The Boring Twenties?

How many times in the last three months have you heard someone say, ‘it’s going to be the Roaring Twenties’?

Dozens?

Scores?

Hundreds?

I’ve lost count.

In all my life, I can’t remember a more ubiquitous sentiment.

Perhaps this is one of those phenomena that humanity wills into existence, but I keep wondering: where were you people living during the last decade? Under a rock?

Like, what if the Roaring decade already happened? And you missed it?!

I’m no historian, but I enjoy reading histories. And I’m no expert, but I’m as capable as Ian Bremmer at spouting spurious nonsense.

Consider a few parallels:

  • Mass communication — the Roaring Twenties had the radio and movies; but the 2010s saw communications technology supercharged at a level people in the 1920s could never imagine. I mean, global mobile and smartphone adoption, Twitter, YouTube, the societal parasite that is Facebook, WhatsApp, TikTok, etc. etc. etc. 
     
  • Consumerism — the 2010s were the era of the “emerging consumer.” According to World Bank data, global household expenditures grew by $10.7 trillion (in real terms) between 2010-2019, with China accounting for 25% of that. Choose most any country of sufficient scale, and you will find an e-commerce platform, on-demand media / delivery, etc.
     
  • Corruption and fraud — “We are in the golden age of fraud.” Corruption and fraud are omnipresent, at a scale humanity has never seen.
     
  • Sexual revolution — I wasn’t around in the 1920s, but I have watched Babylon Berlin, and it’s inconceivable that anything back then could compare to the meat market that is Tinder. 
     
  • Stock market — went totally gangbusters!

Don’t get me wrong — I think there will be an explosion of hedonism and euphoria on the back end of the pandemic.

I, myself, daydream of escaping to Beirut to see a Tala Mortada gig … 
dancing / sweating / in a smoke-filled club / with bass so hard / it hurts.

Or trekking to Central Asia and touring the Silk Road to get as far away as possible from my sons (whom I love more than anything … it’s just been way too long without a breather).

But … most of us know what lies in wait in those deserts.

And I’m not referring to the diarrhea.

I mean the nostalgia for home.

think the surprise is that people will crave genuine connection and intimacy after a decade in the Matrix.

Alas, instead of the Roaring Twenties, I wonder if we’re more likely to see the Boring Twenties.

Less flash. Less sizzle. Deeper, more meaningful relationships, work, and — dare I say — innovation.

And I must confess: given the economic, environmental, (geo)political, and social risks brewing and bubbling beneath the surface of our Botoxed world, a bit of boredom would be positively delightful.

On verra bien.

— Mike


Why Tiger Is Going to Eat VC

Everett Randle @ Founders Fund wrote a thought-provoking essay on Tiger Global and its two structural innovations — maximizing deployment velocity & better / faster / cheaper capital for founders — that are upending growth-stage (ICT) VC investing. (“Playing different games”)


Great Wall of Capital: Part Deux

A few years ago I observed that seven Asia-focused buyout funds were in the market for $34B — a figure that was “on par with the aggregate hauls for EM PE funds in each of the last two years.”

Well.

Fast forward to today, and KKR has announced the close of its $15B Asian Fund IV. 

If the CalPERS & CalSTRS disclosures are anything to go by, the markups on Fund III appear quite good relative to those for Fund II, so the demand makes sense.

But.

If KKR keeps compounding its fund size at 9.9% each year, then they’ll be raising a $38B fund in a decade.

And that honestly doesn’t seem crazy anymore.

Either way, I don’t want to be writing about it.


Jamie Dimon & Fintech

Motive Partners highlighted the following passage from Jamie Dimon’s annual letter

Banks fiercely compete with each other and now face fierce competition from multiple vectors.

Banks already compete against a large and powerful shadow banking system. And they are facing extensive competition from Silicon Valley, both in the form of fintechs and Big Tech companies (Amazon, Apple, Facebook, Google and now Walmart), that is here to stay. As the importance of cloud, AI and digital platforms grows, this competition will become even more formidable. As a result, banks are playing an increasingly smaller role in the financial system.

Financial services are going to be integrated into everything. Legacy banks face daunting challenges.


The Saving Glut of the Rich

Fascinating paper.


From the Bookshelf

There are two forces: fate and human effort …
Two, since actions succeed neither by fate,
Nor sheer exertion alone, but through their bond.



Activated, human effort succeeds through fate,
And then that action’s fruit falls to the actor.
But even the effort of industrious men,
Working together, is fruitless in the
World devoid of fate.
Because of this, idle and unperceptive men
Despise exertion — the wise know better.
For generally action bears some productive fruit,
While to abstain altogether produces
Nothing but the heavy fruit of suffering.

Two kinds of men are seldom found — those who achieve
Their ends fortuitously, without exertion,
And those who, having acted, still do not succeed.
The industrious man, rejecting idleness,
Is fit to live; it is he, and not the idler,
Who increases happiness — it is he
Who desires the welfare of his fellow beings.
If the industrious man, through taking action,
Does not succeed, he should not be blamed for that —
He still perceives the truth.  

— The Sauptikaparvan of the Mahābhārata (Oxford World’s Classics: 1998)

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The information presented in this newsletter is for informational purposes only. Portico Advisers does not undertake to update this material and the opinions and conclusions contained herein may change without notice. Portico Advisers does not make any warranty that the information in this newsletter is error-free, omission-free, complete, accurate, or reliable. Nothing contained in this newsletter should be construed as legal, tax, securities, or investment advice.

Copyright © by Portico Advisers, LLC 2021, all rights reserved.

Ep. 3: Fintech & Financial Inclusion



In the third episode of The Portico Podcast I speak with Monica Brand Engel — a co-founding Partner at Quona Capital, a venture capital firm focused on fintech for inclusion in emerging markets.

If you’ve looked into EM fintech, you’ve probably come across Quona and their portfolio companies.

For example:

  • Sokowatch in East Africa, a working capital provider and last-mile distributor of fast-moving consumer goods to informal retailers;
  • Coins in the Philippines, a mobile, branchless, blockchain-based platform that provides unbanked and underbanked customers with direct access to basic financial services (and which was acquired by Go-Jek in 2019);
  • Or Konfio, a digital banking and software platform for SMEs in Mexico, which received a $100m investment from Softbank as well as a $100m secured credit facility from Goldman Sachs last year.

I was excited to get Monica on the podcast because she has built a career in two of the most compelling themes around: financial inclusion and financial technology.

Our discussion opens with her walking us through her career trajectory. We then talk about the convergence between philanthropic and commercial investment across emerging markets; the commonalities and idiosyncrasies across the markets in which Quona invests; the quality of fintech entrepreneurship in EM; the prospects for technological and business model innovation to migrate from emerging markets to the United States and Western Europe; and the biggest obstacles fintech startups encounter as they attempt to scale, among other topics.

I hope you enjoy our conversation.


This podcast was recorded in October 2020.