they're used for to understand them. Bitcoin and ethereum have very different applications. You know, Bitcoin itself was was the first real crypto to gain mass adopting, so it

has that staying power. But Ethereum is coming something some pretty separate. You know. It's a place where you can build smart contracts, you can actually build applications on top of Ethereum. It's sort of like an Internet layer, are some kind of software software platform, And even just those two alone aren't going to be the only answers. You know, there are other cryptocurrencies built on blockchains that have even higher transactions per second, lower cost fees to do transfers,

like Salada. We're going to see more than just Bitcoin the theoryum that have staying power in the crypto ecosystem. Yeah, I think there are big differences there that maybe Ken Griffin doesn't take into account Um, and he might be looking for something else rather than Um. Trying to appreciate

the diversity in the crypto space. I wonder what you think of the I've always had a question as to why we'll necessarily need to buy whole tokens or multiple tokens just because we like the technology platform upon which they're built. For example, UM, I loved the Internet computer when it came out. It didn't do so well, but the idea I thought was cool and the technology was cool. I didn't necessarily need to own a token, or if I was going to start a business on it wouldn't

have needed to buy two. I think you make a really excellent point here, which is that there's the blockchain that's being built for particular applications, and then there's a token associated with that blockchain or a token associated with that application. And I agree with you. I don't think we need thousands of different tokens or hundreds of different blockchains.

I think what we will see as a real consolidation over the next couple of years, where a few winners will emerge in terms of you know, which blockchains are actually going to be the ones that people build applications upon, and the others probably will die off over the time. They don't have as many unique characteristics, or they're not going to outcompete, you know, the couple best ones. But

what's the utility of the token? I mean, if you build um your business off of the Ethereum blockchain, you don't necessarily need to acquire Ether to do that, do you. Well, you might need to use Ether in order to silicate a transaction. So, for example, when you do an Ethereum based transaction, you need to use Ether tokens to pay the gas fees required to do a transaction, or to pay a smart contract to evaluate some function. So that's

the sense in which you need the token UM. But there are also applications built on top of them where they use different tokens, they can convert under the hood, and so it's not necessarily that you need to own them yourself in order to interact with them, you know. But you have such an interesting background worked at some of the biggest market makers in the world, Jane Street, Citadel Securities, which is obviously is known for its relationship

with Robin Hood. These days, I'm wondering if you think, and speaking of Robinhood, I'm wondering if you think crypto how much it's truly a way to start to get financial assets into the hands of more younger people who for a long time until now have not been trading, have not been paying attention to finances um and have had a mistrust for so many of you know, institutions in finance. Absolutely, it's not just a way and in

theory and in practices is what empirically we're seeing. And there were um several polls done that showed that the percentage of people who were underbanked owning crypto was actually considerably higher than those that were banked. In addition, demographics that are you know, typically more minority demographics that are have either not had the same kind of affair access to banking and investment opportunities in the past, are disproportionately

involved in crypto. So I do think that there's a there's a democratizing effect of crypto, and that it's so low friction, so low barrier to get involved to invest and I think that that's why it's so popular among young people. And also there are so many applications again of crypto. You know, it's not just about owning a

bitcoin hoping that it goes up. Think about all the blockchain based gaming that we're seeing investments and including from our own company f t X. Think about n f t s and the the idea of having collectibles and collectible art and communities around them. These are all I think very appealing to the younger generations. Is the SEC you going to figure out a way to regulate this stuff?

I mean, so far they've allowed a futures based e t F, which is I think pretty silly, um, but it doesn't really make much sense since it's an unregulated product to begin with. So it's a very good question right now. People might not know that cryptocurrency exchanges are not regulated the same way as a stock exchange or

a futures exchange. They're regulated under the finn Send Money Services Business, which is not really the most appropriate regulatory regime for an exchange that can have millions of transactions per day happening, you know, by high frequency market makers. And so there's we are in constant dialogue with the SEC,

with the CFTC. We believe that there is probably going to be some sort of joint jurisdiction between these two agencies of exactly what form we don't know, UM, that's going to be able to regulate these tokens because it's it's tricky. You know, for every one of these tokens, they have different characteristics. Some of them have characteristics of commodities, some of the characteristics of equities, and you know, we'll we'll see where the where regulation heads and then your future.

It's a very interesting point. Brett, thanks so much for your time. Really appreciate it. Brett Harris and their president of f t X talking to us about the crypto world. Let's get over right now to Wendy Wong right now, head of Sustainable Investment Partnerships at New York Life Investments. Wendy, we were talking earlier about the trend in or the it's beyond the trend. I guess at this point the strategy of E s G investing. How has COP twenty

six changed things for you? First of all, thank you so much for having me in for your interest in E s G and besting UM COP twenty Yeah, it's a bit clear that it's a hot topic UM and so you know, I think there's a realization that there's only so much that governments can do UM. But there's also a role that the private sector can play as well. Well. I'm wondering the private sector as far as it goes do you think that some of the biggest strides can

be made there? Uh, well, you know, we always believe that when we work together for collective goal, good things could happen, and so that was the thinking between our i Q Dual Impact e t s. So it's meant to have a compelling investment thesis that is investing in some of these themes that are so important to us gender equality, climate, health and well being. But there's also

UM a give back component as well. So we worked with a nonprofit organization for each of these new e t s and we reinvest our management fiece a portion of our management fees back to these uh these nonprofit organizations so they can continue doing the work they're doing. So it's a great partnership between the private during the public sector. So what are the themes? Talk to us more about the c t F product. What are the

themes here? We have four themes UM that we have UM that are part of the i Q Dual Impact e t F. We have a health and well being theme that was designed with American Heart Association to help people live longer, healthier lives. There's a gender equality e t F that was developed with girls who code investing in UH companies, US companies that have demonstrated a commitment to gender equality. There's a Cleaner Transport UM. It provides exposure to global companies that are helping us move to

a more environmentally efficient transportation technologies. That includes bikes, rails, UM, buses of course, electric vehicles. But it's also beyond all of that. It's sort of the grid and infrastructure that's needed to produce and UM support all of that, and the value chain UM. And then finally, we have an oceans themed e t F i Q oceans UM Clean Oceans e t F o C e N that was developed to aligned with Oceana and that that it offers exposure to global companies that are helping to protect and

achieve a cleaner ocean. Yeah. I'm curious about this because a lot of you know, the newer generations that want to invest in socially friendly e t you know, E t F and investment products, a lot of them feel like they're getting exposures exposures to non clean items as well, especially when you're kind of investing in things that pertain

to the broader market. I mean, what advice do you have to people who really want to start to limit their investments towards things that are good for the environment and good for society. Well, there's a lot of different ways people incorporate e s G in the portfolio. You know, we started sort of as an industry doing negative screaming where we're sort of screening out since stocks and um,

you know, fossil fuels. It's gone a lot more sophisticated. UM. So. You know, part of New York Life Investments is a company called Candrium. They've been doing sustainable investing for over twenty five years. UM and you know, they were a key key part in developing these e t F and they do a lot of scoring and screening of companies that they've been doing it for a long time. They

specialize this. UM. So it's just making sure that investors are doing their research, UM, that the product that they are investing it is in fact accomplishing what they wanted to do. And if that means more than negative screening and you know, sort of the top of the top, then you know that's what they should look for. UM. If you don't mind, I want to double up because if I'm looking for example, the ocean e t F

that you guys had formed. Some of the companies include, if I'm reading this correctly, Home Depot, Microsoft, Procter and Gamble and even Semens. Some of the companies that are in here, how do you really assess them on some of the things that are doing that are good for the environment, but also some of the things that aren't maybe not meeting the standards that we want to see

you in a few years. Yeah, so for will you we can use ocean right, So that investment thesis is, you know, companies that are taking steps towards mitigating harm to the ocean. UM. You know, companies are not perfect, no one is. We're all making we're making steps. It's sort of a gradual process. So it doesn't it includes companies that are sort of um doing the best in their sector among their peers of reaching towards that UM. So, in addition to some of the stocks that you had listed,

it also includes um Adidas. You know, for the first time in more than half of the polyester that are using their products are going to come from recycled plastic waste. We love that story. And then from four onwards their company, that company is committed to only using recycled polyester. So it's that circular economy um. And you know a seafood A seafood provider is also included from Norway and they supply sustainably farm stand men and process seafood worldwide and

everything that they sent out is sustainably certified. All right, Really interesting stuff. Wendy, thanks so much for joining us and talking to us about these products. Wendy Wong is head of Sustainable Investment Partnerships at New York Life Investments. Talking about these thematic e t F s and the broader um E s G trends that have really gone beyond at this point, I think are becoming just a mainstream strategy for investing as which we as we UH

confront these challenges with things like COP twenty six. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller three, pt on false Sweeney I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio